How Government Failed Home Owners

A primer of how the government failed home owners that you probably will never see in an inept media that repeat the bytes that populist politicians-in-power cite.

The U. S. government went out of its way to:

One: See that everyone owned a home whether they could afford it or not.

Two: Give tax exemptions on home ownership interest and taxes as a further inducement.

Three: Provide loan guarantees where tiny down payments were made.

Four: Set mortgage payments out to 30 years, or permit interest-only loans.

We had to have U. S. Government-guaranteed Fannie Mae and Freddie Mac instruments to create this eventual subprime problem and eventually all the excuses to bail out banks.

How come, our neighbor to the north, Canada, has had no problem and no deep housing recession? It has no concerted program for all of this mortgage aid. Canada does not go in for the liberal housing subsidies that the U.S. has to this date, and for which Congress has never taken responsibility.

Cap & Trade Politics

Cap & Trade is a complex subject that the public little understands. That will permit politicians to dispense even more pork, while taxing their way to power.

The idea behind Cap & Trade is to cut down on carbon emission pollution, the type from using fossil fuels. So politicians in charge get to designate which industries get what quotas for emissions with which they can befoul the air.

If the figure you are stuck with is too high by official count, you can buy a credit from someone who is fortunate to have a credit, so you can conform with your government quota. Some industries and firms may be more politically blessed than others.

Then there are fees involved and penalties. That’s where the hidden taxation arises, and accumulates as a giant tax gimmick that will directly and indirectly hit industry and the consumer. The answer to any entrenched statist politician’s dream.

The Chinese and India want nothing to do with it because it destroys economies. New Zealand tried it for a couple of years and quit. The Australians put it on hold after some sober thought. Yet, the Obama administration appears ready for the fiasco.

Credit Availability

No matter how good your credit is, the lender must still have funds to give you. Or the inclination to take the risk of giving you any funds you need, despite your credit standing.

Conventional bank profits came from lending money to worthwhile credit risks. These days, that convention isn’t as simple as that.

Uncle Sam’s regulators now have a nasty habit of butting in for political reasons. After all. consumers vote and banks do not. That’s called populism. It is also called state socialism.

When officials feel existing mortgage terms have to be changed, they “suggest” them. When they feel the bank’s books need strengthening, the customers' good risks cannot be taken. And so on.

Credit availability is thus on the line.

Keynesian Shovel-Ready Jobs

To elaborate on the recent emphasis on the use of billions as an anti- recession stimulus, or what I refer to as a slush fund for political purposes.

A pick and shovel job is meaningless to women and skilled workers who make up such a large part of the work force. This did not help in the 1930’s when women were a small part of the workforce. It certainly is of no use in today’s high-tech industrial society.

What is more, government jobs are an expensive crutch which also create poor psychology. This job program philosophy creates just the opposite employment atmosphere, if we must overcome fear and gloom to get over a recession or a depression.

Ineffective Government Pump-Priming

Liberals refer to the opinion of John Maynard Keynes as an economic pump-primer. But he was not decisive in the methods of producing prosperity, as those who claim to be his followers.

Some examples of the left’s misuse of Keynes theory:

a) That prosperity depends on investment in industry, That did not produce jobs and income in the 1930s.

b) That lower interest rates help as the Great Depression showed in the 1930s. They did not.

c) That lots of bank reserves and deposits don’t really help if the banks are afraid to make loans so industry can invest.

d) That large public works create meaningful jobs as Keynes followers claim. They did not.

Yet, we continue to hear from economists with Keynesian suggestions. ( See the Earl J Weinreb NewsHole® comments.)

Less Venture Capital Deals are Available

Less venture capital deals are available these days. Not because of a recession. Or because capital is tight, as such. It’s merely because the exit door is smaller for the venture capitalists with the ample funds.

There is no shortage of funds for new business. There is simply less willing underwriters to get the VCs off the hook, so to speak. Less buyers to speculate on the wares investment bankers have to offer.

In short, poorer market psychology. The recession itself has little to do with it because bank lending is a small factor.

The Congressional Budget Office “Audit”

The CBO or Congressional Budget Office has become a major tool of lots of foolish shenanigans in Congress. Its activities have become a form of “audit” of the legislative finances being imposed on Americans. It has, however, become chicanery, a façade of what it is not. Thanks to the bulk of the media which never explains, exactly, what the function of the CBO is.

In short the CBO does the bookkeeping for Congress. It calculates whatever Congress puts before it to calculate. If congressmen put in garbage, the CBO turns out garbage. The CBO gives no opinions or interpretation. Congress lies about its numbers and the CBO must report the same lies.

A perfect gimmick for the politicians in Congress with which to maneuver.

We Could Have Easily Solved the Residential Real Estate Flop

There could have been a quick solution to the financial meltdown on Wall Street. It was suggested by some and by me, but was overlooked by “experts” and the Federal Reserve.

The government could have bought up all the excess empty tract developments in California, Nevada, Arizona and Florida, and knocked them down. They would be off the market. No surplus real estate to undermine other property values.

There would have been a stop to the psychological real estate contagion that spread to all the other states. The law of supply/demand would have applied. Much smaller bank assistance would then be needed to clean up the banking books.

We would have had a normal recession, not what has become an excuse for imposing government meddling on America. At a cost that will entangle the economic and social lives of future generations of Americans.

The Mark-to-Market Rule is Here Again?

The mark-to-market financial accounting rule is rearing its head again. It will hurt the banking picture once more, as it did in the 2008 financial meltdown.

The Financial Accounting Standards Board, or FASB, again is considering the use of this standard, which pegs the value of financial assets to the volatility of the securities markets. Banks hate it because it helps put their earnings and balance sheets in constant peril.

I have always maintained that the rule was one of the main factors in the subprime financial meltdown. Because it was always hard to price volatile securities, some of which had too limited a market for reliable evaluation. And as a result of the mispricing, short sellers were able to wreak havoc on banks even further, to the extent of the collapse we witnessed.

Yet. instead of taking this discrepancy into account early to prevent disaster, mark-to-market financial accounting rules were kept on. After the meltdown, rule adjustments were allowed, Too late.

I speak from experience as a former Wall Street senior analyst: When the books allow for the sequestering of questionable assets and the analysis is done correctly, you avoid disaster by posting conventional bookkeeping numbers during financial emergencies. It can prevent short-term psychological disasters that fester into long-term catastrophes. ( See the Earl J Weinreb NewsHole® comments.)

Be Careful of Whom We Elect to Office

It is about time we make sure we do not rely too much on so many “experts” to control our destiny, who wind up with government or its agencies which do so much damage.

I am referring to the “geniuses” in the Treasury and the Federal Reserve, the administration, Congress or anyone in official Washington, in a position to try to micromanage our government.

Notice that these folks seem to go to the same Ivy League schools? Schools which never give students bad marks? The same schools which turn out students we hear about and see on TV? Which, as a result, hire fellow alumni because they are like-minded?

I have reported before about their financial and business flubs. More in future comments.

Stimulus Funds: A Political Fantasy

Stimulus attempts by government most often are a political fantasy. The antics that have failed in the past always seem to be forgotten by academics. So they, along with willing politicians, rehash them, as we have seen during the Obama administration.

What is being used are actually “slush funds” to prop up favored state governments, to meet budget deficits. The latter have been primarily due to outlandish, public employee union contracts.

Very few private jobs have been provided by so-called stimulus funds. It has been the slush fund money that has created or preserved government union jobs.

Do You Really Have to Go to College?

If you are going to college just to make money, think again. Contrary to popular opinion, you can work at many skill-requiring jobs and professions without a college degree.

Should you need a degree for window dressing, perhaps for social reasons, you can get one, part-time, and cheaply, from recognized schools via the internet, while you are growing your career at a job.

Make up a list of job categories or small businesses you would like to be in. You will see how just a few take college as a necessity. Some might require a trade school for a short time.

When academics tell you that college grads earn more, their numbers are often misleading. Comparisons are made with those who labor at close to minimum wage, not at skilled, non-college jobs.

We see shortages of skilled labor all around us, but plenty of unemployed college grads. Much of this going-to-college-marketing fluff is not only expensive, it puts so many young people into huge debt that makes it almost impossible for them to get a firm grip on a decent career path.(See my Earl J Weinreb NewsHole® comments on college.)

Union Demands and Economic Inefficiency

Unions help employees for the short term in getting wages and benefits beyond what they may get elsewhere. But the same employees may not be better off in the long run. Not if their jobs are insecure, as a result. The work contracts may be such that there is a tenuous form of permanency.

With unionism, there is often an arrangement forced on employers that has little to do with economic requirements for work to be done. So there is frequently a poor allocation of economic resources.

In real economic life and in the long run, employees get what they are worth to an employer. The law of supply and demand works. If your skill is needed, an employer will pay for it.

Facts Versus Beliefs: A Liberal Religion?

The psychology of facts, versus ingrained beliefs, is part of the political picture. It has unfortunately evolved into a religion-like discussion that so often affects economics and the business picture.

Conservatives claim their economic stance is based on the written constitution, and on historic economic fact. Those events that actually happened in this country and the world. They are reacting to those events.

Liberals, on the other hand, tend to react, religiously, on the basis of their beliefs, the way life ought to be. If the constitution does not remedy what liberals believe is wrong, they would simply adjust the meaning of the constitution. And if the majority of voters don’t want that change, liberals would find a like-minded judge to rule for the change.

Unfortunately, many dictatorships have started with precisely this easy method of adapting government constitutions or basic rulings to what well-meaning. perhaps liberal, folks think ought to be.

Costs That Rise Faster Than Inflation

Many costs today are rising faster than inflation. The most important, and the one that breaks almost every family budget is that of going to college.

Several reasons account for this. One, is that the government subsidizes this effort with tax breaks, Schools are, therefore, not under much pressure to reduce their charges. They do give scholarships, but their charges tend to rise far too much beyond normal inflation.

Schools claim their own expenses are rising at this fast clip, but they may not be exerting enough effort to curtail their budgetary controls, with the government subsidies practically assured.

It is said that health insurance costs are rising as much as three times as much as inflation. But this is not the case. You cannot compare costs when new advances in medicine defy any true comparison of medical procedure and achievement. So, much of the health care inflation talk is bogus.

Franchise Ownership Failure

A quick test for those thinking of buying a franchise:

Do you know the two major reasons for buying a franchise? Or what should be the reasons?

One is name recognition and the other is the training that they are to give you.

But how many franchisers give you true name recognition and training? You better get them because franchises are not cheap. You pay up front for a license, and the royalties thereafter will be a big cut of your bottom line. In fact, those royalties may equal half your net profits, if you ever manage to get any.

In truth, I hardly ever recommend the purchase of a franchise because franchisees never really get true name recognition, and the required training from the average franchiser.

Only a handful of franchises are worth buying. I have gone into this in my business publications. (See my Earl J Weinreb NewsHole® comments.)

MBAs and Their Practicality

You can get an MBA or Master of Business Administration Degree for practically any program given by a college. From accounting, business management, criminal justice, education, engineering, finance, government, leadership functions, politics, real estate, to tourism and a variety of subjects I overlooked for simplicity.

We recently reported about the over-abundance of MBAs from graduate schools around the country and the impracticality of the degree’s use, other than for a resume entry.

Lots of students, loads of graduates. All with MBA degrees, which in the real world, have become relatively useless. Except, of course, for their use in a resume. There are simply too many MBAs to attract the attention they formerly did.

They are expensive to get and, someday, students may realize they are not worth their use on a resume.

Beware of Hanging Juries and Judges

American justice may be questionable for folks in business.

With a fiercely anti-business sentiment administration in Washington this may be a good time to note once again a problem about a lack of civil rights for citizens who are involved in business.

Whether as entrepreneurs, small business operators, merchants, or CEOS of small and large companies. Anyone who hires employees.

They really ought to be protected as a minority, as compared to the majority who work for others.

To those unfortunates I issue a warning. Beware of Hanging Juries and Judges, should you wind up in court as a defendant. Whether in a civil or a criminal case. Whether you are innocent or guilty.

Because many members of the jury, including the judge, will be inclined to consider you guilty before you can prove yourself innocent. That, simply because you are involved in business, as an entrepreneur, merchant, or CEO of a small or large company.

Most Americans. as well as college graduates, lawyers and yes, judges, have little knowledge of business and finance.

Thus, they are influenced by the media’s negative attitude towards business and finance and they tend to harp on “greed” of those involved in industry.

Seeking Venture Capital? Part II

Assuming you are able to find a venture capitalist willing to listen to your proposal:

Use reasonable numbers in your proposed Business Plan. At the same time, you must show that the business is scalable. That is, it can become big enough to attract enough speculative funds.

Remember: Venture capitalists make money by eventually selling their equity interest to the public on a large scale. They think in terms of hundreds of millions in potential profits. The business therefore has to grow fast. In just a few years.

There has to be what venture capitalists call an ”exit strategy.” That is, an eventual public underwriting or IPO., or a sale to a large corporation. The faster the growth the better.

But, at the same time, they would like to see their investment risk be at a minimum.

In the event you get turned down, as you will often be, keep coming back with follow-ups. Few seekers of venture capital are successful with their early attempts. You must be consistent and persistent, to get attention. So stick to these basics and keep trying. Good luck counts.

Note: I have found that venture capitalists are not all brighter than most in the financial community. Those who have made fortunes at what they do mostly stumbled upon the big winners. They have been taking unmerited bows the way lottery winners do when they pick winners. (See my Earl J Weinreb NewsHole® comments).

Seeking Venture Capital? Part I

If you are seeking venture capital for your business, you are confronting different recessionary problems than if you were going to a bank for a loan. Most banks today do not make loans that have a hint of risk anyway.

There is plenty of venture capital around. Funds are actually there. However, the problem is that venture capitalists worry they have little escape opportunities with which to make their eventual profits.

Venture capitalists make their big profits only when they can sell their ownership through a major Wall Street underwriting or with a private sale to a major corporation. And that is now a long shot in today’s recessionary economy.

Government’s Tardy Medical Statistics

Numbers officially used, that is, government data, are always far behind current information. That is certainly true in the case of medical practice.

The medical profession has, at its finger tips, up to date, practical knowledge. Doctors are aware of the nuances of medications and techniques which government data lack. Yet this laggard government data will be the basis upon which government health coverage will be dictated by its panels.

This is not just an idle scare tactic by those who do not want government-administered panel decisions. This is the way medical decisions are made this very day, in the UK and elsewhere, under government health care.

Another Way to Make Health Care Cheaper

There are many ways to make health care cheaper without ruining the entire system with a nationalized, socialized version. The Obama administration is intent on ramming through its idea quickly so that few Americans will discover the potential problems.

One alternative that makes sense in making health care cheaper, would be for doctors and hospitals to set their bills at the lowest rates now being charged insurance companies. That discount rate would be the one given to the non-insured. That usually is a fraction of what the insured pay.

Cannot afford that? Those who cannot pay that, can get it free.

Need Health Insurance Competition?

The Obama administration says we need public health insurance to compete with private health insurance. This is where politicians talk down to voters, who they figure were dumb enough to vote for them.

There already are about 1500 private health insurance plans. They can compete with each other if they were allowed over state lines. The ONLY plan that would have NO competition would be the public plan. With no capital or working cash outlay, the taxpayer will provide funds to undercut those 1500 competitors.

If you now have private health insurance, it will be priced out of the market entirely. However, you will eventually pay more or have your benefits reduced. Or rationed, as the only attempt at cost-cutting.

This was done in England, Canada, and with other foreign health insurance programs, as their experience shows. (See the Earl J Weinreb NewsHole® comments.)

The MBA Over-Supply

About 150,000 MBAs graduate each year. As is the case with other aspects of education, our colleges, particularly graduate schools, have accommodated demand by manufacturing such degrees.

It’s easy to come up with what the Ivory Tower of Academe suggests a business executive or financial expert ought to know. At the same time, the educator must be certain not to make the course too difficult or classes will not be filled. The schools are a growth industry, after all.

So we get a happy medium. Lots of students, loads of graduates. All with degrees, which in the real world of business and finance, have been dumbed down and have become relatively useless.

Except for their use in a resume. And these days, we are reaching the stage where there are simply too many MBAs to attract the attention they formerly did.

Health Insurance Needed By All Americans?

Some questions about the need for universal insurance coverage:

One: Are all residents getting medical help now? Yes, they do, when they go to ERs in an emergency.

Two: In dealing with this small group, should we tinker with the entire health insurance system?

Universal coverage could have everything collapse: What we like today should be kept; what we would like corrected can be changed; the independent use of doctors and medical treatment, when we want it and when we need it, can be retained.

How about giving the poor uninsured a free membership card for private insurance of their choice?

Government Health Insurance Cheaper?

The Obama administration keeps repeating its argument that government health insurance has to be cheaper than private health insurance. That is not true, and defies past experience wherever practiced.

Look at Medicare and Medicaid if you want to see costs rising far beyond general health expense estimates. Many reasons account for this. But they are conveniently overlooked when it’s politically necessary to do so.

One: Private insurance does a far, better job of preventing fraud that envelops government programs.

Two: Private administration is more efficient. When government attempts to cuts its overhead costs, it does so by paying bills that it should not be paying. Efficiency is the lesser option.

Private insurers also create effective doctor and medical networks that government has heretofore not done to avoid errors, and probably will never accomplish.

Three: Government reduces operating costs by delaying or simply not paying for certain coverage. Rationing may be done by age or what a consulting board says should be treatment standards. We know it causes a loss of lives by comparing American statistics with those of countries with socialized medicine, such as the UK and Canada.

Small Loan Do-Gooders

Payday loan outfits are under attack from do-gooders in government. Usually their fee is about $15 for a $100 two-week loan. That works out to 15% interest. That’s o.k. as a temporary loan, if it is not repeated twenty six times a year, when the rate would become outlandish. Therefore, there is room in the economy for such emergency service.

Left-leaning government observers do not like the concept, because they think folks with poor financial ratings should get the same terms as those with credit that is top-notch. After all, fair is fair.

But folks with bad credit have always needed emergency funds. That has been true going back for years, in good and bad times. We know why so many in the past patronized mobsters for funds. Paying, in that process, enormous interest charges plus limbs and lives. as the penalty for non-payment.

So when legitimate services charge what do-gooders say is too much, an attempt is made to stop the vile business.

And perhaps go back to the good old days.

There is a Cheaper Way to Health Care

Obesity costs about 216,000 lives annually, according to credible estimates.

It’s been also estimated that universal health coverage, with its enormous costs and drastic overhaul of the health system may save just another 18,000 lives. And that can cost trillions.

Something does not add up here. What is needed is education in schools, public forums, and media about general health habits.

And how attempting to fine tune the nail in our present health care system, with a ten-ton truck, can bankrupt our entire economy for generations to come.

The Definition of Rich

The Obama administration’s definition of who is rich is peculiar. It bandies about an annual figure of $250,000. Sounds like a lot, which is not. If you live in New York City you can cut about half of it for your net, before contemplating an enormous cost-of-living hurdle to overcome.

But that argument for taxation is primarily based on outmoded figures, when families depended on only one of its members working. They may have been the norm twenty years ago. Today, women have careers, especially after their children are grown, when both husband and wife, and sometimes single youngsters add to household income.

Family total income may reach what this administration calls “rich” and get taxed accordingly, only when you add up a total of very modest earnings. These individuals are not after-tax “rich” by any definition.

Announcing Layoffs in Advance

Corporate disaster is likely when tipping off creditors and employees well in advance of problems that require plant closings. Yet, leftist politicians and their union backers have legislation where employers of a certain size and type must notify employees well in advance of possible plant close-downs.

I can see why employees would like to know early on if they are to be trained for other jobs. But such action may unduly scare employees in the event the plants are not eventually closed.

Often, financial conditions are poor, and finances cannot be arranged properly until the last minute. Once a notification has been made, you may have already lost employees with which you would have been able to salvage the operation.

And then the question of credit. Once the mandatory plant closing announcement is made, the company’s credit may be permanently damaged. Stockholder values, including pension holders and other such institutions may be adversely effected.

Socialized Medicine’s Meaning

Too large a segment of the public still does not truly understand what happens when the government is in charge of spending or granting funds for health. It can never be even-handed when there are budgets and limited funds to consider.

We already have that to a degree in the United States today, when more research is done on breast cancer than on prostate cancer. That happens because of inordinate political pressures. Aids research has always received more funds per normal need than does breast cancer. How many women realize that?

In Europe, rationing of drugs and treatment results from chronically limited funds. Medical research in the U.S. will eventually be curtailed as well, when funds are constrained.

Need further proof? Look at the states in America where a form of socialized health care already is underway.

Health Insurance Competition and the Government

Those operating in the government on the political left love to tell you how private insurance companies, or any private business, should be able to compete with any entity that is government-run, especially with regard to health insurance.

But we know from experience that government entities are not operated at low cost. The Post Office is just one example. Medicaid and Medicare is government insurance coverage run amok.

What the pro-government statists also never tell you, is that government has no capital costs. The taxpayer subsidizes capital and operational outlays.

All private health insurance companies must provide expensive capital and funds of their own and yet have only a few percentage points of profit to show for it.

Never fall for the argument that having a government agency option to choose from, in health insurance, will help the consumer.

It’s a ruse. And the needed funds will be coming out of your pocket.

Government-Sponsored Health Experience

The Obama administration completely overlooks the past experience of others with regard to government meddling in health coverage:

One: The bad service the Canadians and Europeans get in terms of care and by rationing of care.

Two: The sharply rising costs of Medicaid and Medicare, forms of government sponsorship, in this country.

Three: The fraud in Medicaid and Medicare that now exists.

Four: The current shortage of doctors and providers without adding the additional patients proposed.

Five: The experience of the few states that have what the Administration wants for fifty states, on, for example, “guaranteed issue” coverage.

Six: The need to have tort reform when compensating patients for medical malpractice, in order to reduce costs.

The administration can propose step-by-step changes without emulating problems encountered elsewhere, but does not.

Medicare and Medicaid Fraud: A Growth Industry

Medicare fraud is estimated to be about $60 billion each year.

This is because of widespread criminal operations that go unchecked due to poor government oversight on varying levels. It consists of ploys such as using dead doctor reports, fake patients and non-existent treatments.

The FBI says Medicaid fraud is a $10 billion annual industry. Practices involve billing for nonexistent or unnecessary services, kickbacks and inflated costs.

With all this, how is the government going to undertake a massive health insurance plan that will entail one sixth of our entire economy?

Politicians tell you only how this fraud-infested system is going to save money.

Health Insurance for Illegals

About twelve million illegal immigrants may now qualify for free health care, for themselves and relatives, under the Obama Administration’s health care planning, and present local law around the country. So-called undocumented immigrants still get medical care when they ask for it.

The fact is, only about eight million Americans cannot afford health insurance premiums. The media dwells on a number of well over forty million that includes many who do not want coverage or do not need it for a variety of reasons.

I would think it would be far cheaper to give the needy group health coverage free of charge, without the mess of revamping the entire system, as is being proposed by enthusiasts.

Government Health Insurance and New Doctors

The Law of Supply and Demand applies to health providers as it does to commodities. This is a dirty secret politicians never mention.

You may tell the public you will increase their ability to get more medical care. But to do so, you must also increase the number of doctors, along with their facilities and aides.

It takes about eight to ten years to educate and train a bright young student willing to work hard enough to become a doctor. At a cost of at least $100,000 in tuition.

Administration and congressional health care law sponsors are selling the health insurance bait/switch, in part, by trying to cut health costs through a reduction of doctor income.

This would make it tougher to reduce the investment or acquired debt of becoming a doctor. Nobody mentions training new doctors at government expense and if it ever happened, why train so hard for so little compensation?

The Tort Cost of Health Insurance

The neglected cost in the health insurance discussion is a subject the Obama administration intentionally glosses over because about 90% of lawyer political contributions go to the Democrat party.

Yet, the cost of malpractice insurance and the need for tort reform to reduce that cost, represents a major area for health insurance reform. It has not been directly addressed by the Obama administration.

In the proposed health Insurance legislation, heavily weighted towards reducing doctor’s income, as a means of saving money, the MDs can still be sued for malpractice. It is as if the government is waging war on the main players in the health field.

Without health care providers, there is no health care. Forcing providers to retire or not to enter practice is ridiculous.

Doctor and provider errors can and should still be taken in account. Compensation can be handled with tort reform, including expert independent arbitration.

Hidden Health Care Costs

With all the talk about health care, has anyone bothered to actually get into the cost of administering government health, as compared to what it costs to administer average for-profit, private plans?

It stands to reason that any government has a disadvantage in cutting costs. Politics finds it easier to hire than to fire. Voters you fire will not vote for you again. Politics also finds it easier to overpay. Especially when government jobs are unionized.

Has any government ever run ANYTHING efficiently? The Post Office, for example?

Also: Let us consider our experience with Medicaid and Medicare. How they botched the efficiency and costs of that forerunner to proposed health insurance.

If the cost of Medicaid and Medicare have gotten so far out of hand, beyond their original projections, how can we believe the health care savings fantasies of the future?

Inflation as an Option?

Deflation may be bad. The Federal Reserve Bank policy under Alan Greenspan after the turn of the 21at Century, and under Ben Bernanke today, has always shown some fear of deflation, the kind that had engulfed Japan for the past twenty years. So the Fed always has had an inflation bias.

But why was deflation acceptable in the second half of the 19^th Century when the U. S. operated and expanded under the gold standard? Prices trended down for decades. The financial panics the U. S. experienced were relatively short.

And why must we have 2% or 3% inflation as a norm? That can hurt middle class savings over time? To make it worse, an International Monetary Fund economist has suggested a target inflationary rate of 4%, to make it easier to fight recessions by adjusting interest rates. He deems today’s rates too low to be used as a recession-fighting tool.

I feel even 2% inflation is a cruel tax on every citizen.

The Shortage Of Doctors and a Solution

Further to my report about doctor shortages under government health coverage:

Unsaid with all the talk about government health coverage is the fact we have a shortage of doctors, particularly in primary care. This gets worse every year. Moreover, this occurs most rapidly where the government restricts their income and adds to the workload.While the Obama administration’s health insurance planning has doctors still subject to any alleged tort malfeasance.

Massachusetts, for example, covers 97% of its residents with enforced coverage, but it does not have enough doctors to accommodate the added insured put into the system. The average wait time to see a primary care MD is up to from 36 to 50 days. Yet, the state happens to have more of these doctors than others.

Furthermore, the shortage is expected to get worse through out the country, as doctor income is pressured downward, while workloads go up.

Doctors start careers in heavy debt and it is becoming more and more impossible for them to recoup that burden with present political thinking in this country.

Universal health care planning loses lots of its common sense when it comes to doctor employment. Without enough competent doctors, the best planning is useless.

Doctor Shortages Under Government Health Insurance

Finding a doctor after you have government health insurance is not as easy as passing a law offering universal health insurance. You have to pay them a decent wage for the skills they have.

About 1,500,000 Canadians don’t have or cannot easily find a primary care physician. Because of a shortage in medical staff in Norwood, Ontario, in one instance, a TV video showed a town clerk pulling names of lucky winners to see a doctor in a lottery. Losers had to wait.

That’s only one reason many sick Canadians come to America for surgery. Canadian officials call much of what we may consider essential surgery as “elective.”

Before we change our system to emulate Canada’s or the British version,or any other universal health coverage gimmick, remember health coverage does not automatically mean health care.

The Greek Problem in the U.S.?

Under the Maastricht Treaty that lead to the European monetary union, budget deficits were limited to 3% of gross domestic product (GDP) and total debt was restricted to 60% of GDP. Greece consistently cheated. France and Germany and others also broke the Treaty agreement.

Ben Bernanke, the head of the Federal Reserve Bank in the U. S., says that total debt of 2% and 3% of gross domestic product (GDP) is sustainable, and we are now there at that level. But the extraordinary Fannie Mae and Freddie Mae debt are not in the federal budget.

So why are we not headed down the same road to disaster? The Obama administration policy will be making our situation far worse than that now destroying the Greek governmental structure, and endangering the European Union.

Medicine and the Law of Supply and Demand

Some ways to make health coverage cheaper without Big Government. Recognize the value of increasing supply to meet demand. And be alert to how it should not be done.

One: Adding the number of patients but not adding more doctors, In fact, developing disincentives for doctors to practice family medicine, will not make medicine cheaper. You cannot legislate lower income for doctors and have more in the system.

Two: Driving out of business over 1500 competing private insurance companies with the one public health insurer that will have no competition, will not reduce costs. Have insurance companies compete over state lines, which they presently are not permitted to do.

Three: Installing rationing of benefits under the guise of “suggesting” treatments that doctors ought to give. It is not a proper way to reduce demand to meet supply.

Law Suits and Health Costs

The political bias in health insurance is highly evident and the Obama administration is guilty of it. Which explains why tort reform has never been fully a part of the administration’s proposals.

What could save enormous costs but is hardly ever mentioned is tort reform. Even though the government will tell the doctor how to practice, he or she could still be sued for malpractice. All that would be needed is a cap on lawsuits, something the lawyers are successfully lobbying against.

At least 25% of medical costs alone are for defensive medicine. Impartial arbitration panels should determine whether patients have been truly harmed and how, and for how much they ought to be compensated.

A Proposed Health Care Tax on Small Business

Another instance of a dumb political act that often comes from the left. From politicians who think of dumb tax legislation, in the hope that voters will think the tax will be against the employer, and not the public.

In one of the proposals for universal health care, by forcing every employer to insure its employees, those with as little as $400,000 annual payroll who don’t offer coverage, will pay an 8% penalty. The penalty will be 4% for payrolls between $250,000 to $400,000.

Labor is a major cost for most small, non-manufacturing businesses, The net, bottom line often does not exceed 5% or 10%. With an added health tax, many entrepreneurs who would love to insure employees when they want to attract them in a booming economy, will not be able to afford them.

Is this legislation for a recessionary economy in need of a genuine boost?

The Government Also Operate Supermarkets?

The argument the Obama administration has been using for its proposed health insurance, is that its choice will force the 1500 or so private health insurance companies become more competitive.

The fact that 1500 health insurance companies compete is not competitive enough, in the Administration’s view. All it had to do would make it possible for companies to compete across state lines.

But if the government presence will make health insurance more competitive, why not a government supermarket chain? That ought to cut prices? Or a government clothing chain? It seems we now have autos from Uncle Sam. Why not more of government from this administration which loves to emulate socialistic tendencies?

That is what the Russians enjoyed under the Soviet Union? They really had a ball as consumers of goods and services, didn’t they?

Government Health Coverage Can Cost Lives

Almost 15% of patients in the U.K. must wait more than one year to receive treatment, after they have been referred to a specialist by a general practitioner. As much as 50% of patients getting government care must wait between 18 to 52 weeks for treatment.

On average, over three-quarters of Canadians must wait about three months for an MRI under government-operated health care.

Forget about adequate , timely dental care in those countries. You can imagine how their governments put teeth at the bottom of the preference list when they must cut costs.

More than 75% of National Health-care Service British patients waited four or more weeks for admittance into a hospital, as reported in May, 2009.

The average survival rate for all types of cancer for patients in the United States is 60%. Canada’s survival rate is at 55%; Europe’s is at 48%. Or that about 80% survive the prostate cancer diagnosis in the USA , as compared to about 43% in the U.K., under their nationalized service.

Something the Obama administration proponents of government health insurance in this country never mention.

Americans are not all familiar with this. The media tends to overlook such facts. The media continues to spout administration propaganda without much analysis.

Government Health Insurance Can Manipulate Drugs

Government sponsors of public health insurance always claim they can set standards as to how doctors ought to treat patients. This is similar to what is being done to reduce costs under government-sponsored programs in England, Canada, and Europe.

But what you are not told is that the cheaper items dispensed are often the older drug versions. They are older generics, whereas the newer, more costly branded versions are not dispensed. That saves money for the government health system.

However, in many instances, older drugs, while they are certainly cheaper, are not better. In fact, they may not do as good a job as the newer, branded drugs.

The government certainly saves money at the expense of the patient’s health or life.

Health Practices and Health Costs

According to a report from the Harvard School of Public Health, about twelve health style abuses account for over one million American deaths each year. Cut down those statistics and you have remedied the health care problem which has become politicized.

It’s been estimated also that smoking costs about 467,000 American lives a year. High blood pressure from unhealthy lifestyles causes about 395,000 lives per year. There is some overlapping as bad health habits are the cause of multiple afflictions.

An emphasis on such changes can save the American economy an enormous amount of money, while keeping its capital infrastructure intact. But that may be too simple for many of our health care grandstanding politicos.

They would rather change the entire structure of a sixth of the economy.

Be Wary of Government Show Trials

It can and is happening here, in the U.S.A.

Government show trials, the way it was done in the Soviet Union under Joe Stalin. Except that the villains are not going to be sent off to some gulag in Siberia after they have served the purpose of populist politicians.

The Obama administration, Congress and organized unions chase after Toyota, which is non-union, in a huge show trial with the cameras and the finger pointing. No suggestions are made that, perhaps, perplexed, victims sometimes step on gas pedals instead of brakes, which jams sensitive equipment. And occasionally high-tech equipment will go bad.

The government and union conflict-of-interest with its ownership of competing General Motors and Chrysler, of course has nothing to do with this extravaganza??

If it did, would not the media and the finger pointers bring it up??

Do 45 million Americans Need Health Insurance?

Is it true that 45 million Americans have no health insurance?

There is lots of doubt about this figure. Many claim, with reasonable authority, that this includes illegals, those in between jobs that offer insurance, and folks who are not interested and wish to self-insure.

If the number is considered, that is only about 15% of the population. In truth, we are looking at true need in only about 5% of the population.

College Training Dysfunction and It’s Correction, Part 2

In my previous report, I noted the lack of balance on the average college campus with regard to the world political and cultural view of those who teach our youth.

It negates the whole purpose of going to college for a broad education. The minutiae that are relegated to memory are soon forgotten. But the ability to reason and think clearly ought to be the prime college education goal.

The remedy I feel is simple but overlooked: Publish the resumes and commentaries of all professors and full time instructors, along with the rest of the routine material that colleges use to entice students.

Example of what students ought to know: Have teachers and professors comment on their ideas about recent Supreme Court decisions on business, finance and other pertinent U. S. Constitutional matters.

Moreover, schools ought to be responsible for the relative accuracy of such statements made to recruit students.

Truth in advertising laws should apply to college recruiting.

College Training Dysfunction and It’s Correction

Of the 630,000 full time instructors and college professors at universities, there is a major dysfunction in the way they instruct students. It has been going on for some time and it has been recognized for a while, but unfortunately, only by a few.

It has to do with the world political and cultural view of those who teach our youth in those sensitive late teens and early twenties. It negates, in a sense, the whole purpose of going to college.

The tidbits relegated to memory are soon forgotten. The ability to reason and think clearly, ought to be what college education should instill in youthful minds.

But when not more than 5% of college professors and teachers, vote republican, even much less in the social sciences, as in the 2004 election, red flags should go up all over.

How broad, then, are perspectives being taught? These academics are turning out our media “giants” and our business and political leaders.

My question is rhetorical because the answer is already evident. The media and much of the rest of what graduate are sorely in need of a broader perspective than what they get in school. They require a more independent, and less politically slanted view of what they now get toward business, finance and western values.

I will have more on this subject in my next report.

The Media and My Doubts

I find media is generally lackadaisical and often inaccurate on business and financial information and ideas. Always question the accuracy and slants you get on any subject related to such topics. No doubt they fail in most other areas with which I am not as familiar.

There are three basic reasons for my doubt about the accuracy and slant of the media.

One is the fact that most of the actual reports are not in-depth. Reporters or columnists may not have the time to devote to the topic or they are simply too lazy to get into the subject.

The second; many do not know their subject. It is difficult to adequately discuss business or finance without real hands-on business and/or financial experience.

And thirdly, the slant of most reporters and columnists who learn from college professors these days, have had a left-leaning bias thrust on them for a number of years. It shows in their career work. They have no idea how the real, day-to-day business and financial world works from the inside.

So my ingrained doubts persist. And I must screen continual errors and bias I find from what I see and hear.