Going violent

The rhetoric in today’s political environment is toxic. Since before the 2008 presidential election, I’ve been expecting it to take a violent turn. Today it happened. It happened later than I expected, and the target wasn’t who I expected, but now we’ve gone violent.

It’s entirely possible that the pundits and candidates who utilize violent turns of phrase didn’t expect it to happen this way. Their intent matters little at this point. You never know whether violent rhetoric will be interpreted literally or figuratively, but all it takes is one person to take it literally for it to turn into a tragedy. Now it appears that a 22-year-old consipracy theorist did take it literally, and now we have a tragedy. Among the wounded is a 40-year-old Congresswoman. Among the dead are a federal judge and a 9-year-old girl.

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Blasko: Daring to dream in D.C.

Andrew Blasko and I were columnists for the same student newspaper at the University of Missouri. He was a couple of years ahead of me, so I can’t exactly call him a classmate, seeing as he was taking 300-level classes when I was taking 100-level classes. But as the senior ranking columnist when I was the new guy, he was a mentor and an influence.

He had an editorial today in the Washington Times. And while there are perhaps two sentences I don’t completely agree with (and he probably wouldn’t want every reader to agree with every single word), it’s very good. I hope some people in Washington read it and take note.

I’ll be back later with something completely different. But since I just found out about this, I wanted to say hey, read this! I know that guy! (And I do think I’ve used up my yearly quota for exclamation points.)

How the Republican Party is losing me

I tend to lean to the right. For as long as I understood what it meant to be conservative or liberal, Republican or Democrat, I called myself a conservative Republican. In college, I wrote a newspaper column for 3 1/2 years brashly titled "No Left Turns."

In last year’s primary, I voted for Ron Paul for a couple of reasons. One, a lot of things he said made sense. Two, at least he sincerely believed in the things he said that didn’t make sense. And three, he’s a doctor. When Ron Paul predictably didn’t get the nomination, I voted against John McCain and for a Democrat, Barack Obama. The main reason was health care.I come from a long line of Republicans. My great great great grandfather, Dr. Edward Andrew Farquhar, helped the Republican Party get organized in the state of Ohio prior to the Civil War. My great grandfather, Ralph Farquhar, worked for the powerful Ohio Republican Marcus Alonzo Hanna. And my dad was three things: outspoken, Republican, and a doctor. Sometimes the order varied.

In 1992, Dad was very much against Hillary Clinton’s health care plan, but he was very much in favor of some kind of health care reform. The system desperately needed it, even then. Rarely did a week go by without Dad getting an angry letter from one of his patients. The story was always the same. Patient comes to Dad seeking treatment. Dad treats patient. Patient gets better. Dad bills insurance company. Insurance company denies claim. Patient can’t afford to pay.

The only variance was the patient’s understanding of what happened. Sometimes the patient was mad at Dad. Sometimes the patient wanted Dad’s help. All too frequently, what happened was Dad just didn’t get paid. The insurance provider–be it Medicare, Medicaid, or private insurance–wasn’t going to budge. The patient legitimately couldn’t pay the bill. Dad could press, but if the patient paid, the patient would go hungry. If Dad didn’t bill, Dad wouldn’t go hungry. Dad had a soul, so Dad would do what people who have souls do and just tear up the bill.

Someone had to give a crap about these people. Unfortunately sometimes Dad was the only one.

Dad told me once that if I decided to become a doctor, he would lock me away for seven years. Being a doctor is a family tradition. Dad thought there were better things for me to do than spend my life messing with computers, but being a doctor wasn’t one of them. He wanted me to have a better life than he had.

Dad died of a heart attack in 1994, aged 51. Had the health care system allowed him to practice medicine and stayed out of his way, I’m sure he would have lived longer. Maybe he would have been still been alive when my grandmother and father in law needed him.

Fast-forward to 2006. My wife was pregnant, but having a hard time of it. Extreme nausea was keeping her almost bedridden some days. Her doctor found one and only one anti-nausea drug that would work, a treatment normally given to cancer patients. Our insurance was willing to pay for it once. When her 30-day supply was exhausted, the doctor tried every treatment that the insurance company was willing to pay for, but none of them worked. She fell into a vicious cycle of dehydration and nausea. One built on the other, and she ended up hospitalized.

The drug cost about $80 a week to just buy outright. I bought a week’s supply to keep her out of the hospital for a week while I figured out what to do next. The doctor knew I was unhappy. I asked him if it would do any good to get a lawyer and sue the insurance company. I was serious and he knew it. He said he wished someone would do that, but if it was me, the only thing I’d accomplish would be getting some face time on CNN and meanwhile we still wouldn’t have the medicine we needed.

This is the free market compassion that Rush Limbaugh spouts about. I’ve yet to figure out what’s compassionate about cutting off a woman’s medicine so she has to go into the hospital. The insurance company will pay for part of her hospitalization, but not the medicine that keeps her out of the hospital. Oh, and while she’s in the hospital, she can’t work.

Writing some letters succeeded in getting her the medicine she needed. And my employer, to its credit, changed insurance plans the next year, to something that takes better care of people.

Unfortunately, this year I found myself working for a very large company that operated as its own insurer in order to keep the profits to itself. And that company quickly decided that my wife was using too much insulin and my son was using too many vaccines. Their doctors disagreed, but they’re only doctors. What do they know about profits?

One day, after getting yet another denial claim in the mail, I ran into a former coworker in a parking lot. He asked how things were going. I told him, then asked if my old company had any job openings. A month later, I was working for my old company again, with the only health coverage I’ve ever seen that actually covers what I need it to cover. When they offered me the job, I had to think for a whole two seconds before accepting.

Most people can’t do what I did. On paper, pretty much every health insurance plan I’ve ever had pretty much looked the same. But like I said, there’s only been one that ever covered much of anything.

And pretty much any old insurance plan works for me, because I rarely use it. As long as I visit a chiropractor every six or seven weeks or so, I have no health issues. I could save a lot of money by declining coverage entirely and just paying the chiropractor out of pocket.

But my wife has to go to the doctor more often. So does my son. Me paying into the system and getting next to nothing out of it covers for them, who pay into the system and take back out a much higher percentage of what they paid in.

The only companies who aren’t jealous of health insurance companies’ profits are the oil companies. Since 2000, their profits are up more than 400 percent. But year after year, more and more people find it harder to get health coverage.

The system has a good racket going, frankly. Food companies sell poisonous food to the unwitting (or apathetic) masses. The masses get sick and have to go to the doctor more. Doctors give them pills for their problems, but the problems get worse because they keep eating poisonous food. Eventually they develop diabetes or cancer, at which point the insurance company can cut off coverage.

Everyone makes lots of money in the meantime. Except for the consumer-turned-patient, who pays out more and more every year, then eventually ends up with a chronic and painful disease.

I’m not saying it’s a conspiracy. Not at all. The free market just found something that works really well for the people in power. It’s a beautiful system–for those who benefit.

Unfortunately that same system hurts people. I live with two people it hurts. And the system killed my dad.

Sometimes the market needs a referee. That referee is called regulation. And since the Republican Party isn’t willing to regulate, I voted for a Democrat that I knew would press the issue.

Actually what I expected was for Obama and the Democrats to push some kind of socialized medicine, and Republicans to counter with something like the German system, which is all private but highly regulated. You don’t hear much about the German system, mostly because it works pretty well.

That’s what I favor.

Some people may wonder why I care, since I have good coverage now. But if you think the plan I have will last forever, you’re smoking crack. Eventually the plan will get too expensive. Or the company could get bought out, or it could lose the contract I’m on. There are any number of things that could put me right back where I was a couple of months ago.

I’d much rather fix the system. I might need it someday, but not only that, I actually have a soul, and I’m tired of seeing other people suffering.

If that makes me a moderate rather than a conservative, so be it. If it means I’m no longer a Republican, well, some things are more important than labels and party affiliations.

So what now?

The Republican Revolution is over. What went wrong?

Before I try to answer that question, a few words by Dr. Donald Prahlow, my high school history instructor, seem pertinent. In 1992 when Bill Clinton took the White House, Dr. Prahlow stood in front of a classroom full of young, mostly right-leaning students and tried to make sense of what happened. "As a historian, I have to say the best thing that can happen, when one political party has been in power for a long time, is to hand power over to the other one." He went on to give some examples. The most important thing I took from his brief aside before getting onto the day’s regularly scheduled lecture was that no president in history has ever been able to wreck the country irreparably in four or even eight years.

Not Richard Nixon. Not Warren G. Harding. Not Lyndon B. Johnson. Despite my strong feelings on that day in 1992, not William Jefferson Clinton. And regardless of your feelings on the two men, neither George W. Bush nor Barack Obama will be the first.

And I believe that what went wrong with the Republican Revolution, which started with the stunning 1994 comeback in both houses of Congress, is largely the neoconservative movement and George W. Bush.

What’s sad is that the end all started with so much potential. I vividly remember Bill Clinton, interviewed on the evening news on either ABC, NBC or CBS around 2002 or 2003 talking about Bush. He said he thought Bush would be very successful early on, because of two words that are largely forgotten today: compassionate conservatism. I’m paraphrasing, but basically Clinton said that if Bush could deliver Democratic-like social programs while delivering lower taxes, it would be almost impossible for the Democratic party to compete with that.

Unfortunately, nothing ever came of that. Rather than being remembered as the president who popularized compassionate conservatism, we’ll remember the image of Bush flying over New Orleans after Hurricane Katrina, looking out of touch and perhaps a bit over his head. Or we’ll remember the bothced recovery effort, which was long on excuses but painfully short on results.

The other Bush promise that never turned into anything was his bipartisanship. As governor of Texas, he had the reputation for reaching out to Democrats and working with them. Unfortunately, as president, we saw a man with little tolerance for anyone who disagreed with him, even if they were members of his own party.

In all fairness, it’s difficult to know how much of what we saw was Bush, and how much of it really was Dick Cheney. And that’s another failing of the Bush presidency: He failed to stand up to Cheney when necessary and put him in his place. The ticket read Bush-Cheney, but
often it seemed the reality was Cheney-Bush.

I don’t think I need to even bring up the wars.

Ultimately, all that came back to bite John McCain. The John McCain who stood up to Bush in 2000 was largely absent in 2008. It’s entirely possible that voters would have punished McCain for the sins of Bush no matter what, but ultimately, McCain didn’t do enough to distance himself from his predecessor. Certainly he risked alienating the 28% of the population who approved of Bush in doing so, but he fell into the same trap the Democrats fell into repeatedly in the 1990s when trying to appease the far left fringes of its party. As long as McCain managed to stay to the right of the Democrats, the minority of the population who favored Bush wasn’t going to abandon him and vote for Obama. McCain needed to concentrate on getting 23% from the center of the spectrum.

Meanwhile, while McCain was failing to distance himself enough from Bush (and was showing he was perfectly capable of being out of touch), Obama was showing up on the Sunday morning political shows, demonstrating that he read things, including newspapers, including the op-ed pages, including the parts written by people he didn’t always agree with. After 8 years of an administration whose idea of keeping informed was listening to Rush Limbaugh and watching Fox News, he probably seemed refreshing.

So what’s next?

The comeback doesn’t have to take as long this time. Remember, the only thing less popular than Bush right now is the Democrat-controlled Congress. They get a pass right now because they’re mostly unpopular for not standing up to Bush. But if the new, bigger Democratic majority fails to get desired results, there’s no reason to believe the electorate will be so sympathetic in two years.

So the Republican party needs to be ready. It has until the 2010 primaries to find its soul, to figure out what it stands for.

For their sake and everyone else’s, I hope it involves smaller and more efficient government and taking the Constitution in its entirety seriously.

And in the meantime, we have a man in the White House who embodies the American Dream and who personifies the result of decades of struggle. Whatever you think of his politics, he will inspire a generation or more, and a lot of good can come from that.

What to the rich do with their money?

Charlie brought up the question of what the rich do with their money in response to the theory of trickle-down economics. This seems timely, as one of my coworkers and I talked trickle-down just yesterday.The theory is often maligned, and usually by people who don’t understand it very well. But frankly its proponents don’t always understand it either.

The classic justification is that if you tax the rich less, they’ll use that savings to buy things like boats and luxury cars, creating jobs for people who build and sell things like boats and luxury cars, and for the suppliers of those companies. And the argument is that this economic activity spreads the wealth better than the government taxing and redistributing wealth, due to government overhead.

At least that’s the simple, back-of-a-napkin explanation you’re likely to hear from a conservative activist when you ask the question. It’s the one I’ve always heard.

The theory is more complicated than that. For most of the 20th century, the fabulously rich were taxed at extremely high rates–70 or even 90 percent. The economist Arthur Laffer argued that if one taxed the rich at a lower rate, then tax revenue would actually increase–the reason being that someone who had the ability to make $10 million probably also had the ability to make more than that, but would probably be more willing to try to make more if the government weren’t taking 90% of the spoils.

Ronald Reagan lowered that upper tax rate to 50%. And sure enough, revenue went up, because 50% of $20 million is more than 90% of $10 million. So both the entrepreneur and the government won.

But contrary to what the modern Republican party seems to think, Laffer didn’t argue that the less you taxed, the more revenue would increase. Tax revenue is a more like a bell curve–tax at 0%, and revenue will be $0. Likewise, take 100%, and revenue will be $0, because nobody will work (or they’ll hide it if they do). The question is what percentage puts tax revenue at the top of the bell curve. I believe that history says it’s somewhere around 38%. Ironically, it was a Democrat who demonstrated that rate. (Hint: it wasn’t Jimmy Carter.)

And when Democrats malign trickle-down economics, they ignore one important fact: When Reagan cut taxes, revenue did rise–a lot. And when Bush I cut them further, it rose even more. The problem was that spending in Washington outpaced revenue growth during the 1980s and most of the 1990s. In the waning years of Clinton’s presidency, revenue finally caught up with spending, and for two years in a row there was actually a small surplus.

And in all fairness to Bush II, that’s been the biggest problem with his economic policy the past 8 years. Revenue went down slightly when he cut the highest tax bracket. But the bigger problem is that Washington spending increased beyond Reagan levels. Had spending stayed in check, we might still be talking about small deficits and occasional surpluses. Instead, he kept taxes low while signing budgets that made Clinton look like a fiscal conservative.

But that’s enough about trickle-down economics. Let’s talk about the rich.

A little over three years ago, I was walking out to my car after work when a couple of well-dressed men approached me and asked for a jump start. I pulled my Honda up to their rental luxury car, we hooked up the cables, got the car started, and they went on their way.

I now believe one of the men that day was the man who soon became the CEO of that company. I won’t name him or the company. Perhaps he was interviewing for the job that day. Not long afterward, he got the job, and as a result of one of his earliest decisions, I lost mine.

So I did a favor for a guy who made $4.81 million last year, and the thanks I got was unemployment.

The soak-the-rich attitude comes from stories like that. When we think of the rich, we think of CEOs who take over large, failing companies, get rid of lots of people, bring in their people, and in the end the companies don’t really get much better, but in the meantime they pocket a few million dollars every year. And when they lose their jobs, they get a golden parachute of a few million more.

But the majority of the rich aren’t like that. They’re more like the owner of the next company I worked for. It was a small consulting company, but it was smaller when he bought it. He bought it during a dark time in its history, brought in some good people, and together they worked hard to make the company profitable again.

In 2006, not long after I met him, he sold the company to a much larger competitor and turned a nice profit for himself. They only retained him for a short time, but he’s not hurting for money. Shrewdly, he didn’t sell them the building, so the company is still paying him rent every month.

Nobody knows what his future plans are, but some people who know him better than I do believe he’ll start another company at some point.

Read books like The Millionaire Next Door, and you’ll find the majority of millionaires are unassuming people who park their Ford Crown Victorias in front of ranch-style houses every night. They’re often self-employed, and usually made their first million by saving a lot and investing in themselves.

I have little respect for the first CEO I talked about, because he has his job mostly because he looks and acts the part. He dresses well, looks like a movie star, and when he talks, he can convince you he cares. But let’s talk qualifications. During his first year on the job, his company’s shares were worth about $1.20 apiece. Now they’re worth 42 cents per share and the company is $1 billion deeper in debt. That’s not all his fault, but it’s hard to argue that he’s done much to turn the company around, and it’s even harder to argue that those results are worth $4.81 million a year. I would think they could outsource his job to India and get comparable results for $100,000 a year and bank the savings.

At least they’d save more than they saved by outsourcing people like me.

I have a lot of respect for my other former employer, because he took a bad situation and turned it around, and he got the job because he bought a company with his own money. He invested his time, energy, and money in it, and besides making himself wealthier, he also created jobs–about 200 of them at his company’s peak–including one for a 31-year-old newlywed who was down on his luck and had worked for two other employers that same year.

The problem with trying to use tax policy to soak people like the first guy I mentioned is that it’s very difficult to do without also hurting the second one I mentioned. And if tax policy hurts him, he might as well just stay retired and play golf or whatever he enjoys doing, rather than starting a new company and making some new jobs for people.

And frankly I’m not sure what we gain when we make people like the first guy pay. I guess we feel better for a while. But the main thing we do is motivate him to hire the very best accountants and lawyers to find and exploit every loophole they can. So he still keeps most of his money, the government gets less than it projected, and the masses are blissfully ignorant, thinking they got some fat cat to finally give up his fair share, whatever that means, but they never see any tangible benefit.

Outlandish CEO pay and incestuous boards of directors loaded with conflicts of interest that perpetuate these outlandish compensation packages really are a separate issue, and the tax code isn’t the appropriate place to try to fix it.

But back to that tax code, and the second guy–the one worth worrying about. For what it’s worth, neither of the two major presidential candidates is likely to do anything that would singlehandedly persuade the second guy to stay retired. A return to Reagan’s or Carter’s income tax levels might, but neither candidate is proposing something like that. The difference between the two is much narrower than either of them want the rest of us to think, and their political rhetoric reflects that.

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