Where Are My Keys?

Of course they didn't have an answer for Ryan, because answering honestly would have ended the debate..

Paul Ryan (R-WI) may have had his 15 minutes today.

The Democrats are touting an estimate from the Congressional Budget Office that their health-care bill would reduce the deficit by around $130 billion over the next ten years. What Ryan pointed out — and what no Democrat even attempted to counter — is that this is because the legislation front-loads tax hikes and Medicare cuts and defers costs, forcing the CBO to score ten years of offsets with only six years of spending. Looked at on a level playing field, the true ten-year cost of the bill is $2.3 trillion rather than $950 billion, Ryan said.

Then he brought up another gimmick: The bill is full of double-counting. “Savings” are counted as offsets for new health-care spending and at the same time set aside to pay for future entitlements. For instance, the Democrats claim $52 billion in offsets as a result of increasing Social Security payroll-tax revenues. But these dollars are already claimed for future Social Security beneficiaries. They can’t pay for both. The Democrats take another $72 billion in premiums intended to fund a new long-term-care program and count them as offsets for other spending. Ryan pointed out that Senate Budget Committee chairman Kent Conrad has calledthis “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

Perhaps most important, Ryan confronted the Democrats with the issue of the “Doc Fix” — a separate bill that would have added $371 billion to the Democrats’ legislation if it hadn’t been stripped out. The Doc Fix would have prevented Medicare reimbursements to doctors from plummeting by 21 percent, a drop that Congress put into the bill to improve its CBO score but never planned to allow, most political observers agree.

Obama responded to Ryan by saying he didn’t want to get “bogged down” in a debate over the numbers; instead, he dared Republicans to defend Medicare Advantage, the program Democrats are planning to cut in order to generate some legitimate savings to pay for their new programs. But the merits of Medicare Advantage are irrelevant to Ryan’s critique, which, put simply, is:

1. Obama said he wouldn’t sign a bill that adds to the deficit;
2. The bill he supports clearly would; even though
3. Democrats have rigged the legislation to produce a deficit-neutral CBO score.

Rep. Xavier Becerra(D., Calif.) was the only Democrat who really attempted to address Ryan’s critique. First, he implied that Ryan was trying to question the integrity of the CBO. But Ryan’s critique calls into question the Democrats’ integrity, not the CBO’s, by pointing out that the CBO’s analysts must by law score what is set in front of them, and that what the Democrats have set in front of them is full of gimmicks designed to hide the cost of the bill.

Second, Becerra attempted to address the argument that by delaying certain spending provisions, the Democrats have hidden the bill’s true cost. He pointed out that the CBO has estimated that the Democrats’ bill would reduce the deficit by 0.5 percent of GDP in the second ten years, when all the spending would be included. But he failed to mention that the CBO’s estimate included the following caveat: “A detailed year-by-year projection for years beyond 2019 . . . would not be meaningful because the uncertainties involved are simply too great.”

Neither Obama nor Becerra — nor any other Democrat — addressed the issue of double-counting. And the only response to Ryan’s point about the Doc Fix was a rather oblique statement by Obama that “if what you’re saying is that we can’t make hard decisions on entitlements, then we’re in big trouble.” In fact, that’s exactly what conservatives have been saying: Not only can’t the political class make hard decisions on entitlements, the Democrats are trying to create a new entitlement and hide its cost. And if they succeed, we are in very big trouble.

 

 

There was no answer to Ryan's questions, because by doing so, the Democrats would be forced to admit their "plan" is full of gimmicks, double-counting, and impossibilities.  So they did the next best thing, and spoke about "difficult choices on entitlements", and questioned his "attack" on the CBO.

The American People are smarter than Democrats (I'm looking at you, Valerie Jarrett!) give them credit for.  They recognize that Obama is using "fuzzy" math.  They don't trust the numbers coming out of this Administration (does the phrases "jobs saved or created" and "if we don't pass tis bill, unemployment could go over 8%" ring any bells?).

The Democrats needed the Republicans at the Summit to appear frothing at the mouth, with bad questions, and nothing to add.

Instead, they got a group that more than held their own, and didn't look like the wild-eyed, "Party of No" that the Left has been painting them as.

I'd score it the same way as others have.  Obama 1, GOP 1, Democrats 0.

Obama performed as expected.  He's a great debater, and held his own (even though when the going got rough, he took his ball and went home from that questioner).  He did have one "dick" moment, with John McCain.  Totally unnecessary, and unbecoming of the President.

The GOP did a great job as well.  Nicely crafted questions, put forth in an easy to understand manner for the television viewers.  They presented their opposition in a clear, concise manner, while being respectful.  If you knew nothing of this health care issue, and your first glimpse was this event, the GOP came off like a Party that had a strong grasp of the issues.

The Democrats (not including the President) came up way short.  The ridiculous examples of constituents that had been affected by not having coverage was 100% for the cameras, and came up flat.  The Denture story?  Seriously?  Stuff like that had no place in this forum.  This was to hash out differences in the details that were blocking the bill from bipartisan support.  Stories like Aunt Marge's dentures had no place in the discussion today.  That belonged way back in the discussions on the floor.  At the Town Hall meetings over recess.  Not here.  Had it been one instance, it could almost be looked over.  But the Democrats in attendance seemed to be almost trying to outdo another Democrats tale of woe. 

I'll point to the last paragraph as being one of the main reasons the current bill has so little support by the general public.  Republicans have been pointing to questionable accounting practices, inability to explain the "math", and an overall concern on the people of how we pay for this entitlement.  All Democrats seem to have been able to do is point to stories like Aunt Marge's dentures. 

I don't know of anyone that doesn't want people to have quality health care.  I don't know of anyone that wouldn't want Aunt Marge to have her own dentures, and not her sisters old set.  What people on the far Left don't seem to understand is that at some point this all needs to be paid for.

The Democrats (again, not Obama) did a poor job arguing their case today.  And that is why this bill will not pass. 

Need more proof that the Summit wasn't a slam dunk for the Democrats?  Check the front pages of CNN, MSNBC, CBS.

Not a whole lot of chatter about how Obama made his case, is there?

 

CBO numbers pre-ordained?

One thing I have learned about the CBO over the last year, is that while non-partisan, it is still operating somewhat at the "mercy" of the President.  People smarter than me that know economics and how the CBO and Administrations work offer this upon how the CBO has come to the conclusion that the Stimulus "worked":

The Congressional Budget Office (CBO) has produced a new reportestimating that the $862 billion stimulus has thus far saved or created 1.5 million jobs. Yet the CBO’s calculations are not based on actually observing the economy’s recent performance. Rather, they used an economic model that was programmed to assume that stimulus spending automatically creates jobs — thus guaranteeing their result.

Logicians call this the begging-the-question fallacy. Mathematicians call it assuming what you are trying to prove.

The CBO model started by automatically assuming that government spending increases GDP by pre-set multipliers, such as:

 

• Every $1 of government spending that directly purchases goods and services ultimately raises the GDP by $1.75;
  
  
• Every $1 of government spending sent to state and local governments for infrastructure ultimately raises GDP by $1.75;
   
• Every $1 of government spending sent to state and local governments for non-infrastructure spending ultimately raises GDP by $1.25; and
  
  
• Every $1 of government spending sent to an individual as a transfer payment ultimately raises GDP by $1.45.

 

(Note that all CBO figures in this post represent the midpoint between their high and low estimates.)

Then CBO plugged the stimulus provisions into the multipliers above, came up with a total increase in gross domestic product (GDP) of 2.6 percent, and then converted that added GDP into 1.5 million jobs.

The problem here is obvious. Once CBO decided to assume that every dollar of government spending increased GDP by the multipliers above, its conclusion that the stimulus saved jobs was pre-ordained. The economy could have lost 10 million jobs and the model still would have said that without the stimulus it would have lost 11.5 million jobs.

The debate over the efficacy of Keynesian stimulus is essentially a debate over the correct multipliers. Some believe the multipliers are high, others believe they are as low as zero(or even negative). Testing the stimulus requires testing the multipliers. Yet by simply assuming large multipliers, CBO effectively pre-ordained its conclusion that the stimulus worked, regardless of what actually happened in the economy.

 

CBO merely provides an analysis of what is presented to them, and then makes their assessment of that presentation.  It's not their place to examine if the components of the analysis make sense or are realistic, just to analyze the information placed in front of them.

 

For example, the bullet points in the piece above.  Democrats and Republicans can argue all day if "every dollar spent on State infrastructure raises GDP by $1.75" is accurate.  The CBO can't.  It takes those numbers as gospel, and then reports on the outcome..  Is the $1.75 figure accurate?  Hard to say.  This piece in Forbes from last year says it's a bit lower;

 

By contrast, increased outlays for infrastructure, aid to state and local governments and extended unemployment benefits increase GDP by between $1.41 and $1.57 for every $1 spent.

 

How much are the CBO's overall numbers affected if $1.49 (I split the difference from the Forbespiece) is inserted into the formula, instead of the Administration-provided $1.75?  Hard to say (I'm no economist), but it just goes to show my original point.  The CBO only reports on the numbers provided to it.  It makes assumptions based on what it is told, not on what history tells us.  It's how Obama's deficits can be "erased" in 10 years.  If you tell the CBO that the economy will grow at 15%, it has to use those numbers in their analysis.  Apply the same "logic" to other information.  If I told the CBO that I would lose 10 pounds per week, the CBO would then show that under the WAMKweight loss plan, I would be 80 pounds lighter in two months.  You and I know that it's unlikely that would happen (especially based on my weakness for sweet things), but the CBO can't make that call.  They can just report that in 8 weeks, I will be 80 pounds lighter.

 

Which explains why there is/are still double-digit unemployment, continuing lay-offs, "unexpected" job losses, and an overall feeling of no confidence by the Market.  The Administration can tell me the sun is shining, but if it's raining where I am, the message rings hollow. 

 

And right now, is a downpour all over the Country.

 

Glad to hear no one on the (D) side of the aisle has ever taken money from Big Insurance..

When did JDJ get rid of the Escalade?

Paddle faster, Republicans!

"I pray God when the Democrats take back control we don't make the kind of naked power grab you are doing."

So said Joe Biden all the way back in May of 2005.  It wasn't just Biden that felt that way.  It was also Obama, Dodd, Reid, Feinstein, Clinton, Baucus, and Schumer:

 

I'm sure there is some subtle nuance I'm missing on why the Nuclear Option was going to destroy America in 2005, and why it is the best choice in 2010.

Enlighten me.

My two cents on the Scott Brown "Jobs Bill" vote..

There's been some chatter from both the Right and the Left on Scott Brown voting to end the filibuster on the "Jobs Bill". 

The Left is rubbing their collective hands together in glee.  They think the folks on the Right that supported Brown are now exposed as losers, and Brown is Ted Kennedy redux.  They even warned us.

Some on the Right are seeing Brown as a turncoat, and a RINO. 

To both I say, chill out.  Neither one of you are right.

For one thing, this was just a vote to bring the Bill to the floor for a vote.  Will Brown and the others vote for the Bill when it truly matters?  Ask me Wednesday. 

For another thing, there is this little thing in D.C. called "politics".  Maybe you've heard of it.  I challenge anyone, Left or Right, to show me a politician that has voted with your personal beliefs 100% of the time.

So you Lefties that wanted Iraq war funding cut off every year while Bush was in office?  Did your Senator vote against those budgets 100% of the time?  No?  Then STFU about Brown on this vote. 

And you Righties that are calling him a RINO?  You supported him for one reason.  To be the 41st vote on Obamacare.  If you look at the Senate "rankings of #1 being the most liberal, and #100 being the most conservative, you figure Brown to fall in around #39-55, depending on the issue at hand.  He's still going to be waaaaay to the Right of where Coakley would be voting.  So those on the Right stomping up and down tonight?  STFU as well.

Brown is going to have to "take one for the team" from time to time, and vote "aye" on some liberal issues.  I'd much rather him vote "aye" for this one, and "nay" for Obamacare, wouldn't you?

He campaigned to represent allof Massachusetts, not just the Conservative ones.  He gets a pass on this one.  More often than not, he'll vote on the conservative side.  I can say with 100% certainty that he'll vote with Republicans more often than Coakley would have. 

So relax.  Take a deep breath, Republicans.  It's going to be okay.

And Lefties?  You lost a seat you held forever.  In the bluest of the blue States.  Do you really think Brown has turned Lib after two weeks in D.C.?  And another thing-for all the crowing you guys do about the need for "bipartisan politics", and "reaching across the aisle", when one of our guys does, this is how you act?

No wonder you are losing Independent voters so quickly.

Cheney resting comfortably..

Glad to hear the former VP is doing better.

Mr. MBA Candidate? I'd like to meet you behind the woodshed..

Professor Galloway is my new favorite person.

Sent: Tuesday, February 9, 2010 7:15:11 PM GMT -08:00 US/Canada Pacific
Subject: Brand Strategy Feedback

Prof. Galloway,

I would like to discuss a matter with you that bothered me. Yesterday evening I entered your 6pm Brand Strategy class approximately 1 hour late. As I entered the room, you quickly dismissed me, saying that I would need to leave and come back to the next class. After speaking with several students who are taking your class, they explained that you have a policy stating that students who arrive more than 15 minutes late will not be admitted to class.

As of yesterday evening, I was interested in three different Monday night classes that all occurred simultaneously. In order to decide which class to select, my plan for the evening was to sample all three and see which one I like most. Since I had never taken your class, I was unaware of your class policy. I was disappointed that you dismissed me from class considering (1) there is no way I could have been aware of your policy and (2) considering that it was the first day of evening classes and I arrived 1 hour late (not a few minutes), it was more probable that my tardiness was due to my desire to sample different classes rather than sheer complacency.

I have already registered for another class but I just wanted to be open and provide my opinion on the matter.

Regards,
xxxx

—
xxxx
MBA 2010 Candidate
NYU Stern School of Business
xxxx.nyu.edu
xxx-xxx-xxxx

The Reply:

—— Forwarded Message ——-
From: [email protected]
To: "xxxx"
Sent: Tuesday, February 9, 2010 9:34:02 PM GMT -08:00 US/Canada Pacific
Subject: Re: Brand Strategy Feedback

xxxx:

Thanks for the feedback. I, too, would like to offer some feedback.

Just so I've got this straight...you started in one class, left 15-20 minutes into it (stood up, walked out mid-lecture), went to another class (walked in 20 minutes late), left that class (again, presumably, in the middle of the lecture), and then came to my class. At that point (walking in an hour late) I asked you to come to the next class which "bothered" you.

Correct?

You state that, having not taken my class, it would be impossible to know our policy of not allowing people to walk in an hour late. Most risk analysis offers that in the face of substantial uncertainty, you opt for the more conservative path or hedge your bet (e.g., do not show up an hour late until you know the professor has an explicit policy for tolerating disrespectful behavior, check with the TA before class, etc.). I hope the lottery winner that is your recently crowned Monday evening Professor is teaching Judgement and Decision Making or Critical Thinking.

In addition, your logic effectively means you cannot be held accountable for any code of conduct before taking a class. For the record, we also have no stated policy against bursting into show tunes in the middle of class, urinating on desks or taking that revolutionary hair removal system for a spin. However, xxxx, there is a baseline level of decorum (i.e., manners) that we expect of grown men and women who the admissions department have deemed tomorrow's business leaders.

xxxx, let me be more serious for a moment. I do not know you, will not know you and have no real affinity or animosity for you. You are an anonymous student who is now regretting the send button on his laptop. It's with this context I hope you register pause...REAL pause xxxx and take to heart what I am about to tell you:

xxxx, get your shit together.

Getting a good job, working long hours, keeping your skills relevant, navigating the politics of an organization, finding a live/work balance...these are all really hard, xxxx. In contrast, respecting institutions, having manners, demonstrating a level of humility...these are all (relatively) easy. Get the easy stuff right xxxx. In and of themselves they will not make you successful. However, not possessing them will hold you back and you will not achieve your potential which, by virtue of you being admitted to Stern, you must have in spades. It's not too late xxxx...

Again, thanks for the feedback.

Professor Galloway

By the numbers..

'Face has his blog up and running from Townhall, over to its new home. (Looks good, by the way!)  He has a post up, showing some before and after numbers.  Obama has some work to do to live up to the promises he has made to the American People.