Power And Dollar

Lay Taxes To Those Not Buying Guns? NRA Must Be Grinning

John Roberts acknowledges that the Obamacare is unconstitutional in the commerce clause.  However, Roberts upholds the Obamacare because it is constitutional to lay taxes to those who do not buy health insurance.  So, using John Roberts formula, can the federal government lay taxes on those not buying guns? 

It seems like John Roberts’ formula is: if it is unconstitutional to X and it is constitutional to lay taxes to X, then it is constitutional.  Better yet, can the federal government impose taxes to finance the rendition program? Or lay taxes to finance the eaves dropping?  To impose taxes if you do not perform birth control?  To impose taxes if you do not perform abortion?  To impose taxes if you do not send your children to public school (this is already in practice)?  To impose taxes if you do not send your children to home school (this is not in practice)?

If John Roberts’ formula has to be supplemented by the general welfare clause, then not much difference it would make, as Richard A. Epstein (professor of law at New York University and a senior fellow at the Hoover Institution) suggests in NYTimes on 2012.06.29: Congress has the power to “lay and collect Taxes” only in order “to pay the Debts and provide for the common Defence and general Welfare of the United States.” The congress still can impose taxes if you do not buy guns since gun ownership contributes to the general welfare, if you agree that more guns around means we will have less criminals around.  The newer formula can still apply to anything the Congress sees fit. 

Isn’t the case that whenever something is unconstitutional to anyone element of the Constitution, then it is constitutional?  Benjamin Franklin said: “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”  John Roberts reversed (or the converse) the reasoning and we get a wonderful universal health care.  At what costs?

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June 29, 2012 Posted by | activism, advocacy, america politics, Current Events, Democrats, opinion, politics, Regulation, Republican, Thoughts | , , | Leave a comment

Obamacare Makes Labor Market More Favorable To Small Businesses

 

Republicans champion capitalism, especially “the pursuit of happiness”.  For that, Republicans consider businessmen to be their safe constituents.  Is enabling small businesses to compete more effectively against the mega corporations something Republican look forward to?  Interestingly enough, Democrats are doing that this time instead of Republicans.  And that is through this Obamacare.

Extending health care to all is the idea of Obamacare.  Having this barrier to health care obviously gives an edge to someone.  In terms of politics (or policy), the question is always about who gets the advantage (or the disadvantage).  Prior the Obamacare days, the advantage is to the employers who can afford the administrative cost of providing a health care insurance to its employees, thus giving them an overwhelming advantage in recruiting and retaining the human resources they need.  This disadvantage suffocates small businesses and self employed.  Ultimately, innovation is sacrificed. 

Plenty of employees make employment decisions based on the health care package.  Many people give up their business dreams and stay as an employee because of the fear of not having health care for their families.  Almost everyone will be covered when Obamacare becomes effective.  Yes, the operating cost is higher for small business owners, however, this increase cost will draw the small business owners much closer to the advantage enjoyed by the mega corporations than if they acquire the health package alone.  In fact, only 38% offer health insurance to employees among the small business owners in 2009 versus 61% in 1993 (read here). 

If America’s small business owners’ talents for success are not willing to move to them and continue to stay in General Motors, ATT and like, then where is the next Google?

March 23, 2010 Posted by | activism, advocacy, america politics, Current Events, 美國, Democrats, economics, Election 2010, health care reform, nonprofits, obama, opinion, politics, Thoughts, US politics, wordpress-political-blogs | 1 Comment

Obamacare and Copenhagen Accord: Non-Events

US dollar continues its rise against Euro and British pound.  The recent news regarding the development of health care bill and Copenhagen accord did very little to reverse this movement.  Why does it matter?  What does it mean?

The appreciation of US dollar indicates the development of the Obamacare does at best not weaken the confidence of the US economy or even improve the fiscal deficit in the future years and at worst not prevent US from being the temporary safe haven being the money parking lot.  Similarly, since Copenhagen accord is not a binding document, it provides no teeth to decrease carbon emission.  Thus, the mod of economic activity will not run into the risk of major shuffling in the United States.

Certainly a series of quarterly earnings following Copenhagen accord in the United States helps.  However, Obamacare and Copenhagen accord could have set how the future game rules will be structured not only in the States but also in the world, only that the States may have to bear the biggest brunt of this episode. 

In particular, Obamacare is not sending health insurance companies’ stock price downward.  On the contrary, health insurance companies have been performing very well in light of the Great Depression.   Either the market has already factored in all the political risk premium or the market actually considers them as non-events thus far.

December 22, 2009 Posted by | advocacy, america politics, health care reform, opinion, politics, US politics, wordpress-political-blogs | Leave a comment

Obama’s Public Administration Philosophy

No polling result is available to serve as a reaction gauge to Obama’s Afghanistan deployment speech.  Obama was an anti war candidate.  Now he is making a deployment decision.  Is he contradicting himself?  What is he after?  What does it mean to us?

He is after his re-election, as every politician is.  Having said that, what also went on in his mind must have been the 2010 mid-term election, although he knew (and everyone else knew) that Democrats will lose seats in that election since all president lose seats in the first term’s mid-term elections. 

War is expensive.  Unemployment is still high.  He acknowledges with Eisenhower’s quote very well that “Each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs.”  After all, war is still a budget item. 

He is not appeasing his own base.  That is for sure.  Is he reaching middle ground?  Considering a much greater proportion of rural area voters have military ties, having a higher expense on military could be Obama’s way to secure a wider base.  But at the expense of sending more people to battle field?

Obama’s speech stresses on one point to justify his approach to this war: the primary nation of nation-building exercise is his own nation.  Will the rural electorate see this as a venue to reward Obama’s core constituency, the urbanites?  Of course, this will be dictated by what Obama will do with the resources or energy freed up by this management approach.

This Eisenhoweran philosophy is simply a reflection of budget constraint.  This is consistent with Nancy Pelosi approach to this portfolio item: war tax.  If you want it, then pay for it.  If you do not want to pay for it, then you probably don’t think it is worth it.  Will the war tax actually fly?  Hard to say.  However, if this Eisenhoweran approach to military conflict will be applied consistently over time and therefore will establish a new foreign policy doctrine, then this war tax idea will eventually take roots.  That will establish another kind of precedence: purpose dedicated tax.  Not that purpose dedicated tax is completely new since social security is funded by a dedicated tax as well.  However, this war tax will definitely take this idea to the next level. 

This is what affects us the most.  America is facing a fiscal crisis and will continue to face a fiscal crisis for decades to come even after paying down the costs incurred by the Bush’s Iraq war, Bush’s Afghanistan war and now Obama’s Afghanistan war, because of the expecting expenses for baby boomers.  Due to this budget constraint, conflicts different interests group will compete harder for this federal budget.  Purpose dedicated tax will then be the weapon for different groups to secure their own funding, especially for new issues, such as green issues. 

If Obama will be employing Eisenhower approach and Pelosi will be playing her cards, they will create a new policy management philosophy that will last long beyond their political accomplishments.

December 3, 2009 Posted by | activism, advocacy, Afghanistan, america politics, Current Events, Election 2010, opinion, politics, US politics, wordpress-political-blogs | Leave a comment

Did Centrists Republicans Just Defeat Obama-Care?

Democratic Senator Baucus is presenting a compromise health care bill in the Senate without public option whereas CNN reports that Obama is finally drafting his own version with a trigger for public option.  The Gang of Six has three Republicans.  They are: Enzi, Snowe and Grassley.  Grassley says in CNN that public option is Obama Care.  Now that Baucus proposal does not have it, Grassley and the like may actually have a way to claim victory that they will have defeated Obama Care.  If so, then health care will pass a giant step. 

 

With the sections 2701 to 2703 and 2706, 152, Baucus essentially creates an analogous health care version of Equal Credit Opportunity Act.  The impact of this idea will be long lasting, much more profound than Equal Credit Opportunity Act not because of any anti-discrimination, but because insurance business is completely centered on selecting good risks, i.e. choosing the less risky applicants, in any kind of insurance product.  One example is that insurers give a different price of life insurance based on occupation of applicant.  If you are a fireman, then your rate is higher.  If you are in the army, you rate is higher.  That is the reason insurance companies are not allowed to use DNA to determine price of health or life insurance.  Similarly, if you are younger, your auto insurance is higher.  While your age can be a factor in auto insurance application, your age cannot be a factor in your credit application, as prescribed by Equal Credit Opportunity Act.

 

This piece of legislation is about health insurance.  Therefore, life insurance can continue to legally discriminate life insurance applicants based on existing conditions. 

 

Health insurance companies underwriting procedures will have to change, industry wide, nationally.  Health insurers are Cigna, Aetna (NYSE:AET), Humana (NYSE:HUM), UnitedHealth (NYSE:UNH) Blue Cross Blue Shield (http://bcbs.com).  Here is an example: Just like some life insurers give better rates for their life insurance policies, some companies may have been marketing well among smokers for health insurance policies.  If Baucus proposal goes through, all health insurance companies may have the same application procedure to underwrite a smoker.  Smokers market is now thinner than before for this smoker specializing insurer.  We do not quite know if discrimination against occupation is covered by Baucus, or age or anything else.  However, a lot of compliance work will get involved in the future. 

 

How will it enforced?  Is Baucus planning to have Department of Labor to have a stronger role in health care enforcement?  Insurance is completely state regulated, for now.  Will this kind of enforcement be incorporated in Treasury? 

 

We will know by the time our speech entertainer Obama gives another performance tomorrow.

September 8, 2009 Posted by | activism, advocacy, Barack Obama, Current Events, 美國, health care reform, opinion, politics, Regulation, US politics, wordpress-political-blogs | Leave a comment

Will Obama’s Health Care Bill Be A Plagiarized Product?

If Obama is drafting his own version of the health care bill, and that CNN is correct regarding a “trigger option”, then at least Obama actually wants it done, although fairly late in game since almost no Republican is left for negotiation.  One good example: Grassley says he will defeat Obamacare.

This trigger option seems to suggest Obama will be plagiarizing Bipartisan Policy Center’s ideas.  In the world of policy development, being violated (the copy right of your policy idea, of course) is a good thing.  What does Bipartisan Policy Center say?  Why does Obama listen to this one?  Remember there are thousands of “think tanks”, advocacy groups and lobbyists who have plenty of ideas (guess where lobbyists’ policy ideas come from?).  So why Bipartisan Policy Center

Bipartisan Policy Center is created by all the living Senate Majority Leaders (Dole, Republican; Baker Republican; and Daschle, Democrat).  Taking their work probably does not only symbolize that Obama is buying a plan that has 2/3 of Republican input, but taking Republican ideas seriously into lasting piece of foundation to the country.  Is it a tactic or philosophic in substance?  Hard to say.  Does it increase the probability of getting done?  Yes, but how much?  That will have to depend on the sales delivery mechanism.  Will it be LBJ style where Obama will be calling each Congressmen, their donor, mother, children, gardener and babysitter?  Will it be an air war about Republicans defeating their own ideals?  It reads like Obama will want to avoid fighting. 

If you want to have advanced information about how this policy will affect your favorite health insurance companies such as Cigna, Aetna (NYSE:AET), Humana (NYSE:HUM), UnitedHealth (NYSE:UNH) Blue Cross Blue Shield (http://bcbs.com), then consider reading Pillar 2.  The main piece of recommendation from Bipartisan Policy Center that is related to health insurance companies such as is in Pillar 2.  If you want to find out how it will affect balance sheet of health care delivery companies (hospitals and so on) like Health Management Associates (NYSE:HMA), Community Health Systems (NYSE:CYH), then Pillar 1 and Pillar 4.  Pillar 3 has something interesting about laws concerning patients.  Of course all 4 pillars are important to all vested parties, be they practitioners, insurers, buyers, support systems (technology service providers).

September 4, 2009 Posted by | activism, advocacy, america politics, Current Events, obama, opinion, politics, US politics, wordpress-political-blogs | Leave a comment

Another Obama TV Performance? This Time, Health Care

Is Obama ready for a deal?  Unnamed senior aide says so to cnn.com.  Obama may be preparing another TV performance again.  We all know everyone in the country is vested in this issue, one way or the other.  The question Obama has to answer is: who else does he need to pull to his side to get this done?  Of course, an interesting question would be: Is he aiming to pass a health care reform? 

A lot of critics have already voiced their opinion (this one and this one) how Obama administration could have handled this debate better, more civilly so that the debate can have more substance. 

Let bygone be bygone.  Obama is only interested at the future anyway.  Which vested party will have a continual interest to fuel more grass root anger?  Not necessarily pharmaceuticals.  PhRMA is not that critical.  It is so uncritical that Republican would rather attack PhRMA’s position on Obama-care. 

As long as Republicans do not sign the legislation, the success or the failure of health care reform will make Republicans the biggest gainer.  In that sense, Republicans are the greatest stakeholder.  If health care reform fails, it certainly is a victory for Republicans.  If health care reform passes, this health care reform will provide ammunition for elections to come. 

Back to the pharmaceuticals, their interest lies in having more profit.  If the health care will expand prospective customers to enlarge their profits, they will be all for it.  In fact, this is how I would understand PhRMA’s website statement (this one and this one). 

Patients are voters.  In fact this issue will motivate a lot of voters, especially seniors.  This is where the upcoming Obama-care speech will be a major source of information.  When Obama will be talking to the voters through the TV box,
1) Who are the interest groups Obama will be talking to behind the text?
2) How is he creating dissent among the opponents?
3) Is he blaming someone else for the fear raised in the town hall meetings? Or is he explaining his position to overcome the fears?
4) Does he show a sense of prioritized items in this legislation?
5) Is he setting up an epic failure to harden his core support and lend a focus on something else?

Whatever position Obama will choose by then, he ultimate will re-structure the health insurance market, and possibly more than just the health insurance market.  Does anyone remember the last time a piece of legislation that affects the society in such scale?  It was the credit market.  Not anything caused by the 2008 credit crisis.  It was actually Equal Credit Opportunity Act enacted in 1974.  How long was that legislation? 8 pages.  How long is the current the congress is discussing?  >1000 pages.   Once it becomes clear what this health care reform beast looks like, it will become clear what kind of a world Cigna, Aetna (NYSE:AET), Humana (NYSE:HUM), UnitedHealth (NYSE:UNH) Blue Cross Blue Shield (http://bcbs.com) will have to live with.  Some will grow and some will shrink.  This is how political risk affects regulation risks.

Obama, in my opinion, is a pro-civil servant president, a contrarian position of Benjamin Franklin, if you remember Franklin’s Dangers of Salaried Bureaucracy.  Obama also enjoys eloquence argument (eloquent is not succinct).  Having a short legislation is easier to make it eloquent.  Of course, this is not a critical factor.  However, being short definitely makes it easier for the salesmen (congressmen). 

If Geithner will have to do financial sector regulatory reform, Obama can actually break this health care reform in pieces, in Federal Trade Commision, Department of Treasury, medicare and social security reform.  If Obama can be stealthier about this reform, he can accomplish more than anyone can conceive.

The cost to the society is high for this prolonged battle, may Obama be victorious or not.  Even Gore’s election loss did not generate such a polarized conflict over such a long period of time.  The last time an event generated such political energy was probably the 60’s.  If we employ this kind of analogy, then is this conflict between eggheads and the rest of society or is this a conflict between generations? Or is this a continuation conflict of the racial haves and have nots from the 60’s?

September 2, 2009 Posted by | activism, advocacy, america politics, Current Events, obama, politics, US politics, wordpress-political-blogs | 2 Comments

USA Election 2000 – Iranian Edition (And Your $$)

The Iranian election becomes another election mess.  The American (the first edition) version requires a Supreme Court to give a final answer.  Iranian one?  A Supreme Leader gives a final say. 

And the Supreme Leader says the incumbent wins.

In a situation like, just like the American original version, a decision made by that few individuals, the decision is ultimately political, whatever the cloak it is actually.  In the American original version, it is under the cloak of law.  In the Iranian version, it is under the religious leader’s cloak.  Note that the Supreme Court Justices are life time appointments just as well.

What ticked?  Not bribe.  As usual, what is the alternative of the decision?  Supreme Leader weighted between incumbent and challenger.  Who is a bigger threat to the Islamic Republic?  Or for that matter, to the power of clergy?

Challenger is always about “change”.  Incumbent is always about “you know what you get.  Don’t rock the boat.”  This applies to any institution (note, not necessarily a country), any selection process (note, not election), any candidate. 

The next question is: what about the protests?  Supreme Leader is confident he can manage the internal crisis.  If the protests get any worse, it will be between a Tiananmen Square (Iranian Edition) and End of Soviet Union (Iranian Edition).  Certainly, Supreme Leader thinks the worst scenario is Tiananmen Square.

Alright, so what does one care about this latest news episode?  Political instability drives up the prices of commodities, in particular, the commodities the geography produces.  So, in this case, oil.

Oil will become more expensive, if this goes on.  The only way oil does not increase further is traders believe the recession is so bad there is no demand for oil anyway, i.e. demand will decrease even if the quantity of supply is not being affected by the political instability of Iran. 

Oil exploration companies’ stocks go down (not up).  The core material of their product gets more expensive, so their profit margins get squeezed.  Consider the following company, BP:

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=1&chdet=1245437692449&chddm=10220&q=LON:BP&ntsp=0

The companies that get affected less so are the American oil exploration companies who have less exposure to Middle East (or think about the Canadian oil companies).  And if you happen to own renewable energy companies’ stock, you should see prices going up for your stocks.  Given today is Friday, one may be tempted to clear their stock inventory just in case the next episode of this Iranian Election comes up and affect the portfolio. 

The things that really distort the prices of stocks affected by Iranian election are: Obama’s announcement on health care and Obama’s announcement on the merger of OTS and OCC.

June 19, 2009 Posted by | activism, advocacy, Current Events, 石油, 美國, election, Electioneering, middle east, opinion, politics, wordpress-political-blogs | Leave a comment

CNN Advertisement: Time To Buy Republican

The author (John Feehery) of this CNN commentary is a political operative, lobbyist, etc.  He makes his living by using his access to the Republicans.  When Republicans are in disarray, so is his livelihood.  In order to drum up more business, he has to encourage his potential customers to spend money in Republicans.  This article is very consistent in his message about “bottom out”.  He also points out very explicitly that political entrepreneurs will see opportunities. 

He is also very good at organizing his advertisement into 5 bullet points.  These points are also in order to of investment relevance rather than political ideology relevance. 

All his points are very valid.  However, the advertisement taste is a little too obvious.

Since when CNN did distributing ad content in place of news content?

May 7, 2009 Posted by | activism, advocacy, Current Events, Democrats, fundraising, legislation, nonprofits, politics, Republican, US politics, wordpress-political-blogs | Leave a comment

How To Use Swine Flu

 

This swine flu became a real political event: California declared a state of emergency; Homeland Security is making moves; Obama is making another TV appearance again.  It so far looks like the market is reacting to the Fed statement rather than this health event.  Banks are up for 3%, S&P are 2% and medical supplies are only up 1.7%.  It is almost a drag in the market today. 

With this swine flu, manufacturers and distributors of over the counter medical supplies are of interests for products like hand sanitizers, wipes, over the counter drugs, surgery gloves, masks, etc.

Certainly, vaccine makers should go up.  However a lot few of those.

Also related industries would be hotel and tourism interests.  Retailers and mall operators which have a heavier geographic exposure in the southern states would get affected (Tex/Mex cuisine chains who have more sites in California and Texas, say).  This issue will fuel more talks around border control. 

Having a tighter border control can be used to divert the attention from gun control once people move their attention back to border violence (if there will still be), drug territory dispute.  We are more connected than before.  However, this forces lobbyist to be more creative to exploit the issue of the day.

April 29, 2009 Posted by | activism, advocacy, Current Events, 美國, obama, wordpress-political-blogs | Leave a comment