Wisconsin Medicaid Cost Reduction - A Little Bit Of Good News On Government Spending

It does not happen often but every once in a while we come across an instance of a government entity actually reducing its costs and inefficiency when it comes to spending taxpayer money. A short article by Ryan Tracy in the August 23, 2010 issue of Newsweek magazine reported on how the state of Wisconsin was able to make a significant cut in its Medicare budget but still maintain quality and also keep the voters happy. Medicaid provides medical coverage and insurance for low income families and people across the country with both the Federal government and each state funding the program.

Last year, Mr. Ryan's article stated that Wisconsin Governor Jim Doyle wanted to slash the state's Medicaid budget by $400 million. However, the Governor took a different approach than most politicians in defining what budget cuts to make. Past efforts like this to cut entitlement programs have usually been ineffective since it involved sitting politicians attempting to make the cuts without endangering their political futures and careers, or in Mr. Ryan's words, "programs like Medicaid cannot be cut without political bloodshed." Usually what happens when politicians have to make difficult decisions they make suboptimal decisions since their actions are guided by their political careers and fortunes, not what is best for the citizens they represent.

Governor Doyle took a different approach in this case, rather than rely on politicians to make the decisions on cutbacks, people that are mostly ignorant of how operations like Medicaid work and thus, are least likely to identify root causes of problems, the Governor turned to the people that that ran Wisconsin's Medicaid program and asked them to come up with the $400 million in savings. The result: Wisconsin Medicaid officials found the necessary changes with the following positive effects:

• The $400 million target was met with a mix of new contracts and new procedures that steer customers to lower cost but just as effective treatments.
• Lobbyists lost influence since elected politicians were taken out of the loop and thus, lobbyists lost all of their leverage.
• Politicians were happy since they did not have to take any courageous but unpopular positions relative to budget cuts, preserving their political careers.
• Knock down, drag out political battles were avoided and changes were identified quickly rather than compromised, ineffective answers that took forever to agree on.
• Best of all, according to the article, voters are also happy.

Wow, a government entity that reduced itself in an effective and efficient manner, saving taxpayer money. How did it happen? It allowed the experts in the field, not politicians in the legislature, to identify the root causes and then solved the problem by attacking the right causes. Compare this behavior of the Federal political class that passed health care reform and financial regulatory reform where in each case, the politicians did not understand the root causes of the problems, resulting in idiotic legislation that will never solve the problems: the politicians never understood the root causes.

Since the Federal government usually pays at least fifty percent of the states' Medicaid budget, you could assume that if the Wisconsin changes saved the state $400 million, it probably saved the Federal government about the same amount, resulting in the nation saving $800 million. Since Wisconsin's population is about 1.9% of the country's total population, a rough, rough estimate of national savings if the Wisconsin savings were rolled out coast to coast would be over $42 billion a year. Taking it another step, what if those same types of changes were instituted in the bigger medical entitlement program, Medicare, on a national basis? Conservatively, at least another $50-$60 billion could be saved just between Medicaid and Medicare.

This step is consistent with two steps outlined in "Love My Country, Loathe My Government." Step 1 would reduce Federal spending by 10% a year for five years in order to downsize the government out of inefficient and ineffective programs and departments. A major process for attaining these downsizing targets is to do exactly what the Wisconsin politicians did: allow the experts, i.e. the government employees who know the ins and outs of the government operations they are involved in, to identify and propose the necessary changes. The twist that "Love My Country, Loathe My Government" proposes is the implementation of a lottery system that would randomly pass on a monetary reward to employees that come up with true costs savings. Imagine what savings we could incur if similar savings were identified in all government departments.

Steps 26 to 29 would attack major issues such as reducing medical costs, instituting a national energy program, fixing public education, and implementing a comprehensive immigration reform
in the same manner. It would institute panels of experts, sans lobbyists and politicians, that would identify true root causes of each issue, just like they did in the Wisconsin Medicaid area, and develop cost effective solutions quickly, without the political infighting that is never good news for the American public.

Congratulations to the Wisconsin leaders, whose foresight and courage allowed their own expert state employees to solve their budget problem. We can only hope that the rest of the political class shows the same initiative. and show it quickly Waiting for our politicians to do the same has resulted in a national debt of over $13 TRILLION.



Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

The Twilight Zone World Of Joe Biden

The Vice President has always been good for a quote, or in many cases, a misquote, when it comes to explaining the reality of our world. However, many times you wonder if he and the rest of us are living in the same world and reality or we are stuck in some sort of twilight zone world where reality takes on a distorted sense of truth. This twilight zone image came to mind earlier this week when the Vice president acknowledged that while the recovery from the recession was proceeding slower than expected, there is "no doubt we are moving in the right direction."

If he thinks we are moving in the right economic direction, than he and I are stuck in some sort of distorted reality, given what is happening in my economic world:

• The Commerce Department reduced its estimate of the nation's second quarter GDP growth from 2.4% to 1.6%, a 33% decrease.
• Unemployment continues to linger between 9.5% and 10.0% even though Joe's administration predicted that unemployment would go to 8% unless the President's economic stimulus package was passed. It was passed and we did not go to 8% unemployment, we went 15-20% higher.
• The stock market is down about 10% from its recent 2010 peak in April and does not appear to be ready to rise any time soon.
• This week we heard that the sale of existing houses dropped 27% in July vs. June, the biggest monthly drop in the four decades that the statistic had been kept. Guess the administration's housing incentive program for first time buyers did not have much staying power.
• Also this week in the housing market, we found out that the sale of new homes was down over 12% in July vs. June and was down over 32% vs. the same time period in 2009. The annual sales rate of 276,000 new housing units is one of the lowest levels ever measured.
• This week we also found out that almost half of the people enrolled in the administration's mortgage recovery program had dropped out of the program for various reasons, not the least of which was inefficient and and ineffective paperwork processing procedures. The number of home foreclosures in 2010 could be as high as one million with several credible sources estimating that the foreclosure number could increase 50% in 2011.
• On Thursday we heard that new weekly unemployment claims continue to linger between the 450,000 to 500,000, i.e. about half a million people a week are now filing for unemployment benefits for the first time. Hardly sounds like the economic turnaround we are told is coming even though the Vice President told the Washington Post on April 23, 2010, over four months ago, that the economy would soon be creating 500,000 jobs a month. Not quite there yet.
• The Vice President did not mention that the Federal government has incurred unbelievably high, record setting government spending deficits over the almost four years that the Democrats have had control of both houses of Congress and the almost two years they also controlled the White House.

So, in Joe's world or twilight zone, shrinking economic growth rates, housing industry woes not seen in a long time, high unemployment, feeble private sector job creation, sky high national debt and mortgage foreclosures, and a falling stock market leave "no doubt we are moving in the right direction."

Seriously, this administration has no clue on how to turn around the economy, resulting in one of the longest and weakest recoveries of all time. Their reaction? Spend more money on dismal, failed incentive programs (Cash For Clunkers, first time home buyer incentive, Cash For Caulkers, Cash For New Energy Efficient Appliances, mortgage rescue, etc.), spend hundreds of billions of dollars on bailouts of financial institutions that either did not need to be bailed out (since most have already returned their TARP payments) or who deserved to fail due to their bad management (Citigroup, Bank Of America), spend hundreds of billions of dollars via an economic stimulus program which stimulated nothing (it has gotten so bad with this program that the administration has evolved from estimating how many jobs the stimulus created to how many jobs the stimulus created AND saved to how jobs created, jobs saved AND lives touched by the stimulus program), and the old favorite, blame Bush.

Bush has been gone for almost two years, the Republicans have been in the minority for almost four years in Congress and during part of that time, the Democrats had a filibuster proof majority in the Senate while also controlling the House Of Representatives. The result of this recent history? We are stuck in an economic ditch and to those of us in the real world, we have no doubt we are NOT moving in the right direction.

What is the root cause of our economic distress? Could it be that consumers and business are uncertain of the future and as a result, have hunkered down in the face of that uncertainty? What are we are uncertain about:

• Could it be we are uncertain how much more in health care taxes and health care costs we are actually going to have to spend on employees and ourselves since the majority of America feels that the recently passed health care reform legislation will not solve our health care cost problem but will certainly increase what we pay for our health care?
• Could it be we are uncertain what this administration will do tax wise, with the expiration of the so-called Bush tax cuts being just one area where the tax bite on American businesses and consumers could rise significantly?
• Could it be we are uncertain how much more we will have to pay in energy costs with the proposed onerous and ineffective cap and trade carbon program that could be passed?
• Could it be that we are uncertain if Social Security and Medicare will be saved from insolvency and how much that might cost?
• Could it be that we are uncertain when Washington politicians will actually get down to tackling the major issues of the country as opposed to just calling each other names and worrying only about their own re-election?
• Could it be we are uncertain that Washington politicians are actually able to solve a real problem (especially since they have never really solved a major problem) when one of the leading members of the Federal political class thinks everything is fine and moving in the right direction despite every indication it is not?

This administrating has introduced so much uncertainly into the market and economy that people and businesses have decided to hunker down and protect their assets rather than go out and invest or spend their assets. And given this mind set, interest rates cannot go low enough stupid sales incentive programs cannot be rolled out to failure fast enough, and no amount of stimulus spending, especially the ridiculous programs from the first stimulus program, will solve the credibility, faith, and uncertainty problems we all currently have with Washington. That is why these incumbents need to be sent home in November and hopefully we can replace them with people that have the skills to remove the uncertainty in the country today.

Until November, consider the words of Rod Sterling, the creator of the TV show, "The Twilight Zone" in light of Joe Biden's view of his world:

You are about to enter another dimension. A dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination, next stop, the twilight zone.
http://www.youtube.com/watch?v=nEBN30I5Voc&feature=related

Joe, indeed, must live in a wondrous land of imagination in another dimension where good is bad, dark is light, and we are all moving in the right direction despite all economic indicators.




Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

The BP Oil Spill, Our Political Class, and Pollution of The World

Consider the following examples of pollution that were presented in an article by Ronald Bailey that appeared in the October, 2010 issue of Reason magazine (after reading the four examples, figure out what they have in common):

• The Nigerian government owns all of that country's petroleum resources. Since 1966, over 456 million gallons of that state-owned oil has been spilled which is comparable to having an Exxon Valdes disaster every year since 1966. Although oil accounts for 90% of Nigeria's exports and 80% of the government's revenues, the Nigeria political class has handled the industry so poorly that thew national petroleum company is now insolvent from a financial perspective. The risk of more pollution from spills is likely to increase as the Nigeria government starts drilling in more remote and dangerous terrain. Mr. Bailey notes that the Wall Street Journal's ranking of countries in order of economic freedom, places Nigeria at 106 out of 183 countries that were ranked, describing Nigeria as "mostly unfree," i.e. the government runs most of the operations in the country.
• In China, a country that ranks 140th out of 183 in economic freedom (another "mostly unfree" nation), 62 underground coal fires have been burning since the 1960s. These fires started when the country's communist government ran the entire coal industry in the country. The underground coal fires burn more than 20 million tons of coal annually, contributing 2-3% of the entire world's total fossil fuel greenhouse gases.
• Haiti is ranked 141, just after China on the economic freedom scale, and is also designated as "mostly unfree." According to Mr. Bailey's article, Haiti is currently 98% deforested, making it highly susceptible to storm and hurricane damage. 95% of Haiti's real estate property is owned by the government, giving private Haitian citizens no reason to protect their own property since they own virtually none of the property in Haiti. Haiti shares the same island with the Dominican Republic where virtually no large scale deforestation has occurred so it must be something in how each country manages it's assets that result in the dramatic difference from an environmental perspective.
• In central Asia, the Aral Sea, the fourth largest lake in the world in 1960, it has shrunk by almost 70% in size since then. Throughout that time, the central communist government in Moscow had repeatedly diverted feeding rivers away from the Aral to support large scale irrigation projects in the Asian deserts of Kazakhstan and Uzbekistan. These now independent countries get poor economic freedom ratings of 82 and 158, respectively.

As you probably guessed it, in every example, the source of the pollution was caused by each country's political class, who rule in a strongly undemocratic manner, where property rights and personal freedom is minimized. The point Mr. Bailey is making is that when faceless government bureaucrats manage their country's' problems, they are unlikely to have a personal stake in the how things are done, just how to get the desired or demanded results. Since these bureaucrats and politicians do not personally own their country's property, they have no stake in protecting them. As a result, four of the world's worst environmental disasters can directly track their source to government actions.

Unfortunately, dictatorships do not have a monopoly on the pollution of their countries. Consider a few examples what the United States government has done to Mother Nature in our nation:

• The Department of Defense generates 400,000 tons of hazardous waste a year, which is more then the waste generated by the five largest chemical companies in the country combined, and this mountain of waste is outside the enforcement capability of the Environmental Protection Agency. In other words, the biggest potential polluter in the country, the Federal government, does not have to abide by the same rules that the rest of us have to abide by.
• The Tinker, Oklahoma Air Force base was supposed to recycle all of its hazardous waste byproducts but until recently decided to sell it, not recycle it. Tests have found higher than expected pollution levels from these materials in the underground water sources close to the surface.
• The U.S. Army's Rocky Mountain Arsenal is only six miles outside of Denver, Colorado. One source I found called the arsenal the "most polluted piece of ground in America." It cost $40 million to clean up the arsenal's 600,000 cubic yards of contaminated soil, soil that was identified as contaminated back in the early 1950s.
• The Federal government runs the 59 Tennessee Valley Authority power plants. While these power plants expels large amounts of greenhouse gases every year, they too are exempt from Federal environmental regulation.

The same effect is going on in these Federal government examples as the examples pointed out by Mr. Bailey throughout the world. These properties are owned by the government and run by the politicians, they have no personal stake in preserving the properties since they do not personally own them. As a result, the biggest pollution source in this country is the very government that is supposed to prevent the pollution and which has exempted itself from its own regulation and oversight.

Which brings us to the government's role in the BP oil spill:

• No one seemed to care that those government employees that were supposed to safeguard the Gulf from an oil spill were either busy surfing the Net for pornography, accepting vacation trips and gifts from the same companies they were supposed to be regulating, were busy setting up career changes to move to the same companies they were supposed to be monitoring for safety, or were neglecting to do the required number of rig inspections. These employees had no personal stake in the safety of the Gulf, they did not own it (the United States government owns it), and the political class obviously gave them no incentive or direction to take a personal ownership stake in its safety.
• The political class legislated a trivial $75 million cap on liability for environmental and economic damages from an oil spill. This released the oil companies operating in the Gulf from having any kind of corporate stake in the environmental condition of the Gulf, they could just buy their way out of a oil spill for a relatively nominal amount of money.
• And the most atrocious piece of political class legislation, the Energy Policy Act of 2005 encouraged and incented the oil companies to go further and further out in the Gulf for oil drilling. The further out they went, the less and less they had to pay the Federal government in royalties. The chance for making billions in profits at the risk of millions in fines made the safety of the Gulf environment secondary.

We trusted environmental safety to our politicians, all of which all over the world caused some of the greatest environmental disasters the earth has ever seen. These politicians were in charge but were not responsible for the ensuing disasters. In all cases, they had no personal stake or ownership of the resources they were supposed to be safeguarding. The scary thing about this phenomenon in America is that the Federal government owns almost two thirds of the physical land in this country. Imagine the potential for widespread ecological damage like Rocky Mt. Arsenal, Tinker Air Force Base, and the Tennessee Valley Authority coal plants.

Several steps from "Love My Country, Loathe My Government" would address these issues:

• Step 1 would downsize the size of government by 10% a year for five years. Included in this downsizing would be the selling of the 70,000 or so government buildings that no longer serve a purpose (as we discussed in a previous post) and should also include the sell off of government land, with proceeds going to reduce our national debt. If the right conditions and laws for private ownership were put in place, people, companies (oil and mineral exploration companies), and organizations (e.g. the Sierra Club, the Audubon Society) could own Federal land, have a personal stake in keeping that land safe, and would be placed under the enforcement authority of the EPA.
• Step 34 would replace Congressional members sitting on Congressional committees that are responsible for the Federal departments and agencies that end up polluting public lands, i.e. they would have a personal stake, if not a property ownership stake, in protecting the earth. In the BP oil spill case, any Congressional person sitting on those committees that oversaw the Interior Department's operations, those operations that were negligent in safeguarding the Gulf, wold be removed from their committee post. Before these politicians are removed form their post, they would remove those federal employees from the posts which they failed at. This would put a federal employee's career stake in play regarding public land, air, and water when a personal ownership stake is not possible.
• While Step 7 would prevent any politician from accepting campaign donations from anyone or any organization except a private citizen, a short term solution in the spirit of this step would not allow any politician to accept campaign donations from any industry that the politician has Congressional committee oversight responsibility for. In the BP case, no politician sitting on any committee responsible for oil exploration and safety would be allowed to accept campaign donations form that industry.

The main point to take away from Mr. Bailey's article and this post is destroy the myth that government and politicians are caretakers of the earth. They are not trusted caretakers, mainly because they have no actual or administrative stake in keeping the earth whole. Another example where "I'm from the government and I'm here to help you" is not the case. Make them accountable by dumping the incumbents in the fall elections and making sure that the three steps above are implemented to ensure that accountability is instituted, from the lowest Federal employee to the highest ranking Federal department heads and Congressional members.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Miscellaneous Political Class and Government Insanity

My monthly issue of Reason magazine showed up this week. Reason is a fabulous magazine dedicated to freedom, liberty, and an in-depth looks and analyses of the nation's problems as opposed to our politicians' shallow and usually incorrect views of today's world and reality. The magazine is also a good source of government programs run amok or politicians acting to shortchange our freedom and our pocketbooks. This month's issue contained the following random acts of insanity:

• Someone is sneaking around in West Cape May, New Jersey and placing scarves around trees and sign posts. Seems harmless enough. Nowhere in the article it is mentioned that the scarves are ugly, degrading, biased, a fire hazard, etc. However, police resources are being used to track down this culprit in order to force him or her to obtain, i.e. pay for, the appropriate permits for decorating public places. Talk about over regulation.
• According to writer Robby Soave, the Federal government owns 65% of the land in the contiguous forty eight states. That in itself is very alarming, given the government's inability to manage anything well, the fact that almost two thirds of our country is under the government's control should make anyone stop and worry. However, even worse is the fact that a former director of the Office of Management and Budget has conceded that Federal agencies have identified over 14,000 buildings that they no longer need and there are at least another 55,000 buildings that are either underutilized or not used at all. Think about that number, 55,000. If you put the two numbers together you end up with about 1340 buildings on average per state that serve no government purpose. In a state like New Jersey with its twenty one counties, that comes out to about 64 buildings per county. The continuing bad news is that these are all estimates since the Federal government has no central, accurate accounting system to identify and manage all of these dead assets. Reason's analysis estimated that if these properties were sold, over $1 TRILLION could be raised. If dedicated to reducing our national debt, this sell off could instantly reduce our overwhelming national debt by about 8%, without raising taxes or cutting other services.
• In the area of unintended consequences, something the Federal government is so good at, consider a recently passed Department of Labor regulation that raises the penalties and fines levied against employers who break the Department's stricter child labor regulations. As a result of the new regulations, inspectors have stepped up enforcement in the agriculture industry. In order to not afoul of the inspectors and the fines they can levy, many farms have decided to ban children from their property altogether even if they were not working. This has put a burden on many of the poorer migrant worker families who do not have access to affordable day care centers for small children. Previously, they would bring the children along with them to the farms, not to work, but to just be safe with their parents. Thus, the people that most need the work on the farms are penalized without just cause because of the Washington bureaucracy.
• In a discussion between Reason representatives and the city council of Cleveland on ways to revive the city of Cleveland, a Councilman was defending their sign ordinance guidelines relative to the long time it takes to get anything approved by the city government bureaucracy. In the course of the discussion. the councilman mentioned that a business sign could have no more than three colors. Perplexed by that condition, the Reason representatives asked why only two or three colors. The answer? Because that was what the regulation said. Can you say circular reasoning?
• Although not in Reason, consider the following insane situation that was reported in the August 27, 2010 issue of The Week magazine. A new Brazilian law prohibits anyone from degrading or ridiculing a candidate, a party, or political coalition during the three months prior to an election. This has caused the country's comedians and satirists to wage street protests against the law. It is unclear from the article who would decide what is degrading and what is ridicule, a task that is probably impossible to define and enforce. What would Jay and Conan talk about during those three months if that law was passed in this country? Would YouTube videos depicting politicians saying stupid things themselves (recall the Georgia Congressman who publicly worried that the island of Guam was going to tip over) constitute a violation of the law? In other words, would it be degrading if politicians make themselves look stupid? An insane law that is impossible to enforce because it is all subjective.

Just a few examples of government and politicians out of control. While government resources around the world are looking for exterior decorators or worried about the color combinations in business signs or suppressing funny jokes about politicians or passing regulations that help no one but economically injure the poor, the bigger issues of our time continue to be ignored. That is the definition of insanity and, unfortunately, also the definition of our political class and government.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Economic Amateur Hour In Washington D.C.

A new round of bad economic news has been spewing forth this week, ranging from the poor housing market to the stagnant stock market to rising first time unemployment claims. After two years of very uneven and unpredictable economic performance, it makes you wonder whether it truly is economic amateur hour in Washington. Consider what we have endured from Washington over the past few years:

• Cash For Clunkers - we have reviewed this program a number of times, pointing out how it was a failure in so many ways. The major bottom line is that the program did nothing to incrementally spur sales in the downtrodden new car market. All it did was cause prospective new car buyers to advance their purchase in order to get the free government rebate money. Once the Clunker rebates ended, the car market tanked for several months since the sales that would have occurred in those later months just occurred a few months early. Thus, there were little, if any, increment sales and all the program did was provide free taxpayer money to people who were going to buy a new car anyway. In addition to this one obvious and fatal flaw were the other mini disasters. These included people using the program to buy low gas mileage trucks and low gas mileage cars, contrary to the other objective of Clunkers which was to increase gas mileage of the U.S. car fleet and that perfectly good used cars, that were traded in under the program, were destroyed, robbing the less affluent citizens of our country the opportunity to purchase a good used car at a reasonable price.
• A similar experience occurred with the government's attempt to spur the housing market. Until the spring of this year, first time buyers of homes could get a cash rebate from the government if they signed a home purchase by a certain day and closed within a few months of signing that contract. Well guess what happened, once that program ended? The National Association of Realtors announced this week that sales of existing homes fell by more than 27% in July. It was the largest monthly drop on record since 1968, resulting in an annualized total home sales estimate of just 3.83 million, the lowest annual number in 15 years. A quote from the article reads: "The weakness follows a strong spring, when now-expired government tax credits sparked sales, especially among first time buyers of lower priced homes." Thus, the same economic principle that happened with Cash For Clunkers happened here: all the government program did was accelerate forward some home sales without incrementally growing the market. Once the incentive went away, sales dipped dramatically, resulting in a net effect of virtually no incremental business. All the program did was give away taxpayer dollars to people who were going to buy a home anyway.
• More bad news from another Washington housing industry program came to light this week, this one relative to the Obama administration's mortgage relief program. According to an Associated Press article, almost half of the homeowners enrolled in the program to help avoid foreclosure have fallen out of the program. The AP reported that the $75 billion program to help owners lower their monthly payments is failing to stem the flow of foreclosures in the country (in a separate article in The Week magazine from August 27, 2010, it was reported that recent monthly foreclosure levels are up year over year and that over a million more homes will be foreclosed on in 2010 vs. 2009.) The article quoted Mark Zandl, chief economist at Moody Analytics, as predicting that the program will eventually help out only about 500,000 homeowners even though another 1.5 million homes will likely fall into foreclosure in 2011. If Zandl is right and the $75 billion program will only help out 500,000 homeowners, then the government would have spent about $150,000 per successful homeowner saved ($75 billion divided by 500,000), certainly a pathetic return on investment from an economic perspective.
• Another government program, Cash For Appliances, was supposed to be designed to incrementally increase the sale of energy efficient appliances for the home. Since absolutely no one in any part of the government is talking about how successful this program was, one has to assume that it performed as badly as Cash For Clunkers and the first time home buyer credits: it likely resulted in no incremental sales and just wasted more taxpayer dollars.
• The Obama administration warned us two years ago that unless the administration's economic stimulus plan was passed, unemployment could go as high as 8%. Well, the econ mic stimulus plan was passed and we have not seen unemployment less than 9.5% or so for lord knows how long. Does that mean if we had not passed the economic stimulus plan that unemployment would be 8%, 15-20% lower than it is today?
• Many times we have spoken about Washington's inability to foresee the gathering economic storm clouds even though there were tens of thousands Federal employees working in economic related government entities including Fannie Mae, Freddie Mac, the Treasury department, the federal reserve, HUD, FDIC, Senate and House banking and finance committees, etc. Of all these people and all these organizations, no one saw the economic mess that has engulfed us until it hit them in the face.
• The current administration has introduced so much economic uncertainly into the market, e.g. what will the health care reform bill actually cost business and consumers, will the Bush tax cuts go away or be renewed, will other taxes be raised and how much, will it be inflation or deflation that we all have to deal with, etc., that both businesses and consumers have reduced their from spending due to this uncertainty/fear factor, with the uncertainty locking up the economy.

Combine these failures with the fact that the political class is spending so much money that our national debt is approaching alarming levels, having just exceeded $13 TRILLION, you really have to wonder what economic novices are running the country today. Economic programs that do not increase economic activity, economic programs that are wasteful and inefficient, and government economic resources that do not see economic trouble before it occurs: certainly looks like amateur hour in Washington.

Obviously, a few major steps and changes have to occur in order to get the amateurs out of Washington, many of which are outlined in "Love My Country, Loathe My Government:"

• Step 1 - start downsizing government functions by 10% a year for five years. This step would reduce the number of insane and wasteful program such as Cash For Clunkers and get the political class focused on fewer but more impactful economic policies and programs. In other words, less people and less bureaucracy should result in less stupid economic policies that government entities launch to protect their turf and justify their existence, all of which are failures.
• Step 34 - systematically but fairly relieve all Congressional members of their committee posts if those committees fail to execute their jobs satisfactorily. In this area, all Congressional members sitting on House and Senate committees responsible for housing, finance, and Treasury should have been relieved of their committee posts for their amateurish handling of the recent economic crisis.
• Step 39 - term limits, as provided under this step, would ensure that the same economic hacks currently sitting in Congress would be gone in a relatively short time and not be allowed to continually perpetrate these stupid and failed economic programs and policies on the American taxpayer.

While 'American Idol", for this generation, and "Ted Mack's Original Amateur Hour", for the older generation, may prove entertainment, the economic amateurs in Washington are not entertainment, they are economically destructive and wasteful. Time to get some pros involved and dump the incumbents in November.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:
http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Looks Like Ike Was Right After All

I found it interesting that two recent articles about our military establishment recently leaned heavily on the thoughts of former President Dwight David Eisenhower. As many of your should know, one of Ike's lasting catch phrases was the "military-industrial complex." His fear was that the military and the industries that support the military may grow in power and statue over time, and predicted (correctly) that these entities would cause the nation to spend more on defense than was actually necessary.

The first article was written by Newsweek's Fareed Zakaria. He described the modest reform goals that Defense Secretary Gates is trying to put in place in order to streamline and make the armed forces more efficient. Unfortunately, he has been opposed by a whole spectrum of parties including politicians whose home districts/states may lose the support of Pentagon dollars, defense contractors, the military establishment, and lobbyists. Why is Gates looking to make these moves? Consider some of the statistics from Mr. Zakaria's article:

• Military hardware costs are spiraling out of control with the cost of one new Navy destroyer costing between $2 and $3 billion a piece to build while the cost of just one new bomber costs $2 billion per plane.
• While the private sector of the economy has stripped away levels of management to become more efficient and responsive, the Pentagon management levels have grown considerably, from seventeen layers a decade ago to about thirty levels of redundant management today.
• We now have almost 1,000 general and admirals in our armed forces, up 13% in the past 15 years, even though the number of people in our armed forces has shrunk over the time period.
• Every management layer at the Pentagon is larger than it was during the height of the Cod War. As an example, the article cites a study from Professor Paul Light of NYU where he estimated that there were 78 deputy assistant secretaries of defense in 1960 and there are 530 today.
• There are more military musicians in the military's marching bands than there are members in the State Department's Foreign Service.
• The Pentagon has ten times as many accountants than the State Department has Foreign Service officers.
• In a recent speech Gates questioned whether or not we needed to spend the money for an additional 100 fighter jets when we already have over three thousand such aircraft, do we really need to build more multi-billion dollar Navy ships when we already have a navy that is larger than the next 13 navies combined, 11 of which are navies of our allies, and whether we need to build more billion dollar stealth fighters when by 2020 we will still have 20 times as many such fighters as China.

Now consider an article by Boston Globe writer Peter Canellos, that was summarized in The Week magazine in the August 27, 2010 edition:

• Our current defense budget of $700 billion is six times larger than our nearest competitor.
• Our current defense budget is more than the next 18 largest defense budgets of other nations.
• More than $130 million of lobbyist money is spent ever year in an attempt to maintain and grow the country's spending on military hardware and other expenses.

Looks like Ike was right after all. We have allowed ourselves as a nation to build and maintain defense capabilities, and the resulting bureaucracy that goes with it, far beyond what is essential for our national defense. Just look at the numbers: a navy bigger than most of the rest of the world's navies combined, twenty times more fighters than our next nearest competitor, a bureaucracy that is bigger and more bloated than any time in our past, a $700 billion defense budget that costs each American household almost $7,000 a year to maintain, etc. The household income of the vast majority of the world's households is less than $7,000 a year whereas we spend almost $7,000 per household just for the Pentagon. It is out of control.

Think about how much better off we would be as a nation if we could cut that Pentagon budget in half. We would immediately inject $350 billion into the consumer economy if we could get half of that $7,000 per household expense back into the hands of our citizens. And this would not be a one time, ill-fated Obama stimulus-like plan, this would be an annual, ongoing $350 billion back into the economy that citizens could spend as they see fit, increasing our freedom of personal choice.

How could we attain this 50% reduction? The following steps, many of which are described in detail in "Love My Country, Loathe My Government," would be a great start:

• We need to realize that current, major U.S. troop deployments around the world are from another era and another time, and that these deployments are not longer strategic to our defense and should be terminated immediately. South Korea is now a very strong, democratic nation. Let them fight their battles with North Korea without the 30,000 or so U.S. troops presently stationed there. We no longer need 50,000 troops stationed in Japan, bring them home since 1) Japan is unlikely to attack Pearl Harbor again and 2) 50,000 U.S. troops in Japan would be no match for the 2,000,000 million Chinese troops if anything should happen in the Far East. There is no longer an Iron Curtain so stationing upwards of 60,000 U.S. troops in western Europe is no longer needed.
• Once these troops were returned home, all armed services recruiting would be stopped and the military vacancies and needs would be filled by the returning troops from Japan, South Korea, and Europe.
• The remaining 50,000 troops in Iraq need to be pulled back home also, as promised by the current President in his campaign rhetoric.
• We need to immediately stop producing hardware that we have no use for. The current size of our navy and our air forces needs to be frozen at current levels and that production be done for replacement of existing hardware, not the expansion of existing hardware volumes. A longer term plans needs to be implemented that starts reducing the hardware needs over time for only what is needed.
• A five year plan, as proposed in Step One of "Love My Country, Loathe My Government," would also be implemented in the Pentagon bureaucracy where the size of every Pentagon organization is reduced 10% a year for each of five years in order to get the military's management streamlined and more efficient.

This type of reduction in spending for defense will be very difficult to do. It has been fifty years since Ike issued his military industrial complex warning and since then, President after President has followed John F. Kennedy's lead, where in his inaugural speech he promised to "pay any price, beat any burden, meet any hardship" in defense of freedom. Unfortunately, based on this type of sentiment, the price has gotten very high, the burden on our economy has gotten very onerous, and the hardships continue to mount for no reason than to feed the interests of the military establishment and the politicians that support them. We have gotten to the silly stage now where we just waste money for the sake of tradition, i.e. we have always wasted money in this area.

It is time for the silly season to end and for our civilian military leadership to take back control of the Pentagon budget. We cannot afford this unwarranted military spending any more (remember how the same problem caused the collapse of the Soviet Union). The real question is whether our political class has the gumption to do their duty relative to the Constitution and civilian control of the military or they will fold their cards, as usual, in order to protect their re-election chances.



Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

What Can We Learn From The Rest Of The World's Leaders

In our last post we briefly discussed a recent article from Newsweek magazine that rated the best countries in the world to live. Unfortunately, the United States finished behind ten other countries relative to the Newsweek rating criteria. In that post we listed out several key actions that America, via its political class, needs to undertake in order to move us up that list of most desirable places to live.

Also in that article were a number of examples of what world leaders are doing in their respective countries that is resulting in improved living standards for their citizens. Some of these noteworthy efforts include the following:

• The Prime Minister of India, Manmohan Singh, is credited with moving India to the forefront of growth and power by getting rid of his country's stagnant socialism ways of doing things and embracing market driven capitalism. The Newsweek article depicts him, however, as being modest, humble, and incorruptible. Compare this to the current American political class that seems hell bent on jamming socialism down our throats and words like modest, humble, and certainly incorruptible (especially given the unethical and/or criminal behavior of Walters (alleged), Rangel (alleged), Blagojevich, Traficant, Cunningham, Jefferson., etc.) certainly do not apply to the prima donnas that currently reside in our political system.
• The British Prime Minister, David Cameron, is the youngest prime minister in over a century but his aggressive attacking of the country's budget deficit has been credited with calming the financial markets relative to the British economy. Compare this to the American political class that continues to rack up record Federal budget deficits every month with no end in sight.
• As with England, the economy if Ireland is expected to rebound strongly due to the necessary but painful austerity moves that Irish Prime Minster Brian Cowen implemented to get his country's deficit spending under control. He had the courage to take a short term popularity hit while doing the right long term strategy, a feat of courage not present in our politicians today.
• Brazil's outgoing president Luiz Inacio Lula Da Silva took Brazil from a second rate economic power to an economic dynamo in the eight years of his rule, primarily because he understood that business was critical to growing the economy, not an enemy to the economy. Compare this attitude with the current White House attitude that feels that more business taxes and more regulations on business is the right thing to do, resulting in chronically high unemployment in the United States for the past year or so, a high unemployment rate that is not expected to decline any time soon.
• The President of South Korea, Lee Myung-Bak, is credited with using his business background to understand the financial crisis and then acting decisively to guide his nation to safety through the economic upheaval. As a result, South Korea recovered very quickly from the recession and the South Korean economy is expected to grow almost 6% in 2010. Compare this to the anemic 2-3% that the United States may grow in 2010 and the fact that our leadership still has not figured out how to get the economy fully out of the ditch.
• According to the article, the Chinese Premier, Wen Jiabo "has earned a reputation as a leader with a heart." Compare that compassion to the lack of compassion shown by the Bush and Obama administrations regarding the Gulf disasters of Katrina and the BP oil spill, Senator Harry Reid who things American tourists to Washington DC in the summer physically smell, Nancy Pelosi who accused Americans who were against Obama's health care reform legislation as being un-American, the Congressman who physically assaulted a college student on the streets of DC after the student asked a question of the Congressman, or the two members of Congress who likened opponents of Obama Care to the racists who fought the Civil Rights movement. Not compassionate at all, downright disrespectful.
• Liberian President Ellen Johnson Sirleaf is credited with uniting her country after decades of civil war and creating the economic environment for two major industries, timber and diamonds, to thrive and grow significantly. She also increase school enrollment by 40% and slashed its debt. Compare that to our politicians who look forward to demonizing those that dare to have differing views, who cannot get our public schools to be successful, and whose management of the economy has been less than stellar.
• King Abdullah of Saudi Arabia is credited with modernizing schools, appointing women to high office, and investing in science and technology. Compare him to our politicians that have place virtually no emphasis on education process improvement, continue to be dominated by older white males in Congress, and who waste our tax money in building bike trails, building farmers markets, and other wasteful Federal earmarks rather than expanding the research and development efforts needed in science and technology.

Just consider some of the words above that describe some of the more dynamic and success leaders throughout the world: humble, modest, incorruptible, attacking budget deficits, sacrificing short term popularity for long term gains, modernizing schools, uniting her country, understanding business and capitalism, a leader with a heart, etc. How refreshing it must be to have leaders such as these. There is much to be learned from people who are actually focused on improving the lives of their citizens and not just on how get elected or where to find re-election campaign financing support. These people actually govern once in office, getting elected is a means to an end. Our politicians see getting elected as the end game.

That is why November is so critical to getting the nation out of every ditch that our current political class has driven us into. It is truly time to dump the incumbents and elect people that fulfill some of the ideals discussed above. Yes, we can learn a lot from the rest of the world's leaders. Whether we do anything about it is up to us.


Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Report Card On This Generation's Political Class

As the first decade of this century comes to a close, I thought it would be a good idea to look back over the past twenty years to see how this generation's politicians have managed the affairs of the Federal government and the country. Twenty years is a good measure since it a reasonable amount of time (not too short to see emerging trends, not too long to be irrelevant), it covers a time period when the Democrats and Republicans each controlled the White House for ten years, it covers a time frame when both parties either controlled parts of Congress or had split control, and the actions taken by these politicians will impact the nation for years to come.

Given this back drop, how did our so-called leaders perform relative to the vital issues facing the country? Unfortunately, the final report card is not pretty:

• Social Security is hurtling towards insolvency with no rational plan in the works to fix it.
• Medicare is hurtling towards insolvency with no rational plan in the works to fix it.
• Our public education system fails to adequately education vast numbers of our children while consuming more and more resources.
• We still have no rational national energy plan, which has caused us to become more and more dependent on the whims and energy pricing of foreign countries.
• We have not figured out how to manage the issue of drug addiction that has led to the evolution of a violent narco state just south of our border and left many our citizens that want to kick their drug habit untreated
• Our borders are still not secure, resulting in over 10 million illegal aliens in the country with a high probability that some of the 10 million are bent on terrorism aims.
• We are fighting two wars that have drained our Treasury, resulting in over 34,000 Americans being killed or wounded, but has not destroyed the terrorism threat that it set out to do.
• We continue to deny basic rights to the American gay and lesbian community, whether it is the right to marry or the right and privilege to serve in our armed forces.
• While the political class has passed a massive health care reform law, this law is likely to fail while substantially adding to the national deficit.
• Speaking of national deficit, we now have an outrageous national debt of over $13 TRILLION, burdening every American household with over $100,000 worth of government debt.
• Government reaction to national disasters such as 9-11, Hurricane Katrina, the BP oil spill, etc., while heroic at the individual level, have been inefficient, ineffective, and expensive at the government bureaucracy level.
• Government entities responsible for the banking and housing industries (e.g. Treasury Department, Securities and Exchange Commission (SEC), Freddie Mac, Fannie Mae, FDIC, Federal Reserve Board, Senate and House of Representatives committees, etc.) failed miserably in foreseeing and managing the economic disaster of the past few years, with confirmed reports that some SEC employees, at all levels of management, spent most of their working days surfing the Internet for downloadable pornography.
• Not to be outdone by the SEC employees, Gulf of Mexico Interior Department employees have also been found to be spending much of their working time surfing for Internet pornography while ignoring safety issues that eventually caused the BP oil spill disaster.
• Through the gerrymandering of Congressional districts, the expansion of earmark volumes, manipulating the primary election system, and the passing ineffective campaign reform financing laws that allow big corporate, union, and PAC contributors to drown out the voices of ordinary Americans, this political class has rigged our voting processes to ensure that the incumbents are always re-elected despite their in office performance.
• Despite massive bureaucracies concerned about consumer safety, failed government processes to foresee the Toyota safety problems and the failed over sight of stopping the import of lead and cadmium laced toy products, probably resulted in American fatalities.
• Moral and ethical behavior have not been a strong point of this generation's political class, whether it was outright/convicted corruption (Traficant, Cunningham, Ryan, Rostenkowski), alleged corruption (Rangel, Walters, and possibly a dozen others), or alleged immoral corruption (Spitzer, MacGreevey, Edwards, Clinton, Foley, Ryan, Sanford, Ensign).
• Intelligent political dissent has degenerated into name calling with those opposed to the invasion of Iraq as unpatriotic, those opposed to Obama Care being likened to racists of the civil rights era or being called un-American, knuckle dragging Neanderthals, or terrorists.
• Never has the country been so divided with politicians using the differences in cultural, racial, sexual, religious, or geographic orientations to "energize their base" while belittling other Americans that may have legitimate, differing views.

Unfortunately, given the above report card, I think we would all have to give the political class a failing grade for their performance over the past twenty years (despite the fact that they reward themselves with automatic pay raises every year). Wherever you land on the above issues, it is pretty obvious that no real progress and, in many cases, no real effort, has been made in successfully resolving these issues.

The focus of our politicians has been very simple: to get elected and stay elected, using whatever financial and government resources (e.g. earmarks) they can get their political hands on or demonizing one group of Americans (gay vs. straight, pro life vs. pro choice, red state vs. blue state, one race vs. another race, poor vs. rich) in order to get the support of another group. Nowhere in this list of political priorities do you see the solving of issues or the uniting of the country as important to the American political class.

And this is not only the Democrats' fault and it is not only the Republicans' fault. It is the fault of all politicians and the American voters who allow both parties to separate and divide us against ourselves while they continue their failing performance relative to the problems facing the nation today.

The time has come to move beyond this petty and ineffective leadership we have endured for the past twenty years. We need to enact the fifty steps, as outlined in "Love My Country, Loathe My Government" as soon as possible. These steps include downsizing government functions to be smaller in number, smaller in size, and more effective in serving. These steps include campaign finance reform to take the overpowering allure and temptation of money out of the election process. These steps include political accountability (including term limits) so that politicians actually behave ethically and morally, and become focused on problem solving and not solely their re-election. These steps include national, independent efforts to fix our schools, our drug problem, our energy problem, and our health care problem, independent in the sense that politicians and lobbyists are excluding from the problem solving process.

Otherwise, twenty years from now, our kids will still be undereducated, our national debt will be insurmountable, government functions will be more dysfunctional, politicians will be more entrenched, more corrupt, and less likely than even now to solve important issues, and the freedoms and liberties we should be enjoying, as guaranteed by the Constitution and Bill of Rights will be just distant memories.

A recent article in Newsweek magazine rated the top countries in the world in which to live. Twenty years ago, the United States would have been the hands down winner. Our economy was strong, the communist threat was ending, we were probably the freest nation in the world. We were the economic, cultural, military, moral, and athletic powerhouse of the world. Today, according to the Newsweek article, we rank 11th out of the best places to live in the world. While other nations have probably accounted for a lot of the improvement, at our expense, on this list, I would also reprimand our political class for not improving our country and our lives as quickly as the rest of the world. From first to 11th in twenty years. Imagine where we will rank in another twenty years if we allow this generation of politicians to propagate further.


Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

If You Are Not Part Of The Solution, You Must Be Part of The Problem - The Gigantic Mess That Is The Federal Bureaucracy

Two articles came together for this post, both of which illustrate how large, unwieldy and ineffective the federal government has become. The first article was written by David Gergen and appeared in the August 15, 2010 issue of Parade magazine. Mr. Gergen talked about how unprepared the Federal government is when it comes to man made or natural disasters. After spending a substantial amount of time in the Gulf after the BP oil disaster, he came to the conclusion that while there were a lot of government employees working real hard to address the disaster, they were overwhelmed for a number of reasons:

• Those employees are "ensnared in a government system that is hopelessly entangled and desperately needs fixing."
• This results in well intentioned and hard working government employees working far below effectiveness.
• Despite large amounts of taxpayer funded resources (Homeland Security, FEMA, the Coast Guard, Centers For Disease Control, state and local governments, etc.), laws and regulations have sprouted up over time that have confused the roles and responsibilities of each of these government entities.
• This mish mash of laws and regulations has resulted in a muddled and clogged chain of command which feeds into uncertainly and delays in addressing the disaster.

Sounds like every other government function from Hurricane Katrina to the financial and economic meltdown of the current recession, everybody is in charge but nobody is responsible. Gergen's remedy is very much in line with Step 1 of "Love My Country, Loathe My Government." We must start downsizing and streamlining all government sources, using a ground up approach to decide what are vital government functions and then properly staffing and training those functions to be more efficient and effective. Without a functional review down to the lowest job responsibility, the muddled chain of command and the substandard performance, relative the taxpayer dollars spent will continue, endangering property, lives, and the reputation of the Federal government.

Speaking of substandard performance, the second article of interest appeared in the August 20, 2010 issue of The Week Magazine. It addressed the continued disaster that is Fannie Mae and Freddie Mac:

• According to the article, Fannie Mae recently announced that it had lost $3.1 billion in the last quarter.
• The good news was that the $3.1 billion loss was its best quarter in three years.
• Freddie Mac followed that announcement by announcing it had a $6 million loss.
• They have asked Congress for a combined $3.3 billion cash infusion in order to not go bankrupt.

Remember, these two organizations have already sucked down untold billions of taxpayer dollars to stay solvent and are expected to need hundreds of billions more in the next few years to remain afloat.

The good news is that the political class is finally talking about making changes to get the situation under control. The Treasury Department will host a conference later this month to generate ideas for a new mortgage financing approach int he country. How successful they will be is in doubt, given that both Fannie and Freddie successfully lobbied to stay out of the clutches of the recently passed financial regulatory reform law. Who says they cannot get out from under Congressional scrutiny again? During the run up to the financial regulatory reform bill, we saw numerous cases of Federal department heads lobbying Congressional people to save their own fiefdoms from change.

Both examples illustrate how big and unwieldy the Federal government has become. We waste tons of taxpayer dollars on very poor service and performance. What is needed are strong, intelligent leaders that know how to analyze a problem, who can identify the root causes of the problem, and are courageous enough to take the correct steps to fix the problem, regardless of whose campaign funding sources gets disrupted, whose Congressional district takes a hit, whose Federal department is downsized, what Federal employees are downsized out of a job, etc. Unfortunately, I see very few people currently sitting in powerful political positions that fill that bill (smart, courageous, problem solvers). Otherwise, I would have hoped that they would have made the necessary changes to fix the bureaucracy. In fact, I would have hoped that they would not have let the situation get so bad to begin with.

That is why Step 34 is so important. This step would remove politicians from Congressional committee posts who did not clean up these bureaucratic messes and the poor, and sometimes fatal, performance that result from these messes. The first step in this long arduous journey to downsize while at the same time improving the effectiveness of the government begins in November with the dumping of all incumbents. As the old saying goes, if you are not part of the solution, you must be part of the problem. Given all of the problems and the inefficiencies we currently have, those that are in charge must be part of the problem.




Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Another Day, Another Five Political Class Disappointments

Today's post is a hodge podge of recent events whose only commonality is the continued disappointments that the political class creates for the American citizen and taxpayer. With all of the major issues facing the country today, our politicians continually come up short in solving those issues, usually getting themselves hung up on petty issues or their own vanity and ego:

1. The biggest disappointment comes from a USA Today article written by Fredreka Schouten that appeared in the August 16, 2919 issue of USA Today. Ms. Schouten reviewed the current state of ethics in the United States Congress this year. Besides the high profile cases of Charles Rangel (possibly going on trial in the House this fall based on over a dozen charges) and Maxine Walters, so far this year an independent Congressional watchdog, the Office of Congressional Ethics, has begun 44 ethics inquiries, up from just 24 through the same time last year, an 83% increase. From these 44 cases, the Office Of Congressional Ethics has recommended that 13 cases of ethics violations be taken forward to the House ethics committee. Speaker Of The House, Nancy Pelosi takes the increased investigations as a good sign which indicates, in her mind, that the process is now catching more ethics violators. The disappointment on my part is that there are so many cases to begin with (44 investigations are over 10% of the House membership) and I am not as thrilled as Ms. Pelosi is: while we may be catching more violators now, the bigger success story would be that there were no ethics violators to begin with.
2. Speaking of Ms. Pelosi, a few days ago she decided to weigh in on the potential of building a Muslim mosque very close to the World Trade Center location. Most reputable opinion polls show that by more than a two to one ratio, the majority of Americans oppose the building of the mosque so close to Ground Zero and would prefer that it be moved further away, if only a few blocks. Rather than celebrate Americans' freedom of speech in this matter, Pelosi actually called for a government investigation of those opposed to the current mosque location. This is consistent with her previous rant where she accused those citizens having honest and legitimate opposing views against Obama Care of being being un-American. How disappointing that a leading political figure in this country does not respect the rights of Americans to have differing views, actually threatening to call in the full weight of the Federal government to question those that might differ from her opinion.
3. An article by Steve Chapman of the Chicago Tribune was summarized in the August 20, 2010 issue of The Week magazine. Mr. Chapman wrote about the amount of waste that the political class has squandered in the Iraq and Afghanistan wars: 1) we as a nation just went over the TRILLION dollar mark as far as cost to the American taxpayer, 2) this is just the cash flow we have spent, it does not include the interest on the amount of borrowed money we used to finance these two wars and the amount of veteran and medical costs we will incur for decades to come and 3) does not include the 34,000 plus members of our armed forces that have been killed or wounded in both countries. The article quotes numbers from a study from scholars Joseph Stiglitz and Linda Bilmes that estimates the total cost of the wars will eventually reach $8 TRILLION. What a disappointment that our leaders can waste so much money and lives for outcomes that are still in doubt and which will never pay back the actual cost.
4. Two articles in that same issue of The Week magazine discussed the vacation that Michelle Obama recently took to Spain with her daughters and some of her daughter's friends. Kirsten Powers from the New York Post summed up my disappointment with the trip when she wrote that it was ill advised, given the dire economic straits many regular American find themselves in. With unemployment high, savings low, job security tenuous, the first lady took herself to a foreign country where, according to Ms. Powers, "are images of Michelle swanning around the Costa del Sol in her one shouldered- Jean Paul Gaultier top." Now, the first family has every right to take a vacation, including their current one in Martha's Vineyard in New England. but would not it have been better if the first lady had "swanned" down in the Gulf Of Mexico area and brought some much needed attention and good publicity to that ravaged area? Consider a view from the second article in that issue of The Week where an editorial in the newspaper El Mundo wrote "what a boost to Spain's tourism industry" her visit to Spain was. El Munod writes that Ms. Obama visited numerous cultural sites besides meeting with the royal family of Spain. How disappointing that the vacation could not have helped her fellow Americans, not the Spanish tourism industry.
5. And finally, a small disappointment but one that is symbolic of how we have allowed the government to get so large that its millions of rules and regulations have taken us over the edge of sanity in many areas. Not to be outdone by the Oregon public health official who shut down a seven year old's lemonade stand for not having a restaurant permit, the Federal government is ordering a North Carolina county to spend $1.1 million to bring its new courthouse in line with the American With Disabilities Act. Apparently, an inspector found that the bathroom mirrors are one inch too high and that the toilet bowls are 18 inches from the wall, not the required 19 inches. Now, I am a full supporter of the ADA, all Americans should have the same access and rights. But come on, the county had received no complaints about the one inch discrepancies and could they not have been allowed to retrofit just some of the mirrors and toilets to save some money? Would not that $1.1 million been better spent on education, reducing a state budget deficit, fixing a highway, etc.? As a country, I am disappointed that we continue to waste limited taxpayer money on non-essential projects, whether it is a one inch discrepancy or a multi million earmark.

There it is, unrelated, diverse events that result in a unified feeling of disappointment with the American political class. We cannot survive much longer as long as our politicians are willing to waste our money, deny us our right to have a differing opinion, and continue to act like the elitists that they thin they are. That is why November is so important, let's find a way to dump the incumbents and end the string of disappointments that they all seem to incur.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/

Is The Federal Reserve System Nohting But A Wild Guess?

Sorry about that last post, hit the send button prematurely. I was intrigued by an article written by Al Lewis that appeared in the Wall Street Journal insert to last Sunday's Tampa Tribune. He was talking about the Federal Reserve Board and System and had some interesting observations.

But before we see what Mr. Lewis was talking about, I decided to do some back ground on the Federal Reserve Board. From various online sources I came up with the following information:

• The Federal Reserve System was formed by an act of Congress, the Federal Reserve Act, in 1913 after a serious of severe bank panics.
• The Board appears to have four major functions:

1. Conduct the nation's monetary policy.
2. Supervise and regulate banking institutions.
3. Maintain stability of the financial system.
4. Provide financial services to depository institutions, the U.S. Government and others.

• Monetary policy usually involves manging the supply of money through interest rate manipulation to achieve a set of economic goals, which usually include low unemployment and stable prices.

Given these functions and background information, how well has the Federal Reserve System performed:

• Given that it was formed in 1913, it apparently did not perform very well in the 1930s, the time of the Great Depression, or the past few years, the time of the Great Recession.
• It does not appear that it has historically done a great job at regulating and supervising banking institutions since the high number of bank failures and banking instruments were the prime causes of both the Great Depression and Great Recession.
• It obviously did not do a good job at maintaining the stability of the financial system since it belatedly forced Congress to quickly pass the poorly written, poorly implemented and very expensive TARP legislation because the Federal Reserve did not foresee the gathering storm clouds leading up to the Great Recession.
• Regarding monetary policy, while prices have been relatively stable in the U.S., unemployment continues to be very high, earning the Fed a failing grade in this area of its responsibility. The scary aspect of their monetary policy management is the fear from both sides of the economic spectrum, those that say inflation will explode at some point in time and those that say we are facing a deflationary period. In either case, the Fed could be very close to missing on their stable prices responsibility.

Thus, I always felt that the Federal Reserve Board and System performed just as poorly as every other government entity when it came to the latest recession (FDIC, HUD, Fannie Mae, Freddie MAC, the Treasury Department, House of representatives banking and housing committees, Senate banking and housing committees, SEC, etc.). When you look at what we have been through over the past two years and compare it to the charter responsbilities of the Federal Reserve Board, you see that they have indeed been less than stellar in managing the economy.

But Mr. Lewis' column this past Sunday puts it all in perspective. He reviewed the following timeline in the Federal Reserve's position on our economic condition:

• In January, the Fed said that"economic activity has continued to strenghten and... the deterioration in the labor market is abating."
• In March, the Fed said that"activity has continued to strenghten ... and the labor market is beginning to improve."
• In April, "the labor market is beginning to improve."
• In June, "economic recovery is proceeding and...the labor market is improving gradually."
• But in August, "the pace of recovery in output and employment has slowed in recent months."

What does this all mean? Let Ben Bernanke, the Fed Chairman explain to us, according to Mr. Lewis: "My best guess is we will have a continued recovery but it will not feel terrific." The key words in the Chairman's statement is "my best guess." Given that the economy has continued to get worse since the fourth quarter of 2009 and the unemployment rate is just as bad now as it was in January, nothing has strenghtened, nothing has improved, nothing has abated, nothing. And now, the leading economist and bank regulator in the country has been reduced to giving his best guess as forecasts. We are not paying high taxes for guesses, we need foresight. I can get someone to guess for far less money that what we are paying the Fed.

Just another government entity that has not done its job. Whether it was the SEC staffers that were surfing the Internet for porn during the lead up to the Great Recession, the Interior Department employees that did not do their required due diligence in supervising oil drilling rigs in the Gulf, Federal consumer safety organizations that missed the Toyota and lead laced toys problems, etc., we pay high taxes for low performance across the board when it comes to the Federal government.

That is why Step 1 and Step 34 from "Love my Country, Loathe My Government" are so important. Step 1 would start downsizing government by reducing its size and reexamining the entire government structure to find ways to make it more effective, including the semi-independent Federal Reserve Board. Step 34 would remove those politicians that sit on Congressional committees from their post if those committees allow lax or sub par performance from government functions to continue. We can all do better than guessing when it comes to the business of the nation.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/