Memo to the Archbishop of NY

[posted on his blog, typos corrected].

There is no need for a government in a highly developed free market society to appoint itself as "provider of healthcare coverage." None, whatsoever. The proposition would be identical to the government taking control of the restaurant and grocery businesses because there are some people who, regrettably, cannot afford to eat. To do so would undermine the market mechanism of distribution, which is quite an effective mechanism. I believe the discussion of "subsidiarity" speaks to this.

Furthermore, New York City once was a shining example of what Catholicism, when practiced, can do to generously overcome any "shortcomings" -- temporary or otherwise -- in the market mechanism.

It is interesting to me, indeed -- in a grotesque way -- that the Bishops are inclined to welcome government interference into the operation of the market mechanism when the Church itself has witnessed the destructive effect government intervention has on the delivery of charitable services. For it is my understanding that Catholic schools in NYC currently are "permitted" to operate in disobedience of a court order to hire those who not only don't agree with the Church, but in fact demonstrably live in rebellion to her (as practicing homosexuals, for example) in proportion to the number of such people in society at large. I believe His Eminence Cardinal O'Connor addressed this in the book he co-wrote with Mayor Ed Koch, "His Eminence and Hizzoner."

Finally, I was dismayed to be asked, during the Prayers of the Faithful at a recent Mass, to "amen" this: "that congress would act to provide healthcare for all....[with disclaimers for protection of life and acknowledgment of conscience]. " It was repulsive on many grounds, and bizarre for the reasons given above: why pray to enlarge government which is not only an offense to the principle of subsidiarity, it ignores the effectiveness of the market mechanism, is contrary to the virtue of personal responsibility, likewise contrary to the principle of limited government, which quenches the spirit of charity and indeed may even outlaw it, and which has set itself up in legal opposition to the Church?

Half-heartedness As A Geopolitical Strategy

How’s that for a headline? You’d think we’d know something about geopolitics, tossing around the twenty dollar word like that. But we don’t -- not too much, anyway. We do, however, know more than we’d like to about half-heartedness, as most probably do. And one doesn’t need any specialized education to know what sort of trouble half-heartedness gets everyone into. A little experience in the business of everyday life is sufficient to impart the lessons.

We all know what half-heartedness is – we’ve seen it in ourselves and in those we’d relied upon for something at one time or another. And we usually learn after a time or two of being disappointed by the same person or group or corporation or whatever that it just doesn’t pay to call on them to do anything. So after a few letdowns, we don’t bother with them any more. We find other ways of getting things done, and discount the credibility of the half-hearted one accordingly.

So why would we expect any different an outcome if/when America, under the leadership of its nominal commander-in-chief president Barack Hussein Obama, decides it’s time to “cut and run” from our commitment to Afghanistan. You know he’s going to, don’t you? There is already a democrat surrogate of his in congress bellowing about introducing legislation to tax Americans for the troops deployed there as if, all of a sudden, the cost of anything mattered to anyone in Washington DC (and that any such notion would be taken seriously in any other time and place besides this confused age). Well, it does when they’re trying to ram a regressive revolution in economics and government like “healthcare reform” down our throats.

Well, this is how politics operates: it’s very refined but no less blatantly passive-aggressive. Somebody stirs up some half-baked idea and the press repeats it until it becomes an “issue,” and then, why, the president’s hands are tied. He has to do something, for “the people” have spoken. Of course, they haven’t spoken at all, the media has spoken for them, and the media is simply the oracle of the administration. But that’s the mechanism, anyway.

So, we'd wager that next week the nominal commander-in-chief, from the vaunted campus of West Point, will begin describing the half-hearted geopolitical strategy that he has chosen for America. It will begin, probably, with a promise of fewer troops than necessary, than has been requested by the commanders on the ground who know what it takes to get the job done. And people will get the message. They will conclude that Barack Obama isn’t too high on America’s initiative in Afghanistan, even though he’ll pepper his presentation with lots of American-sounding high and lofty ideals about commitments and allies and liberty but oh, we need to take care of those in need here at home, beginning with healthcare for our veterans, etc. Surely you can come up with some drivel on your own that would be as close to what he’ll say as ours is. Talk is oh, so cheap.

He’ll have us cut-and-run, and we won’t be trustworthy in the eyes of those who might need our help, and we will have lost precious credibility – this from the man who’s self-appointed presidential mandate is “restoring America’s prestige around the world.” The ironies never cease, do they? Only they’re looking less and less like ironies, and more like outright falsehoods, the sorts of things that someone says when he’s saying what he knows you need to hear in order to consider trusting him while he picks your pocket as you’re thinking about it.

But it isn’t mere vanity to lament the loss of credibility and prestige, not in a world such as ours, where there are rogue warriors hell-bent on killing anyone and everyone who stands in between them and the worldwide implementation of their way of seeing things. Even before this was a problem, it wasn’t mere vanity. Credibility and prestige – and the means to back them up – are what prevent warrior rebels from gaining ground anywhere. They are a deterrent to bullies. And a deterrent to the use of force against bullies who assert themselves. But bullies are popping up everywhere, and the deterrent is becoming less deterring, and that only emboldens bullies.

A Meditation on Incentives

We've been hearing for years that "medicare is broke" and that the unfunded liabilities of this entitlement, and the Social Security system, are mind-boggling. These liabilities are promises to provide care and support for the elderly and the infirm. If this is true of these entitlements, it must also be true of state, municipal, and private systems that have made promises to the aging and the infirm: pensions and insurance companies.

When these claims began to surface, America was in the midst of a historical economic boom -- unemployment at historic lows, asset values at historic highs and increasing at historic rates. Assets, mind you, that are on the balance sheets of various pools of capital, including pension funds, insurance portfolios, etc.

Now, of course, the bubble has burst, asset values have been in a freefall for a year or more, unemployment is at near historic highs (for this is "the deepest recession since The Great Depression"). Pension assets have plummeted and we have plenty of reason to guess that insurance company assets have, too. The Pension Benefit Guaranty Corporation, another bit of moral hazard introduced by the Government to provide taxpayer bailouts to pensions that have been run into the ground, is said to be "on the brink..." History has shown that even private failures ultimately become government liabilities.

So, then, here we have the very real, actuarial problem of "unfunded liabilities." There is only one cure for this condition -- see to it that the liabilities are funded. And there are two ways to do this: increase funds or reduce liabilities. And the government has taken aggressive steps to do both. To increase funds, an all-out effort to create inflation has been undertaken, which would yield myriad taxing opportunities, if only the money would circulate. And to reduce the liabilities...

We said that the liabilities in question are the elderly and infirm. And from almost the moment of its inauguration, the Obama administration has been pushing with all its might by promotion, coercion, propaganda, and who knows what other means, a "healthcare bill" that has introduced into the lexicon of our age the concepts of "end of life counseling" and something called a "Complete Lives System" of healthcare allocation.

We've already begun to see -- in presumption of the passage of legislation giving the government this sweeping authority, despite the overwhelming objections of the American people -- the trumpeted release of "research" and "statistics" that prove, for example, that women really shouldn't bother with breast exams until they are fifty years old, rather than forty. It is chillingly obvious that this heavy-handed propaganda would lead to a larger number of deaths of women by breast cancer which would amount to...a reduction in the liabilities of the federal government.

So here we have an object lesson in how liabilities to the government can be reduced. And this monster isn't even law yet.

This is a meditation on incentives. We can see that the Government is "incentivized" to reduce its liabilities for its undeniably bankrupt entitlement programs and those it might ultimately have to bail out. It's right there in black and white. At a certain point, you're worth more dead than alive to your government. Giving it control over the delivery or payment of your healthcare is giving them that power. Underscoring the absurdity of the entire effort is the pretext of "fixing" these bottomless entitlements with...another entitlement ("free healthcare for all").

Not only do they regard you as worthless, they apparently regard you as stupid as well.

And you're OK with that?

Reality Checks

In a world going increasingly off the rails, we offer these occasional rants and reality checks as a public service.

Just how mad is the world? Or rather, how much madder is it since our last rant (what, three days ago?)? More importantly, is it correct grammar to nest question marks like we just did?

We'll discuss some recent happenings, and you can decide for yourself.

Item: A particular brand of baby crib has been on the market from 1993 to 2008. That's 15 years. It comes to light just now, a year after the model has been discontinued, that 4 babies have died wile sleeping in these cribs. Suddenly, the Government has risen to respond to this "outrage" and the offense du jour is the recall of these cribs. After 16 years?! It's been all over the news, what with interviews with outraged parents who can't get through on the telephone when trying to claim credit for the fifty or a hundred bucks they spent a decade ago for this crib.

To put this travesty in perspective -- in other words, to demonstrate just how ridiculous the idea of a recall and the ensuing public overreaction is, consider that more babies die in car crashes in a day (or less) in the United States than have ever died in all these cribs ever sold over 16 years. Where's the outrage?

And then, too, is this comparison: three babies will die each and ever minute of each and every day by abortion. This includes some babies who might have survived a mishandled attempt at abortion, and were killed after live delivery (a practice President Obama supports). Where's the outrage?

So, getting back to this crib thing, can you say, "manufactured crisis?"

Item: The pending "healthcare" bills before congress authorize the government and its agents to influence or make life and death decisions -- who gets what medical treatments, who is "worth treating," who should be thinking of getting his house in order with "end of life counseling" -- for the citizens of the US. This is unheard of and so clearly outside the proper authority of any just government. No wonder, then, it's being peddled as "healthcare," and that its supporters are sinking to unheard-of moral lows by declaring that "if this bill isn't passed, employers will begin denying healthcare coverage" -- an outright lie, a scare tactic. One must always ask the question, "why are they working so hard to make me believe this," when he hears something on the popular news channels, or when a politician's mouth is moving.

Let's consider precedent: you don't have to be a lawyer to feel your blood going a bit cold when you consider that Terri Schiavo was denied food and water by a court order in a very public legal battle that her loving parents -- and Terri -- eventually lost -- denied the right to feed their own daughter, here in the U.S. of A. (We acknowledge that the blood of most lawyers is cold to begin with).

Mind you, the state worked overtime to starve this woman to death, and simply would not, under any circumstances, accede to or acknowledge the principal of the sanctity of human life but instead relentlessly asserted its absolute authority to end a person's life on the flimsiest of legal arguments. The issue was simply the state's right to decide and Terri Schiavo was merely its prop.

Dear readers, do you need a roadmap to see the "moral hazard" such a precedent sets in a context of a government that has asserted on its own behalf the decision of who lives and who does not?

Dealing with It

I've accepted the new culture we live in. To wit, I've added a new greeting to my standard "how ya doin'," etc.

When I see someone who looks like a muslim, or, especially, is wearing a burkha or driving a cab, I point my finger at them, like it was a pistol, and say, "allah akbar!" with a wink and a big smile.

It's a blast -- no pun intended!

Things to like about Gov. Paterson

For starters, one of the first things he said as Governor was along the lines of, "I don't want this job." How many -- how many!! -- people in political power haven't lusted all their lives for it? How many of them don't fantasize about all the ways they can use it to their advantage, fulfilling all kinds of bizarre wants? So, Paterson might have lusted to be Lieutenant Governor, a cushy job with a salary, perks, a cool office and an official sounding title. But not the real thing! No way! That, in our opinion, qualifies him more than all the ruthless aspirants to power that hold every other elected position in the US. We acknowledge that's not saying much, but it's a key distinction.

Next, he doesn't seem to know the party line. Consequently, he doesn't spout it at every opportunity. The state is broke, he says it's broke. Budget cuts are going to have to happen, he say so. The halls of government resist them tooth and nail, and he says, "they won't let me cut the budget." That kind of candor is refreshing, and the people deserve it.

The next item follows from the previous: Obama doesn't like him. That's a really good thing for the institution of public service, even if it means Paterson has no political future. At least he isn't on Obama's string. On the "enemies list," perhaps, but so are a lot of good people.

Next: He took advice -- that means he's advisable, teachable, humble. At least it means he felt desperate, which is the opposite of arrogant, which, again, distinguishes him from every other instance of political animal we can think of. Right after his former boss, the disgraced barbarian Elliot Spitzer was forced out of office and into a sabbatical for whoremongering with a 23 year old "call girl," Paterson confessed marital infidelity right up front. Good move, if having to own up to such a disgrace can be called that.

Finally, he's got a loveable demeanor. Something about that look on his face makes him a great target for harmless jokes. He provides much-needed comic relief.

So, we're not saying he's a paragon of virtue, only that there are some things to like about the fact that he's governor. The biggest thing, of course, is that it means that Elliot Spitzer is not.

Loser-in-Chief (rant)

Dear Friends:

Your president is a loser. He's a spineless, grovelling incompetent. He is the very face of the worst possible outcome of affirmative action: the quota-in-chief. He's travelling at our expense all around the world, telling everyone who will listen that America is a terrible place that does terrible things -- isn't this exactly what Islam believes?

He doesn't understand America because he doesn't understand greatness. He doesn't get the virtue of "exceptionalism." He doesn't understand leadership by example. He's never been great, and never will be. We identified him as a "silver-tongued slacker" the first time we heard him speak.

He's an embarrassment abroad and at home. Abroad he slanders this great land and at home he and his team of hypecaffeinated malcontented radical power junkies brainstorm new ways to destroy it from within.

He's a disgrace and he's disgracing this country, and the sooner we can put this abysmal episode behind us, the better.

If we survive it.

Which we will. But in what condition? And at what expense?

Regards,

TOT

Not so Bullish After All

As we reminded our readers a few posts ago, ancient Wall Street wisdom teaches that “bull markets climb a wall of worry.”

We suggested that, what with so much to worry about, perhaps we should be on the lookout for a bull market. Not that we have any sane reason for expecting one. But that’s sort of the irony of the premise, isn’t it?

At any end, we got to wondering just how much of this substantial move from the pits of March to giddy days of this week was indicative of genuine market optimism, and how much was the simple algebraic readjustment of the numerator (the index) as the denominator (the currency) continues to shrink.

The answer is summed up handily by the following graph:

We simply grabbed daily closing data for the $/Eur and the Dow going back one year. We took the first day of $/Eur data to be the baseline and normalized successive $/Eur prices to it by creating a ratio of each to the baseline day. We then multiplied by the Dow by the successive ratios in order to adjust it for the changes in the value of the $/Eur.

Since the world didn’t end after all, at least not yet, we enjoyed a pretty nice bounce from March. But not as nice as it would appear in passing. All things being equal, there’s a sizeable correction in store in the Dow unless earnings can grow fast enough to cushion a realignment in currency rates, assuming there is one.

Everybody's really worried about the dollar, too...

Time again to play "Connect the Dots"

Dot: Michael Bloomberg engineers third term as mayor of New York. Some rhetorical resistance is floated, but no meaningful effort is made to rebuff this heretofore unprecedented (and arguably unjustified) claim to power.

Dot: Attorney General Eric Holder, a native of The Bronx, announces that the surviving engineers of the September 11, 2001 attacks on the US, currently designated as enemy combatants, will be tried as civilians in New York City. The decision is universally acknowledged as terrible idea by all except Mr. Brown, Mayor Bloomberg, and President Obama, and their cheerleaders in the media.

We always figured there was a good reason that Bloomy skated into an unprecedented third term as mayor, and that we'd eventually see the reason why. We consider this development to be the strongest contender yet for that reason. Bloomy clearly sees millions of dollars in revenue for the City -- and damn the risk to its citizens -- plus one really fat favor that Holder and the Obama administration owe him.

Holder, it can be reasonably argued, is greasing skids back home. And Obama? No clue. He seems to be obsessed with New York City, in a bizarre way.

We wish he would just leave us alone.

Dr. Jekyll / Adam Smith

There always seems to be a nasty backlash even to a man's noblest efforts. Perhaps this phenomenon is the evidence supporting the "Law of Unintended Consequences." Few would argue that Alexander Hamilton's "blessing," the Federal Reserve system, has been the enabler of prosperity without peer. But it has an alter ego, or at least an evil twin. Enticing as it is to man's base motives, stimulating the imagination with visions of "magic money," it is also the enabler of a debt burden so inexhorable as to be seen as nothing less than a curse to entire generations, generations which might not even have been born had the "blessing" of prosperity it brought been foregone to begin with. So the blessing has a dark side.

Adam Smith advocated persuasively for an "elastic" money supply, heeded so effectively by Hamilton, even as he did for the "blessings" of division of labor. We have seen the dark side of Hamilton's blessing. Dickens fantasies, along with the realities every assembly line everywhere have illuminated the dark side of Smith's ideas on the division of labor. Great levers of production and prosperity, these, and yet, not without unintended, unwanted consequences of at least equal proportion.

We recently recalled a conversation we had long ago with a truck driver who worked for what is probably the most enduring trucking company in existence -- it's still in existence today. He marvelled at a new set of instructions drivers had been given for handling their rigs. Apparently, running a loaded tractor trailer at low engine speed, in a high gear range -- known as "lugging the engine" -- uses less fuel. However, the practice also has a tendency to snap the engine's crankshaft -- a major repair that would entail a hefty towing expense and substantial failure in service for the on-board freight.

However, the bean counters at the home office had concluded that, given the costs of repairing such a breakdown, and the costs of fuel, driver's labor, etc. etc, against the probability of actually incurring the crankshaft failure to begin with, made economic sense. In other words, when it was all said and done, the data suggested that not enough crankshafts would be snapped to offest the fuel savings of "lugging the engine." This puzzled the driver.

As it would puzzle anyone except, perhaps, Adam Smith and the "learned." Why not? It's a perverse course of action: inviting the risk of destruction of assets and increased emergency repair costs, impairment of highway safety, disruption of employees personal lives, willful abnegation of service commiments to customers. Who benefits here? Who in his right mind would do such things to save money on fuel? A modern economic "thinker," that's who. And that's the dark side of Adam Smith.

And so, with this in mind, we might be able to comprehend just what sorts of ghosts are at work in the recent pronouncement by US Preventative Services Task Force -- whatever that is -- that it's better for women to have mamograms at 50, instead of at 40 as was previously recommended. The explanation was given that "as counterintuitive as it sounds, all the data points to this being better." OK, better for whom? The women in the 40 - 50 age bracket, or the Adam Smith's who work for the entitities -- public and private -- that write the checks for the mamograms?

The dark side of Adam Smith is perverse economic comes out in incentives pitting the interests of collectives -- that's a socialist term -- responsible for paying for services -- against those who receive the services. It's a division-of-labor from hell.

In the US currently, there is a private market for health insurance and so the competing interests of patients vs. payers isn't one of absolute dominance. Competition for customers forces insurers to provide something in return for their premiums. But what happens when the payer isn't just a company, it's also the supreme law of the land? In other words, when government dictates who gets paid what for which medical procedure, where does the patient turn for a fairer shake?

And when the government is forced to be more concerned with aggregates than individuals, with its balance sheet than yours, you can be sure that some pretty bizarre dictums are going to be forthcoming regarding the "efficient" delivery of healthcare, because what's good for the patient isn't what's good for the payer. Doctors will marvel, as they are at the new mamogram "guidelines," -- guidelines for now, but what happens when the government controls the delivery of healthcare? -- just as drivers marvelled at the dictum from on high to "lug the engine" even if it meant ruining a motor, delaying deliveries, reduced efficiency at all levels of service, inconvenience to employees and customers.

Below is the infamous "Complete-Lives" graph, which depicts the "probability" of getting medical treatment for any age, under the vision of government controlled healthcare espoused by Dr. Ezekiel Emanuel, health policy adviser to President Obama, and the evil twin of Adam Smith.

So you see, women over age 50 are substantially less likely to receive an "intervention" -- that's how Dr. Emanuel refers to medical care -- than those in the 40 - 50 age bracket. Fewer intenventions means less money spent. The patients, like the customers of that trucking company, be damned.

Oops, sorry.

Bloomberg reports:

Lawmakers were wrong to repeal the Depression-era Glass- Steagall Act in 1999, Reed said. At the time, he supported overturn of the law, which required the separation of institutions that engaged in traditional customer banking services from those involved in capital markets.

So we told Mr. Sandy Weill in an email a year or so ago. He never responded.

The Obama Doctrine

This week 13 US soldiers were shot dead at Ft. Hood, Texas -- that's on American soil -- by a Muslim screaming "Allah Akbar." President Obama held an emergency news conference during which he said, "Let's not rush to conclusions" about it being an act of terrorism. This is the commander-in-chief's message to the American people fighting a war on terror: "Let's not rush to conclusions." This is the Obama Docrine. And this is no way to deal with a terrorist enemy who is sworn to your destruction.

Note, now, that it's perfectly allowable to "rush" to pass a government takeover of the healthcares business, and that doing so is "the call of history." But when it comes to Islamic terrorism, when it comes to innocent people being shot dead en masse by crazed Muslim fanatics, no, we mustn't rush to conclusions.

Thankfully somebody rushed to put that raving animal down with 4 slugs, or the death toll would undoubtedly be much higher.

the smartest guys in the room

In the upscale neighborhoods of this city, the trendiest breeds of dog urinate and defecate on the sidewalk day and night. In the not so upscale neighborhoods, ungentrified by such fauna, human beings do it.

And the platinum-degreed-ivy-league kids still strut around on those sidewalks in shorts and flip-flops.

Ick.

Us and Them

Today's NY Post cites the following very pertinent event:

...A passerby less than thrilled with the Midtown shoeshine hustler's sales pitch yesterday "took his anger out on me because of his own dirty shoes," Ward sniffed.

The 43-year-old shoeshine pro with two decades in the business had gone into his usual spiel from his perch on West 47th Street and Sixth Avenue -- pointing out that the well-dressed man's leather kicks could use a $5 deep polish.

"Why don't you get an education, so you can get a real job!" the man retorted, before taking his swing.

Like many people of his generation, the "man" in question, the one who swung his briefcase at the head of the shoeshine vendor, has bought into the idea that a "real job" can't possibly involve honest labor and effort and that an "education" is what one gets when he is presented with a college degree.

This is patent nonsense and every disinterested observer knows it. It is common knowledge that a desk jockey is the most redundant of parasites on an economy and that a modern college degree is merely a certificate attesting to the ownership of liability for a portfolio of student loans with which the newly "educated" is to be burdened for the rest of his elongated adolescence.