Emigres

Everyone agrees that those applying to come to America must be vetted but there is a problem with those coming from Syria. ISIS has taken control of the printing press. The 17-page Homeland Security Investigations (HSI) Intelligence Report, issued to law enforcement last week, says ISIS likely has been able to print legitimate-looking Syrian passports since taking over the city of Deir ez-Zour last summer, home to a passport office with “boxes of blank passports” and a passport printing machine. Another passport office was located in Raqqa, Syria, which has long been ISIS’s de facto capital. News reports show that Syrian refugees are leaving the country with little more than the clothes on their backs and many have no papers so it is extremely difficult to vet these people. There is a lengthy process to vet most emigres but this has been by-passed for this group. Based on the above it appears that Syrians with proper passports may be a greater risk than those with none.

terror list

The United States started putting countries on the terror watch list in 1979. It started with Libya, Syria, South Yemen and Iraq. Later Cuba, Iran, North Korea and Sudan were added. Various countries have been on the list. Trump has added Somalia. Since Indonesia is the world’s largest Muslim country and it was not banned along with Afghanistan, Pakistan and the other 3 stans from Asia and Saudi Arabia and Kiewit this is not a ban against Muslims but against countries on the terror watch list. Recall that in 2011 President Obama stopped Iraqis from entering the US for 6 months. Back in 1979 President Carter banned Iranians from the US unless they opposed the Shite regime. The order was ruled unconstitutional initially by federal judge Joyce Hens Green, but was reversed less than a year later in September 1980. By then, almost 60,000 students were registered as requested, 430 were deported and 5,000 left voluntarily, PolitiFact reported.

MTM

When Winston Churchill said that they who stand and wait also serve, he was referring to the women of England. During the war women left their homes and went to work in the factories. When the war was over many gave up their jobs so that the men could have them. I recall women who said that they should not be taking a job from a family man. While this planted the seeds for the women’s movement the real impetus came in 1960 with the introduction of the pill. Sexual freedom opened the door to other freedoms and this led to women going back to the work force. Female power was illustrated on TV with shows like Bewitched and I Dream of Jeannie. These programs which ran during the 60’s showcased the new power of women using magic and while they were still in the home they had taken on more influential roles. Shortly after that the Mary Tyler Moore Show started and here was a real mortal, young, single, professional woman, out in the world on her own. After that a number of shows staring working single women taking care of themselves and children became popular. Shows like Kate and Alley, One Day at a Time, Alice, Cagney and Lacey and even Superwoman. TV led the way showing how the culture was changing and this led to the great progress that women have made over the past 40 plus years.

Press

Trump has done the national press a great service. He has awaken them from their slumber. Trump has called them the opposition which means that they have decided to assume their constitutional responsibilities as written in the first amendment. For far too long they have been sitting in their offices doodling instead of digging into government activities. Now as usually happens when the pendulum swings it will go too far but that is preferred over not going far enough. As they move further in to the new administration they will settle down and hopefully start challenging each new move by the government. It will be difficult for some to overcome their bias but most will be able to report based on what is happening not on what they wish was happening.

Delegate

Some political pundits have criticized Trump for allowing his National Security Staff to determine how prisoners are interrogated. Once again they seem not to understand how a businessman operates. It is a strength and a necessity that a manager have the skills needed to delegate. This is also a great way to motivate employees by giving them more responsibility and the authority to go with it.

Tests

Spending on K-12 education has increased 10 fold in constant dollars in the past 50 years. Federal control over K-12 education has risen dramatically in recent decades. Elementary and secondary spending under the Department of Education and its predecessor agencies rose from $4.5 billion in 1965 to $40.2 billion in 2016, in constant 2016 dollars.1 The Department of Education funds more than 100 subsidy programs, and each comes with regulations that extend federal control into state and local education.2 Scores on the SAT have sunk to the lowest level since the college admission test was overhauled in 2005, adding to worries about student performance in the nation’s high schools. You can argue that test scores do not tell the whole story but I have anecdotal evidence that things are not going well. One example is that freshmen must take algebra and many do not understand fractions so the teachers only give problems that have no fractions. This is the same state that you need to pass algebra to graduate but if you don’t you can take a state test and if you flunk it three times you pass. Thousands of freshly minted Minnesota high school graduates wouldn’t have gotten a diploma this year without a waiver from the state because they repeatedly failed Minnesota’s math requirement. In some districts, as many as one-third of seniors wouldn’t have graduated because they didn’t pass the mathematics graduation test.

GDP

When experts argue about the economy they present different picture and one is in the area of employment. One side says unemployment is very low at 4.7%. The other side says that the 20 million people who are no longer looking for work are not counted as unemployed. The answer lies in the fact that the GDP for 2016 was 1.6%. This is the result of all those people not adding to the GDP with their labor. The answer to the money problems facing the government is a 5% GDP. This will lower the debt and prevent cuts to social security and Medicare.

Plans

As a plant manager I was faced with how to handle plans for the installation of new equipment and it poses a dilemma. Since plans like this often change as they progress if you inform the people in the plant along the way it can give the impression that management does not know what it is doing. If you do not inform it is quite a shock when people come to work Monday morning and there sits a new machine that may be used to eliminate some jobs. I chose to reveal things as they happened recognizing that it was not a straight line but a zig zag of changing ideas and plans. Trump seems to prefer that approach also since the complaints against him are that he changes his plans as the program unfolds. Many politicians would be silent until the final plan was firm and the people would have to depend on leaks to find out what is happening. There is an upside downside to either approach.

Embassy

My theory on Trump trying to form an alliance between Israel and the Sunni Muslims against the Shia Muslims in Iran is in jeopardy with Trumps suggestion that he move the US embassy to Jerusalem. Unless!!! This is just another bargaining chip in his art of the deal. If and when they get down to the negotiating table will he keep the embassy in Tel Aviv as a concession to a bigger prize?

Rendition

Early in President Obama’s first term he ordered the CIA to follow the army field manual when it came to interrogating prisoners and thus stopped the procedure known as waterboarding. What he did not stop was the process of rendition which is still in force today. Under executive orders issued by Obama recently, the CIA still has authority to carry out what are known as renditions, secret abductions and transfers of prisoners to countries that cooperate with the United States. Extraordinary rendition, also called irregular rendition, or forced rendition, is the government-sponsored abduction and extrajudicial transfer of a person from one country to another.[1] It is most prominently carried out by the United States government, often with the collusion of other countries: overall, 54 countries are known to have been involved with US extraordinary renditions. In practice this means sending prisoners called ghost to a country like Egypt where they are interrogated using means not allowed in the United States. Ghost prisoners are subject to what the CIA calls “enhanced interrogation tactics”; most others call it torture. The CIA and their operatives’ methods allegedly include waterboarding, sleep deprivation, humiliation, physical beatings, electric shocks, and worse.

Business

Trump has just been presented with the prefect opportunity to show case his business skills. Yesterday the democrats proposed a one trillion dollar infrastructure program that would create 15 million jobs. Trump the plant manager should step up and congratulate them on their plan and how it shows their interest in economic growth and job creation. This is where he trades credit for results. Next he asks them to back his plan for the 15% corporate tax rate and this is how negotiations work. This businesslike approach to politics would so unhinged the entire Washington establishment that they would likely go apoplectic for the next year. That’s how you drain the swamp!

Vouchers

Trumps nominee for Secretary of Education is a proponent of school choice which includes Charter Schools and vouchers. While for people living in the suburbs or smaller cities this is not that important but for students in the inner cities like St. Paul things are quite different. Many of these students, through no fault of their own, have not been taught respect for authority and they can be very disruptive in the classroom going so far as to engage in physical violence. It is the responsibility of the teacher to promote a learning atmosphere in the classroom but that is difficult if even one student is disruptive and if more than one it become almost impossible. The serious students in these classes are not able to learn properly and they would be the likely prospects for vouchers. A voucher means that a certain amount of money spent on each student could be transferred to a school of their choice. In other words the money would follow the student. This is a pending disaster for many inner city schools. If serious students begin to leave the inner city schools for the suburbs there will be a black student flight similar to the white flight that happened years ago when many white people left the city and moved to the suburbs. The one impediment to this black flight is transportation as buses would not be available. Many concerned parents in the inner city are considering sharing in a car pooling to get better educations for their children. The problem with Charter Schools is that they are opposed by the teachers union. In public schools many children with various types of disabilities are main-streamed into regular classrooms. In many cases they have a special adult that goes with them but often they are in the classroom alone. This all depends on the ability of the child. This is costly and the fear is that Charter Schools would not accept these children but the laws as currently written forbid this type of selection. One of the reasons that the principals in the district I sub in loath the idea of expulsions is that each student represents $13,500. This is money that comes from government meaning taxpayers. Charter Schools get about $9,000. Their costs are lower because their salaries are lower and the number of non-teaching staff is lower and things like pensions and facilities cost less.

Style

As the interest in the new president takes center stage his decision making process comes under review. His thinking out loud by way of twitter is a constant source of consternation to many and often reveals his dependents on his instinct. His words go back and forth as his thoughts formulate but always his strong plan B is what his gut says. This style is even more difficult to understand since it follows President Obama who used the intellectual approach and rarely if ever used his instinct. It is reminiscent of Mike Tyson who said, “"Everybody has a plan until they get punched in the mouth." The times when Obama was punched he responded with more professorial rhetoric and if he felt punched he hesitated to show it. The name no drama Obama was appropriate on many occasions. While Obama may be criticized for avoiding his instinctive side Trump can revert too quickly to his plan B. While each of these styles differ what will matter is results. If Trump can bring back good paying jobs for the middle income people all his words will fade into the background. If he starts with a large infrastructure program which will provide construction jobs for many including those in the inner city, attitudes will begin to change. If he follows that up with a tax reduction then companies will bring back money held overseas and investments will blossom. With this new money and lower taxes companies will be encouraged to bring manufacturing back home. Lowering individual tax rates will put money into the hands of consumers and their spending will add fire to economic furnace. Sealing the borders will lead to legalizing those who are here and they can move from the underground network and join the tax paying work force. Revamping Obamacare and reducing regulations will free up corporate monies for further investment. As the economy reaches GDP growth of four or five percent, tax revenues will increase and this represents the best way to bring down the debt.

Mrs. Trump

I found it interesting how the press compared Mrs. Trump with Mrs. Kennedy. It seems most of the conversation was about who made their clothes. These two women come from vastly different backgrounds. Mrs. Kennedy was born into a wealthy family. Her father was a successful Wall Street broker who had a large summer home in the Hamptons. She attended elite private schools and married President Kennedy at age 23 shortly after she left home. Mrs. Trump was born in communist Slovenia and her father managed a car dealership and her mother sewed patterns for children’s clothes. She went to public school including one year of college. She was a model and was offered employment in NY City and at the age of 35 she married Trump. She is founder and owner of a successful business and she speaks 6 languages. The superficial way in which the press tends to report on these women is somewhat disturbing for those who are interested in advancing the cause of equal rights for women.

Intuition

It is becoming more evident each day that Trump relies more heavily on instinct than most. He has even given his cabinet appointees free reign so that they may fall back on their gut feelings. This can be quite effective for those who have good instincts. On a personal note I moved many times over the years and thus was involved in purchasing a number of homes and I always followed the same procedure. I would carefully evaluate each property based on its age, price per square foot, location, utilities, taxes and interest rates. At the end of all these calculations I eventually found myself sitting in a room with the sellers and the broker and after listening carefully to their presentation I would look at my wife and if she nodded I would say OK, we will take it. This always worked out pretty well so while my intuitive skills are not anything exceptional my wife seems to have the knack. Many successful business people use this approach and so experience does show that it works.

Oil jobs

I was watching Morning Joe and the subject was the new appointee for the EPA. He comes from Oklahoma and they said he was bought and paid for by the oil industry. They pointed out the air and water pollution in the state caused by the oil industry but the oil money using lobbyist has allowed oil to continue to grow. He listed statistics showing asthma problems and mercury in lakes and then said it is all about money. This is the kind of reporting we see all too often when it comes to climate change and because of it they lose credibility and it makes it harder to make the changes that are needed. What he did not say is that one half of all new jobs in the state over the past 20 years have been in the oil industry. This represents many thousands of high paying jobs for middle income employees. If the people of Oklahoma decide to get rid of oil that is OK by me but when reporting on the issue I believe it is important to mention the job lose

Health care

Here is a breakdown regarding health care. Employer 156 million Medicaid 62 million (including Obamacare) Medicare 43 million Uninsured 29 million Non group 23 million (those with individual private policies) Public 12 million (federal and VA) Total 325 million The Uninsured should be moved to Medicaid and this group should receive subsidies based on Obamacare rules. Medicare, individual and public should be left alone The employer group should use medical savings accounts and here is how these work. The average cost of employer sponsored health insurance is $18,000 per year for a family plan with employees paying on average $5,000 per year. The company can purchase plans with a $10,000 deductible for $5,000 per year and then put $10,000 per year for each employee into a health savings account. This will save the company $3,000 per year per employee and the employee will pay out of pocket for the first $10,000 of expenses each year using funds from their health savings account. Any money that is not used will carry forward and whatever is left can be used as a retirement fund. People will not use their health care without good reason and when they do they will shop around and the competition will hold prices down. Since people are paying upfront for most of their health care the need for filing insurance claims will only happen when annual expenses reach $10,000. With so many fewer claims the number of people handling claims will be greatly reduced and thus administrative cost will be lower. Providers will be happy since they will get paid when services are rendered instead of waiting for the insurance company. Health care professionals in consultation with patients will determine treatment instead of insurance companies. The additional cost of bringing the 29 million uninsured into Medicaid would cost 290 billion and if the employers put the $3,000 savings toward these cost that would be 468 billion and enough to pay for the newly insured. The downside is that millions in the insurance business and associated businesses will lose their jobs because there is no free lunch.

Putin today

Senator John McCain former navy pilot was on TV today talking about Putin. He said Putin order the bombing of Aleppo where innocent civilians were killed and he is guilty of war crimes. There are many crimes that Putin is guilty of but we must not throw rocks in our glass house. Beginning on December 18, 1972 American B-52s and fighter-bombers dropped over 20,000 tons of bombs on the cities of Hanoi and Haiphong. Did the North Vietnamese think that this was a war crime? Seeing different situations in different ways is not all that unusual. Here is a recent example. These are descriptions of two different countries. I have removed the names but these are treated quite differently by the United States. The __________ authorities have clamped down on all independent media. In 2015, numerous journalists and activists were arrested and harassed. All voices of dissent—journalists, academics and artists—face harassment, trumped up criminal allegations and accusations of being “undesirables” under _________ foreign-agent law, which stipulates that all media (including Internet sites) register as foreign agents if they receive any non-________ support. This effectively opens all independent media up to expulsion. Any actions “violating_________ territorial integrity,” such as peaceful protests or social media posts challenging the annexation, are subject to criminal prosecution. _______legal system limits civil and political rights, such as the freedoms of assembly, religion, and expression. Citizen opposition is seen as connected to a broader conspiracy against ______authority. Therefore, actions taken to compel political conformity—including torture, detention, and imprisonment—are justified based on a security rationale. In 2003, ______ charged and arrested seventy-five pro-human rights dissidents as part of a larger crackdown on civil society. The first is Russia and the second is Cuba.

Bunker down

As the results of the last election sink in both sides are bunkering down to defend their positions and they give no quarter. For a person who is not in either bunker the whole thing borders on the absurd. I am reminded once again of my ten years of experience in that Muslim chat room that I entered just after 9-11. The anti-American atmosphere was dominant and each day someone would bring up some past mistake made by the United States and there were many and then they would wait for my response. When I failed to defend some aspect of foreign policy they were disappointed. I told them that I am capable of thinking for myself and did not find it necessary to follow in lock step with everything the government did or said. I told them that in fact I am very suspicious of government and I don’t trust anything they say. I used the example that if it is 12 noon and some government official says it daytime I would go out and check. On my continuing journey to understand Trump I see him in the bunker sometime and other times he is out. I believe he will listen to as much advice as he can get and then follow his gut to decide. If he brings back good jobs and gets a 4 or 5% GDP everything else will go by the wayside. The one unanticipated road block that could arise is some world shattering event outside of the United States. This is always a hazard for any president.

China taxes

Today President Xi of China is in a big meeting in Davos preaching the Milton Friedman doctrine of free trade but he doesn’t mention that for years China manipulated their currency and to this day China taxes imports. The result is as follows: China is currently our largest goods trading partner with $598 billion in total (two way) goods trade during 2015. Goods exports totaled $116 billion; goods imports totaled $482 billion. The U.S. goods trade deficit with China was $366 billion in 2015. Friedman’s ideas on trade make sense but only when there is a level playing field and this does not exist between China and the US. China taxes many imports with an import tax but they also have a value added tax on all commerce including imports. This raises the prices of imported American goods and makes them less competitive. The low cost of goods imported from China is the result of cheap labor and other financial manipulations. The labor part is 40% and the other is 60%. The US cannot do much about the labor cost but can affect the other costs.

Circus

Over the years I have often read stories about certain animals going extinct and how steps were being taken to save them. One that got a lot of publicity was the giant Panda but there were many others like tigers and other African species. The loss of these animals never really affected me as I knew that I would not be taking any safaris but would be happy to observe these animals on video. As a kid I went to the circus a couple of times and there I saw animals without the expense of a trip to some far off place. Now the circus is closing and one of the reasons is that starting a few years ago they had to get rid of their elephants and these were a big attraction. It was pressure from animal rights people who cause the circus to make the decision to put the elephants out to pasture. Now future generations of children will no longer go to the circus and I wonder about this. Maybe they will just have to be satisfied seeing the circus on video.

Leaks

In watching the news over the weekend two separate instances caught my attention. One talking head reporter type said he had information from a source that is high ranking intelligence officer and another said that if Trump doesn’t get along with these people they will leak information that will interfere with his plans. If either or both of these tidbits of information are true what it says is that the agency feels that its view of things is more important than the view of the president. It is reminiscent of the feud that occurred between the FBI and the CIA while investigating the 9/11 attack. Protecting turf is getting in the way of doing the job.

Credit vs results

On the national quest to understand our new president the story of the ice rink is illustrative of his management style. The city was bogged down with cost overruns and delays in trying to build an ice rink. Trump went to them saying he could get the job done without any knowledge of rinks. He convinced them that he was the expert and then called a friend of his in Canada whose business was building hockey arenas and following his advice was able to complete the project on time and below cost. There is a pattern here of offering expertise to get the job and then finding others that have that same expertise and using them to complete the project. This can be seen in Trumps cabinet picks where he seeks not political knowhow but business acumen. In politics it is all about getting credit for things. That is way when one party is in the White House the other side becomes the party of no. It matters not what is good for the country but only to keep the credit from the other side. In business credit takes a back seat to results. The way a good plant manager deals with the union is to offer credit. The manager will tell the union that every time he goes to the home office and is able to get another employee benefit he will make sure that all employees know that it was because of the union that the benefits were provided. It then behooves the union to make sure the plant runs efficiently. The manager is results oriented not credit oriented. Most of the political guru’s still think in terms of politics when it comes to Trumps management style but he is a businessman first and knows the art of the deal is based on giving credit in exchange for results.

Free market

The difference between North and South Korea is often used to illustrate the power of the free market. The oft quoted story about flying over the two countries at night where the south is lit up like a Christmas tree and the north is dark makes the point in an easily understood way. Another nearby situation also shows the power of the free market. After WW 2 when China split the followers of one group were chased out of the country and settled on the island of Taiwan. The free market flourished and today they have $35,000 per capita GDP. Meanwhile on the main land under the communist rule of Mao things were not so good. GDP remained less than $1,000 until the private sector was opened for business in 1978 and by 1990 the GDP began to rise to the $7,000 it is today. China still maintains a communist government but they have allowed private business for profit to expand. When China allowed for the free market I was sure that communism would fall. I felt that once people tasted economic freedom they would want political freedom but that has yet to happen. I underestimated the power of the central government to control the lives of most people. They are being kept in check by a strong central leadership and the people are fearful of the government.

Ear marks and ethics

Years ago some guy named Lord Acton said power corrupts and this is never more evident than when one party controls the house, the senate and the White House. The first thing Republicans did when then got control was to introduce a bill to limit ethics control over their behavior but just as important was an attachment to that bill to bring back “ear marks”. For those of you who have forgotten what these little beauties are let me remind you. In public finance, an earmark is a provision inserted into a discretionary government spending appropriations bill that directs funds to a specific recipient while circumventing the merit-based or competitive funds allocation process This means that congressman Joe can put in a chunk of taxpayer money to build a whatever in his district so he can use that in his next reelection campaign. One of the main themes of this past election was getting rid of this kind of crap and the first thing they do is to try and bring back old crap. Prior to 2011 when ear marks ended spending was around 16 billion per year. Since that time congress has come up with ways around the law and ear marks have now worked their way to 5 billion and growing. Apparently the growth was too slow so they wanted to get rid of the ban. Fortunately congress was forced by public opinion to forget about this proposal but keep an eye open as they are always looking for ways to enhance their reelection chances.

Investigation

FBI director James Comey is being investigated for his revelation that his office was investigating aspects of Hilary Clintons emails. Comey reports to Attorney General Loretta Lynch. She was forced to recuse herself from the investigation because of an indiscrete meeting she held with Bill Clinton. She may have handled the situation differently and avoided this problem but if that is the case there could be tension between her and Comey. The result is a new investigation headed by the Inspector General who reports to Lynch and he will determine if Comey acted in the proper way. I would like to think that these people are above looking for pay back but if that is not the case Comey may be in for some surprises. Of course all of this is too little too late but it will continue to bring up more information about Mrs. Clintons emails and that can’t be good.

Big shots

We are all familiar with a case where some big shot is pulled over and says to the cop, don’t you know who I am. I see something similar happening with the national press. Throughout my life presidential candidates have always acted one way while campaigning and another way while governing and the press fully expected Trump to follow that pattern. Now the press expresses surprise when Trump does not change the way they expected, that he does not act as they say, “more presidential”. They are in a dither over this and I can understand that because they have spent their lives studying politicians and consider themselves the experts in this field and now their knowledge seems inadequate to explain the Trump phenomenon. One of the main things they cannot understand is Trumps propensity to tweet and here is where I see them acting like the fore mentioned big shot. They say that he tweets because it drives them nuts and his voters like it. Their conclusion is, doesn’t he know who we are!

Cabinet

The senate confirmation hearings for the new Trump cabinet are underway and one thing is concerning. When Robert McNamara gave up his $400,000 a year job as President of Ford Motor Company and took on the job of Secretary of Defense he was widely admired. No one suggested that he had a conflict of interest even though Ford had many dealings with the government. Trumps nominee for Secretary of State Rex Tillerson CEO of Exon is giving up his high paid job and his former salary and bonus is an active news item. There is no reason why he should not be fully vetted and questioned by the senate as should all the appointees but it would be unwise to reject him just because he is from business. In the early years of our country the elected representatives came from all walks of life but as time passed that changed. Today there is a whole class of professional politicians who maintain their positions using the power of incumbency and jerrymandering. They are reelected at a 90% rate and stay in the job for many years, some for a life time. It would be a refreshing change to see others who are not professional politicians get more involved in government. Perhaps Tillerson is just the beginning of others like him who will follow in his footsteps. The country voted for change and this could be one way of changing.

Tweak IRS

Many people are aware that the income tax laws are complicated and difficult for most taxpayers to follow. I offer one small example to illustrate the point. There are two main programs that offer tax credits for higher education expenses and they are The American Opportunity Credit and the Lifetime Learning credit. Both will reimburse for the cost of books needed in the course but the American Opportunity Credit allows you to purchase the book anywhere but the Lifetime Credit states you must buy the book at the University book store. Many students do not realize this and buy the book online and find out only when they file their taxes. How this happened one can only guess but it could be that lobby groups inserted this clause into the law to help university book stores. Imagine all the lobbyist working for various interest groups who are tweaking the rules in far more important ways.

Regulations

As I gear up for my 11th year of volunteering at the senior center to file taxes for people, I am once again reminded of the complexity of the tax code. Back in 2002 a big company named Enron cooked their books and caused a financial disaster for its stockholders and employees. They got away with this because they hired Arthur Anderson an outside accounting firm that colluded with them to cheat. To make sure this didn’t happen again the congress passed the Sarbanes/Oxley bill which is an 88 page document that has caused no end of problems for small companies who must hire experts to interpret the rules. In 2010 after the mortgage loan fiasco the congress passed the Dodd/Frank bill containing 2,600 pages of regulations which have hurt small community banks. These banks are overwhelmed trying to figure out the intricacies of this massive document. Before Dodd/Frank the five biggest banks held 10% of assets and after Dodd/Frank they now hold 50% of assets. So much for too big to fail which was the stated purpose of the law! The pages in the law are only a small part of the problem because after congress passes the law the various departments must implement and this takes many more pages. For example Obamacare is 2,700 pages but the regulations are now up to 20,000 pages with more on the way. We are provided with a separate booklet just for Obamacare. By the way the income tax code now has over 70,000 pages of regulations. Small companies once again must hire experts to file. The report broke down total Federal regulatory costs of $2.028 trillion this way: $1,448 billion for "economic" regulations, $330 billion for "environmental" regulations, $159 billion for "tax compliance" regulations, and $92 billion for "occupational safety and health, and homeland security (OSHHS)" regulations. This equates to $10,000 per employee or 12% of GDP. Maybe we can do more with less!

Replace Obamacare

Contrary to news reports the Republicans have two health care proposals to replace Obamacare. Price has one called Empowering Patients First and Paul Ryan has one called A Better Way. Empowering Patients First Act Price’s approach is comprehensive – his latest proposal totals 242 pages People would get subsidies in the form of refundable tax credits based on age, $1,200 per year for ages 18 to 35 and $3,000 per year for all over age 35. After being insured for 18 months pre-existing conditions are waived. This encourages people to maintain coverage. He proposes health savings accounts with pre-tax dollars and this tax break would apply to those covered by Medicare and VA. The federal government would provide grant money to states to take care of high risk patients. His plan would reduce the amount that companies to deduct for employee health care plans. He would remove single adults from Medicaid like it was before Obamacare and provide some government subsidies so that group could purchase private plans. He would allow purchase of private plans across state lines. He would allow the cost of insurance to increase as people get older since their usage would increase with age. Ryan’s plan would also provide subsidies for low income people but would push to privatize Medicare. Subsidies would increase as people get older and must purchase more expensive plans. Medicare already has a private side called Medicare Advantage plans and about half of new people signing up chose these plans. Ryan would set up insurance exchanges where people could chose Medicare coverage or private insurance.

Negotiating

On my continuing quest to understand Trump, I was reminded of a time in 1970 that I was sent to manage a plant in Alabama. The previous manager had been fired for various reasons and when I arrived a union had already gathered the 51% of signatures needed to call for an election. One two occasions I met one on one with the union organizer and it was, for me at least, a difficult situation. This man who was in his early 60’s was a challenge. He would be talking in a normal manner and then say something completely contradicting what he had earlier said. In addition he would change his mood going from calm to very excited. This back and forth both verbally and emotionally had me on a roller coaster. At the end of our meetings I left feeling totally discombobulated and having no idea what happened. As I look back now and as I watch Trump I am just wondering if this is some sort of negotiating strategy. In any event the union lost the election 136 to 92 but I attribute that to being in the south where unions are very unpopular.

Conflict

I expect that many in the press will be watching the new administration for any signs of conflict of interest but it will be an exercise in futility. First the law states that a President cannot have a conflict of interest. The theory behind exempting the President and Vice President from this law is that they need to carry out their constitutional duties without legal restraints. There is a law enacted in 1967 called the emollients clause that could come into play but the only way to restrain the President would be impeachment and that is not likely to happen since a majority of the house must approve and then 67 senators must approve. They would have to object to Trumps vast holdings when this was well known when he announced his candidacy Another law states that a president cannot hire his relatives. Since Trumps relatives will not need a salary he can use them for information, ideas and advice and just not pay them and this will circumvent the nepotism laws. The President can also send a private citizen to negotiate for him and some have suggested his son-in-law may be used in this way.

Single payer

If the main concern about health care is cost then the best solution is single payer or Medicare for all. The reason is that Medicare has about 2% administrative cost and private insurance is at 17% so there is a large savings available and this comes by eliminating about 5 million jobs. These are the people who are paid to handle claims. Clinics and hospitals have rooms full of people and every health care provider has one or more people who deal with insurance claims. The other way single payer saves money is by rationing care. When you have several choices you can change companies and this tends to keep benefits high. If Blue Cross says they will no longer cover transplants for people over 80 then you can switch to Aetna so they are loath to do that. With a single payer there will be no choice. Since a large portion of a person’s life time health cost occurs in the last few years of life this is where the big saving can be found. The country spends 3.6 trillion on health care and Medicare, Medicaid and VA account for 1.4 trillion leaving 2.2 trillion for private care. Saving 15% of that is 330 billion and if you divide that by 5 million that represents the $66,000 average salary of the 5 million who will lose their jobs.

Corzine

The former head of Goldman Sachs, Jon Corzine paid a 5 million dollar fine today to avoid going to trial. This was the result of a five year investigation by the government into the activities of Corzine when he was the CEO of MF Global. Corzine was forced out of Goldman Sachs and was worth $400 million at that time. He later became a US Senator and then Governor of New Jersey. He was defeated in his reelection campaign for governor and then went to MF Global. When Global went broke there was one billion dollars of investor’s money that disappeared and the government went after Corzine. To this day no one knows where the money went and the investigation ended when Corzine paid the 5 million dollar fine. Do the math!

New Obamacare

As the battle for healthcare looms on the horizon it is all politics. If this keeps up not much will happen until 2018 and by that time it will be in dire straights since insurance companies are in limbo while they await whatever is coming. When The President came up with Obamacare he stated he would prefer a single payer plan run by the government similar to Medicare. This was not politically possible so he settled for what we now call Obamacare. Medicaid which was the government safety net insurance for those who could not afford insurance was expanded. It was designed to help children and adults who had children. There were no pre-existing conditions clauses so many people waited until they got sick to sign up. Many others were not even aware of Medicaid or how it worked. When Obamacare came in it expanded Medicaid to cover all low income people including adults without children and it also raised the income limits for those who would be covered. A lot of advertising and other methods of reaching out were used to let everyone know about the new plans and about 20 million people were signed up. This included those who were already on Medicaid and many more who did not know about Medicaid. It was a solid benefit and it was either at no cost or at a lowered cost using government subsidies to make up the difference. The next income group that signed up were those who did not receive subsidies and it is this group that is now in trouble. These people are mostly in the middle income group and see their premiums rising and their plans have very high deductibles so they are paying out of pocket for most of their medical needs. One approach the new congress is considering is to reinstate Medicaid but include all the new members with all the existing subsidies. Then set up private insurance to cover the rest of the people relying heavily on employers to subsidies employees. With the benefit of hindsight it probably would have been better if this were done from the start. If companies are allowed to use Health Savings Accounts they can purchase major medical insurance with a high annual deductibles and then offer their employees assistance in handling their regular out of pocket medical expenses. If the Health Savings Accounts are set up so that money not used can be saved and added to retirement, then employees will shop around for their health care and use it wisely and this will tend to lower overall health care cost.

Major medical

There is an unwritten concept in insurance that says to self-insure as much as you can afford. In my early years in the business there was a very popular type of health insurance called major medical. It had a high deductible with a low cost. It was designed so that the consumer would pay out of pocket for most health care services and have a safety net to cover large expenses. These consumers would shop for their health care like they shopped for other services since they had to pay direct to the provider. The providers liked it because they got paid up front without having to wait three months for a check from the insurance company. For many low income people this was a burden since they might typically have to pay five or ten percent of their annual income to cover the deductible so they began to demand of their employers plans with lower deductibles and have the company pay part of the cost. These plans were reinforced through union negotiations and resulted in the typical plan with a small deductible, a small co-pay and a stop gap. As the third party payer, the insurance company, began to assume more of the cost the price of health care services began to rapidly rise. Obamacare has reversed this process by offering plans with high deductibles and lower cost with the added advantage of having the government subsidize low income people by covering the cost of deductibles and premiums so they have health care at no cost to them. For those whose incomes are high and are not eligible for subsidies these new plans closely resemble the old style major medical.

Croatia

happy new year to you too, I hope it started well and that it will be great year all the way through. Let me answer your questions. First, EU is not very happy with Trump as USA president. Why is it so? Because leftist media have been against him just like almost all media in USA and because leftists in Europe are very loud and influential. Is Trump good for Europe or not? I think there will be not much difference, the difference and deviation from EU interests might occur regarding Russia. But I am not certain about that in long term, because also EU badly needs Putin for many reasons, not only economical ones (war crysis in Syria, consequential migrant vawe, expanison of terrorists acts in EU and Turkey, Turkey's position toward EU and Russia etc.)... Russia (together with Turkey, which more and more becomes Russian ally instead of American ally, because USA supports kurdish groups which Turkey considers as threat to its national sovereignity) took over main influence in what is going on in the Middle East from USA. This is fact and I believe that Trump took that fact into consideration. Logical step from here would be, and it seems that it is, that Trump will try to cooperate with Russia regarding the Middle East crysis which part of EU won't like for sure. But I think that if we come out from point of political pragmatism, all 3 superpowers probably realised that not even one of them can act as single and that they after all depend on each others. Second: I don't really understand Obama's position at the moment, why is he supporting Clinton after everything is lost? She was his oponent once too and back then he was very critical about her support to Bush' escapades in the Middle East that caused mess that we all pay for today. Maybe USA not that much, but Europe for sure does. And third, I liked Obama, I didn't like Trump before elections but during election process I favorited Trump before Clinton. Why? Because I didn't find Clinton senciere and on the contrary, I found Trump very senciere and at the same time as huge pragmatic (so I doubt that he will expell all mexicans and so on from USA, he is too pragmatical for that). This might seem as paradox, how is one senciere if he speaks of one thing and does another? Well in my case I think that we all expected that Trump will speak of one thing and stand for another after he becomes president and we all knew exactly what will that be. So I hope that I am not wrong in this case. I don't think that it is smart if politician and his policies shift too right or too left, and last nominations for most important functions in USA do present some concern for me. But hopefully things won't bo into same wrong direction as they went in era of younger Bush. I think that Trump is simply too smart and pragmatical for that. I hope that I am not wrong. Minority of people, mostly those who belong to rightist political options or into political centre, feel the same as I do. But we will see, all options are open. As it comes to Russia, many of us don't like it, but it seems we will be forced to cooperate with it, like it or not, simply because we have to. Maybe someting good comes out of this, what do you think? Congrats for winning of your candidate, it was painful to watch protests in USA after elections, while Trump still isnt nominally president. It seems that leftists, same as in Europe, don't recognise democratically presented will of the people if it doesnt suit them. Here those leftists are mostly ex communists or parties with support of ex communist party and they mean nothing good for our prosperity and democracy. They still want to establish the system of priviledges for members of ex communist party and their children, grandchildren, political supporters and so on, in which democracy is obstacle and not goal. I hope that USA never witness that and maybe winning of Trump is good news in that regard too. Those who voted for Trump belong to middle class that was not heard from Clinton side. Those who protected against Trump have full asses of everything and don't have to struggle to survive themselwes and their families. Of course this doesnt mean that oppression of minorities is good idea, far from that, and I hope it will never happen. All the best in new year, I hope to hear from you more often!

Health insurance

One of the areas of change expected in the new administration is health care. Prior to Obamacare low income people had Medicaid that was started in 1965 and expanded and improved in later years. Medicaid provided low income people with health care that included preventive care, eye and dental care, prescription drug care and overall health care. There were no preexisting exceptions but the major weakness was lack of coverage for single low income people without children. Obamacare expanded Medicaid to include this group. Obamacare also increased the income levels for acceptance and attempted to standardize the various state laws into one federal law. For states that chose not to expand Medicaid coverage there are people whose income are too high to qualify for the old Medicaid but who would qualify for Obamacare if the state had expanded. Nationally there are 2.5 million adults who fall into the gap. Overall about 8 million new people now qualify for health care under Obamacare. One of the possible repeal and replacement options for Obamacare could be the reinstituting of the old Medicaid idea while incorporating the changes brought about through Obamacare. This would include the higher income eligibility and the allowance of 26 year old to remain on their parents plan. The rest of the population would be enrolled in private insurance with changes made to crossing state lines and limited legal liabilities for insurance companies. If such a plan is installed then Obamacare will have made a lasting improvement in the lives of millions.