03/12/2010 12:45 pm
POV
Liz Peek: It's Still About Jobs, President Obama
© Chuck Kennedy/WhiteHouse.gov
Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 3/8)
Editor’s Note: Liz Peek is a financial columnist.
How does it feel to live in a country that is falling behind? I’ve often wondered whether people in England, for instance, woke up one morning in the last century and suddenly realized that they had become a second-rate power, or was there a long period of gestation – of small give-ups and disappointments along the way?Adult children living with parents, people losing their homes, retirees returning to the work force – there are so many things that ordinary people are sacrificing to stay afloat. The Wall Street Journal notes on its front page today that U.S. household debt declined by 1.7% last year – the first drop since record-keeping began in 1945. That seems like a positive development, until you read that the drop came from loan defaults.
The most important problem our country faces is that our economic engine is not putting people to work. The most recent four-week moving average of unemployment claims rose to 475,500 from 470,500 the prior week. Though the end-week tally dropped slightly, the figures were discouraging. Despite signs of expansion across the economy, the number of people out of work seems stuck. From there all other issues flow.
Not so long ago, President Obama promised to focus on jobs. That emphasis lasted about a minute and a half, before he returned to his dogged push for health-care legislation. He has badly, badly misjudged the mood of the nation. People would have forgiven him for putting health-care changes aside some months ago and using the bully pulpit to push for trade agreements, fast-track expansion of nuclear plant construction or other measures that might have pumped up the economy. Instead, we are mired in the absolute worst kind of back-room political wrangling, depressing this naturally ebullient country.
Consider the latest Rasmussen poll, which indicates that 57% of likely voters say that the health-care bill will harm the economy, and 66% think the bill will increase the federal deficit. Despite all the speeches, all the town halls, all the TV interviews, the president has not moved the dial of public opinion. In fact, the polling has gotten worse. The more Americans have heard about the bill, the less they like it. Not to say that they have actually read the final version of the bill – not even those in Congress have been given that opportunity. The New York Times reported today that several Democrats in the House complained that they "had received few details about what would be in the legislation" even though they may be asked to vote on the bill quite soon. What a way to govern.
At this point, Democrats are in a bind. The only way forward, most feel, is to pass health-care legislation so they can claim victory and move on. In my view, there will be no moving on. We will not leave the health-care issue behind any time soon, since its rollout will involve contentious tax hikes (including a first-ever payroll tax on dividends and interest, which is bound to infuriate retirees) and other changes that will become the focal point of elections this fall.
That’s bad for the country, because other important initiatives are being left behind or chopped up into today’s legislative stew. Consider financial reform. Sen. Chris Dodd and Sen. Bob Corker were working constructively to fashion a bipartisan plan when suddenly the rug was pulled out from under the Tennessee Republican. Dodd decided that creating the bill was taking too long, and that he would be better off casting Republicans as the Party of No and proceeding without them. It’s not clear he will be successful. Consequently, we may miss the opportunity to change some of the practices that brought on the financial meltdown. Curbing the use of "naked" credit default swaps, for instance, is a good proposal, as is assuring that consumers understand the terms of their mortgages or credit card agreements – obligations typically only comprehensible to a Supreme Court Justice. That seems a poor outcome.
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I am feeling optimistic, the health care bill should be reaching its conclusion one way or another soon. If it does pass, that in itself will create jobs. Spring is almost here, construction jobs will soon be starting. In my area, one of our bigger employers has been recalling laid off workers back to work.
Digging our country out of the major hole is going to take time, I am glad that we have a President who has been and IS working to bring our country back from the brink.
Mel what construction jobs? No one is building…we dont need anymore new homes built, maybe they are needed to tear down newly constructed neighbors that no one could afford to move in to.
Mel - to be honest I wish I had your optimism, but Obama has lied so much, I have lost it.
I Agree CHARDY……
We are in a construction related industry and the only thing being built right now is fences to protect properties! Projects that at one time were projected to begin this Spring have now been pushed to next Spring when Hopefully the economy will improve. No one is wanting to build commercial construction when they do not have tenants lined up to occupy them..that is IF the lenders would even loan money to build them.
Homebuilders say the cost of materials is more than they can sell a new home for in the depressed marketplace.
Any reference Obama made about jobs was just retoric!
SJ, and we haven’t seen the worst of it yet according to economists. Commercial real estate is in big trouble with the banks. We are talking billions of dollars in loans with commercial real estate. Americans are frozen. Obama has created a situation where no one can breathe for fear of a double dip recession. Americans aren’t spending. They are paying off credit card debt. Small businesses aren’t hiring or expanding their businesses for fear of what is to happen this year.
Obama has created a monster because of his lack of experience and ego. He shouldn’t have cancelled his spring break trip to Indonesia. He isn’t in a position any longer in making a difference.
Deber , The infastructure of many areas in this country is in dangerous shape. No one riding over a bridge when it collapses will need to worry about finding a job. Our nearest town (about 17 miles ) has two bridges that one must pass over to get any further east, no matter how far north you go or south, you must pass over a bridge. Both of the two bridges were so bad that no one knows why they hadn’t collapsed . Because of government money, one of those is completed and the other will be done this summer. That package that was a failure to you, put many people to work and saved lives.
I think that how we look at things depends largely on where we live. If one lives in a well populated area such as big cities, it is harder to see and easier to ignore.
Laurel…….MOST communities in my area do not have the extra funds sitting around to to the preliminary work ( millions $) without KNOWING how they will fund a project. It’s called fiscal responsibility.
The fact is those governements that do give their "government employees" something to do while they are on the payroll funded by tax dollars paid by the private sector and just hope they get the funding to see them happen. No worry….they just count on more government employees to raise taxes to make then happen someday. Even if they have to do much of it over due to materials cost changes, safety engineering standards…..WASTE? YES ( our tax dollars)
Road construction does nothing to help a self employed or small business plumber, framer, electrician, land surveyor, building materials supplier, roofer, carpet installer, appliance retailer, cabinet builder, concrete flat worker, fence builder, mortgage lender, title company, insurance writer, furniture store, …….etc
Mel, you did not state highway and bridge construction in your initial post…but now that you have I can address that - right now in my state, VA, with all the snow we have had this winter, the majority of highway work is being done to fill pot holes…just the other morning on the way to work, there was a crew of over 30 highway workers, 8 were working, the others were standing there talking and looking on…it was pretty sad to see. 30 workers to do a job 8 can do….that is money being thrown out the window…Bridges, dont see any new ones going up around here……
Obama lied, where do I start Mel…first he said he would never sign a bill that is filled with pork, YET he did within his first month. He just said a month ago he was going to concentrate on jobs, but the next day he was back to pushing healthcare. CPAN would be in all Congress meetings, lie, only once has this happened…and before you say it would be boring, he could have at least given us the option to look. He also siad the stimulas pork package would create jobs and the unemployment rate would not go above 10%, lie…he at one time said the healthcare bill would not cover illegial immigrants and we all know @ the time he said that, it was a lie, they fixed it the next day…Here are more:
Lie One: No one will be compelled to buy coverage.
During the campaign, Obama insisted that he would not resort to an individual mandate to achieve universal coverage. In fact, he repeatedly ripped Hillary Clinton’s plan for proposing one. "To force people to buy coverage," he insisted, "you’ve got to have a very harsh penalty." What will this penalty be, he demanded? "Are you going to garnish their wages?" he asked Hillary in one debate.
Yet now, Obama is behaving as if he said never a hostile word about the mandate. Earlier this month, in a letter to Sens. Max Baucus, D-Mont., and Ted Kennedy, D-Mass., he blithely declared that he was all for "making every American responsible for having health insurance coverage, and making employers share in the cost."
Lie Two: No new taxes on employer benefits.
Obama took his Republican rival, Sen. John McCain, to the mat for suggesting that it might be better to remove the existing health care tax break that individuals get on their employer-sponsored coverage, but return the vast bulk—if not all—of the resulting revenues in the form of health care tax credits. This would theoretically have made coverage both more affordable and portable for everyone. Obama, however, would have none of it, portraying this idea simply as the removal of a tax break. "For the first time in history, he wants to tax your health benefits," he thundered. "Apparently, Sen. McCain doesn’t think it’s enough that your health premiums have doubled. He thinks you should have to pay taxes on them too."
Yet now Obama is signaling his willingness to go along with a far worse scheme to tax employer-sponsored benefits to fund the $1.6 trillion or so it will cost to provide universal coverage. Contrary to Obama’s allegations, McCain’s plan did not ultimately entail a net tax increase because he intended to return to individuals whatever money was raised by scrapping the tax deduction. Not so with Obama. He apparently told Sen. Baucus that he would consider the senator’s plan for rolling back the tax exclusion that expensive, Cadillac-style employer-sponsored plans enjoy, in order to pay for universal coverage. But, unlike McCain, he has said nothing about putting offsetting deductions or credits in the hands of individuals.
In other words, Obama might well end up doing what McCain never set out to do: Impose a net tax increase on health benefits for the first time in history.
Lie Three: Government can control rising health care costs better than the private sector.
Ignoring the reality that Medicare—the government-funded program for the elderly—has put the country on the path to fiscal ruin, Obama wants to model a government insurance plan—the so-called "public option"—after Medicare in order to control the country’s rising health care costs. Why? Because, he repeatedly claims, Medicare has far lower administrative costs and overhead than private plans—to wit, 3% for Medicare compared to 10% to 20% for private plans. Hence, he says, subjecting private plans to competition against an entity delivering such superior efficiency will release health care dollars for universal coverage.
But lower administrative costs do not necessarily mean greater efficiency. Indeed, the Congressional Budget Office analysis last year chastised Medicare’s lax attitude on this front. "The traditional fee-for-service Medicare program does relatively little to manage benefits, which tends to reduce its administrative costs but may raise its overall spending relative to a more tightly managed approach," it noted on page 93.
In short, extending the Medicare model will further ruin—not improve—even the functioning aspects of private plans.
Lie Four: A public plan won’t be a Trojan horse for a single-payer monopoly.
Obama has repeatedly claimed that forcing private plans to compete with a public plan will simply "keep them honest" and give patients more options—not lead to a full-blown, Canadian-style, single-payer monopoly. As I argued in my previous column, this is wishful thinking given that government programs such as Medicare have a history of controlling costs by underpaying providers, who make up the losses by charging private plans more. Any public plan modeled after Medicare will greatly increase this forced subsidy, eventually driving private plans out of business, even if that weren’t Obama’s intention.
But, as it turns out, it very much is his intention. Before he decided to run for office—and even during the initial days of his campaign—Obama repeatedly said that he was in favor of a single-payer system. What’s more, University of California, Berkeley Professor Jacob Hacker, who is a key influence on the Obama administration, is on tape explicitly boasting that a public plan is a means for creating a single-payer system. "It’s not a Trojan horse," he quips, "it’s just right there."
But even if Obama wanted to, it is simply impossible to design a public plan that could compete with private insurers on a level playing field and without "feeding off the public trough" as Obama claims.
At the very least, such a plan would always carry an implicit government guarantee that, should it go bust, no one in the plan would lose coverage. This guarantee would artificially lower the plan’s capital reserve requirements, giving it an unfair edge over private plans. What’s more, it is simply not plausible to expect that the plan wouldn’t receive any start-up subsidies or use the government’s muscle to negotiate lower rates with providers. If it eschewed all these things, there would be no reason for it to exist—because it would be just like any other private plan.
Lie Five: Patients don’t have to fear rationing.
Obama has been insisting, including during his ABC Town Hall event last week, that the rationing patients would face under a government-run system wouldn’t be any more draconian than what they currently confront under private plans. This is complete nonsense.
The left has been trying to address fears of rationing by trotting out an old and tired trope, namely, that rationing is an inescapable fact of life because every system rations whether by price or fiat. But there is a big difference between the two. If I can’t afford caviar and champagne every night, any rationing involved is metaphoric, not real. Genuine rationing occurs when someone else controls access—how much of a particular good I can consume.
By that token, Obama’s stimulus bill has set in motion rationing on a scale unimaginable in the land of the free. Indeed, the bill commits over $1 billion to conduct comparative effectiveness research that will evaluate the relative merits of various treatments. That in itself wouldn’t be so objectionable—if it weren’t for the fact that a board will then "direct financing" toward approved, standardized treatments. In short, doctors will find it much harder to prescribe newer or non-standard treatments not yet deemed effective by health care bureaucrats. This is exactly along the lines of the British system, where breast cancer patients were denied Herceptin, a new miracle drug, until enraged women fought back. Even the much-vilified managed care plans would appear to be a paragon of generosity in comparison with this.
Obama has repeatedly asked for honesty in the health care debate. It is high time he started showing some."
http://www.forbes.com/2009/06/30/obama-health-care-reform-opinions-columnists-public-option-medicare.html
I can post more but I think you get the jist…
Chardy the state of VA will do what ever it can to steal money from the tax payers. I lived there for over 24 years, I left there 8 years ago, registered my car in NY, then traded it in for a new one in NY, moved to NC and got that one registered in NC, but the State of VA is still trying to collect taxes from me on a vehicle that hasn’t been registered in that state for 8 years. They tell me the only way to clear it up is to get a lawyer and go to court. I don’t have that kind of money, and I’m not paying taxes to a state I don’t live in. The state of VA taxes are so high I wouldn’t move back there even to be closer to my children, I’m moving to a state on the borderline so I can be closer but you can keep VA, I hated from the moment we moved there. but when your in the military you go where they send you.
I trust the President, and you can’t blame him for what past Presidents have done with the help of the senate and congress, he’s only trying to clean up after others. So lets give the guy a chance, he can’t pass laws without support from the two houses. He can’t stand up and say I’M THE PRESIDENT AND SO THIS IS LAW, it doesn’t work that way.