The MLLG Collection – Short Takes

We accumulate numerous blog-worthy topics too short for an entire posting.
From time to time we present an eclectic collection of such pithy morsels. 
The MLLG Collection – Short Takes
By: George Noga – February 15, 2017
1. Veterans Administration: During the 2013 VA scandal, veterans died while waiting for appointments. In response, Congress voted an extra $15 billion to reduce wait times and to make it easier to fire bad employees. So, how is that working out? Wait times today are 50% longer. Private physicians see up to 8 times more patients than VA docs. In one VA office (Phoenix) 13 employees make over $300,000. The few employees fired for severe misconduct have been reinstated upon appeal. You shouldn’t be surprised; this is simply government as usual. Solution: abolish the VA; move veterans into Medicare and use VA facilities for long-term care and for treating PTSD.
2. Oil Prices: Prices plunged 70+% from recent highs and oil company profits dropped 50%. What happened to all the speculators and price gouging? If energy companies manipulate prices when they are high, why aren’t they doing it now? If they are villains when prices are high, aren’t they now beneficent angels? One thing is certain: when prices rise again, progressives will demonize speculators and oil companies.
3. Vaccinations: The nanny state intervenes in many aspects of family life when there is no public health or safety danger and even when risks are statistically nonexistent. They ban teeter-totters, jungle-gyms and require sawing off limbs under 8 feet high to prevent tree climbing. They ban many toys and outlaw blowing up balloons for kids under 14. They have infantilized America. Yet, in the one area (vaccinations) where government intervention truly is necessary, they are AWOL. Communicable diseases are spreading like wildfire but government panders to anti-science movie stars and progressives ensconced in liberal enclaves who are spreading disease. If the push back were coming from evangelicals in flyover America, the reaction would be different.
4. Source of World Peace: Peace among nations is not achieved by disarmament, weakness or even by treaties. The rare times when peace prevailed was when it was imposed by a powerful nation, e.g,, Pax Mongolica, Pax Romana, Pax Brittannia and, until recently, the Pax Americana. The clear lesson is that peace is not the absence of power but it is a condition imposed by power. War is a terrible thing, but not the worst thing. It is worse to believe that nothing, even loss of freedom, is worth fighting for.
5. Obamacare Not Insurance: One stupid-crazy part of Obamacare is not often discussed. The ACA covers 100% of many small, ordinary and predictable medical expenses such as flu shots, annual physicals, birth control and 15-20 other procedures. However, if you break a leg, the ACA subjects you to high deductibles and copays. This turns insurance on its head; routine expenses are fully covered but a serious injury, when you really need insurance, can cost over $20,000 in deductible and copays. This is akin to your homeowners insurance paying in full for broken windows but charging you $20,000 in deductible and copays if your house burns to the ground.
6. Chick-fil-A: Progressive mayors of many liberal enclaves (New York, Boston, San Francisco, Chicago) are trying to ban Chick-fil-A because its owner once opposed gay marriage – as did Barack Obama at that same time. Perhaps mayors of conservative cities should ban Ben & Jerry’s for its socialistic views. It would be interesting to see progressives’ reaction to such a move. Why stop there? Why not have only liberal companies permitted in California and only conservative companies in Texas?

Next on February 19th is our post: Americans voting with their feet. 

Kitty Genovese and Congressional Democrats

Kitty Genovese was murdered while 38 witnesses looked on and did nothing. The US
Constitution was murdered while 225 Democrats in Congress looked on and did nothing.
Kitty Genovese and Congressional Democrats
By: George Noga – January 29, 2017
     On March 13, 1964 Catherine (Kitty) Genovese was murdered in New York City, raped and stabbed to death over a harrowing 30 minute period, while 38 indifferent neighbors observed from their apartment windows, heard her repeated screams and did nothing to help. This bystander indifference became known as “Genovese Syndrome“, led to the nationwide 911 emergency telephone number and spawned numerous books and movies. The recent 50th anniversary of Kitty’s murder was marked by a new play, “38 Witnesses”, new movies, “The Witness“, and “37” and a “Girls” HBO episode.
     Over a harrowing eight year period (2009 to 2016) the United States Constitution was savagely attacked in Washington, D.C. The Constitution (and the rule of law) was repeatedly abused and violated with multiple attacks to its beating heart. Just as Kitty Genovese’s neighbors stood idly by, over 200 congressional Democrats indifferently watched, refusing to lift a finger to defend the Constitution. Not only did they observe the vicious attacks, they actively abetted Obama, Reid and Pelosi in the carnage.
     Following are but a few of the mortal wounds to the Constitution and the rule of law. Altogether there are over 50 more such violations – too numerous to list herein.
1. Treaties were fraudulently termed executive agreements and not submitted to the senate as required by the Constitution because Obama knew they would not be ratified. Principal among them were the Iran deal and the Paris Treaty on Climate Change.
2. Obama made recess appointments when the senate was not in recess and, in fact, when it was following the exact same protocol Harry Reid instituted to forestall recess appointments while Bush was president. These were serious body blows to the Constitution. The illegal appointments have since been invalidated by the courts.
3. Many (about 45) unaccountable czars were appointed without senate confirmation, an action not permitted constitutionally. Obama’s creation of the CPSC circumvented congressional appointment, budgeting and oversight powers – another clear violation. Again, the courts have stepped in and invalidated such illegal appointments.
4. The EPA, NLRB, IRS, DOJ and various regulatory agencies issued unconstitutional regulations and the FCC violated the law with its net neutrality rules. Once again, many of these actions already have failed constitutional muster in the courts.
5. Obama unilaterally altered the ACA, delaying the employer mandate, extending subsidies to non-exchange plans, not enforcing transparency provisions, delaying out-of-pocket caps, delaying insurance requirements and exempting Congress. This would be de rigueur in Venezuela, Cuba or North Korea but is a serious crime in the USA.
6. Obama unilaterally refused to enforce immigration law and, in effect, conferred legal status on illegal aliens. He violated his oath to faithfully enforce the law.
7. Harry Reid changed filibuster rules for cabinet and judicial appointments, violating long established rules. Tim Kaine, expecting to be VP and to have a senate majority, stated Democrats would further change the filibuster rules for SCOTUS to assure their nominee of approval. Reconciliation (Obamacare) circumvented the rule of law.
   Many of the witnesses to Kitty Genovese’s murder later regretted not taking action. Now, some Democrat senators and representatives regret staying silent while Obama, Reid and Pelosi trampled the Constitution. However, their tears are crocodile tears because they know that what was sauce for the goose is now sauce for the gander.
    The 38 witnesses to Kitty’s murder were ordinary people reluctant to get involved, perhaps at personal risk and Kitty was but one person. The Democrat Congressional witnesses to the evisceration of the Constitution were elected officials sworn to protect and defend the Constitution of the United States and were not at risk of personal harm. Yet approximately 225 of them stood idly by as wound upon wound was inflicted on the Constitution, on our beloved republic and on 323 million Americans.
   There is an appalling moral equivalence between the refusal to act by the 38 silent witnesses to Kitty Genovese’s murder and the 225 Democrat members of Congress passively witnessing the prolonged and vicious assault on our Constitution!

Our next post February 5th addresses the issue of fake news

Election Analysis and Afterthoughts

Hillary had a world class marketing team trying to sell box wine to oenophiles, more baggage than a carousel at LAX, a paranoid streak rivaling Nixon and a limitless sense of entitlement.
Election Analysis and Afterthoughts
By: George Noga – January 15, 2017
     We got it right all year! My January 17th post cited 3 principles: (1) no permanent majorities; (2) the longer a party is in power, the more likely it is to lose; and (3) economics trumps all else. I also cited 3 keys: (1) polling is dead; (2) Obamacare is wildly unpopular; and (3) demographics, i.e. for Republicans to make gains among Hispanics, Asians, women and millennials would be easier than for Democrats to make gains among whites. All 6 of these principles and keys proved to be correct.
     My September 20th special posting began “I don’t purport to know who will win the election, but I know how it will be decided. . . . It will be decided by les deplorables, good-hearted, hard-working Americans branded as racist, sexist, homophobic, xenophobic and Islamophobic and revulsed by the latte-left’s perversion of America and outraged about being lied to.” Those words proved to be prophetic.
     Our final preelecton post on November 6th stated the race was tightening and Trump would win if all or most of the following happened: (1) polling was flawed; (2) there were late shifts in voter sentiment; (3) Obamacare repudiation was robust; (4) government failure drove voters as in the Brexit vote; and (5) blacks and millennials stayed home while evangelicals turned out in force. BINGO! All five happened. 
     Clinton and the Democrats lost because a good, decent and just society is based on a voluntary social and economic compact between citizens and government. That compact was violated, desecrated and trampled upon by Obama, Clinton and liberal elites who would be our masters. Voters demanded change from failed hyper-progressive social and economic policies. It had nothing to do with Comey or Putin; it had everything to do with deeply flawed governance and candidates.

Post-Election Reflections

  •     Hillary outspent Trump 2 to 1 and had a better organization but, in the final analysis, the best sales and marketing are limited by the product being sold. As one pundit nailed it, they had world class marketers trying to sell box wine to oenophiles.
  •     After every defeat, Democrats delude themselves into believing that their problem lay in not getting their message out. Their problem was that they did get their message across and it was soundly rejected by the voters. They never learn.
  •     Liberals exposed their churlish souls after the election: rioting, contesting the results, tampering with the electoral college and planning to disrupt the inauguration.
  •    Voters repudiated Obama’s policies and his method of governance, although he remains personally popular. Both Hillary and Obama immeasurably aided Trump.
  •     Demonization of opponents is dead. The Democrats won in 2012 by turning a good and decent man (Romney) into an unrecognizable monster. It did not work against Trump even though he was a target rich candidate. It may never work again.
  •     Democrats obsess with branding their opponents as racists. That abomination also may never work again. Disagreement about immigration is not racism. Over 200 counties that voted for Obama in 2012 changed to Trump; were they all racists? 
  •     Steve Bannon as a Trump advisor outraged liberals who were a-okay with Al Sharpton advising Obama. Bannon has degrees from Georgetown and Harvard, served 7 years as a navy officer and had successful stints at Goldman Sachs and Breitbart News. Sharpton attended Brooklyn College for two years before dropping out, never served in the military, owes $4.5 million in unpaid taxes and is known mainly for his role in the sordid Tawana Brawley affair that a jury ruled was a giant hoax.
    The fierce, frothing-at-the-mouth animus and virulence liberals are showing for Trump is not out of concern for America or because progressives are afraid he will fail. Au contraire; it is entirely because they are  terror-stricken that he will succeed!

 Coming January 20th – an Inauguration Day retrospective of the Obama presidency

Keys to the 2016 US Presidential Election

By: George Noga – January 17, 2016

  With Iowa caucuses two weeks away, now is a good time to present some perspective about the forces that will shape the final outcome in November. There are three general electoral keys that have stood up from Washington’s time to today.

  1. There are no permanent majorities in America: Progressives and the media dream the present demographics of race, gender, age and class will result in a permanent majority. They are ignorant of history and the genius of Madison’s Constitution. These are the same folks who consternated in 1988 that the GOP enjoyed a permanent majority. Issues, positions, alliances and demographics continually shift and minority parties skillfully adapt.
  2. The longer a party is in power, the more likely it is to lose: The odds get ever and ever higher that a party will lose the longer it holds office. Only once in the past 150 years (Reagan-Bush Sr.) did the same party succeed a full two-term president. Americans like change and understand power corrupts.
  3. Economics trumps all else: Remember Bill Clinton’s mantra “It’s the economy, stupid“? People talk about other issues but vote their pocketbook. The US is experiencing chronic stagnation and many key economic metrics have tanked. Business is not investing due to higher taxes, hyper regulation and uncertainty. When the Democrats soak the rich, they drown the middle class.

Following are some electoral keys specific to the current political landscape.

  1. Polling as we know it is dead: Polling also is unreliable, often fraudulent and manipulated by the media. Statistics are fine for randomly picking a few marbles from a jar and making accurate inferences about the contents of the entire jar. Political polling no longer works because 40% of Americans have no land lines; caller ID screens calls; phones are used only for outgoing calls and when someone does answer, they refuse to be interviewed. Gallup and Pew have given up and will not conduct any presidential primary polls in 2016.
  2. ObamaCare remains wildly unpopular: The recent Kentucky election is a case in point. Four days before the election for governor, the Democrat (Conway) led the Republican (Bevin) by 3 points; for senate, the Republican (McConnell) led by 7 points. Bevin won by 9 points – a swing of 12 points and McConnell won by 15 points – an 8 point swing. All or most of this swing is attributable to voter dissatisfaction over ObamaCare which Bevin made a huge issue.
  3. Demographics cut both ways: Democrats may enjoy an edge among certain ethnic, age and gender groups; however, in the 2014 election, Republicans made notable gains among Hispanics, women, Asians and millennials. It will be easier for Republicans to make further gains in these groups (and gains among black voters) than it will be for Democrats to increase their support among white males, which is at 35% and in free fall. Moreover, it is apparent that race, class, gender, age and economic warfare are losing their effectiveness.

I close with two final keys: (1) Real votes trump polls. After Iowa and New Hampshire, real people casting real votes will result in clarity that cannot be found in any poll. (2) It is far, far too early. In 1988 Dukakis led Bush by 17 points and Bush won by 7 points, a swing of 24 points in a short time. Reagan trailed Carter into October of 1980 and in November won by 10 points and carried 44 states.


Barring a meltdown by one party or the other, it will be a dogfight and we are not likely to have a good idea of the outcome until at least some time in October.

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The next post will be part I of our multi-post series entitled, Guns in America.

  Part I explains why guns are a liberal bogeyman. Don’t miss this provocative series.


The Panacea of Economic Growth

By: George Noga – November 1, 2014
       Throughout its 238 years, the US economy has grown by over 3.0% annually, although data for the early years are problematic. For the 60 years from 1940 to 2000, the US economy grew at a rate of 3.6%. For the following 14 years from 2001 to the present, GDP grew by 1.8%, exactly half that rate. If growth remains tepid, Americans will not recover the ground they lost and their children and grandchildren will, for the first time, be worse off than the previous generation.
        America has transmogrified into Europe which is in permanent recession due to its failed economic policies. Even stalwart Germany is beginning to stagnate. France is destroying its economy in a fit of socialistic angst. Italy has a lower GDP per capita than it had 15 years ago. Meanwhile in Brussels, Jean-Claude Junker continues to strangle EU countries with bureaucrats and regulations. In Europe a 2% growth rate is seen as optimistic, 1.5% as acceptable and no growth as possible. The average European in one generation fell 25% behind the average American due solely to differences in GDP growth. As I wrote last month, just in the past 5 years, the average American has been impoverished by 17% due to the low growth rates coming out of the recession compared to the historic growth rates in similar times. In short, we already have become like Europe although Europe continues to plumb ever new depths. We are well along in suffering a lost decade on the path to a lost generation; our progeny, like Europeans today, will lead lives of quiet desperation.
“Failure to grow America’s economy is a choice; decline is not inevitable.”
        Failure to grow our economy is a choice; decline is not inevitable. It is a choice made by our political leaders solely because they prefer to demagogue inequality, class warfare and corporate profit for perceived electoral gain. It is a choice made by the media because they are lazy, economically illiterate and prefer to flog dead camels. It also has been a choice made by ordinary Americans in the voting booth for all of the aforementioned reasons advanced by politicians and the media. There are strong signals however that ordinary Americans now are beginning to want economic growth.
Economic Growth as the Panacea

        As trumpeted by the headline of this blog post, economic growth is a panacea; indeed, it is the only solution for every problem (real and perceived) that we face today and for the coming generation. It is apropos that Panacea is the Greek Goddess of healing because strong economic growth will heal everything; to wit:

  • The crisis of spending, debt and deficits: A sustained period of strong economic growth (combined with some spending restraint) will enable the US to restore fiscal balance and to stabilize its debt thereby gradually lowering the Debt/GDP ratio to its long-term historical level of around 30%.
  • Climate change and environment: If in the distant future climate change causes some issues, the best antidote is a vibrant economy that will easily enable us to spend whatever is needed to mitigate any such problems.  Only countries with strong economies can afford to spend copiously on the environment.
  • National security: The single greatest asset (weapon) we possess for our national security is a growing, resilient economy. This enables us to spend whatever is necessary to deter any possible adversaries and to defend ourselves should that be necessary. Weakness invites aggression and fosters terrorism.
  • Jobs, poverty and inequality: It is economic growth, not government, that creates jobs. It is sustained growth that fulfills the American dream and eliminates poverty; moreover, growth is the great equalizer.
  • Unfunded mandates: The USA is facing $350 trillion (over one-third of a quadrillion) in unfunded commitments in the next 50 years for Social Security, Medicare, government pensions, Obamacare and other programs.   Absent  a high rate of growth, these promises not only cannot be kept but will require drastic reductions in programs.
Recipe for Economic Growth

      Okay, so economic growth is the panacea; what must we do to achieve it? The answer is straightforward and attainable. If we do the following  we will achieve vigorous, long-lasting economic growth.

  1. Political consensus: Probably the single most difficult hurdle for achieving growth is reaching a political consensus. Politicians and the media must agree to pursue policies that maximize growth and agree to stick with such policies for the long term. They can continue to argue over how to divide the wealth that results; that is what politics is about. Absent some consensus however, achieving sustained growth becomes problematic.
  2. Tax and fiscal policy: Taxes (personal and corporate) must be reduced, simplified and stable. People and businesses must be able to plan ahead and certainty about taxation is indispensable to investment and job creation. In the same vein, spending needs to be restrained.
  3. Eliminate uncertainty: Business hates uncertainty; it stifles planning and results in gridlock. There needs to be a broad and sustained political understanding about taxes, regulations and new initiatives.
  4. Sound money: The Fed should focus only on maintaining sound money and fighting inflation. A strong, stable and sound dollar are indispensable for a vibrant economy.
  5. Regulation: The economy is being strangled by regulation and litigation. We need to have a moratorium on new regulations while we gradually reform and roll back existing ones. Our tort system needs to be reformed.
  6. Energy: We should develop every possible energy source including ANWR, offshore and shale and natural gas on federal and state lands. We should export LNG immediately from many terminals and, of course, construct the Keystone XL Pipeline. Such a policy will create jobs, make us energy independent, stimulate the economy and, importantly, prove to be a potent weapon in keeping Putin and Russia in check.
  7. School choice: I include this because educated, trained workers are a potent economic resource. Further, school choice will bring about more equality and reduce poverty. It also is a panacea.
     The choice is ours. We can continue on our present slow growth trajectory which will condemn future generations to a downward spiraling economy and reduced living standards; they will experience untold miseries as the crisis of spending, debt and deficits culminates in a meltdown. They will inhabit a Clockwork Orange nation drowning in taxes, regulation and uncertainty. They will have part time jobs for low wages. At best they will collect 65% of the present Social Security benefits deferred until they are age 70; Medicare and Obamacare (also age 70) will be busted; health care rationed and long waits common for poor treatment. They will inherit a volatile, dangerous world where nuclear weapons proliferate, a revanchist, aggressive Putin-led Russia and all without the resources for adequate national defense.
       Or, we can make a different choice; we can choose to reject decline and to embrace high-growth policies. This would lead to a virtuous circle of better education, abundant and cheap energy, and to a far safer and more secure nation and world. It would result in fixing the debt crisis and funding all the promises we have made for the future. Most of all, it would help ordinary Americans. As year after year of high growth enriches America, the politicians can fight over how to best divide up this cornucopia – including addressing any inequality issues.
       Firstoff however, we must make the right choice. This gets us right back to the heart of Alexander Hamilton’s question: “Whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend on accident and force.” Is America today still capable of putting politics aside when self preservation is at stake? Or, do we heed the Siren song of politicians advocating failed ideologies, searching for Utopias and demagoguing political correctness, class warfare and inequality?

Into the Eye of the Debt Hurricane

Update on the Crisis of Spending, Debt and Deficits
By: George Noga – September 20, 2014

     By some metrics the debt storm has abated. Compared to earlier deficit projections published herein, the USA is slightly better off, with the difference due entirely to the massive Obama tax increases. The deficit this FY ending September 30 is $500 billion, equal to 3% of GDP; meanwhile GDP is increasing around 2%, meaning the deficit is growing only slightly faster than the economy, a marked improvement. However, great damage already has been done; moreover, we are merely in the eye of the debt hurricane – it may appear sunnier at the moment, but the deficit storm will soon resume with even more ferocity and we will all be blown away.

The Seen and the Unseen

     The US economy already has sustained massive body blows. The reason we don’t clearly see the damage is due to the difference between the seen and unseen – or, more to the point, the difference between the reported and unreported.

  • In past recoveries following major recessions, the US economy has grown by an average of 5% for the subsequent 5 years; this results in a compound growth rate of 27.6%. Instead, we have experienced 2% compound growth yielding only 10.4%. The difference of 17.2% is the growth deficit. Simply, the average American today is 17% worse off than he/she should be; but we don’t see what should be; we only see what is. Nevertheless, the reality is that every American has been impoverished by 17% just during the past 5 years.
  • We see the increase in federal tax revenue and the concomitant reduction in the deficit. Unseen are the massive tax hikes that produced the revenue. Individual tax brackets increased with the top rate going to 39.6 % – a 13% increase. Investment related taxes were savaged with capital gains rates going from 15% to 23.8% (59% increase) and dividends from 15% to 43.4% (289% increase). Medicare taxes increased 62% and the upper limit was removed. There was a new surtax on investments of 3.8% and the death tax went from zero to 40%. New individual and employer Obamacare taxes took effect along with scores of other Obama tax hikes. The 35% corporate tax rate (world’s highest) is responsible for shifting jobs and investment abroad and businesses keeping $2 trillion overseas. The unseen effects of these massive tax increases will hobble the economy until abnegated.
  • We can see the reduction in the official unemployment rate; what is unseen is the jobs disaster that is America today. There are 12 million out of work, 12 million on disability and nearly 50 million (one in 5 households) in breadlines – err, on food stamps. The labor force participation rate hit a 35 year low. All (net) jobs being created are part time; there are legions of 29ers and 49ers. The true rate of unemployment is 15%, not the 6.2% reported.
  • We see Social Security and Medicare meeting their current obligations but we do not see the demographic time bomb looming for both programs. There is nothing on earth as certain as demographics; 77 million more boomers will retire (10,000 every day) and begin Social Security and Medicare. Spending on both these programs will grow by 8% compounded – doubling every 9 years. Within 10 years we will spend our entire budget on entitlements and interest on the debt leaving nothing left over for defense or for the rest of the government.
  • We see interest rates on federal debt hovering around record lows costing only $225 billion currently. We blissfully do not see what the interest would cost given a return to average interest rates, i.e. interest cost would increase $500 billion per year to $725 billion, or triple today’s cost. And that’s the rosy scenario. This is a no-win situation: keep rates low and the economy is grotesquely distorted and savings and investment are savaged or raise rates where they should be and the budget deficit goes thermonuclear.
  • We see government regulation exploding, uncertainty rampant and the scepter of Obamacare hanging over all of us like the sword of Damocles. We do not see the stultifying effects of all these on job creation and the economy.

     Looking at the gestalt paints a funereal picture. Average Americans already are 17% poorer over the last 5 years than they would have been in a normal economic recovery – and they will continue to get relatively poorer and poorer each year without any end in sight. The tax and regulatory burden, particularly on investment, has skyrocketed, halting new investment and job creation. Behind the “official” 6.2% unemployment rate lays a dystopian jobs nightmare; we are turning into a country of part time workers. We are reaping a demographic whirlwind still in its early stage. We are living on the razor’s edge regarding interest rates; we have a Hobson’s choice: ballooning interest costs or maintaining negative real interest rates. Finally, all this exists within a milieu of hyper-regulation, vast uncertainty and, of course, Obamacare.

Current CBO Projections for Spending, Debt and the Deficit

     Recently (July) the CBO released its latest forecast. The CBO alternate baseline forecast (its most realistic) assumed the average middle class family’s tax burden doubles over the coming generation; it also assumed no more recessions, wars, terrorist attacks, natural disasters and that interest rates remain low perpetually. Despite these horrific (taxes doubling) and grossly unrealistic assumptions, the results are disastrous. The deficit increases by over $100 trillion and the CBO stops forecasting because it can’t conceive of a functioning economy under those circumstances. And all this, dear readers, is based on an uber-optimistic forecast; the reality is much, much worse!

     We have been grazing on the fiscal commons for a long time; the pasture is about to give out and the spring lambs are doomed to a life of quiet desperation. We can muddle through for a few – perhaps several – years with temporizing and half measures. Soon enough time will run out and the ineluctable tipping point (Minsky Moment) will be reached. It will get ugly for an extended period, i.e. a lost generation., Eventually, when we emerge from the rubble, we may get it right again – only because there are no other choices – and America will again enjoy more liberty and less government!

Why I Write This Blog?

By: George Noga – September 10, 2014
        This posting marks the beginning of the end. Between now and mid-December I will publish the final MLLG posts. I often have been asked why I have taken the trouble. Why have I spent 1,000 hours writing 300 posts filling 900 pages containing 500,000 words since November 2007? Why have I written fact-based and principled tracts about public policy even though I am unenamored with politics and politicians? This post answers the question: why. In the Federalist, Alexander Hamilton questioned and challenged his fellow Americans thusly:
“Whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend on accident and force.”
       If any society of men fails to get its politics right, it affects every aspect of life and life itself. Get politics right and we live our lives in freedom, prosperity and pursuit of our dreams. Get politics wrong and liberty, happiness and property are forfeit and life itself is nasty, brutal and brief. Politics, grubby as it is, is the sine qua non to having a life worth living.
      Examples abound of those who got their politics wrong: Hitler’s Germany, Mussolini’s Italy, Imperial Japan, Mao’s China, Pol Pot’s Cambodia and Stalin’s USSR were all black holes where life and liberty were trampled. Today we have,inter alia, Putin’s Russia, the Jongs’ North Korea, the Castro brothers’ Cuba and Mugabe’s Zimbabwe. And don’t forget the entire Arab world, nearly all of Central and South America, Africa and any place ending in “stan”.
       If you believe the western world is exempt, think again. WWI was a senseless slaughter with 40 million casualties; its politically inept conclusion led to WWII with its 150 million casualties. This was due to a failure of politics in Europe and also in the USA. In the past century and continuing to the present, “civilized” Europe has experienced 100 genocides, pogroms and ethnic cleansings. Vietnam was a  colossal failure of American politics to get it right; it cost 58,220 American lives and 303,644 more wounded. Nor have we learned; we continue to get it wrong right up to this day.

       If we don’t get our politics right, our children and our children’s children will live in an Orwellian torpor with their lives, liberty and property constantly at risk because of obeisance to failed ideologies, fantasies, vote buying, political correctness and the never ending and fruitless search for Utopias. Politics is inherently personal. Following are but some of the ways I have been directly harmed throughout my life by our failure to get politics right.

  • I had no father at home for 4 years during WWII which resulted from government ineptitude in fighting and ending WWI. Father was in Korea, also the result of political blunder, for another year during my childhood.
  • I received an execrable, pathetic non education in government schools from age 5 to 18.
  • The Federal Reserve created economic conditions that resulted in severe cycles, bubbles, panics, meltdowns and deep recessions throughout my life continuing to the present.
  • I was subject to income taxes of over 90%, creating perverse, uneconomic incentives.
  • It now requires $15,000 to buy what cost $1,000 when I was born due to government currency debasement.
  • Regulation run amok made owning my business onerous. The regulations, all in the guise of protecting consumers, in actuality, caused them (and me) great harm.
  • The politically micromanaged Vietnam War disrupted my life for the 6 years I served in the military.
  • The Fed has brutally devalued a lifetime of hard work via chronic negative real interest rates intended to protect a feckless government from the consequences of its ongoing debt binge.
  • A torpid, Europesque economy has been imposed, dooming me to economic stagnation instead of robust  growth.
  • The current crisis of spending, debt and deficits ultimately will result in a lost generation.
  • Our government has recklessly created and/or exacerbated dangerous situations throughout the world by weakening our military and appeasing tyrants. An existential crisis likely will result.
  • Obamacare death panels will ration and deny medical care and ultimately could kill me.
       Due entirely to failed politics I was fatherless for five years and lucky I wasn’t orphaned into a life of poverty. I survived utterly wretched government schools, incessant and severe economic cycles, debilitating inflation, astronomical tax rates and hyper regulation. Vietnam discombobulated my life. And all this was because of a government most consider one of the best extant. And all because we failed to get our politics right.
       Now, in my eighth decade of life, our once vibrant economy is riven by government-created anemia. America has transmogrified into sclerotic Europe where men lead lives of quiet desperation. Government has created a crisis of spending, debt and deficits, one consequence being sustained negative real interest rates that savage my decades of prudence. My final indignity is Obamacare; its rationing and death panels may end my life prematurely.
       Unfortunately, it doesn’t end with me. Our children and our children’s children are doomed to a much poorer and more dangerous future; they will be a lost generation. They will pay for our debt binge and generational theft with vastly reduced opportunity. They will inhabit a Clockwork Orange world where nuclear arms proliferate in places committed to our destruction and solely because we weakened our defense and kowtowed to tyrants. Our weakness invites terror and slaughter for which they will pay dearly, perhaps with their lives. And all this from a government most consider one of the best extant. And all because we failed to get our politics right.
“The correct answer to Alexander Hamilton’s question may be in the negative.”
       As you can see, if we don’t get our politics right, our lives are vastly diminished and trivialized in countless ways; we condemn our progeny to economic stagnation and loss of freedom. Their lives and liberty are at grave risk because we failed to get our politics right. It appears the correct answer to Alexander Hamilton’s question may be in the negative.
       I have tried mightily through this blog to show that the answer lies in more liberty and less government. Hopefully, my efforts have given our children’s children that infinitesimally better chance for liberty. And that is my answer to the question: why I write this blog.
        Note to readers:  I am striving to make the final postings between now and mid-December special as I seek to end my MLLG blog on a high note. I hope you enjoy them.

MLLG Special Posting – The VA Scandal

By: George Noga – June 3, 2014
        The MLLG blog, usually written far in advance of distribution, has never devoted an entire post to a current, breaking news story. The Veterans Administration (“VA”) scandal is the exception because it is the perfect storm: (1) it is the poster child for public choice economics – a frequent topic of MLLG posts; (2) the VA is a sacred cow beloved by liberals; and (3) the scandal provides a stark preview of ObamaCare. Finally, the VA issue fits MLLG’s forte, placing a complex issue in perspective through fact-based and principled analysis – and all in about 1,000 words.
“The VA is a government jobs program that incidentally provides health care.”
        To be fair, the problems with the VA go way back – preceding the Omar Bradley Commission of 1955-1956. There have been 18 reports warning of the wait time problems just since 2005 – of which 70% occurred during the Obama Administration. Although Obama did not create the problems, his ineptitude and obeisance to public unions raised them to a new level. Also to be fair, the VA is not uniformly dismal and enjoys support among many vets – not altogether unsurprising from an agency that has $154 billion to dispense and which often certifies routine aging problems (heart disease) as service related and certifies maladies of dubious provenance as eligible for tax-free disability pensions.
“The real scandal is that the VA considers a 14 day wait to be very satisfactory. Throughout the private sector, wait times are measured in hours and not in days.”
        The VA problems have nothing to do with money. The VA budget has gone from $49 billion in 2001 to $154 billion in 2014. Just since 2003 the VA budget is up 106%, while the number of vets increased 30%. The government tends to throw money at the problem; but, just as with failing schools, no amount of money can ever fix the problem.
Real Causes of the VA Problems
        The cause of the VA mess is easily and fully explained by pubic choice economics which teaches that people respond to personal (not public) objectives. An illustration from the Soviet Union is instructive. Glass manufacturers in the USSR made windows too thin and they tended to break easily; they did this because they were evaluated based on the number of square feet of glass produced. To fix this problem, the erudite commissars changed the evaluations from square feet to pounds of glass produced. Thereafter, the factories began to produce uber thick windows with limited translucence.
       We can chuckle at the clueless Soviets, but the VA is no different. They were evaluated based on patient wait times and they responded in accordance with public choice theory – they rigged the system for their personal benefit. This is no different in principle from changing the thickness of glass due to different incentives. No one should be surprised. Of course, private sector workers also respond to personal incentives; however, business does a much better job of aligning personal incentives with those of the organization. Hence, it would be rare in the corporate world for endemic problems like those at the VA not to be immediately reported up the chain of command where action would be swift and where the failure to report negative information also would carry swift and strong personal disincentives.

        Following are some other more salient causes of the VA problems, although all are readily explainable by the theories of public choice economics.

  • In some VA clinics physicians see only one-eighth (12.5%) as many patients per day as in private practice. Each day the operating rooms are shut down by 3:00 PM. The VA is essentially a government jobs program that just happens to provide some health care – after patients wait 145 days and provided it is before 3:00 PM.
  • The VA is 70% unionized with over 200,000 unionized workers. Obama and the Democrats put the wellbeing of  unions above veterans. Public sector unions have hijacked the VA for their own aggrandizement.
  • Union work rules and seniority cause serious problems as, inter alia, unions have squelched outsourcing VA patients to reduce the backlog because outsourcing is a direct threat to union jobs.
  • VA scheduling software uses a DOS operating system – found only in museums – and 1990s era computers.
  • As to be expected, waste, fraud and abuse are endemic given the vast amount of funds and no accountability.
  • The wait time (Phoenix) to see a physician was 145 days from when a patient requested an appointment; much longer counting the entire process. The real scandal is that the targeted wait time (considered satisfactory) was 14 days. In much of the private sector, wait time is measured in hours, not days. In the early 1990s Kaiser Permanente had a 55 day wait but changed to same day scheduling. Within a year they reduced the wait time to one day.
Real Solutions to the VA Problems
        The near term future is as predictable as a Kabuki. First, liberals will claim the Shinseki resignation  brings closure to the problem. His resignation was forced not by Republicans but by Democrats up for reelection who desire to make precisely that argument. Second, there will be some short term patient outsourcing but it will end just as soon as the problem fades from view – the public sector unions will see to that. Third, government will throw some more money at the problem and they will claim victory. These raison d’etat actions will succeed in getting the issue off the radar screens of the toothless media watchdogs (and the public) until well after the next election.
“Worst of all, the VA is a precise microcosm and road map for ObamaCare. What is harming 25 million veterans today soon will afflict all 315 million Americans. Some, perhaps many, of us will die while waiting 145 days or more for an appointment.”

        The real solution, dear readers, will never happen. There is little or no raison d’etre to have a separate health care system for veterans; this makes no more sense than having a separate medical system for any other profession or line of work. To the limited extent veterans may need certain highly specialized care (such as for prosthetics), this could be accomplished via a small number of – preferably private – facilities. Care of veterans should be integrated into the civil health care system much the same as Medicare. At the very minimum, all acute care shoud be privatized and voucherized, with the VA maintaining only rehabilitation and long term care facilities. Following are the main takeaways:

  1. There is no logic for a separate VA health care system; it must be completely or mostly integrated into the  private economy – especially the acute care portion.
  2. The VA problems can never (and will never) be fixed because government is incapable of such fixes.
  3. Liberals and Democrats never fix anything – real fixes are not important; all that counts to them are intentions.
  4. Everything is predictable and explainable by reference to public choice economics.
       Worst of all, the VA system is a precise microcosm and road map for ObamaCare. Each and every problem identified in this post will be multiplied in spades for ObamaCare. The disaster that now is preventing veterans from getting care and, in some cases, has killed them, will be inflicted on all 315 million Americans. It is only a matter of time until ObamaCare makes all Americans wait 145 days (and likely more) to get an appointment and many will die waiting.

ObamaCare’s April Fool – Only It’s No Joke

By: George Noga – April 1, 2014
        You believe you know all the ObamaCare horror stories? You know the lies about keeping your doctor and health plan; you know about the millions of cancelled plans and  the illegal extensions. You know about the website disaster and the much higher premiums, deductibles and copays. You know about all the political payoffs to labor unions and about the 29ers and 49ers.. You know high-end medical facilities such as Mayo are now off limits. You know you have much fewer choices of physicians and hospitals. You know about the coming doctor shortage, rationing and death panels.
        If you know all that, you still don’t know the biggest April Fool of them all; in fact, you don’t know either of the two biggest ObamaCare surprises. In the run up to the law we incessantly heard about the 40+ million uninsured and how disgraceful this was for Amrica. Obama said: “I’m not going to walk away from 40 million Americans who can get health insurance for the first time.” ObamaCare was sold primarily so that the uninsured could get coverage. The dirty secret is ObamaCare never was about providing coverage to the uninsured; instead, it was about changing Americans’ private insurance plans into government plans.
“ObamaCare’s goal was not to insure the uninsured but to shift Americans from owning private insurance plans into becoming dependent on government plans.”
       The numbers bear this out. Pre ObamaCare, the 48 million uninsured number always was a known red herring. From 10-15 million already were eligible for public plans; 9-12 million were illegal aliens; 17-29 million earned enough to buy insurance but freely chose not to; and 4 million were without insurance only temporarily. Bottom line: when using reasonable midpoint estimates for the above data, only 5 to 10 million Americans were involuntarily without health insurance. Now, let’s fast forward to 2014 and ObamaCare and see what has changed.
  • Only about 10% who bought through exchanges were previously uninsured.
  • Up to 80% who signed up with exchanges shifted from private plans to public subsidies.
  • 60% of those who signed up for Medicaid were already eligible.
  • Illegal aliens remain ineligible for ObamaCare just as before its passage.
  • The 17-29 million Americans (mostly young males) who previously chose not to buy insurance are less likely to buy now that they are required to subsidize everyone else.
        When all the data become known, we still will have 40 million uninsured Americans – about the same number as before ObamaCare. This is not an accident and was well understood beforehand. ObamaCare never was about insuring the uninsured, it was about shifting private insurance to government programs. There you have it; you once again have been hoodwinked and bamboozled. This April Fool is no joke and it is on you. Where are all my liberal friends who were bleating about helping the poor and uninsured? When the piper plays; they dance.
“ObamaCare is dividing Americans into 3 distinct cohorts. One-third will be dependent on Medicaid (ugh!); the middle cohort will have fewer and much less desirable choices; the top group will enjoy top-tier concierge services.”
        I wrote supra there is a second surprise, i.e. ObamaCare is carving up Americans into three distinct segments each of which will receive widely different care. The bottom third will be on Medicaid and dependent on government programs with little choice of doctor or hospital; they will receive substandard and indifferent care. The middle cohort of Americans will muddle through with costly plans that exclude the best physicians, hospitals and facilities; they will experience lengthy waits and rationing. Surprise: the top 10% to 20% of Americans will receive concierge medical care and continue to have the best of everything America offers.
     ObamaCare is a naked lie. It was sold to us as compassionate to insure more Americans; it doesn’t accomplish that because there weren’t but 5-10 million involuntarily uninsured Americans to begin with. Instead, its goal is to move everyone into government care and in the process it cruelly divides us into three groups – each with vastly different standards of  care.

Balanced Budget Amendment No Holy Grail

By: George Noga – Updated March 10, 2014

     A balanced budget amendment (“BBA”) is favored by 80% of all Americans in the belief it will, once and for all time, force fiscal discipline on the government. They are putting way too many eggs in the BBA basket. Watch out what you wish for. If there is a BBA, all those eggs will end up scrambled into a rather unpalatable omelet.

  There are myriad paths through, over, under and around a BBA. In short, it would not be worth the paper it was written on – assuming it can garner two-thirds majorities in Congress and ratification by 38 states. Following is a partial list of ways a BBA could be eviscerated.  

  1. A BBA appears simple but is complex. How do you define budget; what does balanced mean; what is a tax? It would be the only part of the Constitution that could be waived.
  2. What are allowable exceptions such as for military actions and natural disasters? There will be escape hatches big enough to drive a truck through. Whatever exceptions are carved out for some things, expect many more of such things. How would waivers work?
  3. How would a BBA deal with economic cycles? Revenues can both skyrocket and plunge from year to year. Are we to slash spending in a recession and be profligate in a boom? How do we define recession and boom? How is a BBA to be managed over the course of an entire economic cycle without opening to door to great mischief?
  4. Lawsuits will tie up a BBA for decades and federal judges will wind up with enormous power to change it. Consider how the federal bench has dealt with desegregation and busing; they still are entangling themselves over 60 years after the initial ruling.
  5. How do we distinguish capital expenditures from annual expenses? Surely, the argument will go, a BBA was not meant to include infrastructure spending that has a life of 50 years. If capital is treated differently, more expenditures will be classified as such.
  6. How do we address off-budget spending such as by Fannie, Freddie, USPS and the Federal Reserve? Who will prevent government from creating scores of new off-budget entities? Do we exempt interest on the debt; what happens when interest rates skyrocket?
  7. Watch out for so-called special taxing districts; these are favorites of local government with 50,000 nationwide. If they are not under the BBA ambit, they will mushroom.
  8. Are Social Security, Medicare, Medicaid and civilian/military pensions to be part of the regular budget? Are they no longer to be considered off budget entitlements?
  9. User fees will sharply increase and the government will be creative in imposing new ones. Be prepared to pay handsomely for everything you get from Washington – how about $100 to file a paper income tax return or $50 to get into a national park?
  10. Loan guarantees will become de rigueur as a way to fund programs off budget. After all, a loan guarantee is not an expenditure – is it?
  11. Instead of direct taxation, costly new regulations will flourish. Rather than spend tax money, Congress will bypass taxes and accomplish the same result through regulation.
  12. The tax code can be used for far more than raising taxes subject to a BBA. It can be larded with tax expenditures, incentives, penalties and all sorts of tomfoolery.
  13. Don’t forget mandates. Since the ObamaCare mandate survived judicial scrutiny, what is to stop government from substituting mandates for taxes or spending? The feds could   mandate that states, counties, cities (and even people) spend money not subject to BBA.
  14. A budget can be balanced with tax increases. This would strictly comply with a BBA but tax increases are certainly not what BBA proponents intended.

     Reluctantly, I have come to the view that a BBA is not the answer because: (1) we would expend lots of energy (perhaps for naught) enacting a BBA better spent elsewhere; (2) it will not work for all the reasons noted supra; (3) it would beguile us into falsely believing the problem is solved once and for all; (4) many of us would declare victory and move on while the other side would keep fighting; and (5) you can’t take the politics out of politics.

     The solution is to remain engaged permanently, albeit this is contradictory to human nature. Once a problem appears solved, we tend to go back about our private business. But big government and its acolytes never stop and neither must we. As seductive as it may seem, a balanced budget amendment is fool’s gold; it is not the Holy Grail.