Thursday, August 27, 2009

Separating Fact from Fiction

by Gordon Cooper

From Broader View Weekly, August 28, 2009

As the noise from the Health Care Reform effort continues to drown out almost every other political discussion this summer, it has become increasingly difficult to determine which voices are speaking facts and which are merely spreading fiction. The charges have been flying from both sides and even though we have spent precious newsprint in our two previous columns covering this topic, we decided the importance and relevance of this issue demanded at least one more effort.

At the risk of being redundant, I will fight the urge to echo my earlier objections to this legislation. For those readers who were unable to read my columns or for those who may have forgotten the arguments, I invite you to log on to our blog or email me for copies.

In the fight for facts over fiction, it has been believed by many in the media that the protestors have been the ones spreading misinformation. Obama spent a fortune flying to Montana and New Hampshire for staged Town Hall meetings and gave speeches to civic leaders, church leaders, and anyone else who would listen about why we needed this overhaul and why we needed it now. He claimed this unprecedented sales job by our chief executive was necessary because “so much misinformation was out there”.

I’m sorry to say that he failed to not only stifle the noise of fallacies, but I am suggesting that he actually added more volume to the din. Let me explain.

Obama claims that this bill will pay for itself with two-thirds of the expenses covered by reducing waste, reducing subsidies to insurance companies who augment Medicare coverage, and increasing efficiency. The final third will be supplied by increasing taxes on those earning more than $250k. That is the plan. However, I should remind you here that these are the same planners who were surprised by the depth of the economic morass, and same ones who had to redress the Cash for Clunkers program when it didn’t go exactly as planned.

Even if this bill did not scare me with its provisions for an overreaching and all-intrusive bureaucracy that would monitor and influence every private interaction between physicians and patients, and even if I was not concerned with the loss of privacy and freedom of choice that is contained in the details of this monstrosity, I would still oppose it on economic grounds alone.

Obama is either not being factual in his numbers or he is being naïve. I hereby offer the following factual examples of why this plan will not pay for itself.

Obama bases his numbers on the increased cost of insuring 46 million Americans (and/or anyone who can swim the Rio Grande or squeeze beneath a border guard’s nose) who are currently uninsured, while assuring the rest of us “who like their health care can keep their health care”. The facts are that it will be impossible to squeeze that many people under this umbrella without someone getting pushed out into the rain.

We need only look to our northern neighbor and to the State of Tennessee to see how expensive health care becomes when we get it for free.

In a recent article published on by Randall Denley (Tuesday, August, 18, 2009), the author lamented about how costly the Canadian system had become. In fact, he claims that 43% of Ontario’s program spending budget goes to fund health care. He also claims the system is antiquated and inefficient and not patient-friendly, “being driven by government budgets – not patient needs”. I can also quote other Canadian authors who say their current program is unsustainable as it is being run now.

Now, before my critics start yelling about how unfair it is to be comparing Obama’s plan to Canada’s, let me tell you a little secret. One of Obama’s health care architects is Health Czar, Nancy DeParle. She was also instrumental in casting the failed TennCare health policy in Tennessee.

That policy started with the same lofty and altruistic goals as the current House bill. However, reality set in and as employers saw their taxes rise, they shuffled off their employees to the public option and costs skyrocketed. In a few short years the plan was consuming a full third of the state budget and sucked up every penny of new revenue. Before the plan was re-structured, almost half of all TennCare subscribers were people who had migrated from private plans to the free plan. Are you surprised?
To pay the extra costs, taxes were raised, reimbursements to doctors and hospitals were reduced and benefits to patients were slashed. In other words, health care was rationed, and taxes were raised.

Another fact that has not been disclosed by Obama is the fact that the Congressional Budget Office (CBO) has crunched the numbers and concluded that the new taxes, mandates and bureaucratic sludge that always seems to accompany any government program will increase our obscene deficit by another trillion dollars and cost our economy another 1.6 million jobs.

Again, these are facts, not fiction. Verify them if you wish. I do not dispute the fact that we need reform – but not this reform.

The Faltering Plan for Reform

by Keith Cooper

From Broader View Weekly, August 28, 2009

As we near the time Congress will resume its session after its August break, the momentum for real change is slowing. There are several reasons that the plans for health care reform coming from Washington and the White House are losing steam.

One reason is the Democrats’ failure to stay on message and control that message. As organized opposition surfaced at town hall meetings and congressional meet-and-greets, representatives were ill-prepared to answer the tough questions posed and often ill-informed about proposals that were in committee. The result was a lampooning of public officials that seemed like an ambush to the world audience that was observing.

At the same time, Senators and Congressmen from the opposition set out to obstruct any solution that came from the Democratic president or his colleagues in Congress. This is the worst kind of politics because it abandons the interests of constituencies in favor of power brokering and posturing. Instead of addressing problems that have caused struggles for the GOP, and a thumping in the last election, Republicans opted to become a party of “no” and get in the way of any proposal no matter the benefits to the individual.

Another problem is a caving in at several levels of the process. The authoring of the separate proposals in the House and Senate were perverted by the influence of health insurance companies and political pressure. Provisions that stood a chance to trim costs, increase efficiencies or cover greater numbers were struck in order to gain leverage to pass any measure at all.

This is the greatest threat to President Obama’s promise to provide something that comes close to universal health care. Even the White House recently backed away from the idea of a public option until pressure from supporters effectively put it back on the table.

It doesn’t help that there is an organized campaign in some media to oppose any reform at all. Some of the most influential voices in conservative media are now discounting their power (an interesting suggestion coming from some of these inflated egos) and claiming that the opposition to Washington’s efforts is led by the masses. They attempt to convince grassroots America that the charges leveled against the talking heads are insults against American citizens. They feed the line that Obama and the Democrats are elitists that are directing their hatred at the public.

The argument makes no sense to me, especially since those voices shout arguments against health care reform that show their general disdain for anyone who would gain coverage under any new plan that might emerge.

Unfortunately, representatives were unsuccessful in countering that message as well, and began to get beaten-up in the media and public opinion. Representative Eric Massa of New York’s 29th district was blasted for comments he made at in informal gathering of bloggers recently. He mentioned that he would oppose public opinion to vote in ways that would benefit his constituency. Instead of applause for taking a principled stand for the public good, he was showered with daggers of contempt. And he was talking about voting against the current iteration of the legislation.

Supporters of reform have been unable to dispel the myths used to attack the plans and present the proposed benefits in a concise way. This has allowed the same misinformation to be repeated over and over. As a result many of those myths are accepted as truth.

For instance, claims about the high costs of reforming the system are overblown, especially since the details of the legislation are yet to materialize. Critics characterize every government entity as inept and inefficient. They argue that moving health care from a private system would endanger important services. The fact is that the most vital services we rely on are already publicly run. Emergency services, police forces and fire departments are publicly funded and run and operate well in most cases.

Also, the administration’s discussion of cost reduction is often characterized as a reduction of compensation to physicians and care providers and rationing of patient services. In fact, part of the concept is a reform of the bureaucratic waste and excess of the health care system. Faith in American ingenuity should envision the ability to efficiently distribute health benefits under a new streamlined system. Instead, the defeatist opposition turns again to the same tired assertions about the evils of big government.

Comparisons to other public health care systems are often used to undermine the efforts to reform the U.S. system. Canada is a favorite choice as an example of the problems of public health care. Interestingly, Canada is ranked above the United States in the quality of health care. In fact, in an August 12 column on Fox News’ website that was critical of patterning our system after Canada’s, Wendell Goler admitted that:
Canadians have a longer life expectancy, lower infant mortality rates and lower rates of obesity and diabetes than people in the United States. Canadians' primary care doctors get paid more and spend more time with their patients than doctors across the border to the south.

An interesting observation from Obama’s most vocal detractor: Fox News.

The fact is that the most common talking point in the health care debate is a weakness of the current system. The concept, called “death panels” by some, whereby a panel makes judgments about treatments and coverage, is a fabrication of the right. However, that type of decision-making goes on every day. Panels and agents in cold corporate insurance companies make choices to deny services to needy patients (often in life-or-death situations) in order to serve the interests of their bottom line. Even though the legislation imposes no such panel, putting those decisions in the hands of those legally bound to the service of the public is better than leaving it to those legally bound to the service of shareholders.

Like my brother Gordon, I recognize the need for reform. Like him I don’t think the current plan fits the bill. Unfortunately, if this current effort fails, I fear it will become more and more difficult to pursue meaningful change.

Sunday, August 23, 2009

Cutting through the Fog

by Keith Cooper

From Broader View Weekly, August 14, 2009

Since members of Congress began their August break recently, there have been efforts on both sides of the debate to present their cases. Democrats have held town hall meetings to allow for discussion of the legislation. Cable news and talk radio have launched campaigns to color public opinion and oppose the reform measures.

Unfortunately, other forces are also at work. Special interest groups and political action committees are organizing folks to disrupt meetings, shout down speakers, and give the impression that a “huge” mob of grass-roots individuals are rising up against the government. Some protests have turned nasty and even violent.

Lost in the fray are the real details of the bill and issues of concern.

The objective of this week’s column is to attempt to cut through the fog and fury of the heated rhetoric and help decode some of the actual bill that is beginning to emerge from Congress.

Unfortunately, it is unrealistic to represent the thousand-plus page document accurately within our limited space. Also, I will admit that I have not read the entire House bill, and that I have read none of the document that the Senate will resume work on when the session returns in September. In fact, wading through the tangle of legalese gave me a greater appreciation for our representatives charged with crafting, amending and even reading the legislative materials that cross their desks. I am not excusing members of Congress who vote on bills without reading them fully, but I found myself wishing for a staff of interns to parse the bill for me.

In the interest of brevity, I will take a look at a few of the criticisms leveled against the bill and discuss them with reference to its actual provisions.

One claim of the opposition (whatever form that opposition takes – be it GOP leadership or conservative media) is that individuals will be forced into a public government-funded health insurance system even if they have existing health insurance with which they are satisfied. There is a provision wherein an employer’s offered health insurance plan is evaluated against certain criteria to ensure that such plan provides sufficient coverage. Any insurance plan that fails to meet these criteria would hardly be worth enrolling in. Employers not currently offering insurance that measures up, have the option to enroll in an appropriate plan or choose the public option. The hope is that employers will be able to provide more inclusive health insurance coverage to their employees by having greater choice of options available.

Opponents also claim that the House plan specifically provides for tax-payer funding for abortions. The Right to Life movement has been loud in its opposition to the bill because it accuses lawmakers of providing funding for abortions in sections of the bill addressing outpatient clinic services and family planning services. In fact, there is no specific reference to abortions at all within the bill from the House of Representatives. There is a portion of the bill that allocates funding to clinic services, but only as a means of defining the breadth of medical coverage under the plan to include entities outside of physician’s office and hospital services.
Some in the movement are pushing for a specific prohibition of public funding for abortions but one of the sections of which they are critical comes close to just that. The section on family planning services denies coverage of those services for women who are already pregnant. While I disagree with this limitation, it should placate abortion opponents. Apparently, though, any public funding of women’s health services is equated with promoting abortion in the minds of some.

The most interesting claim opponents of the bill are making is that it promotes physician-assisted suicide or euthanasia. To be fair, there is a provision that discusses end of life decision and promotes physician-patient consultation that weighs the concerns versus the benefits of certain treatments. This provision does encourage consultation on living wills and sustaining treatments of patients in end-of-life situations. Some conservative talking heads have said that the bills deference to existing state laws regarding these matters implicitly promotes euthanasia since two states (Oregon and Washington) permit physician-assisted suicide. While it is true that the bill suggests physicians discuss a state’s legal requirements regarding the patient’s care, it neither implicitly nor explicitly warrants the practice of euthanasia. The fact is that many ethical doctors already institute a policy of consulting with patients, especially those who are aging, about realistic treatments. Surgeries or treatments that are invasive are often risky and may yield little relief to certain patients, regardless of age. The tendency may be for doctors to recommend treatments to prolong life or minimize symptoms whenever possible, but I believe a realistic approach is morally superior to playing God at the expense and potential peril of the patient.

I am not endorsing the current bill. I had hoped for a real reform of the broken health care system in our country that would provide the neediest among us with the security that vital health services are within reach of us all. I think this bill falls well short of that. However, I feel that the bill should be disputed on its merits and not amid a smokescreen of misinformation.

It is unreasonable for me to claim that this column comes close to educating Broader View Weekly readers on the various components of the health care reform bill. I can only offer this advice: educate yourself. HR 3200: The Affordable Health Care Choices Act of 2009 is available for download at Also, check the rhetoric you hear against the list of fact checking resources provided weekly on page 2 of the Broader View Weekly. Most importantly, don’t rely on any one source for news or information.

Get Off The Couch!

by Gordon Cooper

From Broader View Weekly, August 14, 2009

The blessing of living in this technically advanced era is the ability we have to access many sources of information at the mere click of a mouse. We also have news outlets available to us at any time of the day or night. These opportunities were denied all previous generations in our nation’s history. You would think, therefore, that we would have the most informed and well-educated citizenry to have ever lounged on the couches of our fair nation. Sadly, that is not the case. I am sorry to say that we (Note that I am speaking in first-person plural here, I include myself in this indictment) all too often sit back and allow others to do the heavy lifting for us. We sit back in our easy chairs and bovinely chew our cud and burp out the pre-digested “facts” that others have sought out and delivered to us in soft, chewy morsels.

It is my intent today to inspire you to get up off the couch, go to your computer or to your library’s computer, and do some heavy lifting. Exercise your brain and, in so doing, I hope you will be inspired to exercise your DUTY as a citizen to become an informed and active part of the decision-making process within our nation. I will not be telling you what to think, I will not be telling you what questions to ask of your representatives; I will be, however, exposing you to some of the details that I have found in some heavy lifting of my own. But do not expect me to pre-digest these facts for you. That would be an insult to your intelligence and it would deny you the pleasure of chewing these morsels for yourself.
So, it is with the above intent that I bring to you some details about the proposed legislation that our leaders have told us we need.

First of all, the document is available for download at the house website or through other private sites such as I would recommend that each of you take the time to download it – although, for the sake of our forests, I would not recommend printing the whole 1,000-plus pages.

If you take my advice, what facts may you uncover?

Well, you may discover that hidden within this bill that many of our own representatives have still yet to read is the following:
On page 30, line 132 and following, you will read of the establishment of a government committee that will, figuratively, be brought into every exam room of every doctor’s office and hospital. This committee will be active in determining the treatments and benefits available to you and the compensation your doctor or hospital receives.

If you are okay with sharing your private financial information with an unknown and unknowable number of government employees, you will find no problem with the stipulations carried on pages 57-60 where this legislation mandates that the above named committee shall have access to your private (well it used to be private, anyway) bank accounts to determine your ability to pay for medical procedures once you receive a government issued healthcare card. It is cloaked, however, in words that say it is to determine which programs and assistance you may qualify for.

Page 121 lays out in terms that even a weak reader like me can understand that the secretary of this committee shall have the power to set payment rates for all services and procedures. This practice in other nations has led to the emigration of the most qualified doctors from their shores to ours as they realize that price-fixing takes away their incentive and limits their ability to provide the best treatments for their patients. The inevitable result will be a shortage of qualified men and women entering the medical field. This concern was voiced to me personally by an emergency room physician from Arnot Ogden Hospital.

I could go on and on, but that would actually go against the purpose of this column. I want to just pique your interest enough to inspire you to do as I did – read it! I admit that I did not read the whole bill in detail; however, I did do the good work of checking the validity of those who have written about the bill by reading the sections they mentioned.

Remember the Biblical adage that states: “To whom much is given, much shall be required.” (Luke 12:48 paraphrase). We have been given a great amount of freedom in this nation; therefore much vigilance is required of us to maintain that freedom. That maintenance requires us to get off our couches and do some heavy lifting. If you read things in this bill or others that concern you, print up those particular sections of the bill and take your concerns to your elected representative when she or he comes to your town hall. Get off the couch!

Caveat Emptor – “Let the Buyer Beware”

by Gordon Cooper

From Broader View Weekly, July 31, 2009

Perhaps you’ve had the same experience with high pressure sales people as I have had. I have sat across the desk or listened on the phone as the commission-driven agent gave me the “You better act now” routine. I was warned of the dire consequences if I did not sign Today. It was only after I had been sucked in by their fear-mongering that I took the time to read the fine print of the commitment I had signed. It was then that I learned the validity of that admonition listed in my title. The responsibility lies with the buyer to be wary, to ask questions, and to be skeptical of those things that sound too good to be true.

After visiting the White House propaganda website about the need for Affordable Health Care and listening to President Obama’s orchestrated press conference/speech, I felt the same feeling of pressure I felt each time I was in the presence of an overachieving salesman. There is no time to lose, this is a limited time offer, you must act now, etc.

Fortunately, it seems that our representatives have succeeded in pushing back Obama’s timeline and have stifled his zeal to get his monstrous health care overhaul on his desk before the August recess. But we cannot breathe easy just yet. This dangerous bill still has a beating heart and until we can stick a stake in that beating heart, our economy and our nation’s healthcare industry is at risk.

I will not deny that many of the postulates on the White House website are true. We do have a costly system. There are inequities in coverage and premiums. There is a need for change. However, I believe the cures proposed within this bill would be worse that the disease.

Essentially, Obama’s proposal for a “public insurer” to compete with private insurers revolves around four arguments. They posit that a public entity would: 1) bring down prices by bringing in increased competition; 2) save more money by lowering administrative costs, and because the public plan would not be profit-driven, the savings would be passed on to consumers; 3) because they would represent a larger body of consumers they would receive better deals from drug companies and medical suppliers; 4) the single buyer would be a greater negotiator and would truly get the best price for the services and products.
Each of the above arguments is refuted by evidence to the contrary from both foreign and domestic experiments. So, let’s examine them, shall we?

First of all, we already have competition in the health insurance field. Hundreds of companies currently negotiate for subscribers and for suppliers. That competition allows employers to bargain for plans and premiums that best fit their employees’ needs and their companies’ budget. To bring in a large buyer who has little direct accountability to its shareholders would stifle true competition.

Secondly, the idea that a not-for-profit institution is somehow able to lower costs has not proven true. According to John E. Calfee’s article in the Wall Street Journal, nonprofit firms already exist, including some Blue Cross-Blue Shield plans. Evidence shows that there is not a discernible difference in efficiency or cost-savings. The idea that a government-run program could ever lower administrative costs is laughable. By its very nature, any bureaucracy is rife with cost overruns and ever-increasing budgets. We need only look across the pond to see other nations abandoning state-run enterprises and returning public airlines, phone companies and energy suppliers back to private corporations.

Thirdly, larger numbers do not always get the best deal. Many of our private companies serve more subscribers than Canada’s state-run healthcare. Once a plan reaches over a million subscribers the extra numbers do not reflect a significant difference in costs.

Fourthly, the idea that a single buyer would represent a superior negotiator does not stand up against real experience in other countries. The common pathway taken by a monopsony (when a single buyer negotiates with several sellers as opposed to a monopoly in which one seller negotiates with many buyers) is one in which they set the price and all suppliers must either take it or lose the market. In other nations, such as New Zealand, drug sellers have no incentive to spend the millions needed for research and development, because they know the profit level is predetermined by the government. It is no surprise then, that American companies lead the world in innovation and development of new technologies and drugs. To take away the profit is to take away the incentive, pure and simple.

My space here is too short to elaborate further on the dangers of Obama’s proposal, but for those interested in learning more about what happens when a state decides to give “free” healthcare to its citizens, I would suggest you check out the short-lived plan called TennCare. It was a good idea that went bad when it met reality.
In conclusion, let me repeat the warning in my title: Caveat Emptor – “Let the

The Hard Sell

by Keith Cooper

From Broader View Weekly, July 31, 2009

I will agree with my brother Gordon that high-powered salesmen have recently been out in full force.

Anyone who has turned on Fox News or tuned into talk radio has heard the fear-mongering and admonitions. But this hard-sell technique isn’t pitching the healthcare reform measures at debate in Washington. It is drumming up opposition to whatever emerges from the Congressional committees.

And the salesmen aren’t only representatives from the “media”. It has become politically beneficial for GOP leaders in Congress to join other pitchmen in denouncing the measures. An example of the power of politics over policy is the recent statement by Senator Jim DeMint of South Carolina that a defeat of healthcare reform would be Obama’s “Waterloo”. I am certain that for millions of Americans who are unable to afford insurance – or who are struggling with mountains of medical debt – “breaking” the president with a failed proposal is of little interest.

Much of the thrust of the propaganda I’m hearing lately tries to minimize any consideration of the plight of the uninsured or underserved in our healthcare system. A favored approach is to mention that large numbers of the 47 million in the United States without health insurance are illegal immigrants. The implication here is that a public healthcare option would bring those uninsured immigrants into the U.S. healthcare fold. The concept appeals to a group of Americans who hold a certain animosity toward immigration that borders on xenophobia. Some conservative commentators also claim a subset of these uninsured choose not to have health insurance. These pundits overstate the size of this subset and misrepresent the reasoning behind this “choice”. Apparently if a young adult decides to pay his rent, buy food, supplies, or college textbooks rather than the security of health insurance, that constitutes a conscious “choice.” There may be a handful of people who believe themselves invincible who are rolling the dice by choosing to live dangerously, but they are certainly not representative of the uninsured among us.

Another favorite claim from the Right is that Obama is dismantling the greatest healthcare system in the world to install one based on the evils of socialism. I found it surprising that this claim and also the words “greatest healthcare system” were so widespread in talk radio, used most notably by the prominent Sean Hannity and Rush Limbaugh. I was surprised because the World Health Organization released a report in 2000 that ranked the United States at 37th among developed nations in quality of healthcare (lagging well behind the “evil” socialized healthcare systems of Canada and the United Kingdom that are so often criticized by these very radio personalities). And it is common knowledge our healthcare comes with the world’s highest price-tag. I guess it shouldn’t surprise me that such misinformation is disseminated by folks who continue to dismiss global warming as a hoax.

Unfortunately, the pitchmen aren’t limited to news networks, talk radio and Congressional leaders. The hardest sell, and perhaps the most ominous, comes from the healthcare industry. Health insurance providers, the corporate pharmaceutical industry, and medical organizations are powerful lobbying forces. Any measure that passes through Congress, regardless of which party has political control, is likely to be one that has garnered the approval of the industry. This force is the reason past attempts at healthcare reform have been perceived as political suicide.

Like my brother, I had concerns that the reforms needed to the current healthcare system would be rushed through process too quickly. I understood the political pressure to push for legislation while approval ratings are high as an effort to achieve real results. Unfortunately, I feel that a rush to bring about change would result in a token placation of a base that seeks universal coverage without any real reform. A few more months is not likely to yield something that much more meaningful, especially if the trend is to appease health insurance companies and reassure conservatives that socialized medicine is not in the offing.

My vision of healthcare reform is unlikely to be realized. I personally advocate a single-payer system that resembles the socialism many would have us fear. A modification of the current system is likely to fail to bring about lasting and meaningful reform. The current system promises choice through market competition, but most individuals (even those with above-average insurance) have little choice when it comes to the type of healthcare they receive. The current system relies on profitability as the driving incentive, not the quality or viability of treatment.

Unfortunately, as long as the focus is on the politics each side is pitching, a healthcare system befitting a nation as advanced and progressive as the United States remains a pipe dream.

Too Soon to Cry “Failure”

by Keith Cooper

From Broader View Weekly, July 17, 2009

Since the bleak June unemployment numbers were announced recently, there has been a race to declare the stimulus package and the Obama administration’s economic plan as a whole a failure. “Aha,” say its critics, “the spending and taxing the Democrats always want is not working.”

Never mind that it has been less than six months since this administration inherited an economic crisis worse than most had anticipated. And never mind that the previous administration failed to act in time to lessen the effects of a combination of factors that many economists and advisors had been predicting for some time. And never mind that the U.S. had been shedding jobs during most the last two presidential terms with net gains in unemployment rising from four per cent to over seven per cent. And never mind that the spending during those terms was less than conservative and that concurrent cuts in taxes turned a fiscal surplus into a growing debt.

Yes, the stimulus package has its problems. Most of the funds have yet to be distributed and for whatever reason, the bulk won’t be spent until next year or later. I’m not sure why this is but I am certain that opponents of the administration would have a field day if prompt dispersal led to fraud and misuse of taxpayer dollars.

The recent buzz in the media is that with most of the money unspent the administration is gearing up to push for a second stimulus. It is true that some economists and pundits (among them, Warren Buffet) have suggested that more spending is necessary. But there has been no official statement from the administration seeking such action and Democrats in Congress have come out publicly against seeking another plan before this one has played out. All of this has not prevented the leadership of the minority party from frequently bringing up the subject in a desperate attempt to rally the faltering GOP behind something.

The truth is things are bad. Unemployment rates are much higher than anyone wants them to be. Other indicators such as credit flow and consumer spending, which economists watch, leave them less than optimistic.

But this recession is deeper than others in recent history, and has global implications. Recovery won’t look like it did in most past trends, with indicators following a pattern we have seen before. Perhaps this is a good thing because a typical recovery may not be what we need.

Consumer spending and consumer debt has been the engine that drove much of the economy in the United States. Unfortunately, as we have seen, basing an economy on credit can have catastrophic results. And a consumer base that is seeing a spreading gap between wealth and poverty can ill afford to bear the burden. Allowing unfettered capitalist pursuit and greed to drive the economy is also dangerous and unsustainable. The days of business as usual are over.

So too, are the days when politicians could continually tout the benefits of giving huge tax cuts to the wealthiest and corporations as a prescription for whatever ails the economy. “Let’s make Bush’s tax cuts permanent,” they would say, “and stand back and let the power of capitalism work.” Well, that philosophy left us with a deep recession, high unemployment and a weakened financial structure. So what is called for is a different strategy.

Perhaps, our recovery will look something like a new GM. General Motors was forced into bankruptcy and is emerging as a different company. Through a painful process (for all of us) has come the old GM, which is selling its assets to the new GM, which seems to be a complete restructuring of the company with new attention to the customer and new visions. In fact, even radio personality Sean Hannity, who has condemned Obama for taking over the auto industry (among other things), has recently been using his show to praise the new GM and its upcoming products.

The restructuring of the economy will be slow even as the economic decline was gradual. It took decades for unfettered greed, propped up by flimsy credit-based financing, to bring collapse. It will take more than a few months to climb out of the hole we are in. I don’t know if the current administration’s policies will bring about prosperity. But, it is certainly too soon to declare them a failure.

Time for “Change We Can Believe In”?

by Gordon Cooper

From Broader View Weekly, July 17, 2009

As we receive another report of mounting job losses and declining stock indices, as well as continued consumer nervousness, our rookie leader calmly tells us that we need to exercise patience. As if he has been here before and as if he has some innate knowledge of markets and/or some valid examples from history that are hidden from the rest of the economists.
It’s almost like sitting in the back seat while a young, pimple-faced teen with a freshly minted driver’s permit and no road map in the glove box tells us to just trust him, we’ll get there. Meanwhile, the shortcut he assumed was the way home becomes more desolate and the road gets bumpier and bumpier.
The sorry facts are that his policy and the direction he is driving us is wrong, therefore, we are justified in our nervousness and we should be looking for change we can believe in. He has not been here before, this is his first real experience in an executive position; Obama has no experience in leading a company or even a community into a prosperous position. He has no examples in history to which he can point where a nation or any institution has ever spent its way into prosperity. Yet, we are to calmly relax in the back seat while he insists that this is the best way – because he said so.
Someone with maturity and intelligence needs to take the wheel. Now, I know that my fellow columnist will insist that I am being unfair in laying this economy at Obama’s feet. He will say that the initial stimulus bill was instituted during Bush’s term. I will concede that point. I was against it then, and I was even more against the second one – as I pointed out in a previous column. I believe that “governmental stimulus” is an oxymoron because history has shown that the best stimulus in any economy is less government involvement. The lessons learned from past recoveries indicate that tax relief and sound regulatory policies work to increase economic production and job creation.
But, before the nay-sayers blast me for my jaundiced view of Reaganomics, let us look at the current trends among our global competitors. While we raise our Capital Gains Tax rate and increase our control of our auto industry, our chief competitor, China, has seen rapid growth in its own manufacturing base and auto sales. Why? Could it be that they have learned from Reagan’s example? They have no Capital Gains Tax, and they have only a 15-20% corporate tax rate. Is it any wonder that their auto sales are up 36.5% from last year while ours are falling? Car sales last year from Chinese manufacturers registered 6.1 million compared to U.S. car sales of only 4.8 million.
“Just be patient”, Obama says.
Let’s also look to our European competitors, as one after another, their leaders are realizing that taxing and spending yield economic stagnation. Each day it seems more talk of lower tax rates and relaxed regulation comes from those nations who seek beleaguered and over-taxed corporations to relocate to their cities and to bring jobs to their citizens.
“Just be patient”, Obama says.
However, before my critics shout me down for being a whiney, back-seat child crying “Are we there yet?” without offering any suggestions, let me make a few suggestions for a solution to our dilemma.
First of all, let’s repeal the thousand-plus page stimulus bill that none of our representatives or senators read before signing. Let’s expose all the pork that our so-called representatives have slathered into it. Let’s call for “true transparency” – as was promised – by posting each expenditure with a solid cost/benefit projection including the actual “number of jobs created or saved”. In other words, let the American people look out the windshield, so we can at least see the bumps in the road before we hit them.
Secondly, we should restore confidence in our investors by calling for deep cuts in all Federal spending. It may be nice to have a new, shiny vehicle in our garage to call our own – such as a restructured healthcare policy or a new environmental policy – but if we can’t put food on our table, that car won’t fill our bellies. In other words, if we aren’t producing products the world wants, we aren’t creating jobs Americans need. And if we stifle American manufacturers with more taxes and more regulations they will take their operations across the pond to more business-friendly environs.
Thirdly, tax cuts do work to stimulate the economy, spending does not. Bush’s tax cuts did restore our economy after 9/11 left it paralyzed. Reagan’s tax cuts ushered in two solid decades of growth, prosperity and innovation.
I say it’s time for a change we can believe in again.