Mitt Romney's speech to Israel conservatives included praise for their performance on containing healthcare costs. Israel's costs as a percent of its GDP are 10% lower than those in the US. What he doesn't understand is that Israel keeps its costs down with a government plan that nobody in the GOP would support. It is a single payer plan with strict government cost controls. He, of course, has no plan for cutting the cost of healthcare in the US. The Ryan plan. that he supports, does not reduce spending on healthcare. It simply shifts some of the cost increases from government to individuals. Its hard to explain why he would praise Israel's form of socialized medicine.
Its hard to believe that his staff does not brief him better than they did on this speech. He is pretty clueless.
Tuesday, July 31, 2012
Mitt Romney Takes His Campaign To Israel
The conservative party in Israel hosted Mitt Romney on the campaign trail during his campaign stop in Israel. He told them what they wanted to hear and he pleased the conservative Jewish Americans who he brought with him. One of them, who had supported Newt Gingrich in the GOP primaries, was pleased. He has stated that he will provide $100 million to the Romney campaign. It may also help Romney in the battle for Florida, which is one the large swing states that will determine the outcome of the election.
Monday, July 30, 2012
Conservatives Control the Budget Deficit Debate And Some Of Them Are Democrats
The Simpson Bowles plan for dealing with budget deficits is being used as the starting point for debates about the budget. It is being supported by serious people who have want to cut social welfare programs. They are using our current revenue shortfalls, which produce large deficits as the rationale. The debate has been one-sided because Democrats have not offered an alternative approach to deficit reduction. The GOP has controlled the debate by default. One of the problems is the social security surplus has been used to fund current operations. When the surplus is exhausted, taxes will have to be increased or spending will have to be cut. Conservatives would rather cut spending than raise taxes on the super-rich.
The Financial Times Profiles Mitt Romney
This article in the Financial Times uses Mitt Romney's mistakes on his visit to London, and the purpose of his visit to meet with the Likud leaders in Israel, into perspective. The Obama campaign should import some help from the UK.
Robert Samuelson Argues That Economic Pessimism Is Our Problem
Robert Samuelson tries to explain why investors are so risk averse that they are willing to purchase US treasuries at historically high prices. The high prices for risk free treasuries tell us that investors have little fear of inflation. In other words, they are not worried about an economic expansion that would reduce unemployment and cause prices to rise. Banks are flush with record levels of reserves but there is not a high demand for loans from business or from consumers. Moreover, they have tightened their credit standards so that only the most credit worthy customers can obtain loans.
Samuelson blames this on economic pessimism. There is a loss of faith in the ability of government to use monetary policy or fiscal policy to affect the business cycle. In other words it is a problem within economics. I don't see the problems that way. Politicians make the decisions not economists. They tend to listen to economists who support their political perspectives. Economists who favor a more active role for government have less influence on politicians than those who believe that markets are self correcting. The politicians are aligned with constituents who have less concern about unemployment than they do about other matters. Corporate profits have been very good in this climate. They want a government that will support their interests, which include lower taxes and less regulation. They also want a government that redistributes income upwards rather than downwards. That is why deficit reduction has replaced employment growth in election campaigns. Cutting social welfare programs enables government to cut taxes, and claim that deficits will be reduced, without affecting spending on programs that redistribute income upwards. Neoliberal economics serves the political interests those who fund political campaigns. The means by which government programs redistribute income upwards is less visible than social welfare programs.
Samuelson blames this on economic pessimism. There is a loss of faith in the ability of government to use monetary policy or fiscal policy to affect the business cycle. In other words it is a problem within economics. I don't see the problems that way. Politicians make the decisions not economists. They tend to listen to economists who support their political perspectives. Economists who favor a more active role for government have less influence on politicians than those who believe that markets are self correcting. The politicians are aligned with constituents who have less concern about unemployment than they do about other matters. Corporate profits have been very good in this climate. They want a government that will support their interests, which include lower taxes and less regulation. They also want a government that redistributes income upwards rather than downwards. That is why deficit reduction has replaced employment growth in election campaigns. Cutting social welfare programs enables government to cut taxes, and claim that deficits will be reduced, without affecting spending on programs that redistribute income upwards. Neoliberal economics serves the political interests those who fund political campaigns. The means by which government programs redistribute income upwards is less visible than social welfare programs.
Senate Committee Reports That Billions Are Wasted On For-Profit Colleges
The Senate committee found nothing good in its study of for-profit colleges. Over half of the students enrolled do not get a degree and they leave with a pile of debt. The average CEO compensation is over $7 million. Executives and shareholders are the major beneficiaries of the billions spent by government on for-profit higher education. Their expertise is in marketing and recruiting.
The senators seemed to be surprised that private firms are more concerned with profits than they are with providing a good product. They don't need to produce a good product as long as they can sell a high priced product to desperate customers who can use government subsidized loans to pay for it. It is not much different than selling sub prime mortgages to poorly informed consumers who believe in the American dream of home ownership.
Unfortunately, it is not likely that Congress will do anything about the problem. For-profit higher education is performing just as it supposed to function. It is making a lot people rich and their lobby is good at purchasing support from politicians. It is just another form of predatory government. The major goal of predatory government is to take tax dollars, that are collected to provide public goods, and funnel them to hucksters for private gain. Their supporters in Congress will argue that profit seeking businesses are more efficient at providing public services than institutions without a profit incentive.
The senators seemed to be surprised that private firms are more concerned with profits than they are with providing a good product. They don't need to produce a good product as long as they can sell a high priced product to desperate customers who can use government subsidized loans to pay for it. It is not much different than selling sub prime mortgages to poorly informed consumers who believe in the American dream of home ownership.
Unfortunately, it is not likely that Congress will do anything about the problem. For-profit higher education is performing just as it supposed to function. It is making a lot people rich and their lobby is good at purchasing support from politicians. It is just another form of predatory government. The major goal of predatory government is to take tax dollars, that are collected to provide public goods, and funnel them to hucksters for private gain. Their supporters in Congress will argue that profit seeking businesses are more efficient at providing public services than institutions without a profit incentive.
The Anti-Obama Versus The Anti-Romney Campaigns
Robert Reich wishes that the Obama campaign would go beyond exposing the flaws in Mitt Romney. It would be a disaster if the Republicans won the election, but the Obama campaign seems to believe that it does not have to propose any bold plans for fixing the economy. They believe that the electorate will reject a candidate that has nothing better to offer than the policies the won two elections for George Bush. They may be right, but that will leave the president without a mandate to do anything that would move the country in a better direction.
I'm not convinced about the importance of mandates. Obama had a mandate to reverse the direction of the country after winning by a wide margin in 2008. He wasted it on Obamacare. Perhaps both campaigns are correct. Romney is hard to like. His best chance is to pin the bad economy on Obama who continues to blame it on Bush. Neither candidate seems to have a vision for the future that it is willing to sell to the public.
I'm not convinced about the importance of mandates. Obama had a mandate to reverse the direction of the country after winning by a wide margin in 2008. He wasted it on Obamacare. Perhaps both campaigns are correct. Romney is hard to like. His best chance is to pin the bad economy on Obama who continues to blame it on Bush. Neither candidate seems to have a vision for the future that it is willing to sell to the public.
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