Mad Deficits & Debt

Econbrowser has a post that caught my eye with its reference to an old favorite of mine, Mad Magazine.

In $9 trillion-- what, me worry? James Hamilton writes:

I also believe it is relevant to compare these deficits not just with GDP but also with current federal tax revenues. $1 trillion is approximately the total personal income tax receipts of the federal government in 2006. My preferred metric for what each additional trillion dollars would require from me personally is to take what I paid in federal income taxes in 2006 and double that amount. To pay off $9 trillion, I'd have to do that for 9 years.

It's not just the federal government that has a problem though. Here's the Wisconsin State Journal from June:

Like a financially strapped consumer facing higher credit card bills, the state would face unprecedented debt payments over the next four years under state budget proposals by Democratic Gov. Jim Doyle and lawmakers.

By 2012, yearly payments on state debt will likely consume at least 4.5 percent of the state’s total income from taxes and fees, according to projections by the Legislature’s and Doyle’s budget offices. That’s 13 percent higher than the 4 percent threshold state officials have long considered to be a reasonable limit.

At some point, spending and taxation will have to find a sensible balance; something that is no doubt easier said than done. Those with an affinity for seeking government solutions to all the problems of society ought to wake up and smell the revenue, or lack thereof. There is no support for even moderate increases in the tax burden and rightfully so.

Is Glenn Beck really this stupid?

I mean that sincerely. I don't have cable, so I've never seen the show. Mabye there's an inside joke here that I just don't get.



I've also never produced a television show; but don't they have meetings before the shows air where they discuss what they are going to say?

h/t @TAC blog

Cerberus in need of $5.5 billion

From the NY Times:

Clients with more than $5.5 billion invested in hedge funds controlled by Cerberus Capital Management have told the firm that they want their money back....

Mr. Feinberg has told investors that he still believes the investments in the Cerberus Partners funds will be profitable over time and that he did not want to sell securities and other assets in a down market.

But the loss of fee income on more than $5.5 billion in capital could prompt talented traders and investment professionals to leave for better-paying firms. Investors who are considering staying with the firm are also concerned that the liquidations will push down the value of their investments as they are sold off.

“We are embarrassed and disappointed by our 2008 performance, and we feel an obligation to you to turn this around,” Mr. Feinberg said in the July letter

That line about talented traders leaving seemed rather ominous to me, but maybe I am reading too much into it. Regardless, could the position of Cerberus have an impact on the New Page Mill in Kimberly?

The Real Cause of the Financial Crisis

No doubt the cause of the financial crisis that began last fall will be discussed and debated for years. Future PhD's will make their names drawing conclusions from it. But as we approach the anniversary of the collapse of Lehman Brothers, the casting about for a root cause will intensify. To date, I have read no better explanation than this one at Econbrowser, co-authored by Menzie Chinn, a professor at the UW Madison:

[W]e view the current episode as a replay of past debt crises, driven by profligate fiscal policies, but made much more virulent by a combination of high leverage, financial innovation, and regulatory disarmament. In this environment, speculation and outright criminal activities thrived; but those are exacerbating, rather than causal, factors....

We are now witnessing the unwinding of this process of debt accumulation....

In some sense, this process of retrenchment is necessary. For many years, the United States consumed more than it produced. We borrowed and for a while thought that the old rules had been suspended. But now it turns out that we do have to pay back what we have borrowed. The attendant higher saving rate and lower investment rate will lead to a substantial improvement in the current account balance, or in other words, the paying off of our debt.

We borrowed and spent like there was no tomorrow. Well, welcome to tomorrow.

I just listened to a fascinating discussion of Orwell with Christopher Hitchens. He describes how Orwell recognized one of his own strengths was his "power of facing unpleasant facts."

Certainly Chinn's analysis above includes some unpleasant facts. Our power of facing with regard to these facts is not immediately apparent; but one can hope that we yet have the power to become a bit more Orwellian. Which in this sense would be a good thing.

Kagen to hold town hall meeting next week

Congressman Steve Kagen will hold a listening session on health care in Green Bay on Monday August 31st from 7:00 to 8:30 PM.

It will be held at Southwest High School - 1331 Packerland Dr.

Here's the link to Kagen's official site. Info on listening sessions can be found under the Press Releases heading.

If you are interested, but reluctant for fear of encountering the craziness that marked Kagen's listening sessions earlier this month, I would urge you to reconsider.

I believe this event will still be contentious, but am willing to bet that some of the more intense fury has dissipated.

Are you sure those death panels aren't in there?

Tyler Cowen from Marginal Revolution [E.A.]:

Daniel Callahan's notable Taming the Beloved Beast: How Medical Technology Costs are Destroying Our Health Care System soon will be out. Here is his position:

I can sum up what I want to say in some simple propositions. First, ways must be found to return to more basic levels of medical care for ever more patients (e.g., to emphasize prevention and primary care) and to make it more difficult to receive medical care at the higher levels (e.g., advanced expensive cancer treatments or heart repairs). Second, the priorities for technologically oriented health care should begin with children, remain high with adults during their midlife, and then decline with the elderly. Third, if the medical care received during those first two stages of life is good, the elderly will have a high probability of a good old age even if advanced technologies are less available to them. Fourth, health care cannot be reformed, or costs controlled, without changing some deeply held underlying values, particularly those of unlimited medical progress and technological innovation.

Go read Tyler's short post. He makes a great point as to how the public realizes this thinking is common among the Democratic leadership. In this light, the outcry against health care reform really isn't all that surprising.

For my part, this is what scares me: A future where a bureaucratically imposed National Grandma Quotient is maintained, but individual grandmothers no longer matter.

Hell is the triumph of aggregates over individuals.

WI-8 Gets Early Look at Candidate Reid Ribble

Reid Ribble is a Republican candidate for the eighth congressional district seat currently held by Democrat Dr. Steve Kagen. Last week Ribble held a question and answer session hosted by a Republican women's group at the Appleton Yacht Club.

While I wasn't sure what to expect from Ribble, I came away feeling quite impressed. It is clear that he is a serious candidate who has thought about what he sees as the issues and has invested his own time and effort in getting his campaign started.

The crowd at the event numbered about thirty. Some there knew Ribble personally and offered a testimonial to his character. Others appeared to be feeling out his positions on various issues. It was clear that all in the room were not supporters of Steve Kagen or of the current Democratic agenda both in Congress and from the White House.

The session consisted primarily of questions from the crowd. These ranged from the tactical to the philosophical.

On fundraising, it appears Ribble has thought about just how much money he believes he will need to be successful. As much as people bemoan money in politics, it is foolish to pretend it is not part of the process. In a line I found particularly thought provoking, Ribble made the point that interest group money flows into politics because average citizens are by and large unwilling to finance campaigns.

Health care was obviously a big topic and one which Ribble discussed at length. He emphasized individual ownership and portability of coverage; drawing on his own experience as a business owner who provides health coverage for his employees.

Someone asked about his campaign's top three ideas to which he replied that we needed to: stop borrowing; stop spending; and stop taxing. During the discussion he emphasized his commitment to fiscal responsibility several times.

A question on foreign policy did arise and while he was able to handle it well, this is an area where a candidate like Ribble has an obvious weakness. When the top issues are the stimulus, cap and trade, and health care, a successful local businessman turned candidate is a great idea. If one year from now major international developments dramatically switch the nation's focus, a candidate like Ribble could seem out of place. Collapse in Pakistan or a nuclear armed Iran could potentially push some of the current domestic concerns out of the minds of voters. Admittedly, I'm not sure how an allergist from Appleton is any more qualified in foreign policy than a roofing contractor from Appleton; but an allergist who has served two terms in the House may hold the edge in this contest with some less ideologically driven voters.

Ribble described himself as a "common sense conservative" and a "reluctant Republican." Both are labels that could appeal to voters unhappy with the current direction of the country, but unwilling to argue for a return to the policies of the Bush administration. I think Ribble was clear that he can't (and wouldn't) support reckless borrow-and-spend policies regardless of which party was advocating them. In what could be the line of the campaign, Ribble said that he wanted to tell Dr. Kagen that he is, "allergic to runaway federal spending."

While it is still early, the 2010 campaign season is apparently underway. The level of interest in the current issues is sure to bring increased focus on races throughout the country. This focus will be even more intense in districts like the Wisconsin 8th, where there is a very real chance that an incumbent could lose. The early indication from Ribble is that he is a formidable candidate and will be tough opponent both for Kagen and the other Republican challengers.

Why the average investor doesn't stand a chance

From the Wall Street Journal:

Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry's research didn't find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

You remember Goldman don't you? They are a major recipient of federal bailout dollars, both directly and through agreements with other bailed out firms such as AIG.

Goldman claims that this discrepancy is merely a matter of differing time horizons. Perhaps they are correct: They need to make a profit now, so their research department is going to hold off on telling you what they really think for six days.

*Economics In One Lesson*

Even though it first appeared in 1946, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt has some fascinating things to say about events happening right now. I was particularly struck by this:

Government guaranteed mortgages, especially when a negligible down payment or no down payment whatsoever is required, inevitably mean more bad loans than otherwise....They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared to other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment.

At first glance I thought this was incredibly prescient. But then I had second thoughts. After all, it isn't the government guaranteed loans that have gone bad in the latest crisis. Otherwise banks wouldn't have toxic assets. They would be made whole by government guarantees and it is the government that would have the toxic assets. (They do anyway, but that is a function of the response the current crisis.)

On the other hand, it's not that hard to argue that government guarantees distort the market; and it is these distortions that started us down the path of ruinous activity in the mortgage markets. Activity whose negative effects eventually spilled over into other parts of the economy.

In light of recent history though, Hazlitt is far too optimistic about the private market's ability to avoid the negative consequences outlined above, which he sees as the outcome of government intervention only. His confidence in the market seems thoroughly misplaced when he writes:

Most lenders, therefore, investigate any proposal carefully before they risk their own money in it.... The private money will be invested only where repayment with interest or profit is definitely expected.

He was right about the expected profit part; but lenders weren't counting on repayment in order to obtain their profit. It wasn't the government extending loans to people with no realistic chance of repayment, it was the private mortgage industry. It wasn't the government giving mortgages to people who provided no documentation as to income or credit history, it was the private mortgage industry.

The proliferation of liar loans and incredibly stupid behavior by so many involved in mortgage transactions however, does not mean that Hazlitt was wrong about the consequences of government intervention; but it is clear that his notions about the free market's ability to avoid such negative outcomes seems outdated.

What isn't diminished at all and is, in fact, reinforced by the latest economic crisis is what Hazlitt calls the single lesson that contains the whole of economics:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

It is absolutely clear that many in the financial industry were either ignorant of or willfully disregarded this simple notion. It is demonstrable almost to the point of being indisputable that much of the financial activity in our recent past consisted of the pursuit of narrowly focused short term profit with little or no thought given to the "longer effects" or the consequences "not merely for one group but for all groups."

Finding a way to teach both our government and our industries Hazlitt's lesson, and getting them to put it into action, is essential to our future prosperity and our continued economic security.

Economics Can Be Fun

No that is not a typo.

For proof head over to The Carnival of Economic Fun #1 for posts that combine humor and economics.

The inaugural edition includes a post of mine from back in January about how my five boys taught me a lesson in incentives.

Check it out.

Are Rumors of the Death Panels Greatly Exaggerated?

Much of the health care debate over the last two weeks has revolved around Governor Sarah Palin's statement from her facebook page about her parents or her baby with Down Syndrome having to stand before a government "death panel" which would determine whether or not they would receive medical care.

The media coverage has almost universally centered around reassuring people that no such thing exists and that Palin has simply got her facts wrong. I'm no fan of Palin and I think it is definitely fair to say that her "death panel" remark is at the very least some over the top rhetoric. It's also accurate to say that the House bill does not set up any type of governmental body called a death panel. Still, I'm not convinced that this is a simple open and shut case of Palin lying while President Obama, Congressional Democrats, and the Media champion full and honest disclosure.

In order to appear as if they have the indisputable facts on their side, many in the media have identified a provision in the House bill that would allow Medicare to pay for end of life counseling with a doctor as the item that sparked the death panel remark. They are correct that discussions with a doctor about end of life issues are certainly important medical services; and, as such, they ought to be covered by medical insurance. But what if it isn't this particular provision that upsets people who do worry about the creation of some type of death panel?

Last Friday, the New York Times had an article purporting to reveal the real source of the death panel rumor, which was heralded by some bloggers as providing the definitive refutation to what they saw as Palin's baseless accusation. The article detailed how this rumor is really nothing new and that it represents an attempt to derail the current health care reform by the same people that destroyed President Clinton's effort at reform in the nineties. After what was a thoughtful and persuasive article, the authors concluded on this note:

Still, one proponent of the euthanasia theory, Mr. Neumayr, said he saw no reason to stop making the claim.

“I think a government-run plan that is administered by politicians and bureaucrats who support euthanasia is inevitably going to reflect that view,” he said, “and I don’t think that’s a crazy leap.”

This, for me, speaks to the longevity of the death panel rumor. Not that people who oppose Obama's policies in general are entitled to their own facts, but that an administration whose worldview does not consistently value life (Obama's position on FOCA is well documented) may be in a position to make decisions which could harm individuals in the name of what they see as the greater good.

But there really is no need to take my word for it. We should see what the President himself has said. Slate blogger Mickey Kaus, a liberal, says that Obama, "came a lot closer to talking about "death panels" back in April than I'd thought." He then quotes from an interview between the President and David Leonhardt of the New York Times:

THE PRESIDENT: So that's where I think you just get into some very difficult moral issues. But that's also a huge driver of cost, right?

I mean, the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here.

LEONHARDT: So how do you - how do we deal with it?

THE PRESIDENT: Well, I think that there is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place. It is very difficult to imagine the country making those decisions just through the normal political channels. And that's part of why you have to have some independent group that can give you guidance. It's not determinative, but I think has to be able to give you some guidance. And that's part of what I suspect you'll see emerging out of the various health care conversations that are taking place on the Hill right now.

Yikes. ... I'm sure the "not determinative" part was very important to Obama. Still! He's talking about a panel of independent experts making end-of-life recommendations in order to save costs that have an effect at an individual level. And he thought it would be in the bill that emerges. ... It's also pretty clear that something like the "IMAC" panel is what he has in mind. Whether or not the IMAC would actually do this--Harold Pollack says end-of-life issues are well down the curve-bender's list, for example--Obama thought it would do it. . .

This reaction reveals two critical points with regard to the current debate. First, the notion of a death panel cannot be totally remote when someone supportive of Obama can see the possibility. Second, the death panel fear does not spring from the inclusion of end of life counseling in Medicare. This provision is little more than a straw man, knocked down in the service of discrediting Palin.

While I'm certainly not claiming that the Obama administration is ready to literally pull the plug on anybody, nor that such an outcome is even their intent. However, having said that, I don't believe the fear of such an outcome is totally misguided. The government already has tremendous power over life and death. It doesn't seem at all crazy to worry that health care reform would extend that power even further.

Constructive Opposition

No one should allow themselves to be fooled into thinking that all of the opposition to the current health care reform process simply wants things to remain as they are. Still, it's nice to be reminded of this from time to time.

Dad29 recently argued for dumping HR 3200 altogether, but this doesn't mean no reform. Here are his top two:

And reforms are needed. So the Administration should focus on the Necessary Things:

1) Devise a method to accomodate pre-existing conditions;

2) Ensure portability;

He's got five more, so go read the whole thing.

My own thinking is that the current system is unsustainable in the medium term. This means that even if the current effort fails, the time until we are back at it will be shorter than the space between Clinton's effort and this one.

The effort ought to focus on universal catastrophic coverage. This could have the triple benefit of providing medical care in the case of a major accident or illness, of acting as a true safety net against lifelong financial ruin due to high medical bills, and reducing the costs of routine medical treatment.

I think the distorting effects of employer provided insurance on the cost of making a simple trip to the doctor are greatly underestimated by most people. Removing a few of the layers of bureaucracy between patient and doctor for day to day care can't help but bring costs down. Does anyone really think it ought to cost $95-$265 to have a doctor shine a light in your child's ear and issue a prescription?

So keep in mind that being critical of the health care reform proposal is not the same thing as wanting to maintain the status quo. Constructive opposition does exist and should ultimately improve the effort at reform.

The Astroturf Is Always Greener

As quoted by Matthew Yglesias [his emphasis]:

A new coalition this morning is launching $12 million in TV ads to support President Obama’s health-reform plan, in the opening wave of a planned tens of millions of dollars this fall. The new group, funded largely by PhRMA, is called Americans for Stable Quality Care. It includes some odd bedfellows: the American Medical Association, FamiliesUSA, the Federation of American Hospitals, PhRMA and SEIU. [...]

The group’s campaign is likely to mean that White House supporters keep the upper hand on the airwaves. PhRMA’s participation is key, because the group has promised to kick in as much as $150 million for advertising and grass-roots activity to help pass the president’s plan.

I'm pretty sure Democrats critical of recent health care town hall protesters put the price ceiling on "grass roots" considerably lower than $150 million.

Unitended consequences and health care reform

With all of the chaos and anger surrounding the health care debate, I find it helpful to occasionally stop screaming and take a look at just what it is we are getting ourselves into. While I realize the Senate Finance Committee version of health care legislation isn't out yet, some analysis has been done on parts of it. Of particular note, is analysis by groups that don't have a clear partisan motive to either trash or to herald the current proposals.

Just such an analysis is this one from the Center on Budget and Policy Priorities [E.A]:

The Proposal’s Deep Flaws

The proposal has serious flaws, including the following:

Biasing Hiring and Firing Decisions Against Low-Income, Female, and Minority Workers

• The proposal would make it considerably more expensive for employers who do not offer insurance to hire workers from lower-income families than workers from higher-income backgrounds to do the same job.
• As a result, it would distort hiring decisions. Employers would have strong incentives to tilt hiring toward people who have a spouse with a good income (or have health coverage through a family member), teenagers whose parents make a decent living, and people without children (since the eligibility limit for the subsidies in the new health insurance exchanges will increase with family size). Low-income women with children in one-earner families would be particularly disadvantaged.
  
  While language could be included to try to ban such discriminatory effects, it would be virtually impossible to enforce effectively.

The analysis singles out low-income women with children, but another group that could easily fall into this category would be single income families with more than the average number of children. (I know. It's all about me.) While my family and I live quite comfortably, I wouldn't be at all shocked to see that we fell into some category of poverty on a federal scale due the fact that eight of us live off of just my income since my wife works in our home.

For someone who believes like I do that the traditional family serves as the foundation for American stability and prosperity, it is disheartening to see another step toward the destruction of one of our most critical institutions. The American Family has already sacrificed too much in pursuit of the empty materialism that characterizes so much of modern culture.

Also, this cautionary note should remind everyone that just because politicians promise one thing when laws are being crafted, events have a way of departing from the script. This doesn't necessarily mean that President Obama and others are lying about their intentions. No matter how good one's intentions, they are no match for unintended consequences.

U.S. Fiddles While China Grows

Economist Simon Johnson has a recent post at The Baseline Scenario highlighting two great dangers to U.S. prosperity; one foreign and one domestic.

On the foreign side, Johnson encourages us to set aside the monetary relationship between the U.S. and China. The real danger he says, is from China's habit of investment with an eye toward productivity growth (e.g. infrastructure, education). This in and of itself might not be so bad if we in the U.S. were doing the same.

This is where the domestic part of the problem comes in. Johnson argues that the U.S. has not worked to increase productive sectors of its economy. Instead, our economy has seen a certain non-productive sector increase dramatically as a share of GDP. Specifically, the finance sector, which he spitefully dismisses as "rent-seeking."

No, rent seeking is not when Mr. Furley knocked on Jack Tripper's door on the first of the month and all of the 70's sitcom hijinx that such a scene entails; it is the practice of extracting benefits above and beyond what those they would receive under free market conditions, often by turning the political process to their advantage.

It's the combination of these two different approaches to economic development that represents the real danger for the United States. Here's Johnson [E.A.]:

Finance in its modern American form is not productive. It is not conducive to further sustained economic growth. The GDP accruing from these activities is illusory – most of finance is simply a tax on what is done by more productive members of society and a diversion of talent away from genuinely productivity-enhancing activities.

The rise of China does not necessarily imply slowdown or demise for the United States. But if they specialize in making things and we specialize in finance, they will eat our lunch.

Anybody know what the Masters of the Universe on Wall Street eat for lunch? Hope the Chinese like it.

Go read the whole thing.

Just where did that TARP money go?

You can get lots of great detail about which institutions received TARP money at sites like Pro Publica, but as to exactly how the money was used is not so clear.

But it's not just the average citizen that is likely to be blocked in their attempt to follow the money any further than the front door of the recipient; it seems many of the watchdogs are suffering the same fate. From McClatchy:

Although hundreds of well-trained eyes are watching over the $700 billion that Congress last year decided to spend bailing out the nation's financial sector, it's still difficult to answer some of the most basic questions about where the money went. [snip]

When the Bush administration first went to Congress for the money, TARP's main purpose was to buy up hundreds of billions of dollars in bad mortgages and so-called mortgage-backed securities that were bought and sold on Wall Street.

Today, TARP consists of 12 programs that sent those hundreds of billions of dollars to big banks, but it's also bailed out auto companies, auto suppliers, individuals delinquent on their mortgages, small businesses and American International Group, the big insurance company.

The watchdogs now must oversee the maze that TARP has become.

Just because a lot of people are watching, however, doesn't mean they get everything they want to see.

If the professionals tasked with keeping an eye on this money are not able to do so, for whatever reason, what chance do the rest of us have?

Even though I am a fan of Elizabeth Warren, the article makes me worry that TARP oversight may have crossed over into "shoes in the x-ray machine" territory. This is when the government, confronted with an exceedingly difficult task, opts for highly visible but largely meaningless efforts to provide the illusion of effective action. In other words, the regulatory equivalent of "jumping the shark."

A different idea for health care reform

Author Zach Krajacic writing in the Christian Science Monitor:

Imagine how much automobile insurance would cost if it paid for all expenses associated with owning an automobile – oil changes, engine failures, worn-out tires, brakes, rust, and so on. The number of people who couldn't afford car insurance would rise dramatically, and we would have a car insurance crisis in America....

Under the system I am proposing, health insurance would pay for emergencies and urgent care, diagnostic tests and X-rays, medically necessary surgery, hospitalization, therapy, and any other critical services that few people could afford to pay out of their own pockets. Individuals would pay for routine, discretionary, and elective services – such as doctor visits, acupuncture, marriage counseling – on their own....

Insurance is intended to be a pooling of people's money to pay for large, unexpected expenses – not for every expense that is incurred. In other words, it is supposed to be a safety net for catastrophic events.

In essence this would be an attempt to return insurance to what it ought to be: a hedge against a catastrophic event. These days, health insurance premiums are too often thought of as a lay-away plan for treatment of every runny nose and sore throat.

H/T Lakeshore Laments

If I could have asked Steve Kagen a question

Obviously, the unruly crowd at Kagen's town hall prohibited any meaningful dialogue. But if things had been otherwise, I would have asked Kagen this:

Earlier tonight when responding to a question, you indicated that H.R. 3200 did not allow for federal funding of abortion. If that is the case, then why did Representative Bart Stupak, a Democrat who represents the U.P., feel the need last week to offer an amendment to H.R. 3200 to explicitly prohibit funding for abortions.

Given the party and regional similarities between these two Representatives it is a little more than disconcerting how they can read the same bill and come away with two diametrically opposed understandings of what the bill does and does not allow.

Basically, that is the real problem with the current health care reform proposals. They are too long, too complicated, and utterly incomprehensible.

Those that support reform would do well to remember this and perhaps think twice before demonizing those that are opposed to the current proposal. Perhaps they are right to oppose it, since it doesn't seem anyone, including the people that are going to vote on it, understands exactly what this bill will mean in the real world were it to become law.

Mickey Kaus on Grassroots vs. Astroturf

Here's Slate blogger Mickey Kaus with an excellent question:

P.S.: If an "astroturfing" campaign gets real people to show up at events stating their real views, isn't it ... community organizing? ... 5:04 P..M.

I still say the outrage at Monday's listening session was real, even if it was largely unruly and at times demonstrated how ill-informed some people are on the issue of health care reform.

Kagen's Green Bay Town Hall pt. 3

This is part 3. Part 1 is here. Part 2 is here.

Despite the contentious nature of Kagen's town hall, there are some initial conclusions that can be drawn from the experience.

First, people are scared. Literally scared. Two of the more thoughtful and less boisterous speakers from the audience (one man and one woman) both used the word scared and both seemed sincere. During his comment the man rattled off a list of what have largely become buzz words for government intervention (Fannie Mae, Freddie Mac, Medicare, Medicaid, etc.) and he ended with what was almost a plea for help, stating that he was afraid of his own government.

Next, concern over illegal immigration and, more specifically, about the use of government money to provide services to illegal immigrants is quite high. Those in other parts of the country can dismiss this as flyover country racism or xenophobia, but it is real. People feel threatened by this notion (whether actual or perceived) and this will most likely continue to shape at least some portion of the debate. Kagen did his best to try and persuade people that the current bill wouldn't allow coverage of illegal aliens, but the crowd in front of Kagen clearly wasn't having any of it.

Also, two of the Obama administrations biggest talking points (probably the two biggest) are clearly not being taken seriously by the voters as represented by those in attendance at the town hall.

First, the idea that if you like your current health coverage, you will get to keep it. Every time Kagen repeated this a collective groan went up from the crowd. Absolutely no one took this claim seriously. At one point a man read from the bill itself about the grandfather clause for plans in effect prior to the effective date of the legislation. The question was why is there a need to grandfather in plans that Obama says won't have to change. to which there was no clear answer.

Second, no one was buying that taxes on the wealthy alone would be enough to pay for both the health care bill and all of the other recent spending that the government has undertaken. When Kagen used the line regarding taxing those making over $250k only, he was shouted down. It didn't seem to strike Kagen as incongruous that behind him was a sign put up by his office that included a phrase about no free lunch while he was offering lunch to everyone in the room on the tab of those earning over $250k per year.

Finally, and this is purely a political matter, Kagen acquitted himself well given the onslaught, but at times he was his own worst enemy. If someone would ask him about a specific section of the bill he would occasionally open his copy and begin reading it to us. It is not understandable. Reading it aloud made him sound foolish.

He seemed to bring the crowd around talking about his own previous health care proposal and his support of Ron Paul's bill to the audit the Fed, but within a few minutes he put his foot in his mouth. Someone from the back of the room shouted to ask him why he didn't accept Medicaid patients when he was a practicing physician. He was taken aback by this and indicated that it was an outright lie. He went on to explain that he did accept Medicaid patients, but that concerning those patients he, "didn't sign a contract with the Federal goverment," at which point the room erupted in jeers.

The obvious implication was that if he couldn't sign on to the offer the goverment was making why should we.

And judging by the behavior of those in attendance tonight, no one was.

Kagen's Green Bay Town Hall pt. 2

This is part 2. Part 1 is here.

Once I got into the auditorium it was clear that the reports from those leaving had been correct. Sentiment in the hall was tremendously negative. 300 angry people shouting and clapping also generated tremendous heat and the room was sweltering.

Kagen read questions from cards completed by attendees. For the most part the questions feel into five broad categories (in no particular order): government control of health care; out of control government spending; coverage for illegal aliens; coverage of abortion; tort reform.

Of the four, abortion was the least mentioned, but there was a large applause line during one abortion related exchange. Mr. Kagen was explaining that an individuals health care can affect those around him. Specifically, that in the past one child infected with polio could go to school and infect others. In response, someone in the crowd yelled out, "they have to be born first."

Regardless of what the questions were, almost every one was greeted with shouts of derision. If the question itself was particularly negative, cheering would often begin before Kagen had finished reading it, drowning out his voice.

I could closely survey at least one quarter of the auditorium and from what I could see there were only two people in that area that were willing to clap or shout in support of Kagen. The rest were clearly against anything that Kagen had to say. Many of these felt no reluctance to shout during both the questions and answers. Sometimes the outbursts included pleas to leave health care alone or to read the bill, sometimes they would accuse Kagen of lying outright.

It was clear that many in the crowd had researched portions of the bill, or had at least referred to sources that discussed the bills provision. An older gentleman seated next to me told me that this was the first town hall he had been to. I could see that he had printed out some information about the health care bill, that included citations to specific sections. He had also taken notes in the margins.

There were some signs posted at the entrance to the auditorium stating that the Brown County Library didn't allow the display of political signs and these were being confiscated at the door. This did little to dampen the crowd's enthusiasm. I did see one person asked to stop handing out political literature in the lobby, though owing to the amount of chaos at the scene some dissemination of literature did occur. As I noted, though, many people came prepared with their own information, so this was largely not a factor.

Eventually, Kagen departed from the question cards and started taking questions directly from audience members. This was far superior to the card method and did allow for some give and take between the audience and Kagen. It also quieted some of the shouting, at least during the questions, as most were willing to let people speak since it was clear most people were against the health care reform bill.

This questioning allowed the topic to shift during the last half hour when two longer questions were asked about Kagen's Cap and Trade vote. Both of the questions were similar in that the questioners indicated they had called Kagen's office prior to the vote to express their disapproval. They basically wanted to know how Kagen could vote for Cap and Trade after, what they saw, as overwhelming support against it within the district. I don't believe they ever got that specific question answered, since the questions also revolved around the paper industry and Kagen was able to tout his fight against unfair Chinese imports of paper. If nothing else, the questions go to show that it is not just the health care issue that people are worried about.

This largely describes the scene tonight. I'll deal with some brief conclusions in part 3.

Kagen's Green Bay Town Hall pt. 1

It was clear from the start that Kagen's staff underestimated the interest in his appearance tonight. To be fair, so did I. I arrived at 6:40 for an event scheduled to start at 7:00 only to be told that the auditorium was full and that they were closing the doors. At the time I was within 3 feet of the door, so I just stopped and waited.

The published auditorium capacity was listed as 300. So there were 300 seated in the auditorium and there had to be at least that many people behind me. Kagen staff began moving through the crowd indicating that the Congressman understood they were interested and he was willing to hold another town hall at some unspecified date in the future. They also reminded everyone about the session being held in Appleton, tomorrow. Though several people in the crowd complained that the Appleton venue is even smaller than the one at the Brown County Library.

When it was clear that the auditorium didn't have capacity for all those in attendance, many in the crowd started to chant that they wanted the action moved outside where the larger number could be accommodated.



At this point sentiment outside was incredibly negative. Many people were shouting randomly while others directed their ire at the nearest Kagen staffer. The comments at this point largely ran along the lines of, "if you can't organize a town hall, how can we let you run health care."

The crowd was mostly older, but varied age groups were represented. After 7:00, the Kagen staff closed the door to the auditorium citing a "fire hazard". I witnessed several tense moments at the door where a Kagen volunteer blocked people from opening the door. At this point the crowd frustration really in, and a chant of, "vote out Kagen," began.



At this point, we could hear both cheers and boos from inside the auditorium, but we couldn't tell at all what was being cheered and what was being booed. As early as 7:15 some people began straggling out of the auditorium, those of us near the door tried to press these people for information about what was going on inside.

One of the first to come out was a woman that said she was an opponent of the bill, but that what was going on inside was, in her words, "disgusting." She indicated that there was some type of shouting at almost every question or answer and that very little could be heard or understood inside the auditorium.

Additional people came out, and expressed the same thing. I spoke to a televsion camera man who had been inside the auditorium. He indicated the feeling inside was overwhelmingly against the health care reform bill.

At this point, I was still outside the auditorium, but as people left, additional people were allowed in to take their place. I had to wait until about 7:45 but eventually I was able to gain access to auditorium itself. It soon became clear that the feeling inside the auditorium was, if anything, more intense than what I had witnessed in the lobby.

Part 2 is here.

Representative Kagen-Green Bay Town Hall

**Update: Coverage of town hall with two short videos is here**

Representative Steve Kagen will hold a listening session on health care reform in Green Bay on Monday night, August 3rd.

It will take place at the Brown County Library at 7 PM.

Here are some links covering potential questions for Kagen on health care:

Berry Laker with questions for Kagen
Lakeshore Laments with questions for Kagen
Jo Egelhoff with questions for Kagen

See you there.

Representative Baldwin Votes to Fund Abortions

Wisconsin's Representative Tammy Baldwin is a member of the House Energy and Commerce committee, one of the committees considering health care legislation. In committee, Representative Bart Stupak of Michigan, who is a Democrat, offered an amendment to prohibit federal funding of abortions as part of health care reform. The amendment was defeated by a vote of 27-31. Ms. Baldwin voted against the amendment and to allow for federal funding of abortions. Here is the amendment:
Given her history and the area that she represents, her vote should come as a surprise to no one.

More interesting to me is that a Democrat who represents the Michigan's Upper Peninsula (Stupak) is willing and able to attach his name to an amendment explicitly prohibiting federal funding of abortions. Those of us here in Northeastern Wisconsin like to pick on our friends from up north, but the fact of the matter is that in many ways the UP and NEW are very similar.

It would seem for our own Congressman Kagen the choice couldn't be more stark on this issue. Remember this difference is between Democrats, not Democrats and Republican.

It remains to be seen if Kagen will side with Baldwin and allow for taxpayer funded abortions or if he will have the courage to side with Stupak and the very many of his constituents who find such a prospect abhorrent.