March 31, 2010

Helping Hand

This is from Keith Hennessey and is absolutely fantastic:

This is shocking:

The Obama administration will announce a major new stock market initiative on Friday that will directly tackle the problem of the millions of Americans who lost money betting on stocks. The government will buy loans from stock brokerage houses at the current value of the stocks in an investor’s portfolio, in an effort to stabilize the stock market, people briefed on the plan said. The government will also increase incentive payments to stock brokers who loaned on margin to their investing clients and now assume some of the losses of those clients. And it will require those stock brokers to cover some of the losses of unemployed investors for a minimum of three months.

OK, I made that up. But how is it different from this, which is real?

The Obama administration will announce a major new housing initiative on Friday that will directly tackle the problem of the millions of Americans who owe more on their houses than they are worth. The government will buy loans from investors at the current value of the house in an effort to stabilize the market, people briefed on the plan said. The government will also increase incentive payments to lenders that cut the principal of borrowers in modification programs. And it will require lenders to cut the monthly payments of unemployed borrowers for a minimum of three months.

Buying a house is a big deal. So is getting a mortgage. As with any investment, when you buy a house and a mortgage you assume both upside and downside risk. You are responsible for both sides of that bet, not someone else.

Some homeowners were fooled or deceived into buying a bad adjustable rate mortgage (ARM). I feel bad for them and am willing to consider policies directed at them. At the same time, it’s hard to distinguish “fooled or deceived” ARM buyers from “savvy speculator” ARM buyers, so if we subsidize one we may end up subsidizing the other as well.

But now let’s look at a homeowner with a fixed rate mortgage who is “underwater” because his home has declined in value so that the house is worth less than the mortgage. His net worth has declined because the value of his home plummeted, and that’s tragic. But since he has a fixed rate mortgage, his monthly mortgage payment has not changed. The decline in the value of their home has not affected his ability to make his mortgage payment, and therefore to remain in that home.

He can continue to live in his home and wait for the value to appreciate, just as a stockholder can hold onto a stock after a decline and wait for the price to recover. I don’t see why taxpayers should subsidize him because he lost money on an investment, just as taxpayers shouldn’t subsidize him if he lost money in the stock market.

This homeowner may face some other financial hardship (see the underlined language above). Maybe he lost his job, or maybe he got hit by a bus and has high medical costs. This financial hardship may cause him to be unable to make his mortgage payments, and with the lost equity value, he cannot borrow against the value of his home. But again, this is no different than if he lost big in the stock market and then lost his job or got hit by a bus.

Imagine twin brothers, each with $180K of annual income. One rents, and the other has a $700,000 mortgage on a home that declined from $800,000 in value to $600,000 in value. Both brothers lose their jobs. Why should the renter pay higher taxes to subsidize his brother’s mortgage payments?

Losing a home due to financial hardship is tragic. Does that make it someone else’s responsibility? Why should a broad-based decline in housing prices shift responsibility for planning for a financial loss from a homeowner to taxpayers? Why do policymakers (on both sides of the aisle) think we should make taxpayers (some of whom struggle to make their own mortgage payments, and others of whom rent housing) subsidize someone who lost money on an investment?

Costing Out Health Care

Tom Brown at Bankstocks makes a great point regarding the CBO's scoring of Health Care:

........Our elected representatives seem convinced the CBO is made up of equal parts rocket scientists and psychics.

Are you kidding me? I’m sure the CBO has more than its share of serious, well-meaning bureaucrats, but the fact is that even for the most serious, well-meaning bureaucrat in the world (and even rocket scentists and most psychics, for that matter), predicting the future is next to impossible. And trying to predict how much a proposed transformation of one-sixth of the economy will cost over the next ten years is insane.

Don’t believe me? Take a look at the numbers the CBO has come up with regarding a program infinitely simpler than health care: the TARP bailout. It’s a $700 billion program, signed into law in October, 2008, that essentially involved the government buying bank preferreds and warrants. The program couldn’t be more straightforward. The CBO knows the terms and coupon of the preferred. Valuing warrants isn’t especially difficult. All the CBO needs to do is estimate who will repay, and when, and who will default.

As I say, simple. And yet have you seen the numbers the CBO has come up with? Last week the agency provided at least its third update on what it thinks TARP will cost. In just less than 18 months, the CBO’s estimate has gone from as high as $356 billion to as low as $99 billion. The most recent guesstimate: $109 billion. Not exactly confidence-inspiring! If the CBO can’t cost out the TARP in the near term, why should anyone think the agency can come up with a remotely accurate ten-year forecast of how a project as large and complex as health care reform will play out?

Good grief!

The Anti Boras

This is an absolutely fantastic article by Murray Chass on Ron Shapiro and the deal he worked out for baseball's best hitter Joe Mauer.

Here are some of favorite parts (these parts are also directly applicable to real estate brokerage):


By Murray Chass

March 25, 2010

......If Mauer were a Boras client, he would not have signed that contract. But then, he wouldn’t have chosen Boras as his agent.

Agents have track records, and players gravitate to the agent whose negotiating style suits their needs and desires. If they want to get every last dollar, don’t mind putting up with possible controversy and aggravation, don’t care how long it takes and don’t care where they play, hire Boras. If they care about where they and their family will be happiest and most comfortable and will settle for less than the absolute last dollar, go with Shapiro.

Mark Shapiro may be biased. Ron’s son, Mark is a Princeton graduate and general manager of the Cleveland Indians. He has dealt with all of the agents.

“His distinguishing factor,” Mark said, “is he considers himself an advocate of the player first. He seeks to do the best job for the player in the context of satisfying what he wants. In today’s game that’s not always the case. Some agents put client recruitment ahead of what the player really wants. They seek the best deal regardless of what the best fit is.

“Every single deal they do is a platform for the next client. How will this be viewed in the industry?”

.......Shapiro thinks it’s possible that Mauer could have exceeded that figure, speculating that had the Yankees and the Red Sox become involved, $30 million a year for 10 years might have been possible. But all speculation is irrelevant because Mauer wanted to remain in Minnesota.

“Joe had information from me about potential contracts,” Shapiro said, “and it was pretty clear to me he might be tempted to test the water. But in his heart he had a desire to play it out in the way Cal did in Baltimore and Kirby in Minnesota.”

How then does an agent proceed to achieve that goal while making sure his client is not shortchanged? Doesn’t it make the agent’s job more difficult?

“It makes it more difficult only in one sense,” Shapiro said. “It takes much more of an effort to negotiate with the club in this circumstance. It’s not a regular marketplace. I support the theory there is always an irrational bidder. There’s always someone who will step in and create a new marketplace without any effort on our part.”

......Before initiating discussions with the team of the player who wants to stay, Shapiro said, “you determine if a player is willing to go elsewhere if the club isn’t willing to give him proper value.”

“The club,” Shapiro added, “knows or suspects he wants to be there, but he has already decided if it’s not a fair deal it won’t be a deal.”

Beyond establishing ground rules with the player, Shapiro said, “you prepare like you do for anything. You get the client ready to withdraw from the process so his emotions aren’t going up and down if things aren’t going well. You work with the client to understand a fair deal is a deal that satisfies him but is not a high end irrational market deal.”

........Shapiro said the two sides “probably had two points of frustration.” But, he said, “I operate on the glass-half-full theory so no matter how negative it looks there’s a way out. We told Joe it might go into the season and wanted to find out if he would be willing to go into the marketplace.”

.......“I was reflecting with my partner Michael Maas,” Shapiro said. “People are saying ‘wow, you did this, you did that.’ All we did was spend a lot of time with our client and understand what was happiness in their negotiation, not focus on dollars. That doesn’t mean we aren’t going to try to get the dollars up. But in the end we have the satisfaction of having our players play where they are happiest.”

Waxman's War on Accounting

From Megan McArdle:

Accounting basics: when a company experiences what accountants call "a material adverse impact" on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required to record the negative impact--"to take the charge against earnings"--as soon as it knows that the change is reasonably likely to occur.

This makes good accounting sense. The asset on the balance sheet is now less valuable, so you should record a charge. Otherwise, you'd be misleading investors.

The Democrats, however, seem to believe that Generally Accepted Accounting Principles are some sort of conspiracy against Obamacare, and all that is good and right in America.

Here's the story: one of the provisions in the new health care law forces companies to treat the current subsidies for retiree health benefits as taxable income. This strikes me as dumb policy; there's not much point in giving someone a subsidy, and then taxing it back, unless you just like doing extra paperwork. And since the total cost of the subsidy, and any implied tax subsidy, is still less than we pay for an average Medicare Part D beneficiary, we may simply be encouraging companies to dump their retiree benefits and put everyone into Part D, costing us taxpayers extra money.

But this is neither here nor there, because Congress already did it. And now a bunch of companies with generous retiree drug benefits have announced that they are taking large charges to reflect the cost of the change in the tax law.

Henry Waxman thinks that's mean and he's summoning the heads of those companies to Washington to explain themselves. It's not clear what they're supposed to explain. What they did is required by GAAP. And I've watched congressional hearings. There's no chance that four CEO's are going to explain the accounting code to the fine folks in Congress; explaining how to boil water would challenge the format.

........Obviously, Waxman is incensed because this seems to put the lie to the promise that if you like your current plan, nothing will change. But this was never true. Medicare Advantage beneficiaries are basically going to see their generous benefits slashed, retiree drug benefits suddenly cost more and may now be discontinued, and ultimately, more than a few employers will almost certainly find it cheaper to shut down their plans. If Congress didn't want those things to happen, it should have passed a different law.

If Congress thinks that it made the right tradeoffs--or at least, justiiable choices--then our Congressmen should step up and accept responsibility for what they've done. At the very least, I think we can ask that they refrain from trying to force companies to join them in denying reality by threatening congressional investigation of any company who dares to notify investors that this thing is going to cost them money.

That Which is Unseen

This is a very interesting video on the economic fallacy of the "broken window":

What We Are Facing

From a recent report from the Government Accountability Office:

Table 1: Challenges Affecting the Federal Budget in the Near Term

2008: Oldest members of the baby-boom generation became eligible for early Social Security retirement benefits

2008: Medicare Hospital Insurance (HI) outlays exceeded cash income

2010: Social Security runs first cash deficit since 1984

2011: Oldest members of the baby-boom generation become eligible for Medicare

2014: 45 percent of Medicare outlays funded by general revenue

2016: Social Security begins running consistent annual cash deficits and redeeming trust fund assets (i.e., non-marketable Treasury securities) in order to pay beneficiaries

2017: Medicare HI trust fund exhausted. Income sufficient to pay about 81 percent of benefits

2020: Debt held by the public under GAO’s Alternative simulation exceeds the historical high reached in the aftermath of World War II

There are many ways to describe the federal government’s long-term fiscal challenge. One method for capturing the challenge in a single number is to measure the “fiscal gap.” The fiscal gap represents the difference, or gap, between revenue and spending in present value terms over a certain period, such as 75 years, that would need to be closed in order to achieve a specified debt level (e.g., today’s debt to GDP ratio) at the end of the period.2 From the fiscal gap, one can calculate the size of action needed—in terms of tax increases, spending reductions, or, more likely, some combination of the two—to close the gap; that is, for debt as a share of GDP to equal today’s ratio at the end of the period. For example, under our Alternative simulation, the fiscal gap is 9.0 percent of GDP (or a little over $76 trillion in present value dollars) (see table 2). This means that revenue would have to increase by about 50 percent or noninterest spending would have to be reduced by 34 percent on average over the next 75 years (or some combination of the two) to keep debt at the end of the period from exceeding its level at the beginning of 2010 (53 percent of GDP).

Laboratories of Democracy

"It is one of the happy incidents of the federal system," Justice Louis D. Brandeis wrote in 1932, "that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

In Amity Shales' latest piece, she discusses one such experiment in Indiana and why the new Health Care bill spits in the face of what Justice Brandeis wrote in 1932:

It is that states can be laboratories where the country experiments to ascertain which mix of taxes, incentives and public administration works best when it comes to health care.

Obamacare threatens such experiments by superseding them. In doing so, the new federal program deprives the country not only of the experiments themselves but also of evidence that might cast doubt on the promises of the new legislation.

In few states is the change as dramatic as in Indiana. Several years ago Republican Governor Mitch Daniels and the legislature began wondering about the same questions that preoccupied the framers of Obama’s health-care plan: why so many of the uninsured mob hospital emergency rooms, why citizens turn their backs on preventive medicine, why health-care spending expands, and how you get Americans to be aware of health-care costs.

In response, Daniels’s team created the Healthy Indiana Plan, known as HIP. It was billed as subsidized insurance for low- and middle-income Hoosiers: citizens who suffer from catastrophically expensive illnesses get coverage subsidized by state and federal dollars. The state doubled cigarette taxes to pay for it all.

But Healthy Indiana features a few other interesting traits. Joining was voluntary. Participants pay a penalty co-pay if they use an emergency-room for routine health-care needs.

Spending Accounts

In addition, as part of HIP, the state created a health spending account of $1,100 per adult to be used for basic medical needs and preventive care. At the end of the year, patients can roll over what remains in the account. If they have a record of seeking appropriate preventive care, they may also get additional cash from the state for their health needs. Those who don’t get the preventive care do not get those funds.

In its two-year life, Healthy Indiana has proven popular, with some 60,000 Hoosiers enrolling. Ninety nine percent said they would re-enroll.

The preventive component seems to work: Adult HIP members use emergency rooms at a lower rate than adults on standard Indiana Medicaid. They use generic drugs more frequently than the commercially insured. The program hasn’t busted the budget. Some three-fourths of HIP enrollees say they are more likely to seek preventive services. In a state where one in four adults is obese, this is perhaps the most interesting news of all.

........Now Healthy Indiana will be overwhelmed by Obamacare, which will have little regard for individual budgeting and incentives. Perhaps Medicaid administrators will cut off the cash that has flowed to Healthy Indiana. Or perhaps the insurance that Obamacare offers will be more attractive and woo away HIP’s volunteers. Healthy Indiana may survive in name. But the experiment, isolating the effect of a certain incentive upon a certain problem, has been aborted.

I happened to be in the Indiana state house the week that it became clear the president’s plan would become law. Unsure of future funding, Daniels was already freezing new enrollment for the plan. Daniels points out that the federal law will force tax increases at the state level in Indiana and elsewhere. That’s because the federal law effectively mandates expansion of Medicaid, whose costs the states help foot.

........What about other state experiments? The most obvious is Massachusetts and the plan adopted in 2006 under former Republican Governor Mitt Romney. Romneycare resembles the new federal law in that its emphasis is on mandating insurance. Like Obamacare, the Massachusetts plan creates an exchange where customers can buy plans cheaply. It also offers subsidies, of course.

The news on Romneycare has been mixed. On the one hand, more citizens are covered now. On the other hand, the price was out of sight. Massachusetts’s shortfalls are so troubling that this month State Treasurer Timothy Cahill called Romneycare a “train wreck.” Cahill is now under attack for exaggerating the program’s costs. But others also note the cost increase. The Pioneer Institute, a non-partisan think tank in Boston, for example, estimates that the state is spending $360 million more in 2010 than it spent on health in 2006, a greater increase than many expected.

March 29, 2010

A Little More Redistribution

Kevin Hassett makes some very interesting points in this article in Bloomberg:

.....The U.S. government already spreads the wealth around with abandon. Obama’s efforts are just a continuation and magnification of that lamentable practice.

Look at the health bill. In its use of taxpayer dollars to subsidize insurance for those with lower incomes, it follows many other government policies that steer government spending toward the poor.

In a study published in 2007, the Tax Foundation examined the tax burdens and government spending receipts across income groups. It found that for every dollar it sent to Washington, the lowest quintile of the income distribution received $14.76 in government spending. By comparison, the highest quintile --at that time, those making more than $99,500 -- received just 32 cents for every dollar paid in federal taxes.

........Relying on data from the Tax Policy Center, I looked at how the current system differs from a hypothetical one in which taxes you pay are in proportion to the income you make. My calculations indicate that under current law about 52 percent of the revenue from federal taxes comes from redistributive taxation -- that is, tax rates and policies that don’t apply uniformly to all taxpayers. Under Obama’s proposed 2011 budget, this number increases to about 55 percent. And much of the health-care redistribution doesn’t show up until later.

March 26, 2010

An Open Letter Regarding Loan Modifications

This is absolutely awesome stuff:

To: Bryan Moynihan,

CEO, Bank of America

Dear Mr. Moynihan,

I awoke this morning to read that Bank of America intends to begin forgiving mortgage principal for delinquent borrowers. I am writing to inform you that I will never bank with your firm ever again.

Principal forgiveness is an affront to every responsible, non-delinquent borrower in your book of assets. Not only is the federal reserve subsidizing the replenishment of your bank's capital by confiscating yield from savers/depositors so you can earn monstrous spreads on your loan book, but now you are rewarding those who bit off more than they could chew, while those who did not take on excess leverage, or who kept their income-to-debt ratios manageable, see no benefit, even as their home equity values have declined. Even worse, you are denying savers who sit in the cash market the opportunity to purchase inventory from the delinquent.

Capitalism should migrate assets from the weak to the strong, not the contrary. If you want to mitigate your loan losses, I suggest you advance an organized short-selling process to mitigate the expense of foreclosure, and to discover the fair market value of your delinquent assets. But for me, allowing those who are delinquent to now benefit from their financial excesses is a despicable solution that ignores the integrity and responsibility of those who actually finance the lion's share of your earnings: those who don't default.

Moral hazard be damned. Count me as one future cashflow stream you will never see again!


Lessons Bill James Learned from Baseball Research

From his 1988 classic The Bill James Baseball Abstract

"What I wanted to write about... is a very basic question. Of all the studies I have done over the last 12 years, what have I learned? What is the relevance of sabermetric knowledge to the decision making process of a team? If I were employed by a major-league team, what are the basic things that I know from the research I have done which would be of use to me in helping that team?"

1. Minor league batting statistics will predict major league batting performance with essentially the same reliability as previous major league statistics.
2. Talent in baseball is not normally distributed. It is a pyramid. For every player who is 10 percent above the average player, there are probably twenty players who are 10 pecent below average.
3. What a player hits in one ballpark may be radically different from what he would hit in another.
4. Ballplayers, as a group, reach their peak value much earlier and decline much more rapidly than people believe.
5. Players taken in the June draft coming out of college (or with at least two years of college) perform dramatically better than players drafted out of high school.
6. The chance of getting a good player with a high draft pick is substantial enough that it is clearly a disastrous strategy to give up a first round draft choice to sign a mediocre free agent. (see note #1)
7. A power pitcher has a dramatically higher expectation for future wins than does a finesse pitcher of the same age and ability.
8. Single season won-lost records have almost no value as an indicator of a pitcher's contribution to a team.
9. The largest variable determining how many runs a team will score is how many times they get their leadoff man on base.
10. A great deal of what is perceived as being pitching is in fact defense.
11. True shortage of talent almost never occurs at the left end of the defensive spectrum. (see note #2)
12. Rightward shifts along the defensive spectrum almost never work. (see note #2)
13. Our idea of what makes a team good on artificial turf is not supported by any research.
14. When a team improves sharply one season they will almost always decline in the next.
15. The platoon differential is real and virtually universal

We Good Europeans

From today's WSJ:

As if governors these days don't have enough on their plates. Now that ObamaCare has become law, there's a whole new to-do list for my state:

1) Plan for the termination of our Healthy Indiana Plan. This is the program that's currently providing health insurance to 50,000 low-income Hoosiers. With its health savings account-style personal accounts, it has been enormously popular among its participants. I hope those folks will do all right when they are pitched into Medicaid.

2) Start preparing voters for a state tax increase. The axe won't fall until someone else is governor. But when we are forced to expand Medicaid to one in every four citizens, the cost will add several hundred million dollars to the budget.

3) Check to see if Indiana should drop its health insurance plans and dump its government workers into the exchanges. Paying the new tax penalty might actually be cheaper for the state, as it will be for many private firms. I'm not certain the same rule applies to government as to business, but since no member of Congress read this entire bill before the vote, I don't feel embarrassed about not knowing.

4) Ramp up our job retraining programs to handle those who will be fired by our medical device companies, student loan providers, and small businesses as they wrestle with new taxes, penalties, or in the student loan case, outright nationalization of their business.

5) Call the state's attorney general to see if we can join one of the lawsuits to overturn ObamaCare. Yes, it's a long shot. But why not try?

6) Investigate an offset to all this extra cost. We may no longer need the Department of Insurance since insurers will now be operating as regulated utilities under the thumb of the federal government.

It's discouraging that all of this could have been avoided. Congress could have done what Republicans should suggest now: Shift to a system that allows individuals—not businesses—to buy health insurance tax free. They could also create tax credits for buying health insurance based on income and health status to guarantee everyone coverage and encourage medical care and insurance competition. Republicans should push to lower barriers for buying insurance across state lines, create incentives for states to repeal mandates, and limit frivolous lawsuits that increase the price of insurance.

But for the moment, our federal overlords have ruled. We better start adjusting to our new status as good Europeans.

Mr. Daniels, a Republican, is governor of Indiana.

March 25, 2010

A Prayer of Dr. Johnson

What a beautiful prayer this is from Dr. Samuel Johnson:

Almighty and most merciful Father, who by thy son Jesus Christ hast redeemed man from Sin and Death, grant that the commemoration of his passion may quicken my repentance, encrease my hope, and strengthen my faith and enlarge my Charity; that I may lament and forsake my sins and for the time which thou shalt yet grant me, may avoid Idleness, and neglect of thy word and worship. Grant me strength to be diligent in the lawful employments which shall be set before me; Grant me purity of thoughts, words, and actions. Grant me to love and study thy word, and to frequent thy worship with pure affection. Deliver and preserve me from vain terrours, and grant that by the Grace of thy Holy Spirit I may so live that after this life ended, I may be received to everlasting happiness for the sake of Jesus Christ our Lord. Amen.

Up, Up, and Away

From John Hussman's latest shareholder letter:

Though hyperinflations are typically driven by the inevitable financing of fiscal deficits by money creation, you will not find sustained inflation without sustained fiscal irresponsibility. As Peter Bernholz notes in Monetary Regimes and Inflation, "there has never occurred a hyperinflation in history which was not caused by a huge deficit of the state." While we certainly don't anticipate anything on the order of hyperinflation, the expansion in deficit spending that we currently observe (regardless of whether one measures the deficit as a fraction of GDP or as a fraction of government spending) is beyond anything ever observed in the post-war era. I continue to anticipate a near doubling in the CPI over the course of about 10 years, focused primarily in the latter half of this decade.

You Know Your Plan Stinks When......

Fidel Castro praises it:

"We consider health reform to have been an important battle and a success of his (Obama's) government."

Who Made God?

From Edgar Andews' book Who Made God? Searching for a Theory of Everything

…There is one answer to the question that atheists are happy to accept – the answer “We made God.”

…For the moment let me point out three small problems with the “We made God” hypothesis. First, it falls into the very same trap that the atheist cunningly sets when he asks, “If God made everything, who made God?” Because when he confidently declares that we made God it must then be asked, “If we made God, who made us?” Since the answer “God made us” is obviously excluded
ab initio, the question “Who made us?” is no more answerable than “Who made God?” Just to replay, “Evolution made us” simply will not do. As Scott Adams has observed, “Evolution isn’t a cause of anything; it’s an observation, a way of putting things in categories. Evolution says nothing about causes.” Or to put it more simply, if evolution made us, who made evolution?

The atheist will no doubt replay that evolution is simply the way nature works; it is just part of the “everything” that theists wrongly attribute to God. But the logic of this contention leads us in an unexpected direction – that I’ve written a diminutive one-act play to prove it.

[On stage three people: “theist,” “first atheist” and “second atheist” engaged in an argument. Enter left “enquirer” wearing a duffle coast and a puzzled expression.]

Enquirer: Excuse me interrupting, but can you tell me who made everything?
Theist: Yes; God made everything.
First atheist: Oh? So who made God?
Second atheist: We made God.
Theist: Then who made us?
First atheist: Evolution made us.
Theist: Who made evolution?
Second atheist: It’s part of everything; “everything” made evolution.
Enquirer: Excuse me interrupting…but who made everything? Oh, never mind.
[Enquirer exits left (the way he came in) wearing an even more puzzled expression.]

…A philosophical argument that ends up where it started is even more pointless – and such, as out little drama indicates, is the claim that “We made God.”

The second problem with this contention is that it is devoid of any evidential basis, as we shall see in due course. It is not, in fact, an explanation at all. It doesn’t explain religious concepts, religious experience or the almost universal religious instinct of mankind, ancient or modern. Rather, it is a smokescreen concealing ignorance, a speculative shrug of the shoulders concerning the substantial phenomenon of religious belief. Like many atheistic arguments, it is at heart a tautology. Beginning with the hidden premise that God does not exist objectively, it looks for (and finds) an alternative explanation of religious faith and experience entirely within ourselves. It then reasons as follows: since God definitely exists in the minds of those who believe, and since God does not exist otherwise, then God must exist only in the minds of those who believe. Bingo! We made God.

Thirdly, whenever A makes B (and whatever A and B might represent) it is reasonable to assume that A (the creator) is greater than B (the creation). Beethoven was greater than any of his compositions and Rembrandt, Turner or Picasso greater than any of their pictures. When my wife makes a cake, however well it turns out, it is soon gone – a thing of transience and insignificance in comparison with the once who made it. But if man fashions a
transcendent and all-powerful God out of his own imagination, the creation is greater than the creator – which, while not proving the existence of God, takes a lot f explaining. I accept that my reasoning here is ontological in character but it remains valid, I thin, as a refutation of the “Who made God” hypothesis. After all, Richard Dawkins argues strenuously that a God who made the hugely complex universe must be even more complex than his creation…. I assume I’m allowed to say the same thing when it’s a case of man allegedly creating God.

March 24, 2010

Dingell on Controlling the People

Rep. John Dingell (D-MI), the Dean of the House of Representatives for being the longest serving member of the body (he was first elected in 1955, succeeding his father, Rep. John Dingell, Sr.), made an amazing admission during a live telephone interview with Detroit WJR News/Talk 760 radio talk show host Paul W. Smith on Smith's show Monday morning, March 22, 2010. The night before, Dingell had been a featured speaker at the Democrat Congressional leadership victory press conference after Obamacare passed the House.

In response to a question posed by Smith, Dingell said:

Let me remind you this [Americans allegedly dying because of lack of universal health care] has been going on for years. We are bringing it to a halt. The harsh fact of the matter is when you're going to pass legislation that will cover 300 [million] American people in different ways it takes a long time to do the necessary administrative steps that have to be taken to put the legislation together to control the people.

Florida Lawsuit Against Federal Government

The entire text of the lawsuit is here.

My favorite parts:

The Act represents an unprecedented encroachment on the liberty of individuals living in the Plaintiffs’ respective states, by mandating that all citizens and legal residents of the United States have qualifying healthcare coverage or pay a tax penalty. The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying healthcare coverage. By imposing such a mandate, the Act exceeds the powers of the United States under Article I of the Constitution and violates the Tenth Amendment to the Constitution.

......The Act also represents an unprecedented encroachment on the sovereignty of the states. For example, it requires that Florida vastly broaden its Medicaid eligibility standards to accommodate upwards of 50 percent more enrollees, many of whom must enroll or face a tax penalty under the Act, and imposes onerous new operating rules that Florida must follow. The Act requires Florida to spend billions of additional dollars, and shifts substantial administrative costs to Florida for, inter alia, hiring and training new employees, as well as requiring that new and existing employees devote a considerable portion of their time to implementing the Act. This onerous encroachment occurs at a time when Florida faces having to make severe budget cuts to offset shortfalls in its already-strained budget, which the state constitution requires to be balanced each fiscal year (unlike the federal budget), and at a time when Florida’s Medicaid program already consumes more than a quarter of the State’s financial outlays. Plaintiffs cannot effectively withdraw from participating in Medicaid, because Medicaid has, over the more than four decades of its existence, become customary and necessary for citizens throughout the United States, including the Plaintiffs’ respective states; and because individual enrollment in Plaintiffs’ respective Medicaid programs, which presently cover tens of millions of residents, can only be accomplished by their continued participation in Medicaid.

Further, the Act converts what had been a voluntary federal-state partnership into a compulsory top-down federal program in which the discretion of the Plaintiffs and their sister states is removed, in derogation of the core constitutional principle of federalism upon which this Nation was founded. In so doing, the Act exceeds the powers of the United States and violates the Tenth Amendment to the Constitution.

.........The Act is directed to a lack of or failure to engage in activity that is driven by the choices of individual Americans. Such inactivity by its nature cannot be deemed to be in commerce or to have any substantial effect on commerce, whether interstate or otherwise. As a result, the Act cannot be upheld under the Commerce Clause, Const. art. I, § 8. The Act infringes upon Plaintiffs’ interests in protecting the freedom, public health, and welfare of their citizens and their state fiscs, by coercing many persons to enroll in Medicaid at a substantial cost to Plaintiffs; and denies Plaintiffs their sovereign ability to confer rights upon their citizens and residents to make healthcare decisions without government interference, including the decision not to participate in any healthcare insurance program or scheme, in violation of the Tenth Amendment to the Constitution of the United States.

March 23, 2010

20 Scary Things about ObamaCare

I know I am overdoing a bit on the Health Care Bill, but the simple fact is that I firmly believe this is the biggest and most important legislation we have seen in quite some time.

Please read this entire piece from Investor Business Daily on 20 Ways ObamaCare Will Take Away Your Freedom:

The sections described below are taken from HR 3590 as agreed to by the Senate and from the reconciliation bill as displayed by the Rules Committee.

1. You are young and don’t want health insurance? You are starting up a small business and need to minimize expenses, and one way to do that is to forego health insurance? Tough. You have to pay $750 annually for the “privilege.” (Section 1501)

2. You are young and healthy and want to pay for insurance that reflects that status? Tough. You’ll have to pay for premiums that cover not only you, but also the guy who smokes three packs a day, drink a gallon of whiskey and eats chicken fat off the floor. That’s because insurance companies will no longer be able to underwrite on the basis of a person’s health status. (Section 2701).

.....4. Think you’d like a policy that is cheaper because it doesn’t cover preventive care or requires cost-sharing for such care? Tough. Health insurers will no longer be able to offer policies that do not cover preventive services or offer them with cost-sharing, even if that’s what the customer wants. (Section 2712).

......11. If you are a physician and you don’t want the government looking over your shoulder? Tough. The Secretary of Health and Human Services is authorized to use your claims data to issue you reports that measure the resources you use, provide information on the quality of care you provide, and compare the resources you use to those used by other physicians. Of course, this will all be just for informational purposes. It’s not like the government will ever use it to intervene in your practice and patients’ care. Of course not. (Section 3003 (i))

12. If you are a physician and you want to own your own hospital, you must be an owner and have a “Medicare provider agreement” by Feb. 1, 2010. (Dec. 31, 2010 in the reconciliation changes.) If you didn’t have those by then, you are out of luck. (Section 6001 (i) (1) (A)).

.....14. You are a health insurer and you want to raise premiums to meet costs? Well, if that increase is deemed “unreasonable” by the Secretary of Health and Human Services it will be subject to review and can be denied. (Section 1003)

.......19. You will have to pay an additional 0.5% payroll tax on any dollar you make over $250,000 if you file a joint return and $200,000 if you file an individual return. What? You think you know how to spend the money you earned better than the government? Tough. (Section 9015).

That amount will rise to a 3.8% tax if reconciliation passes. It will also apply to investment income, estates, and trusts. You think you know how to spend the money you earned better than the government? Like you need to ask. (Section 1402).

20. If you go for cosmetic surgery, you will pay an additional 5% tax on the cost of the procedure. Think you know how to spend that money you earned better than the government? Tough. (Section 9017).