Detailed Abstractions

Representative Weiner (D-NY) on estate taxes (here):

WEINER: You aren’t paying anything in that case because you’ll be dead.

Which while heartless, actually seems logical at quick glance.

In critical thinking however, one must always think about context.  To use a very basic example, take numbers.  If I say, 1.8 trillion dolloars spent on federal government in one year.  Seems meaningful, but it’s really meaningless without additional information.

For instance -

1.8 trillion dollars spent on federal government in 2010.  We got off cheap.

1.8 trillion dollars spent on federal government in 1950.  Well… we probably would’ve collapsed by now.

& lastly, for Mr. Weiner and the government in general, they as using the tax code to incentivize certain behaviors.  Tax breaks for small businesses, helps spark business creation.  Tax breaks for home ownership, helps home sales. 

So if you work your whole life, make a decent amount of money yearly, but live furgally, and retire after 30 years with 10 million dollars, this tax is an incentive.

Just not sure what kind of society you want to build when the incentive is blow all your money before you die instead of leaving it to your family

In the current political landscape which is America, with admissions from Senator Dodd for not reading the financial regulation he helped author (here), or Senator Baacus admitting he hadn’t read the health care reform bill he helped craft (here), you would be hard pressed to find a situation in which any politician seemingly cares about going overboard with their rhetoric, but the tax debate seemed to spark rhetoric like that only seen during war time.

Senator Menendez thinks things are sooooo bad, he calls the dealing with the GOP similar to dealing with terrorists (here):

Sen. Robert Menendez (D-N.J.) on Friday compared the tax-cut fight with Republicans to negotiating with terrorists…

& not to be outdone, Senator McCaskill thinks pitchforks and violence are needed (continued):

…while Sen. Claire McCaskill of Missouri suggested Americans might need to “take up pitchforks” if Congress renews tax breaks for the wealthy….

& let’s not forget, Senator Brown… who thinks paying people to stay home is the beginning of job growth (here):

….extending unemployment benefits that creates economic activity that creates jobs, not giving a millionaire an extra ten or twenty or $30,000 in tax cuts that they likely won’t spend,” Brown said….

No worries that Sen. Sherrod et al are wrong on the facts (here):

After the dividend tax rate came down, average dividends among the top 1% surged to $52,814 in 2004 and $83,072 by 2007. Reported dividends of the top 1% in 2007 were twice as large as the previous peak in 2000….

&

Average capital gains among the top 1% rose from $145,433 in 2002 (in 2008 dollars) to a record $427,930 in 2007….

But it does make one wonder where you go from there with their party leader has made a deal with terrorists & those deserving of pitchforks? (here):

Short video of Author Brad Thor discussing Wikileaks most recent release of US classified documents where he asks, “Why are we so reluctant to kill people who need killing?”

Update:  Yesterday in a DA post, F*$k North Korea, I noted from Stratfor about North Korea’s attacks on a South Korean island that:

…the sustained shelling of a populated island by North Korea would mark a deliberate and noteworthy escalation…

For those unfamiliar with Stratfor, they are a professional intelligence gathering organization and not simply another media outlet for international news.  With that in mind, phrases like “deliberate and noteworthy escalation” are very serious (unlike standard TV media where everything will kill you and everything is horrendously worse than it ever has been).

DA further noted, that while there were open questions, the facts….. are not open:

…A soverign and free nation, was just attacked and had its citizens murdered by a bully,a terrorist sponsor, an illegal weapons supplier, a despotic and opressive human rights abuser, all run run by an idiot who propagandizes others in his divinity….

Now there has been an increase in the level of rhetoric and threat response from the US (here).  Speaking of normal media’s rethoric, the title: Obama sends U.S. warship to Yellow Sea in show of strength as two Koreas teeter on the brink of all-out war is instructive.

Either way the US response has gotten better:

…Mr Obama earlier issued a statement condemning the ‘outrageous’ assault and underlining America’s close ties with Seoul.

…The White House called on North Korea to end ‘its belligerent action.’…

And:

…President Obama has ordered a U.S. warship to Korea in a shetow of strength to prevent an escalation of one of the most serious confrontations in the region for decades….

I say gotten better, because we should stand by our allies and in cases like these, even stand with countries who aren’t necessarily strong allies if they are a free people being attacked by a despotic country.

The open question however is: Will this matter?

As North Korea is just bully and a coward, there’s reason to think this isn’t the end.  Stratfor noted in an update on the situation today, that North Korea does indeed (more…)

Early yesterday afternoon (local time in South Korea), North Korea began shelling a South Korean controlled island with artillery (from Stratfor here):

…Though details are still sketchy, South Korean news reports indicate that around 2:30 p.m. local time, North Korean artillery shells began landing in the waters around Yeonpyeongdo, one of the South Korean-controlled islands just south of the NLL. North Korea has reportedly fired as many as 200 rounds, some of which struck the island, injuring at least 10 South Korean soldiers, damaging buildings and setting fire to a mountainside. South Korea responded by firing some 80 shells of its own toward North Korea, dispatching F-16 fighter jets to the area and raising the military alert to its highest level….

What’s interesting to note, is that North Korea has murdered South Koreans before, such as the recent sinking of the ChonAn, but as Stratfor puts it (emphasis added):

…While the South Korean reprisals — both artillery fire in response by self-propelled K-9 artillery and the scrambling of aircraft — thus far appear perfectly consistent with South Korean standard operating procedures, the sustained shelling of a populated island by North Korea would mark a deliberate and noteworthy escalation…

(more…)

An excellent publication overall, the Economist, is using their online debates to ask a question which doesn’t seem to have any useful answer (here):

This house believes that America’s political system is broken.

The current debaters are Matthew Yglesias, defending the motion and Peter Wehner arguing against.   In their second round of the debate, the house is winning with a full 75% agreeing to a broken US political system.

I say it doesn’t seem to have any useful answer as the most likely result from such a poll will be based mainly upon emotions.  Since most lay people don’t typically sit around and try to analyze political systems, the answers from the majority of respondents will have to fall back on other knowledge and human behavior demoonstrates this is likely to be emotions.  IE – if I like what’s going on, no fixing.  If I don’t like what’s going on, it needs fixing.

Reminds me a little of an argument I’ve seen a number of times in the health care debate.  Invariably, someone will put up a poll telling me how many people think their health care costs are too high.  & my retort stays the same, with some variation of Socratic questioning like… ”So?  Did you expect to see a poll that said most Americans want to pay more for anything?”

But I digress, the question has been asked and for Mr. Yglesias, things aren’t going well.  His baisc argument starts something like this:

American political institutions are in a period of crisis. The source of the crisis is relatively simple. Our institutions work only when leaders can reasonably expect broad bipartisan co-operation, but the emergence of more ideologically rigorous parties makes such co-operation extremely unlikely…

Which might make for a good thesis, assuming you can prove that broad bipartisan co-operation is indeed a requirement (hell, prove it’s useful…) as well as proving that more ideologically rigorous parties have come into existence.

His proof?  In the short, yet varied history of the US, he points to the last few election cycles – excluding all information about 9/11 and two wars and the nominal fact that the higher the consequence of any legislation the more ferocious the public debate – he starts his historical research by going all the way back to President Bush the younger; who entered the presidency with:

…an unprecedentedly weak electoral mandate. More voters marked their ballots for Al Gore than marked their ballots for Mr Bush. The median voter in the election supported Mr Gore. But thanks to a combination of litigation, stubbornness and the perversity of the electoral college, Mr Bush succeeded in prevailing and becoming president….

Just a quick note here – is it a little odd to start an arguement to theoretically prove that idealogically rigirous institutions are harming us, by being idealogically rigid… but whatever.

He contends that the result of the weak mandate  and an inability to overcome a Senate fillubuster worked well:

…This led to a fair amount of legislative co-operation in the first Bush term. A series of important changes to the Elementary and Secondary Education Act were approved; an extremely costly new prescription drug benefit was added to Medicare; income taxes were steeply cut—all on an at least somewhat bipartisan basis….

Somewhat bipartisan?  Like idealogically rigirous, “somewhat bipartisan” is undefinable in any concrete terms, but a quick look on just the tax cuts seems to indicate consistent partisan fighting.

What we know?

The cuts themselves were passed in two bills.

1. Economic Growth and Tax Relief Reconciliation Act of 2001 &
   1. Senate vote here, House vote here
2. Jobs and Growth Tax Relief Reconciliation Act of 2003.
   1. Vote totals here

In 2001: only 1 Republican voted against it in the Senate out of 33 nay votes (the other nays were Democrats), and in the House, all but one of the 154 nay votes were cast by Democrats.  & of course out of the yea votes, while less one sided, still doesn’t appear to be bipartisan.  In the Senate, 12 of the 58 yea votes were cast by Democrats and in the House 28 votes our of 240 yea votes were cast by Republicans.

& 2003?  I guess Mr. Yglesias would also be surprised to learn that in the 2003, the tax debate was even more lopsided (more…)

It’s a truism of real leaders since the dawn of time; they find themselves, not from true success and stable times, but rather from adversity and chaos. When faced with those seemingly insurmountable odds, it’s the strongest who remain calm, read the landscape, and discover new answers from which they can seek out continued success.

Though under great stress, we humans tend towards the flight or flight response. True leaders however, can use these difficulties against themselves to provide both motivation and a sense of urgency to gain the ingenuity required for such challenges.

This is understood well in society. Like business leaders who understand innovation can be helped significantly by design constraints (here):

Great designers understand this. Charles Eames says design is all about innovating around constraints. And it’s the constraints – the scarcity – that fires the designer’s creativity. Smart business people “get it” too. Amazon founder Jeff Bezos embraces self-imposed scarcity saying, “One of the only ways to get out of a tight box is to invent your way out.”

They understand that principle of economic scarcity. As do military leaders. Sun Tzu notes in the Art of War:

For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.

For President Obama, the Tea Party & the Republicans taking back control of the House of Representatives could give him the opportunity to display true deft.

Assuming it does happen as predicted (here via the Philly Inquirer) however, the President is accorded a tough task ahead.

He would now have the body responsible for appropriations bills (all spending bills much start in the House & they are very important. For instance, they can kill health care by simply not funding it….) mainly in place due to running against him. Secondarily, while they don’t wish to be seen as obstructers, their willingness to work with Obama will be small even without their election strategy. Because any bill passed, regardless of how/why, if it turns out to be a good or well liked idea, Obama will naturally take credit to further his chances for re-election in 2012.

& the Democrats know that neither the President nor health care is a selling point for this election, even if they are communicating differently. The facts are that se hasn’t really made many direct candidate speeches, just backyard BBQs in key districts in key states. They are essentially, and correctly, playing against their weakness – his popularity.

Not a bad strategy in the short term, but I think people have heard him speak enough and any celebrity (yes, while the President is certainly more important and more powerful than any normal celebrity, s/he is still a celebrity) runs the risk of over saturation.

Irregardless, with Obama, the question is can he live inside those constraints?

What we know is given a new landscape, the answer for tomorrow’s question will not be the same answer as today’s. I think if he can push himself with a sense of urgency, surveys the landscape to see what he has and what he can accomplish with what he has. Then uses both the sense of urgency and strategic thinking by changing his game plan when the field of battle changes…. well, then we’ll see a real leader who may live up to his Nobel Peace Prize (here).

Or said more succinctly, it’s a crappy state of affairs you might find yourself in Mr. President, but challenges is how leaders prove themselves.

Honestly, I don’t think he’ll be able to do it. I think he’s too insecure (here) about himself and his handlers seem to know little more than an approval ratings drop equals time for Obama to give more speeches. & I don’t honestly think that’s likely to change…. but predictions are better left to Ms. Cleo.

What is likely however is the people around him understand exactly this point.  They do know it. The question is whether their emotions towards their beliefs (see: Confirmation Bias here & here) combined with the difficulty of telling a President who gives great speeches to shut up. Not to mention game theory predicts leaders to surround themselves with “yes men”.

All of that makes significant and required change seem unlikely, but I’d never count out someone who made it to the Presidency, nor, the team that helped him get there.

So Mr. President, here’s your chance.

As most know, late last week, smaller health insurance companies sent out press releases detailing a simple fact – when mandates increase, so will premiums (via WSJ here):

…Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators….

To most, this might seem an obvious consequence of the legislation.  The economics and logic of these required rate increases are undeniable.  If someone, in this case the government through force of law, tells a private business that they must increase their spending, under force of law, some, if not all, of those new expenditures will be passed on to consumers (WSJ continues):

…Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates….

…Aetna, one of the nation’s largest health insurers, said the extra benefits forced it to seek rate increases for new individual plans of 5.4% to 7.4% in California and 5.5% to 6.8% in Nevada…

…Regence BlueCross BlueShield of Oregon said the cost of providing additional benefits under the health law will account on average for 3.4 percentage points of a 17.1% premium rise for a small-employer health plan…

…In Wisconsin and North Carolina, Celtic Insurance Co. says half of the 18% increase it is seeking comes from complying with health-law mandates….

Not only should this seem obvious, but in a free country, any company should be able to set their rates for their services.

This of course assumes you don’t work for the government – then the news is shocking (WSJ continues):

…The White House says insurers are using the law as an excuse to raise rates and predicts that state regulators will block some of the large increases.

“I would have real deep concerns that the kinds of rate increases that you’re quoting… are justified,” said Nancy-Ann DeParle, the White House’s top health official. She said that for insurers, raising rates was “already their modus operandi before the bill” passed. “We believe consumers will see through this,” she said….

Not only shocking – but so wrong that even more force is needed.

Enter the Department of Health and Human Services threatening private business, for making private decisions, solely because those decisions disagree with the government’s predictions (via HHS website – bold added):

It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act.  I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases….

…We estimate that that the effect will be no more than one to two percent….

…Given the importance of the new protections and the facts about their impact on costs, I ask for your help in stopping misinformation and scare tactics about the Affordable Care Act.  Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections….

Think carefully about some of  these words/phrases used by government officials against private businesses in a free country: zero tolerance, misinformation, not tolerate, unjustified….all for raising theirs rates at a greater rate than the government assumed.

Maybe it’s just me, but when the government threatens people for fishy emails, then moves forward to threaten private business for deciding what to charge for their services…. well, it certainly doesn’t appear to be a free society.

As Thomas Jefferson stated so many years ago:

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.