In November 2010, the American people voiced they’re displeasure with the democrats by sweeping them out and the republicans into the Senate and the House of Representatives. Now that the democrats can’t pass any legislation they want, they’ve decided that the best political move for them is to do absolutely nothing. Enter the republicans.

Rep. Paul Ryan of Wisconsin, chairman of the budget committee, created a proposed budget for fiscal 2012 that addresses the crushing debt that the United States has incurred because of two years of unrestrained, deficit spending resulting in a debt level approaching $14.3 trillion. The budget proposed by Rep. Ryan not only cut spending but also provides a plan to address the problems in Medicare so that it remains viable on into the future. Sen. Harry Reid (Nevada) and his fellow democrats, in a purely political move, caring nothing about the American people, chose not to provide any alternative plan, but rather they claim that the Ryan plan is to kill Medicare completely. They even stooped so low as to create an ad that appears to show a figure similar to Rep Ryan pushing an elderly woman in a wheelchair down a path toward the edge of a cliff. It is a despicable response focused solely on getting democrats elected in the future and completely discounting the needs of future Medicare recipients.

It appears the democrats’ plan, rather than coming up with their own plan to address Medicare, is to lie to the American people about the Ryan plan so they can get elected in 2012. They are hoping that some Americans will simply believe their lies rather than checking out the facts and thinking through the issues of the Rep. Ryan’s Roadmap for America’s Future. If the democrats were real leaders, they’d propose alternatives to the Ryan plan, but that won’t happen because then they’d have to explain their changes in Medicare to the same people they’re lying to today.

I talked to my brother about the job he does versus some, and I emphasize some, other workers doing the same job. Being as humble as he could, he told me he does very good work, very fast, and I believe him.  I asked him about some of the other workers doing the same job as he does. As you might guess, he says that most of the workers doing his job are good at what they do, but there are some that are gaming the system and doing as little as possible on the job. I asked him what he thought of those workers that are not working very hard yet making the same amount of money that he is. It surprised me a little that he didn’t have much of a problem with that.

I am very comfortable that the income that my company pays me is because of the value that I, personally, bring to the company. In fact, basic economic theory states that workers are paid EXACTLY what they are worth to their employer. Do you doubt that? Here’s an example.

Let’s suppose you own a business and you produce a widget and can sell that widget today for $100. Now assume that I come to your business and say to you, “If you hire me into your business, I can improve your widget so that you can raise the price of your widget by $50 to $150. My fee is $10 per widget produced.” Would you hire me? Just to recap the scenario, if you hire me and pay me $10 for every widget produced and you can sell each widget produced for $50 MORE than before, is that something you would do? Of course you would! Your business would be making $40 MORE in profit for each widget sold. Ok, let’s change the scenario such that instead of paying me $10 per widget, I want you to pay me $90 per widget. That means to make $50 more per widget, you’d have to spend $90 more per widget. Is that something you’d do? Of course NOT! Overall, you’d be making $40 LESS in profit that you are today ($90 cost – $50 income = -$40 profit). One last scenario change. What if I said you’d have to pay me $50 per widget? That means that in order to raise your price $50 per widget, you’d have to increase your cost $50 per widget.  Would you be making any more money? No! You’ll be making the same amount of profit whether you hire me or not. In summary, you, as a business, will pay me an amount per widget based on the amount of additional value you can make on the widget. In all the scenarios, if you can sell your widget for $50 more by hiring me, you’d be willing to pay me UP TO $50 per widget.  The exact amount of value I provide to your business.

Now back to my brother. Assume that my brother does better work and does it faster than some other workers doing the same job. Because of unions and collective bargaining, all workers doing that job get paid the same amount. But if my brother is doing a better job and doing it faster, companies that he works for are getting more value when he does their work. That means that companies would be willing to pay my brother more than others to do their job, but they can’t because the rate is set for all workers doing that job. In effect, the collectively bargained rate becomes the AVERAGE value for all the workers. Or stated another way, because the best workers are providing say $35 per hour of value while the worst workers only provide $15 per hour, the collective bargaining rate becomes $25 per hour ($35 + 15 = $50 / 2 = $25). So assuming my brother is one of those best workers, instead of getting paid the $35 per hour that he is worth, he’s taking a $10 per hour cut in pay to compensate for the worst workers. In contrast, the worst workers that are only providing $15 per hour of value to companies are getting a $10 per hour bonus for doing nothing. Or you can think of it as my brother is giving $10 per hour from the money he earned to the worst workers. This is a great deal for the worst workers, but a bad deal for my brother.

So who does benefit from collective bargaining? The answer is the worst workers and unions are the only beneficiaries of collective bargaining and are doing it on the backs of the best workers. The worst workers are being paid more than they could get if they were evaluated on their work and the best workers are helping set how much more. The unions are also benefiting because those union members are paying their dues for the union to collectively bargain. The big losers in collective bargaining are the best workers like my brother.

So as the end of the very lame duck session approached, the tax cuts enacted during the Bush administration were coming to an end.  Let them expire, and every American’s taxes were going up.  Republicans and Democrats were in agreement that they could not let taxes go up on American’s making less than $250k, but while the Republicans wanted the tax cuts extended for everyone, the Democrats wanted to let the tax cuts expire for those tax payers making MORE than $250k.  Everyone knows that if you let a tax cut that has been in effect for the last ten years to expire, they equates to a tax increase.  They trumpeted that extending the tax cuts for everyone would raise the debt by over $800 billion.  What is ironic to me is that the Democrats didn’t seem concerned about the debt on any legislation they passed previously like extending the states’ unemployment benefits to workers that didn’t  qualify for benefits previously!  Or when they extended the number of weeks of unemployment benefits from 26 weeks to 99 weeks.  The Democrats are up in arms about the national debt now?.  How embarrassing!

I truly believe that they Democrat don’t give a hang about the American people.  All they really care about is the group of voters that typically vote Democrat like labor unions and those American’s that want to “stick it to the man” and live off the government.  I used to think that Democrats and Republicans wanted a better America; they just had different ideas about how to get there.  I’ve modified my views.  I BELIEVE there are some Democrats that want a better America for everyone, but I don’t THINK that the far left progressives in the Democratic party is in that group.

One of the Sunday morning political shows is This Week currently hosted by George Stephanopoulos. One of the best parts of the show is what is called the "round table" where the host brings up a topic and one or more members of the round table comment on the issue. Generally, the make-up of the round table members is equally distributed between liberals and conservatives.  On the show this Sunday, January 24, 2010 were:

• George Wills is a writer for the Washington Post. [conservative]
• Matthew Dowd is a political consultant.  [conservative]
• Sam Donaldson is a reporter and new anchor for ABC News.  [liberal]
• Cokie Roberts is a contributing news analyst for NPR. [liberal]

Now let’s take the view of an average American couple in middle America named Joe and Jane Doe.  Joe and Jane read the local newspaper and watch the news on TV.  The both have jobs that they have to drive to so they listen to the radio on the way to work and back.  They are interested in what’s going on in our nation so they occasionally watch and listen to the news.

How likely is it for Joe and Jane Doe to hear or see the four round table members in the mainstream media?

Matthew Dowd is a political consultant so he is not likely to be on TV or radio other than occasionally as a commentator on someone’s talk show.  He’s probably the least likely of the four to be seen or heard regularly by our couple.

George Wills writes for the Washington Post.  Since Joe and Jane don’t live in Washington, they are not likely to get the Washington Post regularly so the only way they’ll get the read George Wills is if his editorials are published in their local paper which will happen sometimes, but not always.  If Joe and Jane want to stay up on politics at all, they’ve probably heard of George Wills.  George is a regular on This Week so if they watch that show (like I do), they could hear him every week.

Sam Donaldson is on ABC News.  If our couple watch the national news on CBS or NBC, they probably won’t see much of Sam Donaldson, but if they watch ABC, they’re going to see him a lot as either a reporter or an anchor.  Also, if they watch This Week, he’s become a regular so they’ll see and hear him as much as George Wills.

Cokie Roberts is a regular contributor to NPR.  I know when I used to listen to NPR in the mornings, there was rarely a day I didn’t hear Cokie Roberts.  Include Ms. Roberts as a regular on This Week.

Sam Donaldson and Cokie Roberts report regularly via TV and radio stations that are seen and heard by millions of people on a daily basis.  While Ms. Roberts is typically presenting her opinion of a news topic when she’s on NPR, Sam Donaldson, as a reporter, is supposed to be objectively reporting the facts without editorial bias.  How well he does that is interpreted differently by different people, but there can be no doubt that his views are very liberal.  It is impossible to be totally objective in reporting about a story in which a person has strong political view.

It is clear.  What is supposed to be objective, mainstream news is liberally slanted.  Just listen to the views and comments of those who deliver it!  No wonder Fox news is doing so well!

At AIG, Feinberg required that the top 25 executives have their pay cut to no more than $500,000.  The Wall Street Journal reported that in response to the pay cuts and the government oversight,  multiple AIG executives have threatened to resign from the company (http://online.wsj.com/article/SB126015238193279485.html).  

Who thinks that if multiple executives resign from AIG that it is more likely that AIG will be successful in repaying the government loan they received?  The only people that think that artificially cutting executive pay is a good idea are those that think “sticking it to the man” is well overdue.

The truth is that as Feinberg chooses to cut those executive pay packages, he is virtually assuring that AIG will NOT be able to repay the loans much less the interest.  A sports analogy will hopefully make this clear.

Suppose a professional baseball team is taken over by the city it plays in and the mayor of the city says that the max they’ll pay their ball players is $100,000.  What will happen to the team?

The first thing that will happen is the all the best ball players from the team will begin talking to other teams who might pay them more than $100,000.  If a player is good enough to earn more than $100,000, some other team will hire them and the player will leave.  Once the season starts, the city team will not be competitive and get pounded by all the other teams.  The city team will lose most if not all of their games, the attendance at games will dwindle, the advertisers will stop advertising, the team will lose money even with the lowest payroll in the league, and the team will fold.

Now suppose that the team was previously worth $100 million.  After the pay cuts and the team folds, the team will be worthless.  By artificially limiting payroll, the city has turned a $100 million asset into $0.  Hopefully, the mayor will feel good about telling the citizens and fans, “At least we didn’t pay any players more than $100,000!”

The same is true for AIG and other companies whose executive pay is being manipulated by the government Pay Czar.  With the pay artificially limited, the best talent within AIG will leave to make more money somewhere else and executives in the marketplace won’t even consider going AIG even though it would help that company be successful so the bailout money will be paid back.

Summary

It is one of those “feel good” statements to hear the Fed Chairman say that he expects the bail-out money to be paid back with interest.  But instead of doing everything possible to make successful those companies that took the money, the Obama administration created a Pay Czar that is overtly causing the best talent to leave the same companies that we want to be successful.  I’m sure that in the future, when AIG can’t pay back the bail-out money with interest, they’ll be accused of squandering the money on bonuses.  They’ll attempt to deflect the blame when the real problem is the Obama administration playing politics with our money.

Remember during the campaign, while running against Senator Clinton, then Senator Obama made it very clear that he voted against the Iraq war and that he, if elected, would get our troops out of Iraq.  This stance was very popular with the far left, anti-war constituents and helped him win the democratic nomination over Senator Clinton.

Now President Obama is facing a problem with the war in Afghanistan and his hand-picked military leader, General McChrystal, says that 40,000 MORE troops are needed or the US risks losing the war.  Losing a war doesn’t mean adding one to the loss column in the newspaper scoreboard, it means that many US soldiers will be killed.  But President Obama, after months of deliberation, decided to discount the recommendation of General McChrystal, and deploy only three quarters of the requested troops.  Why?

During the Iraq war, in an effort to quite the violence, the military proposed the "Surge" tactic of sending an additional  large deployment of troops.  President Bush approved the recommendation immediately.  Historically, there is no doubt that the strategy worked!  The additional troop deployment did exactly what the military leaders said it would.  It quieted the violence and probably saved hundreds of US military lives.

President Obama believed that if he quickly approves all the troops asked for by the military, the far left, anti-war groups, and the right, will compare him to President Bush and, politically, he doesn’t want that!  The President is more concerned with his political persona than the lives of US solders!  There is no other explanation!

What possible information could the President have gotten that indicated to him that the recommendation of General McChrystal was actually more than needed?  Which adviser told the President that General McChrystal doesn’t know what he’s talking about and that 30,000 troops would work just as well as the 40,000?  Does it make sense to anyone that one or more politicians would know more about how many additional troops are need that the head of military operations in Afghanistan?

How well will President Obama sleep at night when the US casualties in Afghanistan are reported?  All those military families that get that fateful communication that their loved one has been killed in Afghanistan will wonder whether deploying those additional 10,000 troops would have saved my son or daughter’s life!

1. Adoption of internationally benchmarked standards 
2. Recruiting and retaining quality teachers and principals
3. Building data systems to measure student success
4. Informing teachers on how to improve their practices and turn around low-performing schools

I’m speechless!  As I’ve said in previous posts, you can’t make this up!  A stimulus plan for education!  How will giving money to the public education system stimulate anything?

The Obama administration has absolutely no regard for the good of the American people and the economy.  All they are doing is pushing their political agenda as fast as they can before the American people have a chance to figure out it is a disaster in the making.  It is pandering to the teacher’s unions that helped put Obama in the White House. 

Let’s look at each of these four items in some detail.

Adoption of internationally benchmarked standard

Here in the US, the “standards” that the government uses to measure student performance against have been falling for years.  Education advocates continually challenge the validity of standardized testing as being biased toward one group or another and should therefore not be used to measure the success of the public education system.  Students in private and parochial school throughout the US continue to score much better as a whole than public school students.  The problem with the public schools will not be changed by changing the standards they are measured against whether those standards are international or domestic.  If the students are not living up to the standards today, changing the standards won’t make an ounce of difference in the student’s performance and achievement.

Recruiting and retaining quality teachers and principals

Every entity that has employees has some that are excellent, most that are average, and some that are poor performers.  The problem with retaining good teachers and principals is that, because of unions and tenure, the poor performers get to stay when times are tough while some excellent teachers and principals get cut.  I assume with more money, the school systems can just keep more teachers and principals instead of doing the right thing and getting rid of the poor performers.  Jack Welsh, former GE CEO once said that GE had a policy of trimming the bottom 10% of their workforce every year and bringing in new people to replace them thus improving the quality of the entire workforce year after year.  If the public school system would actually do that, they would not only keep the quality teachers and principals, but they’d probably turn some average and poor performers into excellent performers.

Building data systems to measure student success

We have a perfectly fine system for measuring student success.  It is called the report card!  We could build more elaborate data systems, whatever that actually means, but it won’t change how we measure student success and it won’t make students any more successful doing the same thing as before.  All these data systems will do is slice and dice the existing data so it can be pulled apart and some measure of success can be proclaimed after applying dozens of limiting criteria.  The administration will make the results look like they want them to!

Informing teachers on how to improve their practices and turn around low-performing schools

This is a two-part issue and I want to address each part separately.

The first part says they want to inform teachers on how to improve their practices.  I have not met a single teacher in any school that has said the problem in their school is that teachers have no ideas on how to improve their teaching practices.  Sure there are some new teachers just out of college that have lots to learn, but most teachers that have been teaching at least two years have plenty of ideas on how they can help  students improve in the classroom.  Teachers don’t need more information about how to teach, the emphasis must be on getting students to learn!

The second part talks about turning around low-performing schools.  Everyone would like to turn around low-performing schools, but throwing money at them won’t improve them one bit.  According to Forbes, the Alexandria City school system spends over $18,000 per student (http://www.forbes.com/2007/07/05/schools-taxes-education-biz-beltway_cz_cs_0705schools.html) yet graduate only 73% of students.  Contrast that with most private and parochial school.  For example, according to the Archdiocese of Cincinnati, which operates 22 parochial and private high schools, the graduation rate is 97% (http://www.catholiccincinnati.org/schools/PDF/FactSheet0809.pdf) while most of those schools have tuitions of less than $11,000.  Low-performing schools should be turned around, but throwing more money at them is a complete waste.

Money is not the answer to education woes!

The amount of money spent on the public education system has been going up for years while standardized test scores and graduation rates continue falling.  The system has a big problem, but money is not the answer.

If President Obama wants to improve our public education system, he and his team should focus their collective energies on how to get mom and dad involved in their child’s education.  When parents don’t care, kids won’t either.  Work on making sure a child has both a mother and father to grow up with, then get those parents involved.  It will make things better for a child, but it is not something President Obama can just throw money at!

I guess the Obama administration figures that the American people are either not interested in it, won’t be able to understand it, or won’t like the planned health care reform package.  So instead of explaining the details and fielding questions critical of the plan, they’ll try to scare the American public into accepting the plan without worrying about the details.

Remember the housing crisis!  Many people said they didn’t read all the “fine print” on their mortgage and didn’t know that their rate could go up so we should bail them out.  Does anyone think that was a good idea?  But that is exactly what the democrats are doing with health care reform.  They are worried that if the American public finds out too much about the details, the plan is doomed!  They don’t want any debate.

The American people cannot afford to have congress rush this bill through congress.  We could end up with the government spending trillions while health care costs continue going up.

There is no way that a government sponsored and run health care plan will operate under the same rules and guidelines as private health care plans!  Here is why.

How insurance works.

When you buy insurance, you’re making a bet.  You are betting that the amount of premium payments that you will pay will be less then what you would pay if the insured event occurs.  But, if the insured event never occurs, you would have paid those premiums for nothing.  That’s the bet!  But how does the insurance company figure out how much to charge you for the coverage?  It is all about statistics.

An insurance company figures out how much to charge for insurance based on how likely it is that the event will occur.  The more likely it is that the event will occur, the more an insurance company will charge for the insurance.  The other thing to remember about insurance companies is that they need to make a profit.  Any company that pays out more than it brings in will eventually go out of business.  Here is a simple example.

If you have a heart attack and need heart surgery, that procedure could easily cost $50,000.  For most people, getting a bill for $50,000 would be a problem.  Now nobody wants to have a heart attack and everyone will try to avoid having one; but heart attacks still occur.  We buy health care insurance in case we have a heart attack.  If you’re a young person in good health, the likelihood of having a heart attack is very low.  On the other hand, if you’re older, not in good health, smoked all your life, your chance of a heart attack is much greater.  The insurance company will charge the young, healthy person much less than they’ll charge the older person.  Don’t forget about the profit that the insurance company needs to stay in business.

Private health care plans (1300+ of them)

Health care plans are insurance plans.  They are insurance plans that focus on health care costs.  How much the insurance company charges for health care insurance is based on how healthy we are and how much health care costs.  In the previous section, we said that heart surgery could cost $50,000.  The insurance company doesn’t set that price; the hospital and doctors set that price.

A health insurance company, if they are big enough, can negotiate with hospitals and doctors on how much the insurance company will pay for a procedure like heart surgery.  The insurance company and the doctors and hospitals could agree that the insurance company will pay $45,000 to the hospital and doctors for the heart surgery.  At $45,000, the insurance company, hospital, and doctors can still make a profit.  If the hospital and doctors refuse to accept $45,000, the insurance company could refuse to cover heart surgery in that hospital with those doctors causing all the insurance company subscribers to use a different hospital and doctors for heart surgery.  Lowering the amount paid for health care allows the insurance company to keep their premiums lower while still making that profit.

Public health care plan (1 of them)

The first difference between all the private plans and the single government plan is that the government does NOT have to make a profit.  With no more than that fact, it is obvious that the government sponsored plan will cost less than any private plan for exactly the same coverage.  Add to that the 45 million people that are currently on the government’s Medicare plan which already makes it the largest plan in the US, means the government run Medicare already has power to negotiate with hospitals and doctors that no private insurance company will ever have.

The government could dictate how much they’ll pay for the heart surgery and the hospitals and doctors would just have to accept it or be cut off from millions of potential patients.

In for the kill

Here is how the government plan will kill the private plans.

Since the government wants to lower the cost of health care, they’ll stipulate to the doctors and hospitals that they’ll pay only $30,000 for heart surgery while the private plans will be paying $45,000.  This means that the private plans MUST charge more in premiums than the government plan for the same coverage.  Also, as long as the doctors and hospitals will take the government insurance, they’ll be much less likely to accept lower payments from the private insurers.  The doctors and hospitals will probably want MORE from the private insurance companies to help recoup the money they’ll be losing from the government plan.

Private insurance companies will be forced to charge higher premiums to their subscribers while people on the government plan will be charged less for the same service.  It is inevitable that people in private plans will move to the government plan because it costs less putting the private insurance companies out of business leaving only the government plan as the sole payer of all health care costs.

Health care treatment with the public plan

The Obama administration can spin this issue in ten different ways, but if the government creates a public health care plan that all American’s can qualify for, the private insurance companies WILL go out of business and leave the government plan as the only plan.  Because the government plan will be paying less money to hospitals and doctors, some hospitals and some doctors will go out of business leaving fewer hospitals and doctors to service the population.  Fewer doctors and hospitals means the American public WILL be waiting longer and longer for health care treatment.  Just as with other countries that have single payer insurance (re: public plan), health care will be rationed meaning waiting months to receive treatment that today is available in days or weeks.

Summary

Today everyone gets good health care treatment even though not everyone has health care insurance coverage.  With the government’s plan, everyone will have health care insurance coverage, but the actual health care treatment will decline significantly.  Which scenario would you prefer?

Let’s recap this.  President Obama has made multiple changes to US security in order to make the US safer.  He stated that he wanted to close Gitmo because its existence inflamed radial muslims and served as a recruiting tool.  Obama has chosen a timetable to removes troops out of Iraq because it also serves as a rallying cry for radicals.  The president routinely blasts the Bush administration for their policies (more than 100 days and counting into his administration as I predicted) and has used it to validate the president’s own policies.

The vice president said in a speech that security policies that only go half way leave the US only half protected.  And if the US is only half secured, the risk of an attack on our soil IS greater.  Does any rationally thinking person disagree with this?

Enter Mr. Panetta.  Eager to move away from his department’s critisim from Nancy Polosi and her accusation that the CIA lied to congress.  Panetta says NOTHING about the security policies, but instead, deflects the issue by asserting that Dick Cheney WANTS the US to be attacked.  Remember that Leon Panetta is running the department that is supposed to be collecting intelligence that should be used to keep the US safe.  I have to wonder whether Mr. Panetta might turn his department’s resource gathering skills on former Bush administration personnel.

Mr. Panetta.  Instead of wasting your time making up absurd accusations that former Bush administration officials want to see an attack on our soil, quit playing politics and focus all your time and energy making sure it never happens.  PLEASE!