July 31, 2009

More Thoughts on Henninger's Observations

Henninger: The Blue Dogs’ Final Dilemma is Health Care - WSJ.com:

Henninger's quote below certainly applies to Vermont. We are a state where the public sector is intentionally squeezing the private sector as it has increased government services and commensurate spending. Vermont's economy was unhealthy even before the recession began. Nevertheless, Vermont racheted up spending beyond the ability of the tax base to support it.

State government is now facing runaway pension and retiree health care liabilities and a massive (by Vermont standards) hole in its future revenue stream. The basic problem: Vermont for a decade or more has been on a "Cadillac" state spending binge fueled by a "clunker" private sector economy.

"The problem is that in Washington and many states the public sector’s revenue needs have arrived at a point where space for the private economy is more or less beside the point. That is the clear message of the California and New York budget crises and the difficulties of financing the Obama health-care plan.

For centrists in both parties the moment has come to decide which side of the public-private divide they want the U.S. and its future workers to be on. Trying to live in both has brought us, inevitably, to that decision."
My guess is that leaders in Montpelier are hoping that national health care reform will bail them out of the fiscal pit of Medicaid and Catamount Health. Yet none of this relief would kick in, as I understand it, until 2013 at the earliest if approved.

Let's have a Discussion About Health Care Service Rationing

Missing in the debate about health care change is the obvious requirement to ration services.

Adding millions more people to a government system without stringent cost control, including rationing, defies common sense and is a prescription for higher deficits or massive tax increases, likely both. Other nations with a government-run system implement rationing in one form or another. Yet, on a personal level, denial of service is a tough pill to swallow.

Those who contend that 'health care is a basic human right' are obliged to answer the question: how much care and at what cost? Of course, the devil is in the details, but I might favor rationing, if I understand how it will applied.

This mad rush by Congress and the President for massive restructuring is wrong. We deserve a debate that is clear, reasoned and thoughtful. We should understand both the personal and system ramifications of overhauling health care, an industry that accounts for one sixth of our economy, before plunging headlong into it. Clear information for that debate should be coming from our Congressional delegation and the health care industry. But it's not. Instead we get generalities from the President and from most lawmakers.

President Obama recently extracted promises from the hospital industry and the drug companies to save $Billions. We deserve to know how those savings will be accomplished. Will hospitals and doctors choose to earn less? Will they ration procedures, gain speculative efficiencies from electronic health records? If the cost savings are real, I want to know how, where and when they will be achieved.

Vermonters should understand how restricting services will be accomplished. We don't even hear the word rationing used because our political leaders and others are afraid to talk about it. Yet, we obviously cannot afford a system of medical care that treats every person for every condition with all possible means regardless of costs.

July 30, 2009

Now is the Time to Revamp Vermont State Government

Now that economists advising the state have rendered an even more dismal view of Vermont revenues (forecasts down by another $28 Million), some legislators have begun the predictable hand-wringing and 'woe is us' groaning. But the Governor and Legislative leadership have an enormous potential to revamp government and set spending on a far more rational path for the future. Opportunity is knocking.

Many government employees are choosing to accept incentives for early retirement. Others are losing their jobs. Yet, this painful downsizing of government opens a rare opportunity for an overhaul that will serve us more efficiently.

The economy may be in the tank for some extended period and far too many people have already lost their jobs in the private sector during this recession. Tax revenues will continue to deteriorate. Yet, now is absolutely the right time to seriously analyze and prioritize the services that government provides, eliminating those that are not essential. When you can't afford business-as-usual, business must adapt.

We must do this because the economy will unlikely rebound quickly, if ever, to former levels. Without a healthy private sector economy driving a future increase in the tax base, Vermont simply cannot support the present level of education, health care and social services spending. Lawmakers should not expect to see increased tax revenues anytime soon nor enough federal bailout. Banish the notion they should even entertain yet more new taxes in the next legislative session!

In the midst of myriad special interest groups jockeying for their dollars and programs, this will be very hard work. Perhaps the Governor's "Tiger Teams" searching for cost savings are a small step in the right direction. However, simply belt-tightening and chopping out a bit of cost here and there will not accomplish what's needed. We must insist on a far more comprehensive review of government.

Let's take advantage of this opportunity to seriously examine how much Vermont government can do a lower balanced budget. Government simultaneously must become more efficient, less costly and continue providing essential services of high quality. It may take a few years to accomplish this, but we must muster the will for it now.

Many people tell us that Vermont government is sorely lacking in effective technology, much of which is clunky and obsolete. Typically, legacy systems are underutilized and difficult to upgrade. It's not an easy task and one that is likely to fail if changing or replacing systems is done haphazardly without examining the processes, interrelationships and interactions necessary for efficient citizen service and internal operations. The worst mistake is to insert new technology into obsolete functions.

The tasks ahead for our government should be:

  • Take a deep and thoughtful look at what government should be doing, consistent with reduced revenues.
  • Determine the right combination of people, organization and technology to deliver those essential services with high quality.
  • Source to the private sector (profit or non-profit) those functions that make sense and can be done more efficiently there.
  • Spend money wisely to implement efficient systems based on proven, web-based technologies.
  • Place people in the proper roles and train them on new systems.
  • Demand performance-based accountability from managers and employees alike.
  • Negotiate with unions the modifications in work rules needed to accomplish these changes.
Revamping government will surely cause great turmoil, yet we are already in the midst of that upheaval because of the recent budget reductions, layoffs and retirements.

Let's insist that government reinvent itself while it has this rare opportunity. Ask Governor Douglas and your legislators, particularly the leadership, to bury their political hatchets and step up to this effort. Government reform should be a centerpiece of 2010 political campaigns.

Henninger: The Blue Dogs’ Final Dilemma is Health Care - WSJ.com

Henninger: The Blue Dogs’ Final Dilemma is Health Care - WSJ.com

(Note: This link may not be active for more than a week for non-subscribers to WSJ Online.)

The health care debate is really about something much deeper. Henninger adroitly describes the tug-of-war between the private sector and the public sector as drivers of our economic health and personal well-being. This debate is much deeper than health care.

"With President Obama’s health-care bill, the forces that across 40 years grew into unbridgeable opposition to each other could not be more plain to see. American politics has arrived at a crossroads.

This struggle over health-care legislation isn’t just another battle between the Democratic and Republican parties. It’s about which force is going to take the United States forward for the next generation: the public sector or the private sector. If by now you haven’t figured out which sector you are in, then you’re a Blue Dog Democrat"

The Blue Dogs and other moderates have been sliding to this final dilemma for years. The issue is not whether one is for or against “government.” The issue is: Do they work for us, or do we work for them?"

Consider the massive public sector costs that would require ever more taxes on private and business activities at both the state and federal level. We are in an era of potentially huge public policy shifts that may make Americans ever more reliant on government.

"The problem is that in Washington and many states the public sector’s revenue needs have arrived at a point where space for the private economy is more or less beside the point. That is the clear message of the California and New York budget crises and the difficulties of financing the Obama health-care plan.

For centrists in both parties the moment has come to decide which side of the public-private divide they want the U.S. and its future workers to be on. Trying to live in both has brought us, inevitably, to that decision."

This is not a good thing for our country. How can anyone argue that racking up huge public debt and massive tax increases with no hope of repayment is good for America? This reaches far beyond party affiliation.
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July 29, 2009

Folly of Waxman-Markey H.R. 2454

I subscribe to a monthly printed newsletter called The Energy Advocate. In the July 2009 issue publisher Howard Hayden quotes from the Waxman-Markey (H.R. 2454) "American Clean Energy and Security Act of 2009." This is part of his story about the tremendous strides that have been made in the last 20-30 years in reducing health-affecting air pollutants in the United States.

Because of EPA's attempt to classify CO2 as a pollutant and to regulate its emission, Hayden implies that Congress is on a fool's errand with H.R. 2454 because CO2 is a naturally occurring component of our atmosphere (0.04% by volume), essential for all plant life. He points out that the legislation may have an escape clause (see below).

The respected Christian Science Monitor also has a very recent editorial faulting other elements of the Markey-Waxman bill. My hope is the Senate will drastically modify it or let it lie. I have long maintained that cap-and-trade schemes on this scale are fraught with risk of manipulation, doomed for failure, and will dramatically increase the costs of energy and further repress our economy. If Congress thinks it must control carbon dioxide, a direct carbon tax on the end users is far more rational so that people will see it clearly, not camouflaged in high prices.

The act specifies that the Administrator of the EPA

"shall annually prepare and certify a report to the Congress regarding whether China and India have adopted greenhouse gas emissions standards at least as strict as those standards required under this Act. If the Administrator determines that China and India have not adopted greenhouse gas emissions at least as stringent as those set forth in this Act, the administrator shall notify each Member of Congress of his determination, and shall release his determination to the media."

He also makes the case that CO2 is not a pollutant (as proposed by the EPA).

"With the recent politically directed EPA finding that CO2is a pollutant, there seems to be a feeling among our lawmakers that a reduction in CO2 emissions can be accomplished by laws, regulations, and cap-and-trade schemes. Engineers will use some magic equations and magic substances like Unobtanium to accomplish the will of Waxman, Markey, Pelosi, and other starry-eyed true believers.

The chemical facts are these. Natural gas is primarily methane, CH4, which has four atoms of hydrogen for every carbon atom. Petroleum contains a great many compounds but all-in-all, the lot of them can be roughly represented by CH2; there are two atoms of hydrogen per atom of carbon. Coal is roughly CH, with one atom of hydrogen for each carbon atom. (We ignore contaminants here.)

When we burn any of these fuels, part of the energy comes from burning the carbon and part from burning the hydrogen. Necessarily we get H2O and CO2 as products of the combustion. It's not as if the carbon is some sort of contaminant in the fuel; it is part of the fuel. There is no such thing as low carbon natural gas, low carbon oil, or low carbon coal. Another way of saying it is that without carbon, coal, oil and natural gas would not exist. If I dwell on the obvious, it is precisely because Washington's climate controllers are unable to understand such subtleties."

July 25, 2009

David Brooks - "Kill the Rhinos!"

In several columns recently David Brooks has been pounding on the failure of the proposed health care reform legislation to restrain costs. I agree with him. Politicians generally prefer pandering to people by telling them that they can have insurance coverage and it won't cost them much, if anything. They don't like talking about cost control.

Brooks is absolutely correct that the rhino in this system is cost inflation and it must be tamed. Any legislation that fails to do this is folly.

In Vermont, which is no exception to cost growth, one has only to look at job growth. It is higher in the health care industry, (followed by education) while nearly all other job categories are shrinking. This fact alone points to one reason health care costs are out of control. Costs must be restrained and at the end of the day, painful though it may be, rationing of services and procedures is inevitable.

Where's the debate on how that should happen? Even Brooks doesn't discuss it. Everyone prefers to talk about incentives, disincentives, access and quality. The only point that gets close to the need for rationing is changing the fee-for-service system to something that rewards quality. Those are code words for rationing. If doctors and hospitals don't get paid for procedures and tests, they won't do them. That's a form of rationing.

"Not everything is compatible with everything else. But the point is that you have rhinos at the door! You’ll try anything that works. You want a political class that no longer perpetuates the myth that people can get everything for nothing. You know that it was political pandering that got us into this mess in the first place.

Obama is right. Things will be bad if we don’t tackle the problem this year. Things will be worse if we add to the costs without beating the rhinos."

A hero in the war against fiscal irresponsibility is David Walker, former Comptroller General of the United States for many years. Here's what he had to say about health care reform recently on MSNBC.

July 18, 2009

We Have No Choice But to Ration Health Care

Why We Must Ration Health Care - NYTimes.com:

After reading the first few paragraphs of this piece, I was convinced that Singer is absolutely correct that health care rationing MUST be part of the equation in revamping our U.S. health care system. I have believed this from the onset of the debate a few years ago. Those who don't believe that rationing is essential are in denial.

Those who contend that 'health care is a basic human right' are obliged to answer the question: how much care and at what cost?

We should demand that our politicians talk about this reality. If they avoid it, they are disingenuous or dishonest or both. We simply cannot afford to treat every person for every possible condition with all possible means.

Of course, the devil is in the details. But without a discussion of rationing in the U.S. before we commit to an enormous change in the system, we will have done ourselves a terrible disservice. Without cost controls, including rationing of services and care, not just in the hard cases that Singer uses as examples, but more generally, we will have built a system doomed to fail.

We should demand that our politicians, particularly those supporting single-payer health care to explain their position on rationing. In addition, we should ask them to explain to us how the proposal now in Congress deals with rationing.

TeamObama and others have a basic responsibility, as does the media, to put this subject on the table now.

Kudos to the times for giving the issue 'front and center' treatment.

"The case for explicit health care rationing in the United States starts with the difficulty of thinking of any other way in which we can continue to provide adequate health care to people on Medicaid and Medicare, let alone extend coverage to those who do not now have it. Health-insurance premiums have more than doubled in a decade, rising four times faster than wages. In May, Medicare’s trustees warned that the program’s biggest fund is heading for insolvency in just eight years. Health care now absorbs about one dollar in every six the nation spends, a figure that far exceeds the share spent by any other nation. According to the Congressional Budget Office, it is on track to double by 2035."

"Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won’t be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money. The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?"
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Kudos to Obama

Obama Speaks at N.A.A.C.P. Celebration - NYTimes.com:

President Obama delivered the right message focusing on personal responsibility. All Americans, not just blacks, need to absorb it and recognize that the 'victim society' that has been created in the past couple of decades is a drag on the greatness of America and on far too many individuals.

"Aides said he intended to make the case for personal responsibility — a frequent theme of his presidency — in the context of the civil rights movement and how it has shaped his own life. But he also wanted to send a message to black parents, and especially to black children.

“They might think they’ve got a pretty jump shot or a pretty good flow,” Mr. Obama said, “but our kids can’t all aspire to be LeBron or Lil Wayne. I want them aspiring to be scientists and engineers, doctors and teachers, not just ballers and rappers. I want them aspiring to be a Supreme Court justice. I want them aspiring to be president of the United States of America.”"
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July 15, 2009

Colchester July 4th Celebration

I finally got around to uploading a few pics I took at the Colchester July 4th celebration and the events associated with the 400th anniversary of Champlain's discovery of our beautiful lake.

July 13, 2009

Google Voice

I finally received my long-awaited invitation for Google Voice. Yesterday, I chose my number and have been quietly playing with it to better understand the ins and outs from a personal perspective. I have linked my home phone and cell phone to it.

It's powerful and easy to use. So far I have set up my voicemail, sent SMS messages from the browser interface, made a local call (they are free). I will soon test the voicemail transcription feature and then move to more sophisticated functions.

The feature set is strongest for inbound calls to the new number, which I intend to distribute on my next batch of business cards. I am reluctant to display it on my blog because I don't want a bunch of junk phone calls.

The uptake may be slow, but the phone companies should be worried in that Google is inserting itself at the top of the phone pyramid...and it's tough to beat free and very inexpensive overseas calling.

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Op-Ed Contributor - Chrome vs. Bing vs. You and Me - NYTimes.com

Op-Ed Contributor - Chrome vs. Bing vs. You and Me - NYTimes.com

Cringley gets it right in describing the strategic positioning between Microsoft and Google. Nevertheless, I think new products and services from both companies do benefit the consumer. The techie fringe may be all atwitter about Google's 'FUD' announcement about a Chrome OS in 2010, but most users have little concern and enterprises will not jump to it without some significant benefit. The Google brand will not be sufficient to persuade big companies to switch.

July 12, 2009

Bravo for TeamObama!

Quote from the NY Times, July 12, 2009

"No business wants to invest in a place where the government skims 20 percent off the top, or the head of the port authority is corrupt. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery. That is not democracy, that is tyranny, and now is the time for it to end."
PRESIDENT OBAMA, on the need for reform in Africa.
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July 8, 2009

Google Chrome: Redefining The Operating System

Google Chrome: Redefining The Operating System

Inertia is on Microsoft's side. The people who pay them money will be reluctant to move to an online-only world for all their apps. The trick for MS will be to manage their revenue streams during the transition to a 'fully' online world. It's clear that Google wants to penetrate the enterprise marketplace for its Apps and this new OS aims for it, but that process will not go quickly.

I'l bet my dollar to your donut that MS has their own version of an OS that is geared to online browser-based use of hardware. They'll introduce it when the timing is right. Meanwhile, Windows 7 will launch this fall. My guess: Google's OS announcement is timed to interfere with the uptake of Windows 7, reportedly a very solid OS, due for release this fall, a resort to the old IBM FUD (Fear, Uncertainty and Doubt) approach.

July 3, 2009

Pay-for-Chat Plan Falls Flat at Washington Post - NYTimes.com

Pay-for-Chat Plan Falls Flat at Washington Post - NYTimes.com:

Could we have some outrage from the Times editorialists, please? This is a travesty at the Washington Post, not a PR fiasco as the Post's public editor would have it. This is a deep breach of journalistic ethics. In fact, this is unbelievable! What have the politicians to say? Are they ashamed or afraid to castigate the 'fifth column?'

The older I grow, the thinner is my trust of politicians, the media and those who have a responsibility to to right by us. I don't think this is cynicism, rather a conclusion based on evidence. What say you?.

Why should we trust what management of the Post may say? To their credit, the Post's newsroom was appropriately concerned and said so.

"The revelation of the parties early Thursday morning by Politico.com appalled members of The Post newsroom and put the paper squarely in the cross hairs of journalism ethicists. In response, Ms. Weymouth canceled the first dinner, scheduled for July 21.

A flier describing the events promised corporate sponsors conversation (“Spirited? Yes. Confrontational? No.”) at the Washington home of Ms. Weymouth. Sponsors were asked to pay $25,000 to attend an event, or underwrite a series of 11 for $250,000.

The July 21 event, focusing on health care reform, “guaranteed” a “collegial evening” with health industry advocates, Post journalists covering the field and administration officials involved with its policies."

States Plot New Path to Tax Online Retailers - WSJ.com

States Plot New Path to Tax Online Retailers - WSJ.com

A Supreme Court ruling now provides the upper hand for online retailers to avoid collecting and remitting state sales taxes unless they have a locus, or 'physical presence' in the state. I believe it's only a matter of time before this will change, either by Congressional action or by a case in which the Supreme Court will abandon its 'locus' precedent. The reason is simple: there's too much foregone tax revenue and it's growing. In this day of 'online everything' and excessive government spending the states are clamoring for this lost money. Consumers (voters), hopefully, will resist.

Consumers are legally obligated, at least in my home state, to report online purchases on their tax returns and pay the state sales tax rate. In practice, few do and enforcement is negligible or non-existent. Meanwhile, online retailers like Amazon and others continue to resist states' attempts to coerce them into collecting and paying these sales taxes.

"Amazon.com Inc. and other e-commerce companies are winning some skirmishes against cash-strapped states that want to force them to collect sales taxes, but their victories may be short-lived.

Several states are contemplating new laws or revisions to existing law that could eventually force online retailers to pony up. North Carolina, for instance, has a two-pronged approach to going after online retailers. If its current efforts to tax online sales fall through, the state's revenue secretary plans to interpret existing laws to require companies that have marketing affiliates collect sales taxes.

State Sen. David Hoyle on Thursday called the effort "a fairness issue." Collecting sales taxes from out-of-state sellers could bring between $150 million and $200 million annually in additional tax revenue, he said. Mr. Hoyle said current law allows the state to force online retailers retroactive sales taxes."