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My latest AIP column is up and it deals with the passage in the House of the Consumer Finance Protection Agency (CFPA) and how another alphabet soup agency will protect us from our own stupidity.

A sample:

I am often vexed lately when reading what our government is doing. On the one hand, I find it hard to fault the intentions of those who wish to make our lives “easier.” On the other hand, I want to throttle them for insulting my intelligence by proposing to do something for me that any reasonably aware 10 year old should be able to do for himself.

If the modern welfare state teaches us anything, it is that we must be cocooned and protected as if we were a newborn babe, or prevented from harming ourselves because we’re too stupid to know any better. It’s not enough that government warn us that the stove is hot. They must put on oven mitts for us and then place a 10 foot high sign in front of our face telling us not to touch anything.

I get this feeling of being patted on the head and told I’m a good boy when reading about the brand new Consumer Finance Protection Agency (CFPA) - another in a long line of alphabet soup government watchdog agencies who are ostensibly set up to protect us from rapacious corporations who would do us harm. And, as you might have guessed, the CFPA has also been constituted to protect us from our own stupidity.

In this case, it will be financial products from which we will be spared the consequences of any irresponsible, ill-informed decisions we might make. The stated reason is to prevent another financial meltdown like the one that occurred a year ago.

I am not against financial regulation - far from it. I am against government taking it upon itself to act as a knight protector against our own ill informed, lazy decision making.

There are already laws on the books to deal with unscrupulous mortgage consultants, crooked brokers, and other get rich quick schemers who don’t make any headway against those who conscientiously review and examine documents, ask questions, and generally take personal responsibility for their own decisions in financial matters.

If the crook lies, or misleads, he and his firm are not only liable for criminal penalties but losses can be recovered in civil court. The point being, we don’t need a whole new agency that will end up stifling financial innovation by limiting who can purchase complex financial instruments, while forcing financial institutions to offer “vanilla” products to consumers they feel are not savvy enough to understand risk.

Buying a mortgage is not rocket science. Sue and I took a night off from watching TV to read every word of the agreement, draw up a list of questions, and would not sign on the dotted line until every one of our concerns were met and questions were answered. We spent an hour with our insurance broker so that we completely understood that aspect of the purchase.

The potential for abuse by this agency is astronomical (the power to investigate and punish will be in the hands of the director - a political appointee). And there is the probability that fewer people will be able to get mortgages because the seller will not be able to offer a wide variety of solutions in order to get a customer into a home.

Credit cards are a different story, and I wholeheartedly endorse reforms in that area. But do we need a new agency for that? Or would common sense legislation that would prohibit industry practices that costs consumers and merchants billions of dollars in unnecessary fees be adequate?

The CFPA is good government gone wild. We don’t need it, and it should be defeated in the senate.

My new AIP article is up and it returns to one of my favorite - and scariest - policy subjects; the threatened disaster due to entitlement growth.

A sample:

There is a ticking bomb embedded in America’s future that is hiding in plain sight. Everyone knows about it. Everyone acknowledges its potential to do enormous damage to our economy. Everyone is worried that, if not defused, it will destroy the dreams and aspirations of future generations of Americans.

And yet, we continue to act as if we can’t see the danger. We pretend that we can continue to pass the problem along to the next administration, the next congress, the next generation of Americans, as if they will be any different and find the courage to face the cancer that is eating us away from within.

We refuse to address the issue of middle class entitlements and how their growth will eventually impoverish the nation. And every year we delay, the problems only grow worse.

Today, we live in the most affluent nation in the world. This is largely the result of our possessing a hard working, industrious, creative, educated middle class whose amazing productivity is the wonder of the modern world. But certain demographic trends are emerging - trends that no one can stop or alter - that will make it impossible for that same middle class to maintain their standard of living not so many years from now.

As James Capretta points out, writing in the new policy quarterly National Affairs, the middle class entitlements of Social Security, Medicare, and Medicaid were all predicated on a growing, prosperous work force. If that were ever to change, the US government would find itself in the same position that General Motors finds itself today; a company whose own health and pension arrangements with its workforce has bankrupted it…

Read that article in National Affairs by Capretta. Our problems arise because of a well meaning and compassionate government that sought to ease the retirement years of the Middle Class - the backbone of the country and those responsible for creating so much of our wealth. These pension and health insurance benefits were designed in another era, for another subset of demographics. When Medicare was first proposed, the lifespan for an American male was pegged at around 67. Now it’s 82 and couple that with a birth rate that has declined from 3.5 children per couple to around 2.1, and you see the crisis immediately.

More people are living much longer and being supported in their pensions and health care by far fewer workers. Something has to give somewhere, sometime, and it is going to happen sooner rather than later. Every year we delay dealing with Medicare and Social Security, the problems will only get harder to solve.

By the way, National Affairs is a great publication and you should bookmark it. It is the grandchild of the old Irving Kristol policy mag The Public Interest that I can remember back in the 70’s and 80’s going to the library to read every quarter because I couldn’t afford to subscribe. National Affairs didn’t disappoint. Still the same excellent writing, devotion to making issues clearly understood for the reasonably intelligent, and right of center slant.

In researching my latest AIP article on health care co-ops, I must confess that I wanted to like the idea. I didn’t know much about them but what I had heard was pretty good.

Here’s a reasonable analysis from the Heritage Foundation that finds some things to like but much more to fault with regard to health insurance cooperatives.

For myself, I am a firm believer in the concept of “simple is best.” All things being equal, whether it is in my personal life, or a government program, the less complex the idea, the better chance it has of working. This may sound stupidly simple but if you look at the way many people live their lives, they could benefit greatly by following that advice. Too often, we unnecessarily complicate our lives by overthinking, or overdoing.

With government, it is simply a matter of scale. Trying to serve 300 million people is, by definition, an enormously complex undertaking. So it would be with co-ops.

The plan is so nebulous at the moment that no one is really sure how co-ops would work in practice. Ideally, you would have 50 separate co-ops serving people in the various states. Some smaller states might band together to form regional co-ops to increase their marketing and distribution opportunities. The federal government would provide $3-4 billion in seed money to get the co-ops off the ground (perhaps more) and an administrative infrastructure for each co-op would either be set up by the state or contracted out.

Participants (”shareholders”) would sign up and purchase insurance through these pools. Policies would not be underwritten by private companies but by the co-ops themselves. It is assumed the government would grant generous tax subsidies to businesses and individuals to sign up with the co-ops and make them a going concern. Decisions on what to cover, and reimbursement rates would ideally be made by all the shareholders, but when you are talking about a statewide co-op, that will probably not be possible.

Would it work? Would the co-ops be able to compete with private insurance companies, forcing them to lower premiums while giving shareholders quality care at a reasonable cost?

The answer is almost certainly no. First of all, there is the titanic complexity of setting up so many co-ops in the first place. By definition, they would have different rules, different coverages (although guidelines from the federal government would help there). They would conduct business in 50 different ways.

Coverage would be wildly uneven and quality would also vary. Some - perhaps many - might not make it or be so poorly run that the government would have to take them over (The Washington, D.C. co-op was forced to sell itself to Humana it was so mismanaged.) There were many health care co-ops during the Depression that all ended up failing. And the record of co-ops begun in the last 20 years is very uneven with some succeeding, some failing, and some just limping along.

I think part of the answer is a matter of scale. The successful co-ops in Seattle and Minneapolis are small enough to be well run and large enough to spread the risk out over as many people as possible.

But what happens when you try and graft that model on to a statewide co-op? It won’t take for the simple reason that what is simple at the local level becomes devilishly complicated when you go from insuring 100,000 people to several million. Also, several questions would have to be raised; who elects the directors or would the governor appoint them? How can decisions on what coverages and how much that would be affecting a million or more people be made? Would politics enter into the running of these co-ops?

Co-ops would not adequately address the problem of insuring those with chronic or pre-existing conditions. And forget portability. Nor would they necessarily insure more of the currently uninsured. It’s hard to see how people would see a co-op - which after all, is competing with private insurance carriers - as any more practical or a better deal than anything they are presented with now. Without an individual mandate, there will be millions who simply refuse to buy insurance regardless of how cheap it is or how generous the subsidy.

Heritage’s Edmund F. Haislmaier thinks that there might be a minor role for co-ops in health care reform:

In the case of health insurance markets, there are two areas where the co-op model could conceivably be applied.

The first is with respect to entities that might organize the buying and selling of health insurance, such as employer purchasing groups or state health insurance exchanges. The second is applying the cooperative concept to one or more of the insurers selling coverage in the market.

The idea that businesses could pool themselves and purchase health insurance is an excellent one and is already being tried with liability and other forms of insurance on a micro basis in several industries. This also would be a complex undertaking but much less so than trying to set up statewide co-ops.

In short, the more I read about co-ops the more convinced I became that on a nationwide basis, it would never work to deal with the problems they would be set up to address and may, in many cases, make matters worse. It is possible that eventually, the federal government would be forced to take most of them over anyway.

I don’t necessarily buy the idea that co-ops are a Trojan Horse for a public option but certainly the potential is there for a de facto government takeover. It’s not the only reason to oppose their creation but it should be weighed with the rest of the complex problems that co-ops would create for both government and the consumer.

No, this isn’t exactly what I promised yesterday about what kinds of health reform I would support. This is a bare bones outline I did for AIP.

A sample:

So yes, we must reform the health care system. But let’s imagine for a moment that President Obama and the Democrats didn’t hate the free market so much and were willing to look at alternatives to what they are proposing that would mean less, not more government control, and allow the free market to do the heavy lifting in helping to bring down health care costs.

It’s not like there aren’t free market ideas out there to reform health care - despite what our president and the Democrats want you to believe. They are attempting to ram this health care reform package through the Congress while saying that their opponents have no new ideas to solve the same problems.

But covering the uninsured by making insurance affordable for all, covering those with pre-existing conditions, bringing down the cost of health care, and assuring that the patient, in consultation with his doctor, has the most control over his own treatment are goals that can be achieved more cheaply, and by using a mostly free market approach to reform.

Unfortunately, a completely market oriented solution is not politically viable or realistic at this time. More than six dollars in every ten we spend on health care in America is spent by government. Medicare, Medicaid, Veterans benefits, Indian health care, active duty military care, and the children’s insurance program S-CHIP are just a few of the programs that have skewed the market in health insurance and health care so that a purely free market solution is not in the cards. And doing away with these government programs - even if it were possible - would not be the answer.

But believe me, we can do better than what the president and the Democrats are proposing.

I then give a rudimentary primer on some of the alternatives.

As I said, it’s not very detailed and there are other reforms I would support. Unfortunately, I lost my internet this morning and it just came on about an hour ago so those who might be interested in what real health care reform might look like - from my humble point of view anyway - are going to have to wait at least another day.

Great discussion with my good friends Ed Morrissey and Rich Baehr last night on my radio show about what’s happening with the politics of health care. Rich, who has been a medical insurance consultant for more than a quarter century, sees a senior citizen backlash coming against the Dems. While Obama and the Democrats concentrate on convincing the middle class about the necessity of health care reform, the seniors are packing town hall meetings and expressing their outrage at the more than $350 billion in Medicare cuts. This will mean longer waits for care, doctors dropping medicare patients altogether, and generally lower levels of service.

Old people, Rich reminded us, vote - big time.

You can access a podcast of the show here.

I think very soon, the Democrats are going to have to decide whether to batten down the hatches and pass their idea of a health care bill, even in the teeth of some serious opposition. Or whether they should scrap what they have and start over with a whole new, much more modest approach. I don’t think they can get to “Plan B” from where they are now. They would have to construct an entirely new framework from which to begin.

It is not likely to happen unless support for their kind of reform hits the low 20’s in the polls. Right now, it’s in the mid-30’s to low 40’s which is bad but not political Armageddon. But support is not rising, it is falling. And the longer they dawdle in Congress, the more the opposition can muster its forces to defeat them.

Right now, I’d put passage of some kind of reform at 60-40 in favor. The only reason it’s that high is that Obama has yet to bring the full force and effect of his office into the debate. A president has enormous power and Obama has several hole cards yet to play. Town halls and speeches won’t get it done. He will have to do what LBJ used to call “the laying on of the hands.” For example, Congress may hold the purse strings but the president has enormous latitude about when those monies can be released. A road project in a member’s district may be held up (or expedited) depending on how that Congressman intends to vote. No matter how bad a member might think the public option to be, that kind of persuasion can work miracles.

If they ditch the public option, that 60-40 number goes up considerably. In the end, that’s what Obama might have to do to get something he can sign.

My latest AIP article is up, albeit with a different title: “CFPA Gone Elitist?” I like the title I gave my piece so there.

But really, if there was ever a case that revealed liberal elitism, snobbery, and their unshakable belief that they know what is best for everybody else because, at bottom, we’re just a bunch of goober chewing, gun toting, Jesus loving, inbred ignoramuses who can’t take care of ourselves, the proposed Consumer Financial Protection Agency is it:

The point is, Obama’s CFPA will play the role of National Papa by forcing financial services institutions - banks, mortgage companies, brokerage firms - to limit the sale of complicated financial products only to those customers who can grasp their complexity and hence, manage the risk.

This elitist idea is the result of the belief by some liberals that too many consumers were snookered by unscrupulous loan companies and bought mortgages that they should never have purchased. These sub-prime loans had balloon provisions that would kick in after a few years, dramatically increasing their interest rate and with it, their monthly payments.

No doubt some loan sharks did indeed either fail to follow the law and fully disclose all the risks associated with such a loan or simply lied. Laws are already on the books to deal with these criminals who prey on those who are less sophisticated in financial matters than others. Full disclosure laws have been a part of the financial industry for many years and there are clear guidelines regarding the disclosure of all risks and obligations of the consumer.

But that’s just not good enough, say the Daddy Staters. We’re too stupid to know what’s in our best interest and even if we read all the disclosure information, we’re too unsophisticated to understand it.

Enter the CFPA who will sit us down in the government family room not to help us make our own choices in financial matters, but to lay down the law and back it up with a shaving strop.

One of the recommendations to financial institutions who will segregate their products into easy to understand, “vanilla” offerings and more complex instruments, is to give consumers a test to weigh their knowledge of financial matters in order to determine whether they are capable of getting a home loan or purchase some other financial instrument.

Neat, huh?

The problem is that if a financial company sells a more complex offering to a consumer and it goes south, the customer can go running to the CFPA with a complaint or sue. In other words, if you like medical malpractice, you will love the new CFPA.

I would be unable to pass even a beginner’s test on financial matters. And devising a test to measure if a consumer has the knowledge to “understand” the risks involved in buying a product will be an interesting exercise. If they make it too easy, they leave themselves open to trouble. If they make it too hard, they lose a lot of business.

There are other problems with the new agency as well. Read my whole piece.

My latest piece is up at AIP and its about how health care reform reminds me a lot of my ex-wife:

I think it would be extremely helpful if Americans began to think of President Obama’s health care reform proposals the same way I think of my first wife. The more you know about it, the less you like it.

And the fact that it lacks common sense, spends too much of your money, makes decisions that would be better left in your hands, and is attractive on the outside while being insidiously rotten on the inside is also reminiscent of my former beloved, although at least my ex-amour was a great dancer and a decent cook. Otherwise, I would recommend a Vegas divorce for this monstrosity of a bill.

One of the major selling points that the president used for his national health care reform was that it would lower insurance premiums substantially. He promised on his campaign web site, in the second presidential debate, and in the third debate:

“If you have health insurance, then you don’t have to do anything. If you’ve got health insurance through your employer, you can keep your health insurance, keep your choice of doctor, keep your plan. … And we estimate we can cut the average family’s premium by about $2,500 per year.”

We Americans can be a pretty cynical lot when it comes to believing politicians so it is a wonder that we actually fell for this little prevarication from Candidate Obama.

We know now that the prospects of keeping your insurance depends on how willing you are to overspend for it. That’s because Candidate Obama’s promise to lower your premiums by $2500 are about as believable as my ex-wife’s explanation for why she spent $1500 on a dress. “But it was on sale…” just doesn’t cut it.

Supporters will probably tell me I’m all wet, that we will save money on our premiums, that we won’t be forced on to the government plan, that costs will come down simply by government waving a magic wand,…

Sorry, but you can spin what’s in the bill all you want and it won’t change the practical effect of what is implied in adopting many of the measures in the bill. This is what supporters refuse to address.

Is there anything in the bill that would require you to drop your insurance that you have now? No - but the practical effect would be to make it prohibitively expensive and force you to choose less coverage for more money - unless you are eligible for the subsidy that doesn’t cover you if you’re part of an employer based insurance plan.

Faulty numbers, insidious requirements, stealth mandates - its all there.

Do I have a viable alternative? No, I don’t. But others do and, as I have said before, it is criminally negligent of the Democrats to present this monstrosity of a bill as the only alternative - that there’s no other game in town. Baucus is looking at some of those alternatives as I write this, although without including a public option in his compromise, it is doubtful that Obama will sign it much less the liberals in the House support it.

I have to believe there is a third way - somewhere. There has got to be a combination out there of public and private that will cover the uninsured and those with pre-existing conditions, bring down costs intelligently, while keeping the best of the private health care system in place, and not cost us $1.5 trillion I refuse to believe that this is not possible - even in our current partisan atmosphere.

I agree we cannot go on as we are now. Those who say we don’t need reform are crazy. Rising health care costs will bankrupt us in 20 years. But to support this bill is to support catastrophe for our health care system as well as for our fiscal situation. Don’t believe me? Ask other Democrats who are the ones standing in the way of passing this bill, not Republicans.

Don’t tell me this is as good as we can do “realistically.” I don’t believe that for a moment. They are big boys and girls in the White House and Capitol Hill. If things are as bad as they say - and they are, except it’s not quite the “emergency” we are being led to believe - then the judgment of the people who believe that this is a crucial issue will be severe if nothing is done.

And, I daresay, the blame will go to both parties. The GOP cannot be accused of “obstructionism” - not with the gigantic Democratic majorities in both chambers. But they will be blamed for not offering solid alternatives. Republicans should be out there every day touting their own plan. Instead, they have decided to treat it as a PR gimmick rather than a serious legislative initiative.

And I will repeat - Obama is not taking the lead on this as he should. He is not being realistic in his criticisms, nor is he doing much besides jawboning from the sidelines. His one effort at compromise - the health commission - was shot down by the CBO as being meaningless in controlling costs. Face it- the guy is an empty suit; all talk and no action.

In that respect, if health care reform is dropped or goes down to defeat, President Obama will be as much to blame as anyone.

My latest column at American Issues Project is up where I write about health care rationing.

A sample:

If one were to calculate the value of all the minerals and chemicals found in the human body, we’d be worth about $4.50 (add $3.50 for the 18 square feet of skin that holds it all together).

A paltry sum, to be sure. But there’s another way to calculate the worth of a human being. If one were to total up the value of all of our organs and other salable elements - what they’d fetch on the open market - our bodies would be worth considerably more. Our bone marrow alone would fetch $23 million. Our DNA would be worth a cool $9.7 million.

Our organs are pretty valuable too. Need a little extra cash? Selling your lung would net you a fast $116,000. Losing your heart would gain you $57,000.

Add it all up and you’d be quite a catch as a prospective mate. There’s $45 million in you just waiting to be mined, bottled, and sold, which is a nice number but probably won’t give you much comfort if you actually try to cash in while you’re still alive.

Then there’s another way to determine how much a human being is worth, coming soon to a hospital near you — the government way. Not surprisingly, the way the government will figure how much someone is worth is not by figuring the value of your limbs, or organs, or what Uncle Sam could get if they mined the potassium out of your carcass. They won’t calculate how much you have contributed to society in the past or how much you might contribute in the future.

And you can bet they won’t try to calculate how much you’re worth to you spouse, your kids, your family, your friends, or your community.

The government will determine how much a human being is worth by calculating how much of a drain on health care resources they will be.

Oh, but don’t worry. It will all be couched in nice, soothing language like “quality adjusted life years” or “comparative effectiveness research.” Anything but what it is; the government deciding which of us gets life saving or life extending treatment and which of us fails the tests.

Read this Eric Erickson article at Red State. These people are dead serious. I’m not sure about the cite from the bill being an accurate representation of what it is meant to be, but it matters little when creepy crawlers like Ezra Klein, Matt Yglesias, and “Utilitarian” philosopher Peter Singer are all inferring that their idea of rationing is determining if someone’s life is “worth it” when deciding whether to give life saving treatment.

There are monetary considerations (rationing) already used by insurance companies to determine some care options. But I’d rather have some green eyeshade guy working in the private sector worried about me or my family suing the crap out of his company making that choice rather than a “bureaucrat with a slide rule.”

As always, please read the whole thing.

President Obama has discovered a spending program he doesn’t like. It’’s crop price supports and other subsidies that go to farmers - most of whom don’t need them or shouldn’t be getting them.

My latest column at American Issues Project examines the outdated notion that farms need and deserve subsidies:

Thank Thomas Jefferson for the nearly $17 billion we taxpayers are forced to shell out every year to subsidize two dozen commodities with price supports, as well as billions more for a complex of interrelated agricultural benefits for everything from crop insurance to irrigation payments.

It was the Sage of Monticello, gentleman farmer, tinkerer, and agricultural scientist, who envisioned an America of “yeoman farmers,” whose industriousness, virtue, devotion to the land, and love of freedom would one day extend coast to coast in an “Empire of Liberty.”

Jefferson offered this vision as a counterweight to Alexander Hamilton’s money grubbing commercial ideas of factory owners and shopkeepers running the country (along with stock jobbers and speculators). The two great visions of America have clashed since our founding, with Hamilton’s ideals eventually winning out.

But the romanticized Jeffersonian vision of the small farmer, battling Mother Nature and the land itself, has never quite died the death it should have. Hence, beginning with the New Deal, farmers have been given special treatment by the government in the form of price supports that place a floor underneath commodity prices. And most of that taxpayer cash goes to “farmers” who are quite far from Jefferson’s yeoman farmer vision. In fact, it was discovered in 2007 that about $1.3 billion in farm aid went to people who didn’t grow or produce any agricultural products at all, while another study in 2008 found that two thirds of the subsidies go to just 10% of all farmers.

Subsidies costs us hundreds of billions in increased food prices, taxes, and lost exports as other nations raise huge tariffs on our farm products to keep them off their grocery shelves. Poor people around the world suffer as well because subsidies not only make food more expensive but also drive them off the land because they cannot compete with western industrialized agriculture.

Read the whole thing.

Two unlike subjects but don’t worry, they are the subjects of two different articles.

First, my weekly PJ Media column is up and you’re going to love it. I will give you the last graf so you will be forced to read the whole thing:

But when the stakes are this high — not just for the Iranian demonstrators but for the U.S., the Israelis, the region, and the world — I am willing to cut the president a little slack and recognize that while we all want him to say what is in our hearts about freedom and justice, his response so far has been about as good as we can expect.

The piece is self explantory. I will have no further comment.

Now for a piece of good news. I have been hired on as a weekly columnist at the excellent site of an excellent organization.

The American Issues Project will feature a little different material from me. Instead of the usual political blather you are used to, I will put on my wonk cap and concentrate on delving into many of the issues facing us today.

A sample from my first effort, “Public Pensions, Public Crisis:”

Trillions for banks, hundreds of billions for car companies and other poor little rich corporations — one wonders when we taxpayers are going to stop being so generous with our hard-earned coin. I am sure these giant corporations are overflowing with gratitude for the beneficence we have bestowed upon them, no doubt dreaming up ways as I write this that they can show their appreciation for our generosity.

Don’t hold your breath, though.

Bailing out failed corporations is one thing. Politicians are famous for being generous with money not their own. But the money in taxes we and generations of Americans yet unborn will be forced to part with as a result of the foolishness, chicanery, and procrastination of our state and local officials who deal with public pension funds will probably make us pine for the days when the Federal Reserve only had to print a few hundred billion or so to enrich a few bankers.

In truth, the “Time Bomb” of underfunded, overly generous public pensions, which many observers have been predicting for years, appears ready to blow up in our faces. Recent losses in the stock market have devastated these funds to the tune of $2 trillion, monies for which we taxpayers are still responsible. And considering that more than half of these plans were underfunded to begin with, we are faced with a potential tsunami of pension fund failures that, by law, taxpayers will be forced to make right.

Read and enjoy.