Chance for Sensible Health Care Reform Improves as Ultra-Liberal Proposals Start to Implode

Americans need health care reform, but what we do not need is a monolithic health care system owned and operated by the federal government and its ant hill of bureaucrats. Our medical advances and treatments lead the world. We need reforms to our current system that preserve the strengths but address problems with medical costs, affordability of insurance, portability of insurance to eliminate “job lock,” and inconsistent quality of care. We need a reform plan that keeps control in the hands of individuals and their doctors, not give it to bureaucrats in the federal government. One such plan is already on the table -- the Patients’ Choice Act (link; link; link; link).

As for the uninsured – take out those that already qualify for federal programs but haven’t signed up, non-citizens, and those who can afford medical insurance but feel healthy so risk going without it, and what’s left is only a fraction of the 46 million count that gets bandied about. I've seen estimates of 10-15 million (here's a well-documented analysis concluding the number is about 11 million). Tweaks to existing federal programs can address those truly in need, who, incidentally, usually can obtain care when they want it at emergency rooms, free clinics, and some doctors’ offices. Not ideal, not optimal, and in need of reform, but medical care is currently available, subsidized by hospitals and doctors from the income they receive from private insurers. No need to rush the overhaul of our entire system to deal with the uninsured problem. Why not take a few months rather than a few weeks?

So why the bum’s rush by Democrats? Why, of course, because the more time people have to examine and think about their proposals the less likely they will be to support them.

The good news – the first wave of cost estimates of some of the Democrat-proposed reform plans have been astronomical, and growing public and stakeholder concern over Obama bailouts, massive spending, unimaginable debt, and political rush jobs has the linchpin of schemes for a nationalized system – the government-run so-called “public plan” option (link)– in serious doubt (link). Even health-care-guy former Senator Tom Daschle, one of many Democrats disgraced recently by admissions of major tax evasion, dropped the public plan from his own health care reform proposal released this past week (link).

There are currently many proposals in various degrees of detail:

• From Senate Democrats on the Finance Committee (Baucus)
• From Senate Democrats on the Health Education, Labor, and Pensions Committee (Kennedy/Dodd)
• From an independent group of Senate and House Republicans (the Patients’ Choice Act)
• From House Democrats, release pending
• From former Democrat Senator Daschle (with Republican props Dole and Baker)

A half-way decent overview of developments with most of these proposals is here from the Associated Press, which, however, true to its ultra-liberal bias, omits to mention at all the most advanced and, to the liberals, threatening Republican reform proposal – the Patients’ Choice Act.

And, as shocking as the Congressional Budget Office’s cost estimates have been, an editorial (link) in today’s Wall Street Journal warns that in the past such cost estimates usually have turned out to have been too low:

Useful to emphasize … is that CBO's number-crunching is almost always off --
predicting too much spending for market-based policies and far too little for
new public programs, especially on health care. The CBO score [read “cost
estimate”] for a new entitlement is only the teaser rate, given that the costs
will inevitably balloon as the years pass and more people mob "free" or
subsidized insurance.

John M Greco

Obama Dissembles On His Plans For Health Care

A friend says to me -- Unlike our current president, for all his shortcomings, former President G.W. Bush at least was not a narcissistic liar. That about sums it up. It is clear to all with open eyes that President Obama is a man of the left, if one pays any attention to his actions and associations, past and present, rather than to his words. But he fools the foolable with his verbal misdirections and falsehoods. He soothingly and earnestly assures us that he is not leading America to the left as he carefully and methodically does just that. For the left, the end has always justified the means.

Obama, strongly pitching his “public option” government-run health plan that he knows is nothing more than a Trojan Horse for nationalized, government-run health care, said this (link) today to a gathering of leaders of the American Medical Association:

"What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system," he said. "I'll be honest. There are countries where a single-payer system may be working. But I believe — and I've even taken some flak from members of my own party for this belief — that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this — they are not telling the truth."

Small lies might not convince, but the big ones ….


JM Greco

The Key Fight in Health Care Reform Is On a “Public Plan" Option, & Prospects Still Uncertain. Will Republicans Hold?

Some observers, including me, believe that many leading Democrats would ultimately prefer to have a straight up national health insurance plan in the US, akin to that of Britain or even Canada, but realize that political support for such a radical switch is insufficient. So their tactic at the moment is to introduce the seed for national health insurance, thinking that once in place the move to truly national health insurance would be inexorable. The plan is to introduce in health care “reform” what will ultimately become national health insurance through the Trojan Horse of a “public plan” option that the federal government would run in competition with private health care plans.

The theory behind a public plan option is good. As President Obama recently wrote, it could give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.” But reality is different. The problem is that private insurers, which must navigate through and comply with 50 sets of state insurance regulations and must negotiate reimbursement rates with providers, could never compete with a government run plan that did not have to operate at a profit and that could dictate reimbursement to providers. Democrats would make sure that premiums for a government run plan would be far cheaper than those of private plans, and so private plans would soon be extinct. Private plans are far from perfect, and many reform proposals can improve things, but government run national health insurance, like that of Britain or Canada, would undoubtedly mean rationing of care through government-imposed cost-driven medical protocols, poorer service, and stifling of medical innovation.

The public plan option is where the important fight is. Can Republicans hold firm as a group to refuse support for any reform plan that includes it? And if so, will Democrats want to pass on a party line vote, which they could do, a reform plan that would be one of the most sweeping and consequential laws in American history, and be wholly responsible when things go sour with the scheme, as would happen eventually? Or if Republicans hold firm, will Democrats blink and drop the public plan option? We’ll all see.

The latest update I’ve seen is an Associated Press report from two days ago titled “GOP Senators Say Bipartisan Health Deal in Jeopardy -- President Obama's declared support for a public insurance plan, which would compete with private insurers, is opposed by nearly all Republicans” (link):

President Obama's hopes for a bipartisan health deal seemed in jeopardy Thursday [June 4] as GOP senators protested his renewed support for a new public health insurance plan, and a key Democratic chairman declared that such a plan would likely be in the Senate's bill…. A public plan that would compete with private insurers is opposed by nearly all Republicans.
Congress might be able to pass a health overhaul bill with little, if any, GOP support. But Obama and Democrats including Finance Committee Chairman Max Baucus have said repeatedly they want to avoid that outcome because such a measure would be less widely supported and less sustainable over time…. There appears to be little room for compromise, with Republicans contending that no matter how a public plan is designed, it would inevitably balloon and crush the private market…. Many Democrats, meanwhile, insist that a final bill must contain a public plan.

John M Greco

The Sad and Tragic End of General Motors

Tomorrow, June 1, it is expected that we will witness the tragic end to a remarkable story – the 100+ year run of iconic General Motors as a private company. The story of storied entrepreneurs William C. Durant, Pierre S. du Pont, Walter P. Chrysler, Louis Chevrolet, among others, and, most notably, Alfred P. Sloan, who, along with legendary engineer Charles F. Kettering, made GM what it once was -- the leading industrial company in the world.

Years of incompetent management and many more years of destructive union hegemony spelled the end. General Motors has long needed a restructuring bankruptcy, but one conducted under the rule of law that would have shrunk, streamlined, and legally rejuvenated the company to allow it to survive and prosper. But we’re not going to get that. A powerful Obama who, using the pretense of a national financial crisis to bend people to his will and disdainful of the legal rights of holders of capital, has something different in store.

Tomorrow General Motors is expected to file for restructuring bankruptcy. In the “pre-packaged” restructuring plan, Democrat Obama is laundering even more taxpayer money to unions, and has extorted from bondholders (e.g., retirees’ pension plans, mutual fund investors) and from emasculated TARP-ensnared creditor banks a much larger piece of what’s left of the company for the automakers’ union than the Democrat union would otherwise get in a bankruptcy proceeding that followed the rule of law and far, far more than it deserves. Democrat union members up, while taxpayers and creditor banks and pension plans down.

Of course, the taxpayer is the biggest loser, other than the rule of law, which seemingly now is of concern only to some behind-the-times Republicans. The federal government (that is to say, Democrat politicians) will own over 70% of the rump GM, and the Democrat union a big chunk of what’s left after that. Larry Kudlow, on his CNBC show Friday May 29, said that the “taxpayers are by far the biggest losers in this deal,” which he said is “an assault on free market capitalism.” Obama has now parlayed the financial crisis and the public panic into taking control over our largest insurer, some of our largest banks, and now our largest automaker, all the while saying, to fool the foolable, that he has no interest in doing any of this.

When I first began working for a big company years ago, I endeavored to read some books about business. I was not interested in books on the latest fads in management theory but rather books that told the stories of successful companies. And one the very first that I read, and the best I ever did read, was “My Years With General Motors” by its legendary long-time head Alfred P. Sloan, a staunch believer in free markets for free men. The dust jacket blurb of my Doubleday paperback edition exclaims “Even today, Bill Gates praises ‘My Years With General Motors’ as the best book to read on business, and Business Week has named it the number one choice for its ‘bookshelf of indispensable reading.' Draft your own blueprint for organizational success by using the tools found in this book. Learn the valuable lessons only Sloan could teach.” Lessons never learned or even appreciated by later management feckless and irresponsible, a union solipsistic and corrosive, and Obama Democrats dissembling and lawless.

JM Greco

"Spirit Of American Youth"

"Spirit Of American Youth"

By Donald De Lue

At the First Infantry Division Museum at Cantigny Park
Wheaton, Illinois, Outside Chicago

Replica of the Original That Stands In the Normandy Beachhead in France,
Honoring Young Americans Who Gave Their Lives For Their Country

Bonnie & Clyde -- Killed 75 Years Ago Today and Reborn as Movie Anti-Heroes

Depression-era bank robbers and killers Bonnie Parker and Clyde Barrow were themselves killed 75 years ago today in a controversial police shoot out in rural Louisiana. The couple were romanticized at the time by some in a seemingly ambivalent public, perhaps reflecting widespread anger with the perceived failures of the banking system in particular and the capitalist system in general. This theme was picked up by Arthur Penn when he made the very successful 1967 movie Bonnie and Clyde (link), which made stars of Warren Beatty and Faye Dunaway.

Reflecting on all this for a few moments today, to my memory it seems that this movie was one of the first somewhat revisionist American movies to celebrate the homicidal criminal as a somewhat sympathetic figure. To be sure, there were previous films about Depression-era gangsters (Public Enemy; Little Caesar), but none that seem to humanize and soften, in part with comedy, criminals that murdered policemen and civilians. Other such movies followed, most notably the Godfather trilogy.

It seems at least one Hollywood producer thinks the American gangster as romantic anti-hero theme still has legs -- to wit, the soon-to-be-released movie about John Dillinger, who eventually met his own demise, two months after that of Bonnie and Clyde, outside Chicago’s Biograph Theater at the hands of lawmen tipped off by the Lady in Red.

R. Balsamo

Remembering Sherlock Holmes and Arthur Conan Doyle

Today is the 150th anniversary of the birth of Arthur Conan Doyle, author of the Sherlock Holmes series of detective stories. Conan Doyle was born in Scotland to parents of Irish descent and became a physician as well as an accomplished athlete and author. He eventually set up medical practice in southern England but work was slow, and so, with time on his hands, as the story famously goes, he turned to his writing avocation. Eventually writing became his sole focus, and although he was a prolific author particularly proud of his historical novels, his most endearing and lasting works have been the 60 short stories and novellas, the canon, featuring private consulting detective Sherlock Holmes and his particular friend and colleague Dr John Watson. After many rejections from publishers, the first Holmes story, A Study in Scarlet, made it to print in 1887.

Holmes is a solitary, brusque, eccentric, and enigmatic figure of eclectic intellectual interests who uses his tremendous skills of observation and deduction to solve mysteries. He lives with his physician friend Watson in London, famously at No. 221B Baker Street. Through the great descriptive powers of Conan Doyle, the stories evoke both the genteel civility and the sinister edges of a bustling, fog-bound, cacophonous late Victorian London at the height of Empire. And who can forget the Persian slipper, jack-knifed correspondence, Watson’s wound from a jezail bullet, the useful coal scuttle, the fitful violin playing, and the 7% solution.

Particular favorite stories of mine include Silver Blaze, with the curious incident of the dog in the night-time; A Study in Scarlet, wherein Holmes first meets Watson and remarks “You have been to Afghanistan, I perceive”; The Blue Carbuncle, featuring Holmes’s deductive discourse on a lost hat; and The Abbey Grange, wherein Holmes impanels Watson as a one-man English jury and exclaims “Vox Populi, Vox Dei.”

Holmes and Watson have been brought countless times to radio, movies, television, and even theater. Until recently, the Basil Rathbone / Nigel Bruce series of radio and film adaptations have been the best known, although grating to any lovers of the original stories. For some reason, adaptations commonly but inaccurately portray Watson as a bumbling fool, presumably to better showcase Holmes’s logical mind, but this device does disservice to the original stories and makes both characters almost comic-book like.

But Holmes aficionados have been rescued forever from such debased adaptations. Twenty five years ago almost to this very day, the definitive treatment of Holmes and Watson and the Conan Doyle stories appeared on the scene from Britain’s Granada TV (link), with Jeremy Brett as Holmes and David Burke and later Edward Hardwicke as Dr Watson. Burke described the films as “faithful to the original in spirit and in detail,” and one reviewer wrote that Brett’s performance “has wiped the memory clean of all previous portrayals.” Granada filmed 41 painstakingly detailed Holmes stories until Brett's untimely death in 1995. This series is a triumph.

I think for those who come back to these stories time and again the lure is the portrayal of two devoted and loyal friends, different yet complementary, and their lives, adventures, and travels in a well-drawn atmosphere of late Victorian Imperial Britain. I was captured by these stories as a boy and remain hooked, and I can still remember reading them years ago late into Chicago summer evenings with my imagination off in some fog-shrouded London street.

Richard Balsamo

New Republican-Proposed Patients’ Choice Act Offers Smart Alternative To Obamacare

Some Congressional Republicans proposed today a new health care reform plan that promises substantial improvement over what we have but, by placing control in the hands of consumers, avoids the federal government-centric features favored by most Democrats that many fear are surreptitiously designed to eventually usher in universal single-payer health care, premised as it is elsewhere on significant rationing of care, limited adoption of new technologies, and substantial wage and price controls for providers.

Called the Patients’ Choice Act, the heart of the plan seems to be reform of the tax code and using that money to give everyone an amount of money with which to purchase a health care policy, either as a refundable tax credit for tax payers or as a direct subsidy for the poor. Consumers with employer-based policies can keep them if they desire or shop for a different policy along with everyone else in the open market or on a state-government-sponsored exchange with competing policies that all meet some minimum standard.

What’s in this plan:
· Portability – workers can take their employer-sponsored policy with them if they want when they change jobs
· Health Savings Account option with its incentives for cost-conscious consumption of services
· No exclusions for pre-existing conditions when consumers sign up for new policies, accomplished through a state-controlled risk-adjustment process across insurers
· State subsidized coverage for the uninsurable through a state risk-pool
· Creation of a bonus incentive for providers to form “Accountable Health Organizations” that deliver higher quality care at less cost
· Creation of an online personal preventive care plan designer
· Lawsuit reform at the state level through creation of expert review panels and specialized health courts
· A Health Services Commission to report on price and quality data and trends
· Strengthening the Medicare Advantage program

What’s not in:
· Individual or employer mandates to have/offer health insurance
· Federal comparative effectiveness board to make and mandate coverage determinations – who can get what care when.
· Federal Medicare-type plan as an option for everyone (the “public plan” option)

The best and most detailed overview I’ve seen so far is by Peter Ferrara at The American Spectator online (link). Ferrara concludes:

The bill would assure essential health coverage and health care to every U.S. citizen, without increased federal spending and taxes, and without the federal government taking over your health care. For precisely those reasons, today's left wing Democrats will not support it…. This bill demonstrates that there is no reason for a government takeover of health care other than the lust for political power that drives the liberal/left political machine.

Philip Klein, also at The American Spectator, has some well-reasoned areas of concern, but is overall very positive (link):

Politically, I think this was a masterful move by this group of Republicans. Keep in mind that [this] alternative never has any chance of being passed [by Democrat-controlled Congress], but it's a statement by the minority party about their approach to an issue. Agree or disagree with the components of the plan, these Republicans have released an undeniably serious health care proposal, and they have done so months before the Democrats have come up with theirs…. This offers a way to oppose the Democratic approach to health care while pushing back against charges that the GOP is "the party of no."

Grace-Marie Turner and Joseph R. Antos have a briefer treatment (link) of this new proposal in the Wall Street Journal. They write:

Republican congressional leaders are finally offering a clear alternative to the health-reform plans being developed by the White House and Democrats in Congress. The goals and the rhetoric of both sides are remarkably similar: cover the uninsured, allow people to keep the coverage they have, provide more choices of affordable health insurance, and rein in health costs. But their policy prescriptions are remarkably different…. Who will control the system? Doctors and patients, or politicians and regulators? That's the crux of this year's health-care debate. The Republican proposal makes the choice clear.

Related posts:
Prospects Uncertain for “Public Plan” Option in Health Care Reform
Health Care Reform – Major Players Pledge to Reduce Costs, While the “Game Changing” Public Option Lurks

John M Greco

Prospects Uncertain for “Public Plan” Option in Health Care Reform

The so-called “public plan" option proposal remains the most contentious of all on the table in the health care reform debate. The idea is that the federal government would offer a government subsidized benefit plan, akin to Medicare, for not only all of the current uninsured but also for anyone who wanted it. As such, it would compete with private insurance plans whereby it might, as feared by many, through its pricing power eventually wipe out private plans and be the only plan left standing, thus successfully effecting a Trojan horse tactic to establish single-payer government run health care.

Two related issues are thorny as well. First -- how to pay for it if enacted. Not much alternative but higher taxes. Second -- how can continually rising medical care spending be better restrained to make all health care more affordable? Here, some endorse free market solutions such as cost sharing to make patients behave more like discerning consumers, while some endorse a federal health care board that would mandate cost-effectiveness-driven coverage decisions as to who gets what care and when (Obama’s new Institute of Comparative Effectiveness, authorized in the stimulus bill).

As of today, the prospects for such a public plan option are unclear. A few days ago Matthew Murray reported (link) in Roll Call that “[t]he fiscally conservative [Democrat] House Blue Dog Coalition … announced its health care blueprint, a plan that likely will have fellow Democrats grousing for its lack of a government-run component.” Also last week, Philip Klein wrote (link) at The American Spectator that “Republican Sen. Mike Enzi (the ranking member of the Health, Education, Labor, and Pensions Committee (which is chaired by Ted Kennedy), and also a member of the Finance and Budget Committees) … insisted that regardless of their public statements in support of such an approach [for a public plan option], privately, Democrats are ‘backing away’ from the idea, ‘or holding it out there as something to trade in the future.’ ”

Finally, in response to my post last week (link) on the public plan option, a physician friend with a wealth of experience in clinical practice and managed care/health insurance comments:

The public option plan is so vague at this point, it seems hard to say what the implications will be. Clearly if you extrapolate it out, it could be the end of direct insurance role for the privates. But they would still run the back office---so less profitable, but still a going concern.

Nevertheless, I think your depiction of it as a "trojan horse" is apt. But, if it were available only to individuals, self-employed, and maybe small business, it could make a real difference without being so dominant. Maybe.

The amounts of money being currently charged for self-employed, small business or the individually insured are hurting business widely. (And remember that in aggregate this is a huge group--- with the self-employed and small business making up possibly the largest group of working people in the country) This is often the rag-tag group which brings new ideas --- really where "innovation" comes from. And the non-innovative private sector insurers are stifling their ability to have reasonable margins in their work with policies which often seem to have little to do with fair underwriting, but mostly to do with income optimization for themselves. If they, the private insurers, could provide more reasonable, less costly alternatives to these groups (which I think means lower profit margin and more accurate underwriting principles) then I would say go for it. I do know how tantalizing it is, though, to have large profit business go along undisturbed, especially in times when other LOBs are declining in margin. They have not budged on this for 20+ years. Maybe the scare of a possible "public option" is just what they need to start them thinking about their business model anew.

The economics are a bit murky. AHIP says it can accept no pre-existing conditions if there is an insurance mandate. But the public option people have been more or less silent on that, since it is politically dangerous. Assuming that did get in place, then AHIP is saying they couldn't compete with the public option due to pricing power imbalances. As far as I can recall, pricing has been shadowing Medicare for years in the private sector (at least payment for hospital days, various appliances, etc.). So have programs and policies, etc. So, while it seems logical that a public option would put competitive pressure in place, I don't understand why it would be a situation where the privates could not compete at all. I do hear that said, though.

John M Greco

Health Care Reform – Major Players Pledge to Reduce Costs, While the “Game Changing” Public Option Lurks

Today the Wall Street Journal reported (link) that “groups representing hospitals, health-insurance companies, doctors, drug makers, medical-device makers and labor” planned to pledge today in a letter to President Obama “that they will work to reduce cost increases in the nation's health-care system by $2 trillion over the next decade,” or, in other words, “to help reduce the growth of national health-care spending by 1.5 percentage points in each of the next 10 years.” The methods employed to achieve this result would include “simplifying administrative costs, making hospitals more efficient, reducing hospitalizations, managing chronic illnesses more effectively and improving health-care information technology.”

I think this is a fine attempt on the part of these stakeholders to demonstrate commitment to be part of the solution. However, insurers and providers have been trying all these approaches for years to control medical costs, with some success. This announcement seems to amount to a pledge to try harder. After all, there is no magic that will stop the steady increase in medical care spending. The main drivers are an aging population and continual, costly dramatic improvements in valuable medical diagnostic and therapeutic technologies, with a modicum of fraud, waste, the liability-driven excessive testing that is “defensive” medicine, and high malpractice premiums thrown in. The "solution" is multi-focal and incremental.

Grace-Marie Turner, president of the health policy-focused Galen Institute (link), wrote today (link) at National Review Online’s The Corner in a post titled Where’s the Beef?:

[T]he tools they said they would be using aren’t new, and the Congressional Budget Office has said they will save little if any money: administrative simplification, coordinated care, evidence-based medicine, and use of health-information technology, etc. So, where’s the beef? No one at the White House event or in a subsequent briefing with reporters by [HHS] Sec. Kathleen Sebelius was able to offer details.

Meanwhile, a Wall Street Journal editorial today (link) addressed the “public plan” option, which would be the real “game changer” in any reform of our health care system.

This new [proposed] entitlement -- like Medicare but open to all ages and all incomes -- would quickly crowd out private insurance as people gravitated to heavily subsidized policies, eventually leading to a single-payer system…. The truth is Democrats know that any policy guardrails built this year can be dismantled once the basic public option architecture is in place. The White House strategy is to dilute it just enough to win over credulous Republicans. That is what has always happened with government health programs….

I can’t think of a better example of a political “Trojan Horse” tactic than this Democrat effort to create a so-called “public option” health care benefit plan that would compete with private carriers. Democrats know that effecting full national health care is a bridge too far right now, so their tactic is to introduce now a seemingly salutary plan that in time will accomplish the same thing.

This Democrat plan illustrates their attraction toward achieving the shared miseries of socialism rather than improving upon the somewhat unequal sharing of health care prosperity that we now have with smart and well-designed reforms.


John M Greco

Illinois Blogger Conference -- May 8

This Friday, May 8th in Downers Grove (west suburban Chicago), Illinois.

Register here.

Obama, the Car Companies, and the Rule of Law

The latest developments in the GM and Chrysler sagas are just more of the same in the unfolding Obama tragedy. Although the situations differ, Obama has basically proposed giving controlling interest in each company to the unions and the federal government.

Larry Kudlow wrote at National Review's blog The Corner last week (link):

What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh?

It should be shocking, though unfortunately by now it isn’t, that Obama is trying to strong arm creditors – those to whom the car companies owe money – into accepting less than what they are owed under the law. Consistent with his socialist world view, Obama exalts the unionized “worker” and denigrates those who lend their savings – “capital” -- to companies. These lenders of money, including millions of common people like me who have some savings invested in bond mutual funds, are to Obama nefarious “speculators.”

The Wall Street Journal’s editorial board commented on the Obama GM proposal (link):

The biggest losers here are GM's bondholders…. mutual funds, pension funds, hedge funds and retail investors who bought them [bonds] directly through their brokers. Under [Obama’s] offer, they would exchange their … bonds for … less than five cents on the dollar. The Treasury … would receive … as much as 87 cents on the dollar. The union's retiree health-care benefit trust would receive half of the $20 billion it is owed in stock, giving it 40% ownership of GM, plus another $10 billion in cash over time. That's worth about 76 cents on the dollar, according to some estimates.

In a genuine Chapter 11 bankruptcy, these three groups of creditors [bondholders, the federal government, and the unions] would all be similarly situated -- because all three are, for the most part, unsecured creditors of GM. And yet according to the formula presented Monday, those with the largest claim -- the bondholders -- get the smallest piece of the restructured company by a huge margin.

…. President Obama has decided in essence to have the feds run GM and Chrysler. This inevitably means running them for the benefit of the UAW that is so closely tied to the Democratic Party.

Obama’s proposal for Chrysler is similar – an unfair gift for the unions at the expense of creditors like me. In an article in Barron’s dated today, Andrew Bary states (link):

In the bizarre pecking order offered by the administration, the unions, which are at the bottom of Chrysler's capital structure, would get nearly full recovery value for their $10.6 billion retiree health-care claims, while the secured creditors at the top of the hierarchy would receive about 30 cents on the dollar. Credit that to politics and a likely desire by Obama to reward the powerful UAW.

Don Luskin said on the CNBC Kudlow show Friday, May 1, that “When it comes to trying to resolve the interests of different stakeholders, there are well established rules under bankruptcy law for figuring out who goes first. We cannot have the president substitute the rule of law for the rule of whim, where he decides that one class of stakeholders is honorable – the unions – and another is dishonorable -- the word he chose was ‘speculators.’ How about ‘money changers?’”

Here’s the really frightening part for me -- to witness how quickly seemingly sober and intelligent people will surrender principle to the charismatic leader Obama. On the Kudlow show, in defense of the Obama proposals, Noam Sheiber of the liberal New Republic magazine said that “You’ve got to throw out traditional notions of seniority” in addressing solutions for the two car companies. “Traditional notions of seniority” are what are embodied in our law. Schreiber obviously thinks that the rule of law should be suspended by fiat when President Obama thinks it should be. Economics writer Irwin Stelzer, writing (link) in today’s NY Post, detects this liberal surrender to the will of Obama and so leads off his commentary with an apt parallel: “I'm saying that when the president does it that means it's not illegal,” shouts Frank Langella's Richard Nixon at Michael Sheen's David Frost in "Frost/ Nixon." We see that for some liberals, the morality of an action is determined not so much by the action itself but by who the actor is.

John M Greco

Why Shouldn’t We Be “Pro-Choice” on Interrogation Techniques? – This “Torture” Concern Just the Latest Democrat Excuse to Hammer Bush & Republicans

Some Democrats continue to wail about alleged “torture” by the CIA under the Bush Administration, treatment consisting of supposedly “harsh” interrogation techniques on captured Islamist terrorists that many current and former intelligence officials say resulted in valuable information that helped foil planned terrorist attacks. Never mind that many, and probably most, do not consider waterboarding and rough treatment to be harsh enough to constitute torture, and never mind that plenty of liberal politicians, we are now finding out, consented to such techniques (and indeed, may have worried that the CIA wasn’t “doing enough” to gather information).

Perhaps we can all agree to be “pro-choice” and allow each individual interrogator to be guided by his or her individual conscience as to when interrogation techniques cross the line and become “torture.”

I don’t think this uproar is so much about possible torture as it is another Democrat avenue of attack at George Bush in particular and Republicans in general. Here’s a parallel. Critics lashed out at Bush for years about the wars in Iraq and, to a lesser extent, in Afghanistan (at times justified). But now that Obama is keeping troops in Iraq in furtherance of the Bush policy and has actually directed and implemented a troop surge in Afghanistan (little reported on by the liberal media), where are all the Democrat anti-war critics and protesters? Where are all the screaming headlines in the liberal media? They’re gone. So how much of the vehemence was really anti-war and how much was in fact simply anti-Bush? Now the very same question can be asked of this “torture” controversy.

Ann Coulter always uses her brilliant, biting wit to great effect, and her just published weekly column does not disappoint. On this topic of “torture,” drawing from recently released Bush Justice Department memos, she writes (link; link):

…. Finally, the most savage interrogation technique at Guantanamo was "waterboarding" …. Thousands of our troops are waterboarded every year as part of their training, but not until it was done to Khalid Sheikh Mohammed -- mastermind of the 9/11 attack on America -- were liberal consciences shocked…. As non-uniformed combatants, all of the detainees at Guantanamo could have been summarily shot on the battlefield under the Laws of War. Instead, we gave them comfy chairs, free lawyers, better food than is served in Afghani caves, prayer rugs, recreational activities and top-flight medical care -- including one terrorist who was released, whereupon he rejoined the jihad against America, after being fitted for an expensive artificial leg at Guantanamo, courtesy of the U.S. taxpayer.

Only three terrorists -- who could have been shot -- were waterboarded. This is not nearly as bad as "snowboarding," which is known to cause massive buttocks pain and results in approximately 10 deaths per year.

Normal human beings -- especially those who grew up with my older brother, Jimmy -- can't read the interrogation memos without laughing. At Al-Jazeera, they don't believe these interrogation memos are for real. Muslims look at them and say: THIS IS ALL THEY'RE DOING? We do that for practice. We do that to our friends.

John M Greco

On Obama, Show Trials Over Waterboarding, and "Moral Bearings"

The radicalism of Obama and his administration continues to astound. Today Obama said (link) that the Bush Administration’s use of certain interrogation techniques, harsh but effective to some, torture to others, resulted from “losing our moral bearings.” He suggested today that his Administration might look into prosecuting those Bush Administration officials who espoused such techniques, this despite the CIA’s assertion, reiterated today (link), that use of such techniques, for one example, resulted in information that prevented a significant terrorist attack on American soil.

Thus Obama now plans to criminalize good-faith policy differences. Charles Krauthammer, commenting yesterday evening on Fox News, thinks the ultimate objective is not prosecution, which would not likely be successful, but prolonged “show” hearings that provide a platform for radical Democrats to continually lambast Bush and Republicans. Obama has been very successful politically “running against Bush,” and he doesn’t want to say goodbye to W just yet. But -- to hold political show “trials” of Republicans and of policies which have kept this country safer will sow the wind and from it the Democrats will reap a whirlwind.

“Losing our moral bearings.” This is rich, but part and parcel of the Orwellian double speak of which Obama is so fond. He knows very well he fools the huge number of Americans who are inattentive and gullible. For it is Obama of course who needs to find moral bearings. This the Obama who just this past week now notoriously warmly embraced the brutal, fascist, vociferously anti-American dictator Hugo Chavez. This the Obama who was the great defender of infanticide and late-term partial birth abortions while in the Illinois state senate not long ago. This the Obama who long associated with the infamous anti-American domestic terrorist William Ayers. This the Obama whose most important mentor as a young man was a card carrying member of the communist party that seeks to destroy American liberty. This the Obama who as the American president bows deeply before a repressive, illiberal Muslim potentate.

It is a developing American tragedy that this Obama, with his deceptively thoughtful and calm demeanor, fools so many of the people all of the time. Obama and his wife project a façade, an illusion of moderation, but we have seen in the occasional slip up what’s really behind the curtain. We know that he and his wife believe America is a morally stained, deeply flawed nation, whose past sins outweigh all the good and justify the enmity of its enemies. And for that they are comfortable around Latin American fascist dictators and repressive Muslim leaders in ways they have never been around Americans like Dick Cheney, George Bush, and millions more whose world view is not dominated and distorted by either white liberal guilt or envy of American accomplishment.


John M Greco

On the Democrats’ Federal Spending as a Percent of GDP, and Other Metrics

The breathtaking profligacy of the recent Democrat spending frenzy has been well commented on (including at this site here, here, here, and here). But despite all of that, I heard some numbers on the Kudlow CNBC show last week that have left me shaking my head. Kudlow’s guest was Jim Grant, editor of Grant’s Interest Rate Observer newsletter (link) and author of the book Mr. Market Miscalculates (The Bubble Years and Beyond). Grant commented on the current recession:

By the numbers, this is a garden variety recession – statistically, by the GDP numbers, it is ordinary. What is extraordinary, of course, are Wall Street’s self-inflicted wounds in credit. However, what is truly momentous is the [federal] government’s response – [there has been] nothing like it.

There have been 11 recessions/depression since 1929. On average, the sum of the fiscal and monetary response, as we index them, has been 2.9% of GDP. What is shaping up now is [a response of] 29% of GDP, 10 times the average response. This 29% response is three times the [federal government] response to the Great Depression for this current recession that is 1/15th the magnitude of the Great Depression. And they [the federal government politicians] may not be done yet [with their spending]. The sheer caprice and scale of government intervention must be frightening money under the bed.

This level of deficit spending is indeed frightening. And all the more so because the real motivation for it in the minds of the ultra-liberal Democrat vanguard has little to do with fighting the recession. As Tim Reid wrote recently (link) in the Times U.K.:

What was most striking about the budget [spending level] - including that it will explode the federal deficit to $1.75 trillion this year, its highest since the Second World War - was that it was a ruthless declaration of how Mr Obama intends fundamentally to change the American social contract, from Right to Left. Its goal is not just to rescue the economy. It is to crush conservatism, end the age of anti-tax, anti-regulation policies that have been the guiding philosophies of US governance for a generation, and usher in a fresh “epoch”, as his aides call it, of New Deal-Great Society wealth redistribution and central intervention that were repudiated by Ronald Reagan 30 years ago.

John M Greco

The Chicago "Tea Party" Tax Protest

I attended the Chicago Tea Party today, held amidst the complex of federal buildings in the central Loop, and it appeared to be a big success. My unschooled guess at turnout was about 2,500 to 3,000, but later I heard John Tillman of the Illinois Policy Institute (one of the speakers at the rally) state that the Chicago Police Dept. estimate is 4,000. At least one other area rally that I know of was scheduled for the suburbs. The enthusiastic crowd was very orderly with a fair sprinkling of kids, senior citizens, and eclectic characters. There were a few costumes of one sort or another. Signs, flags, and banners were plentiful, mostly homemade looking. I especially enjoyed the pirate theme – very topical. I walked around the entire perimeter and saw no counter-protesters. There were about 25-30 police present, looking relaxed and friendly – a high-risk crowd this was not. One criticism I have is that the speakers could not be seen by most of the crowd (I later saw that speakers had a very low platform on which to stand) and as such there was not a clear focal point for many people. Another is that most speakers did not use the microphone properly and were not heard well. The rally really could have used a community organizer to help with these technical matters, which is no doubt a part of their training – I think it’s Rallies, Protests, and Crowd Incitement 101.

John M Greco

Texas Protects Its Successful State Economic Policy; Illinois Says No Thanks, Who Needs Job Growth?

Texas Governor Rick Perry was on the Kudlow show on CNBC last night. He said that "somewhere between 70% to 80% of all jobs created last year in America were created in Texas." Reasons: Texas has no personal income tax, has no corporate income tax, and, according to Perry, recently enacted the most sweeping tort reform in America. Trial attorneys are in check in Texas -- Perry says "we export trial attorneys along with manufactured goods." He did express disappointment in persistently high property tax rates, and said that the fight to lower them continues.

Not too long ago I read a post in which the writer mentioned attending a speech of Perry's in Texas. He reported Perry saying that in Texas they recognize that companies create and maintain jobs, and that when companies prosper, Texans prosper. As such, Perry said that when a business anywhere in the US thinks about opening a new plant or relocating its business, Texans want that business to think of Texas first. They want Texas to have the best climate for business in the US.

Other states, usually those solidly controlled by Democrats, follow a different path. Illinois, my home state, has an incalculably high "corruption" tax, ranks 48th among the states in economic performance according to the ALEC-Laffer Analysis (link), and ranks 47th in non-farm employment growth 1996-2006. So what does new Democrat Gov. Quinn want to do? He wants to raise taxes, and raise them dramatically (link). It will be hard for Illinois to get to 50th place, however, as long as states like Michigan and New York are in the Union, or at least as long as they are controlled by Democrats.

Texans, alert people that they are, are now sending a shot across the bow of the socialist federal ship of state run by Obama and his band of spend and tax and spend Democrats (link) by reaffirming their 10th Amendment rights in our federal system. They have worked hard for their prosperity and they don't want Obama and the Democrats to damage it any more than they already have. In the ALEC-Laffer State Performance Index, Texas is first, by design, among the 50 states.

John M Greco

Notre Dame Betrays Its Principles in Honoring Obama

The University of Notre Dame is now enmeshed in well-deserved controversy because of its decision to “honor President Barack Obama by inviting him to deliver this year's Commencement address and by conferring on him an honorary Doctor of Laws degree” (link).

Honoring Obama is controversial primarily because of his extreme views on abortion. To some, honoring anyone in the least pro-choice is an outrage. I do not agree with this, for I think moral people can view abortion very early in pregnancy as not immoral. However, abortion later in pregnancy is all together another thing, especially when the fetus would be viable outside the womb. And as for so-called partial-birth abortions, where babies are killed while partially born, and so-called botched induced labor abortions, where infants born alive despite the attempt at abortion are denied all care and left to die – these practices are barbaric and disgraceful.

No moral person, even one “pro-choice,” could countenance such despicable acts. But Obama does. And Notre Dame chooses to honor him.

Of special importance in this story is Obama’s leading role, when he was in the Illinois legislature, in blocking adoption of an Illinois law that would require treating infants born alive, despite a failed attempt to abort, as any other infants requiring medical care and comfort. Obama led the fight to preserve the practice of denying infants born alive after failed abortion attempts any medical care and of simply putting them in a closet to die – in short, he fought to preserve infanticide.

Here is Peter Kirsanow writing at The Corner blog at National Review Online last August in a series of posts:

Obama's 2002 vote against the Induced Birth Infant Liability Act ("IBILA") [occurred] while he was in the Illinois state legislature. IBILA would have extended the same medical care to babies born after surviving an abortion attempt as is enjoyed by all babies born alive. When a similar measure, the Born Alive Infant Protection Act ("BAIPA") was introduced in the U.S. senate not one senator voted against it. Even NARAL didn't oppose it….

Obama sits through testimony that babies born alive after an unsuccessful abortion are left to die alone in a utility closet. The babies are provided neither comfort, care, nor sustenance during their brief lives. When this practice was brought to public attention horrified citizens petitioned their legislators to address the matter. Proposed legislation is drafted, [but Obama votes against it]….

Obama supposedly questioned the constitutionality of IBILA… Obama's rationale for voting against IBILA is questionable at best. What isn't questionable is that Obama, the constitutional law lecturer at the University of Chicago Law School, offered no amendments to cure IBILA's purported defect…. Rather, after voting against IBILA, the bill was referred to a committee he chaired where he killed it by never bringing it up again for a vote. (It's also worth noting that while Obama voted "present" 100+ times in the Illinois state legislature, in this particular case he bestirred himself to vote "no".)

Another revealing aspect of the issue is Obama's mendacity in claiming that his vote reflected the purported absence of "neutrality language" in the Illinois state version of the Born Alive Act. It's been six years since his vote, there's irrefutable evidence that the state version was the same as the federal version, yet Obama persists in peddling his false explanation. He's probably judged correctly that the media won't call him on it…. Obama insists on calling living, breathing babies no longer in the womb fetuses; he refuses to call them persons.

David Freddoso has also covered this story in detail in an excellent National Review piece (link). And of course the media did cover for Obama (link).

This is the man Notre Dame chooses to honor this spring. A man so radical in his support for abortion, and so fearful that any restriction would threaten it, that he took a leadership role with fellow Democrats in the Illinois legislature to defeat a bill that would have outlawed the killing of babies born alive. He worked to protect infanticide.

Ten priests of the Congregation of the Holy Cross, the order that founded and runs Notre Dame, wrote (link) in a letter just published in the Notre Dame student newspaper:

Notre Dame's decision has caused moral confusion and given many reason to believe that the University's stance against the terrible evil of abortion is weak and easily trumped by other considerations…. We prayerfully request that Fr. Jenkins and the Fellows of the University, who are entrusted with responsibility for maintaining its essential character as a Catholic institution of higher learning, revisit this matter immediately. Failure to do so will damage the integrity of the institution and detract from all the good work that occurs at Notre Dame and from the impressive labors of its many faithful students and professors.

Dennis Byre has captured the nub of the matter in his commentary the other day published in the Chicago Tribune and at his blog (link):

You can argue that the purpose of any university is discourse and disputation, so Notre Dame should invite whomever it pleases…. [But] If disputation is the reason for Obama's appearance, then let it be in a classroom or confrontational format, where the antagonists can fence. Honoring Obama is not the same as disputing him.

Disputation in the academic sense is not the reason for Obama's appearance. Notre Dame assuredly knew that the Obama honors would cause a massive controversy, one that would catch the nation's attention and divide the church. It was a cynical move by an institution captivated by its own "pre-eminence" to draw attention to itself. At the expense of its (now-dead) principles.

John M Greco

Obama Bows Before Muslim King But Not Before Christian Queen (with links)

Obama bowing before the Muslim Saudi king. He did not bow (appropriately so) before Christian Queen Elizabeth when meeting her. Stunning.

Gateway Pundit (link): !

Mark Steyn (link): Prostrates himself. This is a very weird presidency.

Scott Johnson at Power Line Blog (link): A disgrace.

Michelle Malkin (link): Bleccch.

Sweetness & Light (link): [Can't be denied --] Yes, he did bow.

Debbie Schlussel (link): Officially acknowledging our oil slavery to the Islamic Kingdom.

Atlas Shrugs (link): Submission. Startling.

The Radio Patriot (link): He is a sickening spectacle.

Just One Minute (link): Must be a muslim thing.

Clarice Feldman at The American Thinker (link): Not the protocol, and most unbecoming.

John M Greco

Obama – Just Fooling People About Bankruptcy Option for GM

At this point, given Obama’s long, successful history of talking like a moderate and acting like a radical, thus proving you can fool lots of the people all of the time, only a fool would believe Obama’s threat the other day of bankruptcy for General Motors if more concessions are not forthcoming from unions, among others. Just as with his comment the other day that he was not a big government guy, Obama can lie and he can lie boldly. Obama is the ultimate big government ultra-liberal. When he lies he knows that his core supporters will not care (many of whom indeed rationalize the “noble” lie that furthers their causes), and he won’t care that his opponents will not believe it, but he knows that the middle of the electorate that is uninformed, inattentive, and gullible will swallow it.

The Associated Press reported (link) the other day that:

President Barack Obama refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility of controlled bankruptcy for one or both of the beleaguered auto giants.

Tough talk about the unions, but talk is all it is. The unions are of course a core constituency of the Democrat party, so nothing bad will happen to them. Bankruptcy would wipe out their uncompetitive wages, benefits, and work rules. So what’s really going on? Francis Cianfrocca writes (link) at Contentions:

As a condition of that hurriedly-arranged bridge loan [in the waning days of the Bush Administration], GM was required to come up with a viable business plan, or else be forced to return the TARP money…. And the plans were due on… March 31…. [However,] there was no way on earth for GM to present a viable, stand-alone operating plan. Why not? Because the GM menagerie includes one stakeholder that enjoys near-complete political protection: the United Auto Workers…. GM has many problems, and all of them need to be solved together for this company to have a chance. But if labor costs are protected, there’s simply no chance…. There’s no way that [now former] GM CEO Rick Wagoner could bring all the parties (bondholders, dealers, vendors, and labor) together to agree on major cost cutting, as long as the union held the trump card.

What should happen, given the circumstances? GM should be taken into government conservatorship (the rough equivalent of an 11 [bankruptcy] filing, but with taxpayers funding their losses). But that’s not going to happen. Given that [the Democrat-controlled] Congress is thoroughly unwilling to force the union to suffer, it’s more likely that we’ll see an outcome analogous to the nationalization of British Leyland. That means an open-ended commitment of taxpayer funds to cover the losses of an entity that is insulated from competition, and does its marketing in order to appeal to its government overseers rather than to its customers.

In today's Wall Street Journal, Holman Jenkins cuts right to the chase (link):

President Obama rightly says "sacrifices" must be made if GM is to emerge as a viable company. But there's one sacrifice he won't make: his re-election chances, by leaving the fate of the UAW truly up to a bankruptcy judge…. Keep that in mind amid reports the administration favors a "quick and surgical" bankruptcy. It's a bluff…. Even a "prepackaged" filing runs too much risk of a judge imposing more "sacrifice" on the UAW than the administration is prepared to tolerate.

Mr. Obama will be content with incoherent policies that poll well -- which means GM, Chrysler and perhaps Ford eventually will need taxpayer subsidies as far as the eye can see -- or until a real bankruptcy sometime after November 2012 [i.e., after Obama’s hoped-for re-election, when he would no longer need union votes].

Obama is a master at head fakes that dupe the star-struck and the gullible as he moves the ball down the field. We just all need to watch where he’s running, not what he’s saying.

John M Greco