Back from the Dead - Harry Reid's Public Option

Just in time for Halloween, Harry Reid has raised the dead. Like a zombie from a cheesy horror flick, the public option is now once again roaming the halls of Congress. In a recent announcement, Senate Majority leader Reid stated the newest version of health care legislation would be heading to a vote in the Senate with a government-run public option included.

Setting aside for a moment the foolishness of a public option, Reid’s insistence on including this provision in a plan is utterly baffling. The public option was killed over the summer when Democrats realized the political infeasibility of the concept. The Democrats simply did not have the votes in the Senate to avoid a Republican-led filibuster. The Democrats need every single member of their caucus (58 Democrats and 2 Independents) to agree with the plan in order to push it through without Republican support. The political reality indicated that this just was not possible. If one Democrat wavered the entire plan would fail. And so, wisely the Democrats seemed to move on from the public option. After all, they profess that their real goal is to achieve much needed health-care reform.

Reid’s move to bring back the discussion on the public-option is a step backwards. Nothing has changed to indicate a different political environment. In fact, shortly after his announcement Olympia Snowe, the sole Republican to have voted with Democrats on some health-care related issues, backed off from her cross aisle move. She indicated she would work with Republicans to quash any health care reform that included a public option. Snowe’s rebuke was quickly followed by one from Joe Lieberman – one of the two Independents who caucuses with the Democrats. With Lieberman’s defection a public option is undoable.

So what are the left-wing Democrats trying to accomplish? The inclusion of a public option will sink any reform bill. If the Democrats truly want to reform healthcare, they need to face the reality that it cannot (nor should not – see a prior post on ANR) include a public option. Reid’s gambit seems to lead to nothing but a dead end – torpedoing the Democrats’ and Obama’s crown jewel.

Ironically, it appears that Reid is sabotaging any chance at Democrat-led healthcare reform. One possible explanation is that the Democrats are in such internal disagreement that they cannot design any plan that is amenable to all wings of the party. The tensions between the leftists and the centrists are running high. In order to avoid a failure based on the Democrats’ inability to compromise, Reid is setting up a surefire way to fail that can be pegged on supposed Republican obstructionism. At the end of the day, Democrats will point to the ‘anti-reform’ Republicans who successfully filibustered their plan, rather than their own ranks for the political failure to pass a reform bill. If one is going to fail, at least make it look like it is someone else’s fault.

The Wall Street Journal offers another relatively plausible explanation for Reid’s maneuver. Reid might be offering the plan knowing full well that he will have to drop the public option. The WSJ writes;

He could then tell the left that he did his best, only to have been beaten back to the unreliable likes of Mr. Lieberman….Meanwhile, such endangered swing-state Democrats as Blanche Lincoln of Arkansas could claim they won a great concession if the public option fails, making it easier for them to vote for a final bill that would still do enormous harm to private insurance and the federal fisc.

Reid and his cronies could be trying to push the negotiating grounds leftward in order to achieve a more Democrat-friendly outcome. This is a risky move, but opens an opportunity for Republicans. Senate Republicans should point out the foolishness of Reid’s insistence for a public option. They can easily turn the tables on the Democrats, by branding them obstructionist. How can the Democrats claim to be solving our health care problem if they are offering proposals that clearly are not passable? However, such a strategy necessitates a counter-proposal – something the Republicans have been lacking. A successful Republican-led reform will offer America the right kind of health care fix and deal the final deathblow to the leftist Democrats’ socialist ambitions. Let’s put a nail in this coffin for good.

Fed Up!

The economic meltdown was caused by the underestimation and mispricing of risk. The small town broker,  the average family, and the Wall Street banker were all responsible for taking on too much risk. The government has correctly diagnosed the ailment – in part. While the Fed and Treasury both point to the excessive risk taking, they only seem to place the blame on Wall Street.

As The Financial Times reports, the Federal Reserve has unveiled new rules aimed at limiting and controlling executive pay at all institutions under its purview. This follows sharp controls from the Treasury for executive pay at institutions who still have bailout money.

The Fed defends the proposed rules by claiming they will reduce the excessive risk taking that caused the meltdown. Chairman Ben Bernanke, stated that “…compensation plans that encourage, even inadvertently, excessive risk-taking can pose a threat to safety and soundness.” The argument implies that economic downturn was the direct result of risk taking that was driven by high-pay packages for greedy executives.

This perspective is downright foolish. It is unquestionable that mismanagement and so-called ‘fat cat’ bankers played a role in causing the economic mess. However, they are no more culpable than ‘covetous’ housewives who took out a home-equity loan to buy the flat-screen TV or new Mercedes or the ‘greedy’ loan originator who turned a blind eye to the proper documentation in order to make a quick sale. The fact of the matter is all of America is to blame. Most Americans – individuals and companies – did not make smart investment decision.

The Fed’s new pay policy is simply an attempt to make it appear like the government is doing something productive. In reality, it is simply to appease voters who, egged-on by the finger-pointing Obama, are looking for a scapegoat. It is politically and logistically easier to go after a few, big-target banks, than a million or so credit card owners.

Unfortunately government meddling in executive pay will not make things better. It is the wrong medicine for the correct diagnosis. Such a narrow shot at poor risk-management completely misses the fundamental problem. It obscures the fact that the underlying issues are not and will not be addressed. Even more concerning is the fact that it nestles the government far too deep into the private sector.

Not only will the plan fail to address systemic problems, but it will most likely fail to solve the problem at companies. In fact, it is more likely to exacerbate problems. CBS News reports, that talent is already being driven from top firms. Furthermore, individual executives will find ways around the system. They will find alternative ways of compensation or establish unconventional institutions that do not fall under the purview of the Fed. This will move the main banking industry out of the regulatory eye of Bernanke. At the end of the day the risk will still be incorrectly accounted for and nothing will have changed.

Bernanke is correct that excessive risk is to blame. But let’s step back and stop pointing fingers. Smarter policy that is not punitive and spiteful needs to be designed. Flashy regulations that scapegoat a few individuals while absolving the rest of America from responsibility are counterproductive and will only lead to the next bubble and burst. This is particularly true if our government is simultaneously diminishing risk by bailing-out companies. Any market distortions will misprice risk – why doesn’t the Fed understand this?

A Right is a Restriction

The use of the term “right”, as in ‘Americans have a right to…,’ has become watered down and incorrectly used in far too many instances. Generally, a right is a restriction on the authority of the government. By reserving certain powers to individuals, a right limits the strength of the government and prevents abuses of its citizens. However, a right is not an obligation to provide. While governments are, in some instances, obligated to provide certain items, these obligations are not rights. The distinction, while seemingly slight, is an important one that is often muddled in the popular arena.

Rights, as properly understood, are simply a restriction. They offer no direct provision to individuals. To understand this better one only needs to understand the rights enumerated in the Bill of Rights. For instance, Americans have the right to free speech and the right to religion. In the first instance, the right prevents the government from limiting what any individual can say. In the second instance, the right prevents the government from imposing a religion on any individual. In neither case is the government required to provide something to an individual. Other rights, such as the right to bear arms, can be understood in the same way. The right to bear arms is a restriction on the government’s monopolization of power. It prevents the government from encroaching on the personal lives of individuals, by restricting power.

However, many politicians incorrectly use the term ‘right’ to refer to certain things the government provides. Often this language is used in an attempt to expand entitlements and services. By using this language, politicians aim to make the provision of such items unassailable. This use, however, is incorrect when dealing with the rights an individual has vis-à-vis the government.

The ‘right to a minimum wage’ and the ‘right to healthcare’ are two such false rights. The reason these are not true rights is because they require the government to provide a service. A ‘right to a minimum wage’ demands that the government provide the means and structure for an individual to be provided with a certain wage. The ‘right to healthcare’ that is generally discussed when politicians try to cobble together a health reform package essentially demands that the government either directly or indirectly (eg. by establishing a legal system to force the provision from private sector) provides healthcare to every American. Since rights are defined as the restriction not the expansion of government roles, these claims cannot be rights. A properly defined right to healthcare would simply be defined as a restriction on the government not to prevent individuals from purchasing healthcare. Obviously, this is a relatively meaningless right and not what most proponents of a ‘right to healthcare’ discuss.

Civil rights are also an area where this distinction is very often incorrectly applied. Citizens undoubtedly have the right not to be persecuted or discriminated against based on racial, sexual, or other characteristics. The government is not allowed this power. However, civil rights do not mean that the government has an obligation to provide anything to people based on these same characteristics. In fact, if such an obligation existed it would most certainly violate other citizens’ rights (read: affirmative action).

The point of such a distinction is to correctly define the use of the term ‘rights’ in order to better understand the role of the government. Many policies on the left, and some on the right, tend to dismiss this definition of ‘right’ in order to expand the role of government and provide benefits to narrow slices of the electorate. However, by applying such a definition it is relatively easy to come to a conclusion as to the appropriate role of the government.

[As an added caveat the correct use of the word ‘rights’ does not imply that the government has no positive obligations. What is not a right reserved to the people (or states) is often a role for the government to play. For instance, the government has an obligation to protect its citizens from each other (policing) and from external threats (military). This positive action is something the government must provide its citizens. However, it does not mean that such a positive obligation is a right that the citizens possess.]

What is the Point of Attacking Fox?

Whether one agrees or disagrees with Fox News, the Obama administration’s repeated assaults on the cable news network are unwise and bad for the country. Over the past few weeks, members of the Obama administration have gone on the record attacking Fox News. Amongst other statements, David Axelrod has said “It’s really not news. It’s pushing a point of view,” while Chief of Staff Rahm Emanuel has said that Obama does not want “the CNNs and the others in the world [to] basically be led in following Fox.”

These attacks are unwise for the Obama administration. They accomplish little except to galvanize support around (or against) Fox News and draw partisan lines in the sand. For an administration that apparently strives for bipartisanship, getting mired in the muck with Fox only speaks of desperation and partisanship. The battle has only been a boon for Fox, while making the administration look foolish.

The continuation of such desperate behavior emphasizes the perceived threat the administration feels from Fox. Fox News has revealed numerous scandals and stories, such as ACORN and Van Jones, which are damaging to Obama. The administration’s attacks read as a response to the political costs wrought by Fox News. This not only adds a level of legitimacy to Fox’s reporting, but makes the administration appear as if it is trying to portray a false image to America by demonizing its enemies rather than actually dealing with real issues. Neither is a perspective that the administration wants to foster.

More concerning is the fact that the executive branch is attempting to quash anti-administration (if they may be called that) perspectives. While certainly not yet violating freedom of the press, the administration is treading on dangerous ground. Freedom of the press is one of the most prized rights. Americans of all stripes bristle when it is attacked. Even if the administration’s indictments of Fox News are entirely correct, its behavior is not. No government should be meddling with the news sources that its citizens choose to use.

An open society has numerous voices and perspectives, some of which are correct and others which are not. No news source can be free from biases. Since every incident entails interpretation and perspective there is no such beast as completely objective news. It is up to the consumer of news – the voter – to distill and analyze the multitude of news. Accuracy and correctness will be awarded; while bogus news outlets will be marginalized. The government, and any other body or individual, can choose to play a role in the competition of ideas; however, it can not rightly use its power and position to attempt to silence a perspective that it does not like. Such abuses of power are characteristic of third world military dictatorships, not the United States of America.

Fox News may or may not be what the administration claims it is. Regardless, it is a voice in the mix. Obama’s administration would be wise to drop the attacks on the network; if not for the sake of fostering an open society, then at least to preserve its own image. Let Americans decide for themselves what they want to hear and from whom. America is educated and mature enough to judge Fox for what it is.

What Were Obama's Advisors Thinking?

The news has been abuzz with Obama’s failure to bring the Olympics to Chicago. The President has correctly been questioned on at least two fronts. First, why did he spend so much political capital and energy focused on such an insignificant issue when there are so many more pressing issues? Second, does his inability to bring home the Olympics signify a damaging inability for the administration to influence foreign bodies? There is, in addition, at least one more question that has not been readily addressed: What were Obama’s advisors thinking?

Even before Rio was awarded the Olympics and Obama journeyed to Copenhagen, pundits were questioning the merits of his quest. No sitting American president had attempted such a feat. Not only did it entail political risk, for relatively little gain, there are far too many pressing issues for our President to spend time on such a trivial issue. Even the Huffington Post, darling of the left, criticized Obama’s thinking.

The GOP also got it right in knocking Obama for wasting time chasing Olympic windmills when his time should be spent on health care reform, fixing the economy, confronting the Iran nuclear threat, and doubling his efforts to wind down two crippling wars.

Second, his failure to convince the IOC weakened his credibility on the international stage. As Fox News reports, critics question whether a President who cannot deliver something as menial as the Olympics will be able to deliver a nuclear-free Iran or a globally responsible China. Such claims, however, are probably overblown. After all, the levels of intricacy of negotiations, not to mention government effort, are most certainly leagues apart when negotiating with Iran versus the IOC. That being said, the failure does reduce the aura that surrounds Obama. Furthermore, Obama has most likely lost a little credibility with those that analyze his every move. Such a snafu is not really indicative of his inability to be an international force (there are myriad of other indicators that serve this purpose); however, it may lead to more friction for his agenda down the line.

All this being said, one of the most interesting questions is: “What were his advisors thinking?”. Where was the wise advisor cautioning him against the vast risks and costs and the minimal benefits inherent in such a ploy? Why did no one stand up and tell him it was not worth it? Did his team foresee the GOP attacks? Or were his advisors simply unable to convince him otherwise?

Either way is problematic. Obama selected an award winning set of advisors to run his campaign. They ran a tight, effective campaign that will most likely be a guide for years of future campaigns to come. However, upon ascent to the White House his ability to find strong advisors seemingly has fizzled. Obama has gone through far too many scandalized czars to make anyone comfortable. From the socialist Van Jones to the animal-friendly Cass Sunstein, Obama has surrounded himself with incompetent and downright scary individuals.

The failure of his advising team is becoming increasingly distressing. Every modern president needs to rely heavily on his advisors. It is clear that Obama’s inexperience and his reliance on an out-of-touch, incapable team, is contributing to his mounting political failures. If Obama wants to succeed with his agenda and not solidify his place as the next Jimmy Carter, he must seriously reconsider who he surrounds himself with. After all, if his team could not foresee the political damage of going to Copenhagen, how are they going to handle real issues?

Iran's Ahmadinejad, a Jew? Exports Anti-Semitism

In a recent report, the Daily Telegraph revealed that Iran’s anti-Israel, hardline ruler, President Mahmoud Ahmadinejad does in fact have Jewish roots. The surprising discovery is based on an identity card, displayed by Ahmadinejad, during his election ‘campaign’ last year. According to the Daily Telegraph, the Iranian President’s family name, prior to conversion to Islam in the 1950s, is clearly indicative of Jewish origins.

The discovery that the number one enemy of the Jewish people comes from a Jewish family highlights a sad and unfortunate political reality in the Muslim world. It has always been true that the political establishment in Iran and other despotic Muslim countries use anti-Semitism and anti-Israelism to control and oppress their people. By creating an imaginary common enemy, the despotic rulers from Egypt to Iran to Pakistan divert focus from the abuses of their authoritarian regimes.

However, now Ahmadinejad’s extremely intense vitriol can be understood in a new light. Ahmadinejad has long been one of the most vocal opponents of Israel. While for the average Muslim despot an occasional fanning of the anti-Israel and anti-Semitic flames is sufficient to direct his peoples’ attention elsewhere; Ahmadinejad apparently has a real liability with his family roots. Like any bully he tries to maintain his power and keep his distance from what he hates about himself by attacking others. His intense anti-Israel tirades and Holocaust denial can be understood as a pre-emption against his own weakness.

What is most worrisome is that Ahmadinejad is now exporting his disturbing use of anti-Semitism and anti-Israelism to some newfound political allies. The right-wing Ahmadinejad has long been cozying up with Venezuela’s leftist Hugo Chavez. The union has largely been one of anti-Americanism, shared nuclear knowledge, and assistance with terrorist activities. Now, as a recent article in the Wall Street Journal discusses, the union is sharing a growing hatred of the Jews.

Chavez, along with his allies in Honduras, is using the same tactics as the Muslim authoritarian regimes, and as the Nazis did before, to maintain power and control. Like their Muslim counterparts, the Latin American rulers are hoping to solidify their power and direct domestic unrest towards a scapegoat population. Furthermore, by allying themselves against the same common enemy, Chavez and his cronies are drawing themselves closer to Iran.

No good can come from this disturbing trend. As has happened many times throughout history, expanded persecution of Jews is often a harbinger of worse things to come. The growing Latin-Muslim axis is a threat to world Jewry and global peace. A common test of the freedoms of a nation is how the country treats its Jews. As Gandhi said, “The measure of a country's greatness should be based on how well it cares for its most vulnerable populations.” Iran and Venezuela are failing this test.