Mike Kueber's Blog

December 30, 2010

Are Democrats on the run?

Although I am a conservative, I try to listen to what liberals are saying.  I regularly read the liberal columnists in the NY Times and occasionally change channels from FOX to MSNBC.  But regardless of where I am getting my news, the subject seems to be the same – i.e., the conservative agenda.  

It seems a paradox for conservatives to be proactive and on the offensive while liberals are reactive and on the defensive.  Traditionally, conservatives are in the posture of reacting by rejecting change and maintaining the lame status quo, whereas liberals are nobly working toward a utopia.  Surely, liberals are not happy with conservatives setting the agenda and framing the discussion.  As they say in football, it’s damn hard to score when you don’t have the ball. 

One of the liberal problems may be that they have not clearly defined their agenda.  I was recently reading a publication issued by the Texas Public Policy Foundation, which is self-described as a non-partisan research institute whose mission is “to promote and defend liberty, personal responsibility, and free enterprise in Texas.”  Its mission is an eloquent, succinct description of the conservative agenda that everyone can quickly recognize and no one would argue against.    

By way of contrast, what is the liberal (Democratic) agenda?  I had no idea, so I decided to look it up.  And the Democratic Party of Texas platform of 2010, seemed a good place to start.

The Democrat’s 2010 platform for Texas proclaims the party’s belief in (a) freedom, (b) equal opportunity, (c) a safety net, and (d) ensuring that capitalists operate fairly vis-à-vis workers, customers, and the environment.  Who would argue with that? 

As always, the devil is in the details, so I read the individual planks in the 42-page document, and attached the most interesting below (with my comments bolded and underlined).  But the overarching theme of the platform is attractive and powerful – i.e., individual liberty and economic justice.  (I just made that up, but I suspect it’s been said before.)

All of which confirms what I often said during my congressional campaign – liberals are not bad people; they are people who have bad judgment.  They care about the same things that conservatives care about – namely, for each person to be able to flourish.  We simply disagree over the best way to get there.

Are Democrats on the run?  Obviously, there are.  And the reason for that is that Barack Obama was able to take this country further to the left than people wanted to go.  Because we live in a democracy, the people will pull the country back, and that is what is happening now.

Planks in the 2010 Democratic Party of Texas platform

  • Education
    • Opposition to the “drill and kill” teach-to-the-test policy that Republicans have forced on students and teachers.  Does this mean they oppose Obama’s Race to the Top program?
    • Opposition to “inequitable, unaccountable voucher and privatization schemes.”  No mention of charter schools, which are a variation of public schools.
    • Rejection of efforts to destroy bilingual education; promote multi-language instruction.  Bilingual education is great, but not at the cost of assimilation.
    • Raise teacher pay to levels exceeding the national average.  This will cost more, and there is not indication where the money will come from.
    • Support innovative approaches to ensure diversity in every Texas institution of higher learning.  More social engineering.

 

  • Economy – a market system that is checked and balanced by government to prevent financial abuses and excesses
    • Raise the minimum wage.
    • Pass the Employee Free Choice Act.  How can you title an act “Free Choice” when it calls for the elimination of secret ballots in union elections?
    • Emergency action to protect those with sub-prime mortgages from losing their homes, while suing the Wall Street speculators who caused the financial meltdown on 2007-2008. 
    • State government should contract with Texas and American companies, to the extent possible.  Protectionism.
    • Trade policy – “level up” wages and working conditions by ensuring that foreign workers share in their countries’ gains and become customers for American goods.  And how are we supposed to do that?

 

  • State Fiscal Policy
    • Oppose a national sales tax.  I agree with this, but I think most Americans would prefer a sales tax to an income tax.
    • Oppose extending the Texas sales tax to food or medicine.  I agree with this, but I think most Texas would prefer anything over the implementation of an income tax.  The platform neglects to discuss an income tax or any other means to balance our budget this cycle.

 

  • Health care – is a right, not a privilege reserved for those with resources.
    • Yes on ObamaCare.
    • Yes to stem-cell research.
    • Yes on a woman’s choice to abort.

 

  • Security
    • No to privatization of social security.
    • Insurance rates should be approved or denied by commissioner.  A big step toward a government-run economy.
    • Allow mortgage victims to re-finance, except for 2nd homes, high-end homes, or speculative home investors.

 

  • Public safety
    • Moratorium on the Death Penalty pending further study

 

  • Rural Texas and agriculture
    • Yes on price supports.
    • Yes on “preserving proper use of agricultural property tax exemptions and restructuring the current land appraisal system to insure a fair property tax system for all Texans.”  But does that mean the current system is good or bad?  The current system of exemptions is totally corrupted and should be eliminated. 

 

  • Immigration – America is a nation of immigrants and we honor them, both legal and undocumented.
    • Help Mexico develop its economy so that its citizens don’t feel compelled to emigrate.  Maybe we should fix our own economy first.
    • Continue birthright citizenship.  There is no rational argument for continuing this, so the Democrats don’t bother trying to make one.
    • Create a path to citizenship for all immigrants.

 

  • Freedom and rights
    • Equal opportunity and equal protection
    • Human and civil rights
    • Freedom from government interference in our personal lives and decisions
    • Freedom of religion and individual conscience.  What about same-sex marriage?  The party ideologues rightly declined to reject the will of the people expressed in a recent election on this issue.

 

  • Foreign policy and national security – “Let us never negotiate out of fear, but let us never fear to negotiate.”  JFK

 

  • Access to Justice – Right to trial by jury can’t be waived by contract or mandatory-arbitration provisions.  I like this, having seen mandatory arbitration imposed by USAA as a condition of employment.

 

  • Religious freedom
    • Separation of church and state.
    • Entangling government with religion is dangerous to both religion and the state.
    • Never use the power of government to impose our personal religious observances on others.

 

  • Protecting the democratic process
    • Prohibiting the revolving door in lobbying.
    • Oppose voter ID because there is no proof of impersonation at the polls.
    • Continue to elect judges while working toward judicial campaign finance reform.  But the Access to Justice plank recommended the nomination and appointment of qualified, competent persons to serve as judges.  Did you guys not read each others planks?
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December 29, 2010

The rise of women or the end of men?

In the July/August issue of The Atlantic magazine, Hanna Rosin wrote an award-winning essay titled, “The End of Men.”  In the introduction to the essay, The Atlantic suggests that, as women approach absolute equality in the modern, postindustrial world, there is a chance that equality will not the end point and that women will continue to advance vis-à-vis men and become dominant in society. 

My first thought in reading the introduction to the essay was that I wanted to laugh, not because the suggestion was funny, but because it shows how silly affirmative action for women is.  Just a few weeks ago, I blogged about a movement in Europe to require corporations to include more women on their management boards.   Someone needs to send to them a copy of the July/August issue of The Atlantic magazine.

 Ms. Rosin’s essay, which she is in the process of expanding into a book, approaches this issue from a number of different angles.  The most obvious is, as suggested in the introduction, that women generally have skills that are more valuable in the modern, post-industrial world than do men – skills such as social intelligence, open communication, and the ability to sit and focus.

To support her proposition, Rosin describes the expanding role of women as workplace, except at the very highest levels.  And this role promises to grow even greater in the future because of the current dominance of women at American universities.  In fact, the essay contains a reference to a 2006 NY Times column written by a college-admissions officer who admitted that her exclusive college gave preference to men over women because (1) the applicant pool of women was so much stronger than men, and (2) the college wanted to avoid reaching the tipping point of 60% women students, at which point men and women tend to find a college to be undesirable.   

Among Rosin’s other insights:

  • There is a debate concerning whether male abilities such as aggressiveness and impulsiveness (contrasted with female abilities such social intelligence, open communication, and the ability to sit still and focus) are soft-wired, culture-based attributes or hard-wired, genetic-based attributes.  The former suggests that men will be able to adapt, whereas the latter is less rosy.
  • Historically, families have preferred baby boys.  In recent years, however, that preference has shifted toward girls.  Thus suggests that families see a brighter future for girls than for boys: 
    • “American parents are beginning to choose to have girls over boys. As they imagine the pride of watching a child grow and develop and succeed as an adult, it is more often a girl that they see in their mind’s eye.”
  • Studies have shown that the greater the power of women in a country, the greater the economic success of the country.  The author explains thusly, “
    • Up to a point, the reasons behind this shift are obvious. As thinking and communicating have come to eclipse physical strength and stamina as the keys to economic success, those societies that take advantage of the talents of all their adults, not just half of them, have pulled away from the rest. And because geopolitics and global culture are, ultimately, Darwinian, other societies either follow suit or end up marginalized.

I like the thought that, in our flat world, the American way of life will be competing, Darwinian-like, against other lifestyles in other countries.  That way there will be no losers, only winners.  I am confident that freedom and creativity in America will ensure that we remain world-wide leaders.  And finally, talk about the “end of men” is silly.

December 28, 2010

Political hypocrisy

Hypocrisy means pretending to have beliefs, opinions, feelings, virtues, values, qualities, or standards that one does not actually have.  That word came to mind on Christmas Eve when I heard Joe Biden say that gay marriage in America was inevitable.  Not surprisingly, Biden’s boss had said earlier that his view on this issue was “evolving.”  Both politicians had previously opposed gay marriage in 2008 when they were running for the presidency.    

I don’t have any problem with a person’s values evolving, but does anyone believe that the gay-marriage beliefs of Obama and Biden are evolving?  The only thing that is evolving is their political calculation on which position will do them the most good. 

Everyone watching closely the 2008 election process knew that Obama and Biden supported gay marriage, but because that position would have cost them votes in 2008, they decided to profess a value they didn’t actually have – i.e., civil unions were enough – separate but equal, if you will.  Can you think of a better example of hypocrisy?

Other examples of political hypocrisy are legion, and it usually is exposed when the politician’s electoral situation changes (new district, higher office, different state).  My favorite concerns the issue of term limits.  Too many politicians endorse term limits because it is the politically expedient thing to do, but their heart isn’t really in it.  Is it any surprise that the plank on term limits was the only plank in the Contract with America that did not succeed?

There is a website that provides a lengthy history of all the politicians (mostly Republicans) who have crawfished on their belief in term limits after being elected.  http://www.opencongress.org/wiki/Term_limits.  Some of their explanations make my skin crawl:

  • As a rookie candidate, I underestimated the value of experience and seniority.”  Ric Keller (R-FL).
  • Term limits for the 2nd District only could put us at a disadvantage.”  Frank LoBiondo (R-NJ).
  • The movement to term limits has “just petered out.”  Jeff Flake (R-AZ).

Best of all was the explanation from Gil Gutknecht (R-MN) – “Does it make any sense to keep a stupid promise?” 

Some people think so. 

Remember Woodrow Call in Lonesome Dove, who imprudently promised Gus McCrae that he would haul his body back to Texas for burial.  Although Woodrow eventually realized his promise was stupid, he followed through on the promise and buried Gus along a creek near Austin and said, “Well, Gus; there you go. I guess this will teach me to be more careful about what I promise people in the future.”  That’s what people with intergrity do. 

Other recent examples of political hypocrisy include (1) Congressman Harold Ford moving from Tennessee to New York and suddenly deciding he believed in abortion, gay marriage, and gun control, (2) Al Gore declaring that ethanol subsidies have always been a bad idea, but he endorsed them during his presidential run in 2000 because he wanted to be liked by voters in Iowa, (3) Mitt Romney believing in abortion rights as a Massachusetts politician, but opposing them as a Republican candidate for president, and (4) Barack Obama believing in public financing of campaigns until he realized that he could raise unprecedented amounts through private financing.

You might suggest that political candidates can’t be expected to commit political suicide over issues like this, and I agree.  But there is a way to address these issues without mortally wounding either your candidacy or your intergrity.

When I ran for Congress, my first magazine interviewer asked about my position regarding gay marriage.  I responded that, personally I thought gay people should have the right to get married (civil unions were not “separate but equal”), but politically I accepted the fact that a vast majority of Texas recently approved an amendment to the Texas constitution prohibiting gay marriage and that I would act accordingly.

Voters get the politicians they deserve.  If voters want politicians with integrity, they need to stop voting for politicians who have shown themselves to be integrity-challenged.

December 27, 2010

Great movitational speeches – from Patton to Payton

After nearly 30 years in corporate life, I’ve heard my share of motivational speeches, but none of them matches George C. Scott’s in the 1970 movie, Patton.  As a matter of historical fact, the actual (unrecorded) speech was given by General Patton to the Third Army on June 5, 1944, which was D-Day minus one.  

Part of my fascination with the speech was the coarse language that this North Dakota farmboy was not used to hearing.  My dad had said the word “damn” only once in my presence during my entire life.  Back in North Dakota, we were politically correct before it became mandatory.  I remember being required in 1971 to submit the text of my high-school salutatorian address for review by the high school principal, and then having her instruct me that in urging our generation to work for peace, I needed to be careful to not imply that previous generations weren’t similarly committed.  Huh?

Some of the more colorful phrases used in the Patton speech were “shoveling shit in Louisiana” and “we’re going to go through him like crap through a goose.”  To get the boys fighting made, Patton said, “When you put your hand into a bunch of goo that a moment before was your best friend’s face, you’ll know what to do.”  To get his boys to stop thinking about themselves, he said, “Now, an army is a team. It lives, eats, sleeps, fights as a team. This individuality stuff is a bunch of crap. The bilious bastards who wrote that stuff about individuality for the Saturday Evening Post don’t know anything more about real battle than they do about fornicating.”  In the actual speech, Patton said “fucking” instead of “fornicating,” but according to Wikipedia, to avoid an “R” rating, some editing was required to lines like, “We’re not going to just shoot the sons-of-bitches, we’re going to rip out their living Goddamned guts and use them to grease the treads of our tanks.”

But the most memorable line of all was the first sentence in the Scott’s speech:

  • “Now, I want you to remember that no bastard ever won a war by dying for his country. He won it by making the other poor dumb bastard die for his country.”

Ironically, I thought of that line this Christmas when listening to the G-rated, best country-music video of the year – Kenny Chesney’s Boys of Fall.  (I assume the song’s title is a play on words with the title of Roger Kahn’s great book about the Brooklyn Dodgers – The Boys of Autumn.  The video is an attempt by Chesney to pay homage to something that he and millions of Americans love – high school football.  The video begins with a motivational pre-game speech given by New Orleans NFL Coach Sean Payton to the kids at his high school alma mater – Naperville Central outside of Chicago.  The last line in Payton’s speech evoked George C. Scott’s famous speech:

  • They’re a faceless opponent.  They just happened to draw the short straw tonight.  Now get your asses ready to playWin on three.”

That may not sound like much on paper, but a football coach can bring it to life.  This is but one line of many in the video that will bring goose bumps to you.  If you’re drawn to Rudy-esque stories and don’t mind tearing up, you’ll love this 8-minute video.  Give it a listen

After Payton’s motivational speech and Chesney’s nearly as good song, the video concludes with several rousing pre-game clips from nameless high-school coaches and some nostalgic wisdom from a few Southern football gods – Brett Favre, Peyton Manning, Mack Brown, and Joe Namath – and Minnesotan John Madden.  Last, but not least, watch for Bear Bryant to close it out.  What a remarkable guy!

Are motivational speeches effective?  Payton’s alma mater trailed cross-town rival trailed 17-0 at halftime before rallying dramatically to win 21-17. 

But — my son Jimmy played football for Clark High School, and he said his coaches played this video before every game.  Although it made the kids ready to run through walls, we suspect that the kids on the other teams were probably watching the same video.

December 26, 2010

Sunday book review #6 – Chasing Goldman Sachs by Suzanne McGee

Goldman Sachs has become the fall guy for the 2007-08 worldwide financial meltdown.  Although there were eviler institutions – such as AIG, Countrywide, Washington Mutual, and Fannie Mae – those institutions were humbled and punished, albeit some inadequately.  By way of contrast, Goldman Sachs’ arrogance barely missed a beat (or a bonus) while accepting a multi-faceted government bailout.

The popular conception of Goldman Sachs (GS) is that of an unproductive, money-grubbing leech, or in the famous phrasing of Matt Taibbi in Rolling Stone – “a great vampire squid, wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”  But my hero Warren Buffett has said good things about GS and its chairman Lloyd Blankfein.  At Berkshire’s annual meeting last May, shortly after the SEC accused GS of fraud, Buffett described Blankfein as “smart” and “high grade” and rejected the possibility of trying to oust him – “If Lloyd had a twin brother, I would vote for him.”  Furthermore, I own 150 shares of GS (bought on May 3 for $149 after hearing Buffett’s recommendation, and it is currently selling for $167), so I need to do my due diligence before deciding whether to disown them.  I decided to do that by reading Chasing Goldman Sachs by Suzanne McGee.

Part I of the book – titled Dancing to the Music – consists of four chapters that describe how Wall Street devolved from a staid utility to an extremely risky player.  Among the things I learned in those chapters:

  • Fundamentally, GS and other investment banks play an invaluable role in what author McGee calls the world’s “money grid.”  She uses this term to describe the financial world because she likens it to a heavily regulated utility that delivers an essential service – just like water or electricity – to the economy.  The financial utility (investment bankers) is supposed to be a middleman who merely facilitates the transfer of capital from people who have a lot of money (investors) to those who need a lot of money (businesses).  That sounds like Economics 101.  While commercial banks obtain their money from deposits, investment banks raise their money through equity and bond transactions.  Investment bankers simultaneously serve two clients – buyers who need money and sellers who have money.
  • The problem with this “money grid/utility” analogy is that investment bankers like GS were dissatisfied with the low-risk returns that are generally the lot of utilities.  To generate a higher rate of return-on-equity (ROE), they ventured off into high-risk, highly-leveraged activities.  Instead of working to obtain capital for Main Street businesses (low-revenue work), investment banks started developing exotic financial products for hedge funds and private-equity firms.      
  • High-risk, highly-leveraged activities enabled investment banks to obtain incredibly high ROE rates in the last decade – between 15% and 40%., with GS usually leading the pack, and others jealously trying to catch up by leveraging their capital ever more riskily.  GS’s ROE from 1996 to 2008 was 24.4%, by far the highest in the industry.  Lehman was second at 19.2% and Morgan Stanley was third at 18.6%.  Everyone was “chasing GS.”    
  • The obscene bonus structure at investment banks shifted everyone’s focus to the next quarter’s financial results, with almost no concern for long-term financial soundness or reputation.  For example, in 2007 bonuses at GS averaged $661k per employee, while Lehman’s was $332k.  Although Lehman’s employees should have been happy, they were enviously “chasing GS.”
  • To raise more capital, all major investment banks transformed from partnerships to corporations, beginning with Donaldson, Lufkin & Jenrette in 1970 and ending with GS in 1999.  The partnership structure was especially conducive to restraining risk-taking because it created a feeling of personal responsibility whereas a corporate structure promotes a feeling of personal immunity.

Part II of the book – Greed, Recklessness, and Negligence; the Toxic Brew – consists of three chapters that provide a more technical description of the three major attributes of post-2000 Wall Street that caused the meltdown:

  1. Compensation policies.  Obscene bonuses and perverse incentives to increase revenues without any regard to risk.  This caused investment banks to drift away from their less-profitable utility function of moving capital from investors to Main Street business and toward the more-profitable function of creating exotic financial products for hedge funds and private-equity firms.
  2. Risk-management failures.  Fear (of being beaten by rivals) & greed (for more money) success caused companies to disregard risk; risk managers were marginalized.  In other words, “Chasing GS.”
  3. Regulatory shortcomings.  All federal regulators failed to do their job.  Ever since Reagan, the direction was toward deregulation.  The Office of Thrift Supervision (for thrifts) and the Office of the Comptroller of the Currency (for commercial banks) competed with each other to provide the least interference with their clients who were pushing sub-prime mortgages; derivatives escaped regulators.  The SEC was asleep at the wheel, but the book spends very little time discussing SEC failings.

Part III of the book – The New Face of Wall Street – consists of two chapters that describe how Wall Street needs to work if it is going to avoid another meltdown.  This part of the book seems like an afterthought – like author McGee was so caught up in describing the trees that she never developed a sense of what the forest needed.  Among her suggestions:

  • Foremost, Wall Street should return to its role as an intermediary – i.e., a utility that mere facilitates the movement of money from investors to businesses. 
  • Wall Street should be prohibited from making trades with its own capital, investing in hedge funds or private equity divisions.  This would minimize the conflicts of interest between Wall Street and its clients. 
  • And finally, there needs to be a regulator to monitor financial products, like derivatives. 

McGee is not very optimistic that Wall Street will change its ways.  She cites Citibank’s chairman Richard Parson as declaring that they are going back to their basics.  But his “basics” did not include any professional concern for Citi’s clients or the health of the banking industry.  Rather he was referring to Citibank’s core constituencies – employees and stockholders.  Of course, that is the same motivation that got Citi into all of its trouble – i.e., because its employees and stockholders are just as deserving as those of GS, then Citi should do whatever it can to match the financial results of GS (ROE and bonuses).  As a solution to these distorted values, author McGee suggests that the investment-banking world would be a better place if GS competitors tried to emulate, not GS’s financial results, but rather GS’s best features – i.e., strategic thinking and planning.  However, McGee fails to explain how that is going to come about.

McGee also is discouraged by a recent quote that came from Morgan Stanley’s chairman, John Mack.  He declared that Wall Street couldn’t stop itself from screwing up, that regulators need to “step in and control the Street… force firms to invest in risk management.”  Thus, vigorous regulation is needed, and this led to the Volcker Rule, endorsed by Barack Obama, which recommends a prohibition on speculative investments by investment banks that are not on behalf of their customers. 

Subsequent to the publication of Chasing Goldman Sachs, Congress enacted the 2,000-page Dodd-Frank Wall Street Reform and Consumer Protection Act in June 2010.  (Seems that 2,000 pages is becoming the standard length for major reform legislation.)  Among its major reforms:

  1. No more “too big to fail.”  Regulators were given the authority to seize and break-up troubled financial firms if the firm’s collapse would destabilize the financial system.
  2. Back to basics.  Severely restricts the ability of investment banks to invest in hedge and private-equity funds.  (No more than 3% of the bank’s Tier-1 capital.)
  3. Derivatives.  Extend comprehensive regulation to the heretofore unregulated, over-the-counter derivatives market.
  4. A new consumer protection agency.  Creates a new agency to protect consumers in the areas of credit cards, mortgages, etc. from hidden fees, abusive terms, etc.
  5. Federal Reserve audit.  Mandates a one-time audit of the Fed’s emergency lending programs from the financial crisis.
  6. Eliminates the Office of Thrift Supervision.  Its regulatory assignments are transferred to the Fed (holding companies), FDIC (state savings associations), and the OCC (thrifts).
  7. Securitization.  Requires banks that package mortgages to keep 5% of the credit risk.
  8. Credit-rating agencies.  Establishes a quasi-public agency to regulate conflicts of interest that are inherent in the rating business (after a study by the SEC); authorizes investors to sue and the SEC to fine the rating agencies for bad ratings.
  9. Hedge funds.  Hedge and private-equity funds are required to register with SEC and provide info trades to help regulators to monitor systemic risk.

After reading Chasing Goldman Sachs and other books on the financial meltdown, I find myself impressed with the Dodd-Frank bill.  The bill passed by highly partisan votes in the House and Senate (only three Republican senators supported it – two from Maine and one from Massachusetts), but I don’t know what the Republican objections were.  Perhaps it had to do with their historical opposition to the Democratic philosophy regarding regulating – as Ronald Reagan humorously captured – “If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.”  Michelle Malkin called it “the Dodd-Frank monstrosity masquerading as financial reform.

Not discussed in Chasing Goldman Sachs, but something that I have read elsewhere, is the fact that GS is one of the most politically connected entities in America.  Former GS employees rotate in and out of virtually every important financial regulatory office.  Plus, they are not shy about spreading money around where it does the most good.  I was hugely disappointed a couple of weeks ago when I read that my newly elected, Tea Party Congressman Quico Canseco traveled to Washington, D.C. shortly after his election to pick up a $5,000 check from GS.  They obviously bet on the wrong horse before the election and were trying to make amends.  What makes this especially disappointing is the fact that Quico is a lifelong banker, and this might enable him to have outsized importance in future banking developments – just like I could have had with insurance-industry issues or candidate Will Hurd could have had with Afghanistan/Iraq issues.  This campaign contribution suggests that Quico will more likely be an outsized force for bad instead of a force for good.

December 25, 2010

Malpractice in a Texas emergency room

A recent article in the Texas Tribune reviewed whether emergency-medicine doctors should have the same standard of negligence as that of other doctors – i.e., ordinary negligence.    Since its tort reform in 2003, Texas law has required more than simple negligence; instead it requires “willful & wanton” negligence, which is essentially the same as gross negligence.  Although the Tribune did not overtly take a position on the fair standard for emergency-room negligence, there is no question that they devoted a lot more energy to showing that the “willful & wanton” standard causes grave injustices and gave minimal effort to showing the benefits of this variation of tort reform.

Non-lawyers may not have a good understanding of the practical difference between simple negligence and gross negligence, but suffice it to say that in car-accident claims, gross negligence is extremely difficult to prove unless the other driver was drunk.  Similarly, unless an emergency-room doctor acted like a drunk, an ER patient in Texas is unlikely to have a viable action for negligence. 

As support for this conclusion, the Tribune article noted that, since 2003, there have been only 150 lawsuits a year in Texas against emergency-room doctors, and considering the size of Texas, that is a surprisingly small number.

Coincidentally, I have a fourth-year medical-student son who is planning to specialize in emergency medicine, and for the past few weeks, he has been interviewing around the country for an emergency-medicine residency.  He reports that when the interviewers learn he is from Texas, they often acknowledge that Texas is a great place to practice not only because of its broad tort reform, but also because of its enlightened standard of “willful & wanton” for ER doctors.  Clearly, the tort reform is achieving one of its principal objectives – i.e., making Texas a desirable place to practice – but at what cost?

My son, of course, agrees completely with the “willful & wanton” standard.  He believes that ER doctors should be treated differently because they are often in situations where they have only sketchy information and no time for reflection.  In 20-20 hindsight, their decisions are often and easily second-guessed.  He says that happens all the time by the doctors who take over follow-up care of ER patients, and he can easily imagine how second-guessing from a plaintiff’s lawyer and a sympathetic jury will result in injustice against him.

I tried to explain to my son how the standard of “ordinary negligence” takes into consideration the context of any actions that occur, but he is reluctant to placed at the mercy of a sympathetic jury.  I can appreciate that – a jury will almost always err in favor of the injured patient instead of the affluent ER doctor and medical system.

Perhaps there is a middle ground that would provide a better balance between justice to the patient and justice to the doctor and medical system.  I would like to see some thought to affording economic damages (medical costs, lost wages, etc.) based on simple negligence, while requiring the higher standard for obtaining noneconomic damages (pain & suffering, legal fees).

December 24, 2010

Rio Grande Valley Republicans and the party platform

Yesterday, San Antonio Express-News columnist Veronica Flores-Paniagua wrote a column that attempted to demonize Republicans by describing several planks in the party platform that Flores found particularly galling – i.e., the party’s opposition to (a) early-childhood development programs, and (b) Texas’ Top-10% Rule for admission to U-Texas and Texas A&M.  Flores’ tactic is not isolated; I have seen it applied by numerous liberal pundits, especially in connection with the party switching of someone they consider a traitor – State Rep Aaron Pena of McAllen.  

Probably the most thorough point-by-point critique of the platform was conducted by Express-News blogger Gary Scharrer in a posting titled, “The problem facing Rep. Aaron Pena.”  Among the “toxic” planks listed by Scharrer:

  • Ending bilingual education;
  • Deporting illegal immigrants;
  • Repealing the lottery;
  • Making it illegal to be in Texas illegally;
  • Repealing the minimum wage;
  • Creating a school voucher; and

Scharrer then created a second list of planks that he believes will be especially toxic in the Valley:

  • Opposition to ObamaCare;
  • No more than three years of bilingual education for a student;
  • Opposition to mandatory pre-K and kindergarten programs and any federal programs dealing with early-childhood development;
  • No public education for illegal immigrants;
  • For school vouchers/choice;
  • Eliminate birthright citizenship; and
  • Establish voter ID.

To his credit, State Rep Aaron Pena has responded to this media assault by coolly noting that “platforms reflect party activists, not pragmatic conservatives.”  I agree.  In fact, during my congressional campaign, I pro-actively disassociated myself from party planks that I thought were indefensible – especially the plank that equated homosexuality with deviancy.  (I wonder why Scharrer neglected to list homophobia in his critique.)  By way of contrast, the two leading conservative candidates in my congressional race pledged to fealty to the platform, with only two exceptions.  Quico Canseco didn’t accept the plank that said candidates should live in their district because Quico didn’t live in his district, and Will Hurd didn’t accept the plank that said you should favor term limits because 32-year-old Hurt hoped to become a career politician. 

To the Republican Party’s discredit, fealty to the platform is something that they are trying to require.  Every candidate in the Republican primary is asked to fill out a questionnaire of key platform plans and to note any disagreement.  Then the party attempts to publicize those disagreements so that RINOs (Republicans In Name Only) can be duly prevented from representing the party in the general election.  That’s not consistent with the big-tent party that I belong to. 

I think all Republican politicians, not just those in the Valley, need to understand the party platform and be prepared to disagree with those planks that are inconsistent with their values or those of their constituents.  But I also think Flores, Scharrer, and their ilk need to recognize that, because Hispanics in the Valley don’t necessarily think in lock-step with liberals in Austin, Dallas, Houston, and San Antonio, most of the Republican Party planks are consistent with Valley values.  In the months ahead, prominent Republicans stalwarts in the Valley like Rebecca Cervera and newcomers like Aaron Pena will be blazing uncharted frontier trails, and the journey promises to be exciting.

Four more Texas congressmen – not necessarily good news?

In a column in today’s San Antonio Express-News, Veronica Flores-Paniagua declared that Texas gaining four more congressmen in 2012 was “not necessarily good news.”   According to Veronica, Texas earned the additional congressmen because of its growing Hispanic population (legal and illegal), but because of political machinations, the additional congressmen would likely be conservatives who won’t cater to the Hispanic population. 

To support her claim, Veronica resorted to an analysis and criticism of the Republican Party of Texas platform.  (I have noticed this technique applied recently in several news stories, which suggest that there is a vast, coordinated liberal conspiracy to assault that platform.)  Among the planks cited by Veronica as anti-Hispanic were those opposing mandatory pre-K education and other early childhood programs.

Veronica saved her most strident criticism for the Republican Party’s opposition to Texas’ Top 10% automatic-admissions rule.  She said that the plank suggested, without explicitly stating, that the Top-10 law wasn’t based on merit.  Her response – “hogwash.”

Veronica asserted that the Top-10 law was “merit-based, race-neutral… has increased diversity at many schools, ensuring future fuel for the state’s economic engine.”

Veronica’s column has received a plethora of complaints for E-N readers.  One of the more articulate complaints (from somebody named “yo”) stated that Texas was the only state with “such an idiotic requirement” as Texas’ Top-10 law.  That is incorrect.  Texas adopted its law in 1997, and California and Florida have subsequently adopted similar laws, with California’s set at 3% and Florida’s at 20% – the so-called Talented-20 rule.  Obviously, the California universities are more selective than the TX and FL universities.   

But I disagree with Veronica’s suggestion that the Top-10% law is pure meritocracy.  Rather, it is a so-called race- and ethnicity-neutral device obviously intended to increase the enrollment of under-represented races (African-American) and ethnicities (Hispanic) at the expense of over-represented races (Anglos and Asians).  An analogy would be requiring that UT football scholarships be awarded proportionately to all high-school districts throughout the state.  Let’s see how quickly UT football would sink to the bottom with such a rule.  (Please no snide responses regarding this anomalous season.)

My other problem with Veronica’s column was its unpatriotic tone.  She started the column by saying, “Don’t count me among the ranks of those rooting for the state’s Census gains,” and she concluded by asking rhetorically, “Where goes Texas, so goes the United States?  I hope not.”  Veronica’s patriotism calls to mind Rick Perry’s new book – Fed Up.  In the book, Perry notes that one of the great things about federalism is that you can vote with your feet – i.e., if you like being surrounded by same-sex marriage and medicinal marijuana, you can live in California; whereas if you like the death penalty and citizens carry pistols, you can move to Texas.  You know what Rick Perry would suggest that Veronica do.

Filibuster reform

Filed under: Issues,Politics — Mike Kueber @ 2:33 am
Tags: , , , , ,

A recent column by Ezra Klein in the Washington Post reported that Senate Democrats are proposing reform of the institution’s filibuster rules.  The proposed changes leave in effect the current requirement for 60-vote super-majority, but (a) streamline the process for breaking a filibuster, and (b) require that filibusterers actually perform their non-stop talk instead of simply declaring a filibuster and then adjourning to their resplendent offices. 

According to Klein, the Democrats are pushing for the reforms because the Republican leader (McConnell) has been making a nuisance of himself by calling for more filibusters in the past two year than had been called in the 20 years between 1950 and 1970.  The Democrats don’t object that the Republican filibusters effectively block particular bills, but they want ensure that the filibusters don’t prevent the Senate from moving forward on other business.

I wish the Senate would go beyond these procedural reforms and instead completely eliminate filibusters.  Remember in 2003, when Democratic filibusters were causing the judge-approval process of Bush-43 appointees to grind to a halt, there was talk of eliminating filibusters, and the proposal was called “the nuclear option.”  Huh?  What is nuclear about eliminating filibusters? 

To me, the filibuster is tantamount to changing the U.S. Constitution without following the proper procedures.  There is nothing in the Constitution about filibusters.  The Constitution spells out when super-majorities are needed, and passage of bills or approval of judges in the Senate is not one of them.  

Despite the spate of bills passed this past week by a lame-duck session of Congress, American government has become dysfunctional because of the ability of minorities to block majorities, and the filibuster is a major reason for this dysfunction.  Let’s get back to the Constitution and eliminate filibusters. 

Although reforms of the filibuster can be filibustered during a session, these reforms can be adopted by a simple majority vote at the beginning of a congressional session.  Let’s hope Harry Reid and his Democratic majority do that in January.  As Clinton should have said about affirmative action in 1995 – “End it; don’t mend it.”

December 23, 2010

Medicaid in Texas and the budget shortfall – should welfare consumption be encouraged?

States are beginning to realize that ObamaCare is not going to ameliorate their problems with financing medical care for the poor (Medicaid).  In fact, according to some the states’ already deteriorating situation will be greatly exacerbated by ObamaCare. 

Earlier this month the Texas Public Policy Foundation (TPPF) issued a report that describes the financial effect that ObamaCare will have on Texas state government during the next decade.  The TPPF is a self-described non-partisan research institute whose mission is “to promote and defend liberty, personal responsibility, and free enterprise in Texas.”  I don’t know about you, but that sounds pretty partisan to me.  Do you know any Democrat whose guiding principles are liberty, personal responsibility, and free enterprise?  (I would be interested in knowing what the Democratic guiding principles are.  I am adding that to my list of things to do.)

The TPPF notes that Medicaid was already in dire straits in Texas before ObamaCare:

  • “[E]ven if ObamaCare had not been enacted, projected growth in Texas’ Medicaid spending beyond 2014 would have been on a trajectory that appears to be unsustainable.”

ObamaCare will further exacerbate Texas’ problem with Medicaid financing because of three principal factors:

  1. Newly-eligible Texans.  ObamaCare expands tremendously the number of Texans who are eligible for Medicaid.  Currently, children and their parents are eligible if they earn less than 100% of the federal-poverty level (FPL); under ObamaCare, the threshold is increased to 138% of FPL and adults are eligible even if they don’t have children.  Historically, the federal government has picked up 60% Texas’ Medicaid costs.  Under ObamaCare, however, the fedgov will pick up 100% of the cost of these newly-eligibles for only three years, and then its contribution will decline to 93% by 2019.  Although ObamaCare is not clear with respect to post-2019 contributions, it is feared that it will drop to the historical rate of 60% by 2028.  (Under the Cornhusker Kickback, Nebraska would receive 100% reimbursement indefinitely, but public outrage resulted in the Kickback being removed by a reconciliation bill.)   
  2. Previously-eligible Texans.  Although the federal government will pick up 100% of the cost of Medicaid for newly-eligible Texans, Texas is responsible for its 60% share of the cost of Medicaid for previously-eligible Texans.  This distinction is significant because (a) the individual mandate under ObamaCare will cause a large number of Texans claim the Medicaid coverage for which they were already eligible, and (b) the Obama administration is planning to conduct “enrollment facilitation drives.”
  3. The Federal Medical Assistance Percentage (FMAP).  Based on the FMAP, the federal government pays for approximately 60% of Texas’ Medicaid costs.  Under the recent stimulus law, that percentage was increased temporarily to approximately 70%.  Because of the deficit/debt tsunami brewing in Washington, states like Texas are concerned that the fedgov will jigger the FMAP to reduce the federal contribution below 60%.

Even if the fedgov maintains the FMAP at its current rates, Texas will be faced with an unfunded mandate of $31-38 billion for the first decade of ObamaCare – 2014-23, depending on whether the FMAP for newly-eligible residents stays at 93% or gradually drops to 60%.  This mandate will consume over 80% of Texas’ projected revenue growth for the decade, with a result that other government responsibilities, such as education and law enforcement, will be shunted aside or taxes will need to be increased. 

The solution, according to Texas Public Policy Foundation, is for Congress to repeal ObamaCare or for Texas and other states to opt out of Medicaid.  It would be interesting to see what sort of medical care Texas could provide to its poor without the federal contribution of 60%.  Perhaps that can be the subject of the next TPPF paper. 

The TPPF might want to look at Bexar County, which currently makes welfare-type medical care (CareLink) available to all residents who earn as much as 300% of the federal poverty level.  I’m guessing that Bexar County has kept program costs low by not conducting any “membership facilitation drives.”  And sometimes I think welfare should work that way, although I have noticed recently that there have been big pushes to get more people signed up for food stamps.  It’s ironic that financially responsible state and local governments rarely encourage welfare participation, while the financially irrersponsible federal government often does.

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