Why We Must Change

Lawrence Summers does a pretty fair job of explaining why there isn’t much chance that, regardless of who is elected in November and regardless of intentions, we will shrink the size of the federal government appreciably. It boils down to:

  1. An aging population means we’ll spend more on Social Security retirement payments and Medicare.
  2. The cost of financing the debt is much more likely to rise than to fall.
  3. Plain old supply and demand and the deadweight loss of government spending.

or, shorter, unless things change they will stay the same, adjusted for demographics and increased cost of borrowing.

Right now there are something like 20 million people unemployed. What we’re doing now isn’t putting those people back to work. If we want to put those people back to work, we’re going to need to change some things. As Shakespeare put it, nothing will come of nothing. If we don’t change anything, those people won’t go back to work.

It is either stupidity or sophistry to claim that we can’t make substantial reductions in military spending without compromising national security. Can we do that without making any changes? No.

It is either stupidity or sophistry to claim that we can’t make substantial reductions in healthcare spending without compromising the American people’s health. Can we do that without making any changes? No.

I might add that Dr. Summers is ignoring something. Federal government is not the only government and, unless you can come up with a good reason that the deadweight loss of government spending only applies to the federal government, if it’s absolutely positively necessary for the federal government to grow, then maybe it’s also absolutely positively necessary for state and local government to shrink. Unless you don’t give a damn about all of those unemployed people.

Or, maybe, in less you don’t care how small the private sector becomes so long as there’s free healthcare. Then you’re Cuba.

59 comments… add one
  • Icepick Link

    Or, maybe, in less you don’t care how small the private sector becomes so long as there’s free healthcare. Then you’re Cuba.

    I thought we were going to be Denmark. Or maybe Canada, but less pale.

  • Ben Wolf Link

    You aren’t going to employ those 20 million without greater government activity. Markets can’t make it happen in a capitalist economy.

  • Sam Link

    Oh the problems we could solve if our “economically responsible” party wasn’t also our xenophobic party.

  • Andy Link

    We may need to change Dave, but I don’t think we’re ready. We haven’t hit bottom yet. Once we do we might be able to take the first step to recovery.

  • steve Link

    The real growth in federal government is in entitlement spending, and is mostly in health care. Growth in the rest of the federal government has been much smaller. Growth at the state and local level is different in that it actually involves new govt employees. Growth in Medicare means that the computers write a few more checks.

    Now, suppose we eliminate Medicare. Do we get economic growth from the resultant decrease in taxes? I am not so sure. First, we know that private insurance costs more. Total health care spending may very well increase, and as you have noted, health care spending produces fewer jobs. Much of that spending will come from the elderly. Does that make a difference? I dont know. If you think that the money that was going into taxes was instead going into investment, does it matter if it is old people or young people investing?

    Absent Medicare, families will likely have to assume some of the care for which Medicare would have paid. What do we lose by not having those people at work? Are we better off having the 80k/year computer programmer caring for Mom during her rehab, or having a 30k/year nursing assistant?

    If we were talking about the government using our tax money to produce computers or some such, then I would have to agree that eliminating taxes to provide those computers would give us economic growth. I am much less certain when it comes to health care. TBH, I think we are all guessing.

    Steve

  • Andy Link

    steve,

    The problem as I see it this. Medicare/Medicaid is simultaneously too expensive and too cheap. It’s too expensive in that it’s costs so much and the costs are growing compared to basically every other country. As Dave’s mentioned many times, we are getting poor value for the money we do spend. On the other hand, it’s too cheap because providers don’t want to take on those patients because they think the reimbursement rates are too low. Providers threaten that they’ll stop taking patients if rates are reduced. So we are at a balance point where we pay a ton of money for generally crappy service and outcomes. What is the solution to that?

  • As Dave’s mentioned many times, we are getting poor value for the money we do spend. On the other hand, it’s too cheap because providers don’t want to take on those patients because they think the reimbursement rates are too low

    If you pay $1.50 for something that everybody else is paying $1.00 for, there’s less economic activity than there otherwise would be. Medicare and Medicaid are different kettles of fish. I’ll poke around but not too long ago I think I cited a study that found that 90% of physicians accepted Medicare and roughly the same proportion were accepting new Medicare patients. Pediatricians account for about 10% of physicians. That means that something approaching 100% of relevant physicians accept Medicare and are accepting new Medicare patients.

    On Medicaid you’re right. It’s one of the reasons that I say that Medicare is a price support. Except regionally you can’t sell below the support price.

    Medicare accounts for something like 40% of all healthcare spending. If they stop accepting Medicare what are they going to replace it with?

  • Andy Link

    Dave,

    I don’t think my comment disagrees with what you just wrote. I do read about providers complaining that Medicare’s reimbursement rates are too low. They do threaten to stop taking Medicare patients if rates are reduced. And then there’s Congress which, over the last decade, or thereabouts, gives us the doc fix every year. Now, maybe they are bluffing and if push came to shove they’d be forced to suck it up. I’m skeptical. As long as FFS exists they can make it up in volume for one thing.

  • Ben:

    You aren’t going to employ those 20 million without greater government activity.

    In the near term I agree with you. In the longer term ensuring that the private sector contracts probably isn’t going to do anybody any good.

    Can we agree that committing to spend half of everything spent on healthcare and defense (which is what we’re doing now) isn’t going to employ a lot more people?

  • Now, maybe they are bluffing and if push came to shove they’d be forced to suck it up.

    I think it’s a pretty difficult question to answer with any confidence. Relevant factors include area, demographics, and specialty. My guess is that for some specialties Medicare comprises nearly all of their business and for others very little. A doc practicing a specialty that doesn’t depend heavily on Medicare might well stop accepting Medicare if the reimbursement rate goes low enough. A specialty that depends 100% on Medicare? Might be a tougher call.

  • Ben Wolf Link

    @Dave Schuler

    I’m not disagreeing with you. How we spend is far more important than how much, and the way we currently spend is not going to get the job done. Too much gets locked into profits for corporations and high-income earners (doctors, lawyers, etc.) who are much more likely to save rather than spend. We could double our spending in healthcare, but what’s that going to get us other than even more rapid inflation? It’s incredibly stupid to run a massive program like Medicare and forbid it from negotiating prices. It’s also stupid to push a program like Medicaid on states with very limited resources. Making healthcare entirely a federal responsibility would do wonders for states in desperate need of consolidating their budgets.

    As for the federal debt, I’d much rather we stop selling Treasurys and start issuing national certificates of deposit with a permanent 5% interest rate. But that won’t happen, nor will any of the significant (and usually sound) changes posters here at The Glittering Eye have called for.

    Summers is a pig. Always has been and I’m incredibly disillusioned that he continues to have a presence in policy circles. Steve Verdon has a point when he argues voting is futile, because no matter who comes in their underlings always sing the same tune.

  • steve Link

    “It’s one of the reasons that I say that Medicare is a price support. ”

    Medicare as a price support has never made any sense to me. Private insurance pays about 20% more, on average, than does Medicare. For physicians the fees are even more variable and often even higher. Such a large differential makes no sense. I think the proper way to think of it is that Medicare needs to pay enough to make sure its patients get seen. Private insurance fees drive payment levels.

    The most recent studies show about 80% of docs saying they will continue to accept new Medicare patients. This is roughly about the same as for al private insurers, but includes some of the private insurers that actually do pay less.

    http://online.wsj.com/article/SB10000872396390444246904577573531560195466.html

    @Andy- Most docs are really not in the position of being able to afford no Medicare patients. Hard to coordinate and need a concentration of young patients. If you look at payment levels for Medicare, they are pretty close, when you normalize for purchasing power, to what other OECD countries pay for stuff. Private insurance payments are way out of the norm. Medicare is too expensive because its costs are growing above inflation just like private insurance, though maybe a tiny bit more slowly. I think you are correct that we have a poor ROI.

    Steve

  • Icepick Link

    Steve Verdon has a point when he argues voting is futile, because no matter who comes in their underlings always sing the same tune.

    And yet, Steve V and I will be the only ones that don’t go out and reward the people running the country into the dirt by voting for them. Several people here will go out and enthusiastically vote for the jerks of their choice. Schuler and steve will rush out to vote for Obama. Drew and Jan will rush out to vote for Romney. Four years from now everyone will be complaining about the lack of change. Bah.

  • Drew Link

    Thank you for the mind reading, icy.

    But you do have to go with something. And in that brilliant ad with the band rats, hampsters or whatever they were……..you can go with this, or you can go with that…..

    Or you can be an impotent malcontent, like icepick…..

    May I humbly suggest your personal fate will be enhanced with Romney. With Obama, you are effed.

  • Icepick Link

    Drew, you’ve been slavering over Romney for a year now. “He’s a rock star in my field!” You’ve been like a teenage girl fantasizing about Justin Beiber.

    But what are YOU doing telling me Romney will improve my fate? All you’ve ever told me is that the only thing that ever matters is how much I want it and how hard I work. That is almost the only thing you have told me. (The other thing being that I should smile and be happy while getting fucked over all the time. Yeah, put on a happy face, deep advice.) The reason I’m unemployed had nothing to do with Obama, the economy, or anything else. I’m unemployed, according to you, because I want to be unemployed, and that’s the only reason you have ever allowed for ANYONE to be unemployed. Occasionally you might allow that someone, somewhere, MAY have had a bad thing happen to them beyond their control, but it is clear from your tone that you don’t really believe it. You think everyone really gets what they deserve. Which is why you relish making comments like “I only own one vacation home, and I’m only worth twenty million dollars, so I’m not rich” to someone who can’t even get a call back for a job at WalMart these days.

    Fuck you, you disingenuous sadist.

    PS How is Romney going to fix things, Drew? He’s going to cut YOUR taxes, up my wife’s taxes by letting payroll tax increases kick back in (everyone needs to pay their fair share, which is why the quarter-billion dollar golden boy gets to pay a lower tax rate than we do – it’s only FAIR), increase defense spending, and rely on ridiculous growth projections to keep the economy from imploding. (Ryan’s budget plan has increases in federal spending every year over ten years while decreasing taxes. That was before Romney’s extra tax cuts and before Romney’s extra defense spending. How’s that going to balance the budget, numbskull? Oh, that’s right, because he’s a PE guy, that’s how. Magical thinking from an alleged engineer. You should give back your degree with an apology.) Nice bit of fantasy you got there. The only thing you care about is that he wants to cut your taxes, and nothing else. Quit pretending you care about anyone other than yourself, sadist.

  • Icepick Link

    How do I know the Romney/Ryan ticket is all fantasy, without even looking into the details? The fact that they’re telling me in two years time we will have 4% GDP growth and full employment – IF we elect them. No hint that hard times will continue but if we do THIS instead of THAT things will get better eventually. No, we’re going to elect the Magic Mormon and the Callow Catholic, and everything will be fine. Especially if we elect fine, brilliant fellow Republicans like Mr. Akin to office as well. Yeah, you’re all legitimate geniuses in your GOP, Drew.

    I shoulda bought snake oil futures….

  • Jimbino Link

    Nobody but an idiot would go back to work. Last time I worked, I paid 15% FICA, 3% unemployment tax and 2% worker’s comp tax. Beyond that 20% comes the income tax.

    Romney pays 13.5%. Ok, he will never go back to work again either. Only fools work and pay those socialist taxes.

  • Icepick Link

    It took me a while, but now I see the humor! Virility in Drew’s book can be defined solely in terms of having poor people vote to have their own taxes raised (and any benefits slashed) so that rich assholes like he and Romney can have their taxes lowered. Not to mention that Romney is going to pump all that money into the ‘private’ sector via Defense spending – which will all accrue to the owners of the companies. Socialism for poor people, bad. Socialism for rich people, VIRILE. Damn, that’s funny!

  • steve Link

    “I’m unemployed, according to you, because I want to be unemployed,”

    To be fair, he did train at U. of Chicago. That, IIRC, is where we got the theory that unemployment during the Great Depression was because everyone wanted a long vacation. 🙂

    Steve

  • Andy Link

    steve,

    Medicare as a price support has never made any sense to me. Private insurance pays about 20% more, on average, than does Medicare. For physicians the fees are even more variable and often even higher.

    Why would private insurance ever fall below the fiat price set by Medicare? For that to happen, insurance companies would have to be able to force providers to take less than what Medicare pays. That’s usually not possible because the providers will simply refuse to take that insurance and then beneficiaries will have coverage but no access. And, as I’ve noted, providers already complain about Medicare rates and they threaten to drop Medicare patients if rates are reduced.

  • Andy Link

    Drew

    May I humbly suggest your personal fate will be enhanced with Romney. With Obama, you are effed.

    I think Ice has a point. And I’ve asked questions here repeatedly about what exactly Romney can/will do that would be an improvement and no one, as yet, has provided an answer. Just about everything I hear from Romney is stuff that he can’t do without an act of Congress – in other words they are empty promises. So again, what is it you expect Romney to actually do? You talk about “executive experience” – well, ok, how does that translate into policy that Romney can actually achieve?

  • Why would private insurance ever fall below the fiat price set by Medicare?

    It’s almost exactly the opposite. In order to sell in the market the price must be above the support price. The question I think steve should be asking is why aren’t private insurance reimbursement rates closer to the Medicare reimbursement rates?

    I think that’s because of perverse incentives. Insurance companies are generally reimbursed based on a percentage of outlays. The higher the costs the more money they’ll make.

    Why aren’t costs even higher, then? Fear of regulation. It’s a balancing act. Insurance companies let spending rise as fast as they can without getting caught.

    As additional support for my assertion take a look at real healthcare spending over the last three decades. Maybe I’ll hunt around for a graph. The single recent period during which real spending grew very slowly if at all was during the period when SGRs were in force and before the first “doc fix”.

  • steve Link

    “Why would private insurance ever fall below the fiat price set by Medicare? ”

    First, some private insurers have paid at less than Medicare rates in the past. Next, why would providers take them? We all have some fixed costs. There are few practices that can garner enough patients in one age group to cater exclusively to one. Private patients tend to be younger and healthier. The “same” procedure may actually take much less time and effort for the private patient. If you can capture a patient when they are younger, you can keep them as they age. Lastly, it just generates bad publicity, one of the main reasons docs tend to take patients for Medicare and the lower paying private insurance patients. Market share matters.

    At any rate, if a private insurer wants to make sure their patients are seen preferentially over Medicare patients, how much more must they pay?

    Steve

  • steve Link

    “The question I think steve should be asking is why aren’t private insurance reimbursement rates closer to the Medicare reimbursement rates?”

    I thought I did? This is actually a question I ask frequently, so sometimes I assume I have asked it when I did not.

    “I think that’s because of perverse incentives. Insurance companies are generally reimbursed based on a percentage of outlays. The higher the costs the more money they’ll make.”

    My working thesis is along these lines. Insurance companies have little incentive to hold down costs, they just pass them on. They do this for at least two reasons. First, holding down costs is not popular. It hurts market share. Remember the HMO movement. Go watch As Good As It Gets. Secondly, management can justify larger salaries with a larger insurance company.

    “Why aren’t costs even higher, then? Fear of regulation.”

    Probably part of it, depending upon the state. However, we used to (20 years ago), have more of the smaller, commercial, health insurance companies around. They paid 100% of whatever you charged. They eventually went out of business since they could not compete with the larger companies who paid providers less. So, even though there are barriers to entry, if an insurance company charges (successfully) too much, they risk entry of new competitors.

    There exists a really nice curve looking at the number of insurance companies and premiums. If there are “too many”, premiums increase since providers have all of the market power. If there are “not enough”, premiums are higher since they have no competition, but they do level off since they dont want new entry. Somewhere in the middle is a goldilocks number, where premiums are lower.

    Steve

  • First, holding down costs is not popular. It hurts market share.

    That was actually a hot topic of discussion at insurance companies back in the 80s. I remember it.

    The decision was to do as you’ve said, just pass the increased costs along. That’s why my eyes always roll when I read somebody or other talking about an insurance company’s incentives to keep healthcare costs low. It just don’t work that way.

  • Drew Link

    Several thoughts

    As I’ve oft noted, I tend not to comment, or comment stridently, about things with which I have no experience and training. So the notion of the defense budget is one of those. However, routine insomnia has had me watching a series of documentaries on both the Smithsonian and Military channel. They have recently run specials on the lead up to wars. One common theme I have noted is the complacency of populations and the desire to divert spending from defense to transfer payments. Are we talking ourselves into a similar situation? I don’t know, but I wouldn’t get too cavalier in a dangerous world and given historical perspective.

    Icepick

    Blow me. As a serial employer I look at you through that prism. You need to look in the mirror, and you need to grow up. You are a malcontent. Yes, events beyond your control have conspired against you. But you might be the best mathematician or financial analyst or whatever in the world, but I wouldn’t hire you unless I could put you in the back room. You would be an organizational cancer. You need to think about that.

    Andy

    As for Romney, look, I dish it out. I can take it. Someone made some reference to teenage crush or some such. Unfortunately, I’m going to make the same points I’ve made repeatedly before. And that is because I am a small business owner, and speak with small business owners.

    Obama has created a political environment and an uncertain tax and regulatory environment that has caused business owner s to curtail expansion. Obama apologists want to cite lack of demand. Look at various measures of aggregate demand today vs 2007 or 2008 before the crash. There is demand. What there is not, is desire to invest. And what fool would when they want to take the spoils if you win, and say sorry dude, if you lose?

    This is what Romney would do, unleash the inherent capacity of the entrepreneurial class. Citations of a couple points of income tax rates are childish. No, that won’t change the world. But let’s get real, right now the taxes on cap gains are set to go up 9 points. 5 on cap gains explicitly, and 4 on Obamacare. Thats 9 on 15, or 60%. That’s real. Get a clue, people. And is there anyone who thinks that is the end, with this Obama guy?

    I’ve also said this before, and people take it the wrong way. Yes, I’ve got my pot. Obama can starve my investment returns on my portfolio through taxation, but he can’t really hurt me. But he can hurt the Dave Schulers of the world who need a real after tax return on their 401Ks for retirement. He can hurt the icepicks of the world who, if he could get his head screwed on straight, could enjoy an expanding and hiring economy instead of a static economy. Those are the people I think about and hope for when I advocate Romney over Obama.

    Obama is the single worst President of my adult lifetime. Carter was just a dufus in a difficult time. Obama can and has caused real harm.

    Support him if you see fit. Deny that Romney can do better if you see fit. But look up the location of the nearest emergency room before you shoot your dick off.

  • Icepick Link

    To be fair, he did train at U. of Chicago. That, IIRC, is where we got the theory that unemployment during the Great Depression was because everyone wanted a long vacation. 🙂

    steve, I know that’s a joke, but I hope you will forgive for not laughing.

  • Icepick Link

    So again, what is it you expect Romney to actually do? You talk about “executive experience” – well, ok, how does that translate into policy that Romney can actually achieve?

    he’s not going to accomplish much unless he lays the groundwork for it NOW. Campaigns are when political capital is created. He’s not creating anything specific for anything that will require any kind of pain from the voters. In fact, he’s doing the opposite, telling people that he can fix things without any suffering by anyone.

    It just isn’t credible.

  • Icepick Link

    He can hurt the icepicks of the world who, if he could get his head screwed on straight, could enjoy an expanding and hiring economy instead of a static economy. Those are the people I think about and hope for when I advocate Romney over Obama.

    Which Romney policies are going to lead to more investment HERE, as opposed to more investment in China, Vietnam and other wonderful places in the world of low cost labor? What guarantees are there that GE won’t take all their extra money and invest it in their China and India operations to send the products back here? Not a goddamned thing. Romney is offering direct promises to make people like you better off, and he is offering vague notions that maybe if you get another ten million dollars from some goddamned government spending program designed to help “small business” that I just may – MAY- get a part-time minimum wage job. Fucking fantastic.

    The only difference between Romney and Obama is who gets to rip off whom.

  • Andy Link

    Drew,

    This is what Romney would do, unleash the inherent capacity of the entrepreneurial class.

    How? Thanks for the reply, but it seems like more of the same vague assertions.

    Obama has created a political environment and an uncertain tax and regulatory environment that has caused business owner s to curtail expansion.

    Ok, let’s take each of those in turn.

    The political environment is the result of deep divisions in American society – President Obama is the cause of an uncertain political environment – if anything he’s a consequence of it.

    Regulation: This is one area where I think the President has some power, but it’s limited, just as President Obama’s attempts to expand regulatory authority have been limited. We’ll have to see if a President Romney tries to rationalize regulations or uses them to pick different winners and losers….

    Taxes. The Bush/Obama tax cuts are set to expire. No President can extend those cuts unilaterally. No President can create certainty with regard to taxes, especially considering the continuing large deficits. No one knows what will happen in the lame duck session. If there is another temporary extension before Romney takes office, the uncertainty will still be there. Again, Romney cannot do much by himself, things will hinge on what can get through Congress.

  • Andy Link

    should be “President Obama is NOT the cause of an uncertain political environment” proofread fail.

  • Drew Link

    Icepick

    My firm invests almost exclusively in manufacturing companies. Say, 14 out of 15. The academic term is “reshoring” which is just a fancy way of saying that economic and business factors are now encouraging people to manufacture here vs there. We are witnessing it. The biggest Impediments right now are regulatory, employment costs and energy costs.

    Obama is nowhere on those. Romney is 180 degrees opposite.

    I know you think it doesn’t matter who is in office. I know you want to take my head off. But seriously, I’m in this small business world, it would be a sea change to get Obama out. I feel for those like you who have been turned upside down by economic events. It is simply a horrible societal reality. But what could make a change?

    I’m sorry, you have no chance with Obama. None, zip, zero. Argue if you want that it doesn’t matter. Fall into the class warfare crappola if it makes you feel better. But how in Gods name could you do worse? Wouldn’t you at least take a shot?

  • Icepick Link

    Andy, I will also point out that the recession started back in 2007. Did businesses curtail their expansion then because of an uncertain tax and regulatory environment. The problems are far deeper than ‘uncertainty’ for businessmen.

  • Drew Link

    Andy

    “President Obama is the cause of an uncertain political environment – if anything he’s a consequence of it.”

    I have to call complete and total bullshit on that. Is he a eunuch? Is he not the President? Has he not made explicit anti-business comments? Has he not advocated tax increases on business? Has he not advocated ObamaCare? Has he not wasted money on favored green energy companies…..to the benefit of donors? Has he not given away the store to GM union workers while setting aside the legitimate legal interests of capital providers……..and now with a company pretty much dying as before? This guy is an economic disaster. People who cannot see that I do not know how to deal with.

    “Regulation: This is one area where I think the President has some power, but it’s limited, just as President Obama’s attempts to expand regulatory authority have been limited. We’ll have to see if a President Romney tries to rationalize regulations or uses them to pick different winners and losers….”

    It is hard to respond to a hypothetical. I’d release the hounds on coal, the single best return on investment energy source we have, by a country mile. Is that picking winners? I’d say it’s letting the market work. Obama is sucking solar cock, (an absudly poor return on investment) for campaign donations.

    “Taxes. The Bush/Obama tax cuts are set to expire. No President can extend those cuts unilaterally. No President can create certainty with regard to taxes, especially considering the continuing large deficits. No one knows what will happen in the lame duck session. If there is another temporary extension before Romney takes office, the uncertainty will still be there. Again, Romney cannot do much by himself, things will hinge on what can get through Congress.”

    Oh, please. Spare me the naive bullshit. He could get behind it or not. He’s the President. That, with all due respect, was a flat damned stupid comment.

  • Drew Link

    “Andy, I will also point out that the recession started back in 2007. Did businesses curtail their expansion then because of an uncertain tax and regulatory environment. The problems are far deeper than ‘uncertainty’ for businessmen.”

    Nice straw man. Intellectually vacuous. Demand has recovered. Look at the stats. Employment has not behaved commensurately. It has lagged. You have been taken down in the downdraft.

    Become the steely eyed and competent analyst you claim you are. Look at the facts.

  • Icepick Link

    Hey Drew, this mess got started under a Republican president. Republican congressmen signed off on the biggest measures meant to correct things. (That would be bailing out the big bankers and the expense of everyone else.) There have been NO NOISES from the Republicans about breaking up the big banks – none. So on the most important policy, they agree completely with the Democrats. So that’s a wash.

    Bush created the biggest expansion of entitlements since the inception of Medicare. Bush favored government expansion into every facet of life. The Republicans in Congress at that time favored all of those policies, and many more besides. (I seem to be the only person alive that remembers Bush tossing money into ‘infrastructure’ at a prodigious rate back in the day.) Those Republicans will be in charge of Congress this time around, if everything breaks their way. Why should I assume that the same people that spent like drunken sailors last time they were in charge, just a FEW YEARS AGO, are going to do anything BUT that now? Especially since they all rush out at every opportunity to tell us how they’re going to INCREASE the Defense budget? How is that going to be a night & day, day & night difference? All they’re doing is picking different winners and losers than Obama. No fucking difference.

    Romney, when he had the chance to govern, favored an entitlement expansion that proved to be the model for the PPACA. He claims he will repeal and replace PPACA. Really? He’s going to repeal Romneycare on steroids? And what will he replace it with? Did Romney ever turn down power as governor of MASS? As an executive at Bain? Or has he always wanted more?

    Romney is running on the principle that HE can FIX things, which means that HE needs to DO things, which means that HE needs ALL THE POWER HE CAN ACCRUE. How will that make him any fucking different than Obama, other than that he will choose different friends to reward with government largess?

    If you were arguing for a vote for Ron Paul it would be one thing. But you aren’t. You are arguing for tax cuts for Drew, so your company can offshore more manufacturing when Romney’s repeal and replace doesn’t do anything at all to solve the health care spending problem, and you will do so under the guise that it is just too expensive to work in the USA. In other words, you will be exactly where you are now.

    The very best you can argue, objectively, is that Romney will be marginally less horrific than Obama. I refuse to reward that kind of thinking, especially when it comes with a nice tax cut for you, and a nice tax increase for me and my wife.

  • Icepick Link

    Demand has recovered.

    Where? How? All I see are MORE STORES CLOSING. Where is the demand coming from if the median income is still decreasing? Where
    s the money coming from? Is it from increased consumer debt levels? If so, HOW IS THAT A GOOD THING?

  • Icepick Link

    Drew, you assume that the way I am here when I’m arguing with you is the only way I ever am. Not true.

    But even if it were, what would it matter? I never get to see live people in the hiring process. I never get near anyone. That’s because HR departments do not want anything to do with any LTUE. They have no idea if I’m a malcontent or not, because they never talk to me. They never talk to the other LTUEs I know either. We do NOT get the calls. They will NOT see us if we show up in person. THAT is the reality. And that is the part you ignore, because it makes you feel good to think everything bad that happens in the world happens to people who deserve it, because that means that everything good that has happened to you has ONLY happened because you deserve it.

    If I were the happiest guy on earth at all times, no one would give a shit, and I still wouldn’t get to talk to anyone. How do I know that? Because I KNOW that guy. Energetic, positive, almost indefatigable. His wife is dying from cancer and he still manages to work his ass off as a volunteer in several organizations to help others. You know what that gets him? The same number of interview opportunities I get, that’s what it gets him. Nada, zip, zilch. It just doesn’t matter. He lost his job before I did, and that’s all that matters. He’s done as a worker, he just doesn’t know it yet. And all that positivity, and all his experience, amount to nothing. He’s no better off than I am.

    That’s the MOST positive guy I know. (And I once got some very heartfelt thanks from him for giving him an unexpected lift – malcontent my ass. I’ve talked people up, cheered them up, tried to give them a little bit of a boost.) I know a lot of other people that are very positive. Doesn’t do them any good either.

    I know people who ARE malcontents. That doesn’t leave them any worse off. And you know what? If you lost your job, and your home, and your marriage, and your children, and your friends, your entire life, and NEVER DID ANYTHING WRONG, you might become a malcontent too. Me a malcontent? No, things are going too well for me. I’ve lost my job & career, and hundreds of thousands if not a million or two in future income. That’s small potatoes. I got everything else.

    But I’ve lost enough that I now refuse to have someone try and feed me a stinking plate piled high with fresh, warm bullshit and tell me it’s a steak dinner. Which is what you are always trying to do, when you tell me I need to vote in YOUR best interests because maybe, just maybe, it might help me someday.

    When you acknowledge that there are deep problems, and that the solutions will require much pain from everyone, and not just us poor malcontents, then I will believe you actually give a goddamn about anyone other than yourself. In the meantime, all you want is austerity from everyone else to pay for your tax cuts. No, sir, I will not support that.

  • Andy Link

    Drew,

    You keep saying the Obama is responsible for the bad economy and that Romney will fix it. All I’m asking is how Romney will actually do that. Your answers so far have all the depth of slogans. You say Romney will “unleash the inherent capacity of the entrepreneurial class.” I’m asking “how?”

    For example, you believe the uncertain tax environment is problem hurting the economy. I agree! Where we differ is that I don’t think the President has the power to create certainty in the tax environment. Certainty comes from long-term legislation passed by Congress and signed by the President.

    Have you actually read Romney’s platform? Almost all of it will require Congressional legislation – changes to the tax code, repealing Obamacare, changes in discretionary spending, rewriting and reducing regulations, etc. Some of it is really beyond the power of the federal government altogether.

    Some things can be done by executive authority. But there’s something to keep in mind – such decisions by the executive are not enduring like an act of Congress would be. Every four years the regulatory focus can change, so even Romney’s executive powers can bring “certainty” only for a limited time.

    Oh, please. Spare me the naive bullshit. He could get behind it or not. He’s the President. That, with all due respect, was a flat damned stupid comment.

    Well, I think you’re the one who is naive. Presidents “get behind” a lot of things and fail. If you want to convince me that Romney will actually “unleash the inherent capacity of the entrepreneurial class,” then you need to explain how Romney will do it and not simply declare it to be so.

  • PD Shaw Link

    @Icepick, I don’t think the regulatory problems caused the economic downturn, they are, however, a large part of the problem of a slow, depressing turnaround. The country lacks flexability; the regulatory problems that have local, state and federal complications makes new business development slow and risky. They’ve increasingly pushed us towards dependancy on businesses that do not take up physical space (internet, finance) and do not necessarily require an employee to show up at an American address.

    James Fallows argues persuasively that China’s advantage is not labor costs (particularly on the small value goods it produces), which can’t surmount the problems of distance and internal “infrastructure” problems (one of which I would say is lack of legal protections), but the advantage is in the ability to start a plant next week in a changing world. We need to figure out how to create some more of that flexibility, we should not have to wait several years for permits before construction jobs are let.

  • PD Shaw Link

    . . . let out to bid.

  • PD Shaw Link

    LTUE? Life, The Universe & Everything?

  • Icepick Link

    Long Term UnEmployed.

  • PD Shaw Link

    @icepick, Thank you, I’ll try to remember that. “Life, the Universe & Everything” is what shows up when I google. Probably says something about me.

  • Icepick Link

    @Icepick, I don’t think the regulatory problems caused the economic downturn, they are, however, a large part of the problem of a slow, depressing turnaround.

    Okay, I will accept that.

    But the regulatory environment wasn’t all that great in 2007, either. My wife’s former employer largely existed because of regulatory burden at several government layers. Someone needed to be able to tell developers how to navigate all that morass. That didn’t change appreciably because Obama got elected. That, in fact, didn’t change a damned bit because of Obama.

    So the counter-argument that cleaning up all of Obama’s regulations will by itself unleash the entrepreneurial class is disingenuous at best. Other, older regulations need to be ‘fixed’ as well, and a lot of those were put in place by Republican politicians – like the guys that will be running Congress.

    So I’m failing to see how Romney negates all that Republican Party dross that has built up over decades. And that’s even assuming he would want to, and he’s building up ZERO political capital to do that on the campaign trail.

  • Icepick Link

    PD, no problem. I’m not sure how common the usage is. I used to see it on some of the finance/economic websites, but that may have been peculiar to those boards.

  • jan Link

    People can intellectualize both major candidates forever, in projecting what they will and won’t do, assessing their qualities and honesty etc. However, one candidate alone has a presidential record which one can reliably go on, in assuming what the future holds.

    That person is Barack Obama.

    With Obama we can pretty much be assured of more class warfare rhetoric, more “raise taxes ‘fairly’ on the rich”. The only thing will be who will be defined as ‘rich?’ That demarcation line might very well become lower, dipping into the middle class, IMO, as there aren’t enough real rich people to solve our fiscal problems.

    Obama will implement ACA, which some of you apparently like. He will be behind more EPA regulation, having backed off a bit because of this election. This in turn will create more, not less problems, for business formation and consequently job creation. He will decrease funding for the military, increase social programs, continue to encourage food stamp mentality, not do much for entitlement reform (because he will defer it to provisions made under the ACA, which will probably get more restrictive and onerous with time).

    I think there will be more Congressional circumventions, more EO’s or other detours, whereby Obama can technically sidestep working with the checks and balances of a legislative body that might oppose what he wants to do. Obama will have nothing to lose, in the way of future reelections. He will have no incentives to track more to the middle. His agenda, whatever that may be, can be engineered with a ‘full speed ahead,’ and don’t worry about any rocky shoals ahead kind of enthusiasm.

    I don’t know about you, but that kind of ‘power,’ in the wrong direction, is not something I look forward to. In looking at Romney, however, there has been little evidence uncovered that the man is a dishonest or stupid man. His own personal business success shows he knows something about fiscal and entrepreneurial matters. People working under him, for the most part, give him credit for being an ethical and good boss. He has been able to work with a partisan majority, on the other side of the political aisle in MA, with fairly even-keeled results. I don’t see red flags popping out all over the man, even though there may not be trumpets, either, signaling that he will be Superman in rectifying our problematic economy, via the data or details of the plans he puts out.

    Basically, nothing is assured in this upcoming election, except that Obama will be the ‘same old, same old’ and possibly worse..and, Romney will probably not take things down any worse than they are, with some likelihood that they have a chance of becoming better.

    Consequently, for me, the choice is clear, though not guaranteed, in voting for Romney.

  • Icepick Link

    And given how damned difficult it was to build in the earlier part of this century, that indicates that the RE bubble was freakin’ HUGE. It swept everything before it, even regulators.

  • Andy Link

    PD,

    LTUE – Long Term Unemployed.

    I agree on the slowness of government. After all, I’ve been waiting 3/4 a year for a federal government job that I was asked to fill last fall. It took from October last year until June just to get the Job advertised. I applied for the job and got accepted in early July – basically a formality since it was a by-name-request (they still have to “competitvely” advertise a position even with a by-name-request). I’ve received a “tentative offer” for employment and filled out about 25 pages of paperwork, but I am still waiting for all the red tape until I get the “formal offer.” Maybe next month. Then it’s usually two weeks until I would actually start.

    The sad part is that President Obama actually shortened this process. He made it a requirement that new hires be brought on board within 90 days of the hiring decision unless there are special circumstances. It used to take up to six months (imagine getting “hired” but having to wait 3-6 months before you actually started work). Now it takes less than three months. Progress! (said sarcastically)

    So basically it takes a year for the federal government to create and fill a GS job. But I’ve seen positions go unfilled for years because the chosen candidate couldn’t afford to wait on the process and took a job somewhere else, sending the agency back to square one.

    There is so much that is screwed up in our system. Drew will have to excuse me for having little faith that a President Romney will make it all better.

  • Icepick Link

    The sad part is that President Obama actually shortened this process.

    Finally, a full-throated roar of a defense of Obama! On particulars! LMAO!

  • Icepick Link

    Seriously, can you see them running the Manhattan Project like what Andy describes?

  • Andy Link

    Ice,

    Well, that’s why I laugh whenever I hear about neo-WPA projects. Between the bureaucratic hiring process, union protections and davis-bacon, if we start now we might be able to start hiring 2-3 recessions from now.

    And it’s not just hiring. In the DoD it takes 10-20 years to field a new weapon system and the cost is several times what was originally estimated. Oh, and that’s another thing the President can’t fix unilaterally.

  • TastyBits Link

    @Icepick 08-22-2012 03:58 PM

    … the RE bubble was freakin’ HUGE. …

    The economy was running on debt created money, and until the debt is paid down or written down, things are not going to get much better.

    I agree with @Drew about regulations, cheap energy, and employee costs. I disagree about taxes. The effects from raising or lowering them are not necessarily going to do anything. Going from 70% to 35% is vastly than going from 35% to 30% or 35% to 40%.

    When the EU collapses, money will flow into the US. This will occur with any president.

    This election is closer to the 1988 election. If you liked Bush I, you should be happy with Romney, and nobody should be surprised when Romney raises taxes.

    Romney wins by default because he is “less crappy”. I will take “less crappy”, but I do not expect much.

  • Drew Link

    I’m officially bored now.

    Look, I try to talk sense. I’ve made a fantastic living by following the principles I cite here. Be as caustic and argumentative as you like. But so much of what I see hear is “poor me.”. And “there is no hope.”

    “Nothing can be done.”

    I look at it and say, “well, you made awful decisions.” and you have made a decision to lose. And if this guy were running things it would be better.

    I just don’t understand the negative mindset. I just cannot come to grips with it. Maybe because I have engaged in competitive sports all my life. I remember making a miracle shot to win a basketball game some 35 years ago. I get down in a golf match by three with three to go….and I start thinking how am I going to play the next three so I can kick this SOBs ass and win the next three holes. It’s a mindset. Sometimes it works. Sometimes you die and just go congratulate your competitor. But you are not dead until you are dead.

    I find the very same mentality in all the business owners I deal with.

    Woudth that we had that here.

  • TastyBits Link

    @Drew

    You do not know anything about the tar pits at the bottom, but you do not advocate the policies that have created them. “Pull yourself up by your bootstraps” belongs in a Horatio Alger novel.

    Life might be a little from the less affluent neighborhoods. What happens when decides that the basketball court belongs to them. You are terribly mistaken if you think that the basketball or golf clubs you bought are yours. Move into Section 8 housing, and pull yourself by your bootstraps. I would like to see it.

    Your taxes will also be a lot higher than where you live, but it will not be government taxes. The local “community organization” (gang) will determine the rate. You will pay one way or the other, and I would suggest you not find out what “the other way” is. Also, you may not want to piss off anybody, and the police are probably worse than the criminals. It does not really matter. The criminals are around 24-7. The police go home.

    I think Cabrini Green was torn down, but I am sure we can find you another place to start working your way up. I will be willing to help you pack. Remember to bring an extra set of drawers.

  • Icepick Link

    TB, he wouldn’t need to start as low as that. But let’s see him out hoofing for work after a couple of years off. He absolutely refuses to believe anything could possibly be as bad as I say, but I work/volunteer/network with out of work professionals. It IS this bad, especially for people over fifty. (Increasingly I’m hearing people talk about being over 40 and also feeling like they don’t get calls because of their age.) I’d love for him to meet Mr. Positive (to give him a nice, anonymous name) and explain to me the problem with THAT GUY’S attitude. The only reason I say almost indefatigable is that I happened to witness a moment when he was long in the face – I’d never seen it or heard about such from people much closer to him than I – and it was a bit startling.

    LTUE can wear out anyone, and it has become its own sin in the minds of employers. Unless the economy starts booming like the Bubble Years again, we’re just not getting back in the workforce because no one will even give us a shot at an interview. Hell, there’s no reason to, there are plenty of warm bodies looking to fill the slot. That’s not just my experience, that’s the experience of hundreds of people I’ve met and dealt with. I guess we’re all just malcontents. But hey, what do I know – Drew once had a job he didn’t like. That’s never happened to anyone else, you know.

  • TastyBits Link

    @Icepick

    Where is that “get up and go” attitude for businessmen? Why is President Obama such a problem? Why is @Drew allowed to complain about business conditions being bad, but anybody else complaining is an asshole? Apparently Warren Buffet is doing OK. What is the problem with the other PE Investors? Why are they not required to stop complaining and go to work? Is it really too much to ask a shit hot PE Investor to do a little investing?

  • Icepick Link

    Is it really too much to ask a shit hot PE Investor to do a little investing?

    It’s only a bad economy for rich people. The poor and the middle class are just being shiftless bloodsuckers.

  • TastyBits Link

    @Icepick

    I expect philosophical consistency and intellectual honesty, but I am not that smart.

    This is the same problem I have with politicians. They do not play by the same rules as everybody else. @Drew has a proven formula for success, but it does not apply to him. Those with the formula seem to be whining more than those without a formula.

    As a businessman, Mitt Romney knows how to get a deal done, and that means compromise. The only question is what principles he is going to compromise. When the Romney supports figure out how businessmen get things done, they will be ready to join the party. For them, it will be different this time.

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