Hermie and the Gang - the Las Vegas GOP Debate and Advice from France's President Sarkozy

Last night in Las Vegas, the Gang ganged up on Hermie, my sister’s name for Herman Cain, the latest frontrunner of the would-be GOP candidates for president.

It happened in the first ten minutes of the 2,556^th debate this autumn. Okay, maybe there have only been five or six, but it seems like a lot more.

I have to say, I love politics and I love debates, especially when they have consequences, but the Republican wannabes are almost killing off my desire for the good fight.

Anyway, last evening, the Gang decided to have at Hermie because a day or two ago a tax think tank published an analysis showing that Cain’s 9-9-9 tax plan would make the middle class pay more taxes than they do now.

How convenient that the analysis appeared as if by divine plan right before the Las Vegas debate and right after Herman Cain out-distanced Mitt Romney in two polls - in Iowa where he stomped Romney and in a national poll showing that he is neck-and-neck with Obama if the 2012 presidential election were held today.

Now, dear readers, don’t get the idea that I’m for Cain or against Romney. That could not be farther from the truth. But, I am for a solid Republican attack on the mis-guided, badly thought-out, and even more poorly executed policies and nightmarish dreams of the Obama presidency. Mr. Obama could probably be beaten right now by my choir director, except that he’s not American, does not speak English and could not run, having been born in France.

But, the reality is that we have almost 13 months stretching out before us until the November 2012 presidential election takes place. That is an eternity in politics. Or, perhaps less, because if last night’s GOP debate is any gauge, the Republican frontrunners (you can decide who’s actually in front…is it Romney or Perry or Cain or Paul?) are trying their best to lose.

I think we can rule out Bachmann and Santorum and Huntsman, who chose not to appear last night, preferring to stay hidden away in New Hampshire jousting at windmills while lamenting the lack of GOP taste for the middle ground. Maybe if Huntsman were able to explain what the middle ground means and why it’s the best place to be, we’d all be for it. But, simply to say he’s not viable because he’s too experienced, too intelligent and too competent to be acceptable to the vast unwashed GOP majority smacks of elitism at its worst.

So, we had Hermie, struggling to explain his 9-9-9 and the others attacking it as if they actually could offer an alternative, something egregiously missing last night. And, when all the scare words and platitudes about 9-9-9 had been exhausted, the Gang turned on Perry, who, surprisingly, defended himself rather well in explaining an energy PLAN - note the word, because plans, except for Perry's, were sorely missing from last night’s debate.

And, then, almost on cue, Santorum lashed out at Romney for his MassachusettsCare. The others leaped on the wagon, all, mind you without even a hint of an alternative. I despise the arrogance and folly of Obamacare, but at least Obama got it down on paper and sold it to Congress. Where is the GOP replacement idea? There isn’t one.

And, just so the religious right could feel that the evening also belonged to them, we had the spectacle of parading Mormonism out for Romney to bat down and Gingrich to try to place in context.

Finally, it was Newt Gingrich who made the most important comment of the entire debate - he said, “Maximizing bickering is probably not the road to the White House.”
Oh, how right you are, Newt.

The GOP needs : a plan for attacking Obama, not each other; a cessation of debates in which the color of the day is cheap shots at each other; a truce so that the real issues - jobs, tax code changes, businesses staying in America, a balanced federal budget, reduction of the crushing national debt - can be addressed seriously by a GOP that until now has sidestepped them.

If the Republican Party destroys its credibility even before Iowa, how can it expect to beat an incumbent President?

An afterthought - last Sunday evening the French left chose its standard bearer for the 2012 French presidential election. It was a bitterly fought two-phase affair that left the middle-most candidate the winner. Afterward, President Sarkozy, the conservative sitting president, said that the Socialist primary was a bad idea, and that it was not envisaged in the French Fifth Republic constitution where two candidates, or more, fight it out in a once-for-all votation. The Socialist primaries, he said, merely weaken those who engage in them. His team is now gearing up to use all the attacks thrown by the Socialists at each other to bolster his own campaign.   

Take heed, GOP. Take heed.
  

The Eurozone, France, America and Ron Paul

Moody’s, one of the world’s most important rating agencies, today told France that it is considering whether to put the country’s government debt (i.e., bonds) on a negative watch, which would mean that Moody’s could then decide to reduce the AAA rating of French debt.

At first glance, this seems like a reasonable decision because France has a budget deficit of 5.7% of its gross national product.  This is the same as the budget deficit of Portugal, already “bailed-out” by the Eurozone, the European National Bank and IMF loans. Eurozone countries in the European Union have committed by treaty to keeping their budget deficits below 3% of GNP. However, France is far from being alone in violating this treaty commitment. If honest governmental financial reporting were the rule, we would probably find that no other country in the Eurozone is currently in compliance.

But, the real problem in France is that growth is now at about 1.75% annually and is expected to decline to around 1% next year and unemployment is stubbornly at 9%. So, there is no way that consumer spending can boost France’s GNP enough to solve its debt problem in the near future, rather like America's dilemma.

And, France is a particular problem because, along with Germany, it is the pillar of the Eurozone and together, the two countries support the faltering Eurozone economies. Thus, France and Germany are the backbone of the 440 Billion Euro European Financial Stability Fund that Eurozone countries are trying to put together to bail out other weak Eurozone countries as their government debt ratings make it impossible for them to borrow money at reasonable interest rates. If France’s credit rating is lowered, it will cost the country more to guarantee its required share of the EFSF and would probably make the Fund an impossibility, because Germany, whose taxpayers are not enthusiastic about shouldering the entire Eurozone debt, would need to go it alone as the financial contributor to the EFSF.  

Added to this, France has to find 33 billion Euros to help Belgium bail out a failed Franco-Belgian bank, Dexia, which still holds significant toxic debt left over from the 2008 crisis.

In the middle of this mess, the Euro is magically still very high against the US Dollar. It took about 1.37 dollars to buy 1 Euro today. Don’t ask me to explain this, because it defies logic. And, keep in mind that without the US Federal Reserve printing money to keep the European Central Bank afloat, there would not be enough money in the Eurozone to meet ordinary private and commercial needs.

So, dear readers, the next time you hear that America is in the worst financial condition in the world, you might just want to re-read this blog. It ain’t necessarily so, as Mr. Gershwin wrote.

But, what America does need, as does every European country, is fiscal discipline. Nobody can spend 40% more than it makes every year and borrow the rest. Not you, not me, not the Eurozone countries, and not the United States. We are approaching not a liquidity crisis (where there is not enough money in the system to meet demand) but a solvency crisis (where there is a lot of money in the system but it is worthless because the government that prints it has nothing to back it up - not gold or the financial discipline necessary to keep its budget at a level that can be financed by tax income.

When money becomes worthless, it takes a lot of it simply to buy a loaf of bread. If you don’t believe that, ask Ron Paul to explain what happened in Weimar Germany between the two world wars, or in Zimbabwe today. Because when he talks about federal solvency, Ron Paul is right and we all ought to be paying attention.   

Watching the Collapse of Obamacare

People all over the world are convinced that Obamacare was a wise and needed change to the American health care delivery system. They, being captive in state-run health care delivery systems, have never experienced and cannot understand that America’s health care delivery system worked before Obama butted in and it will work again after his disastrous attempt at a government monopoly in health care delivery has disappeared. The world sees the 40 million uninsured and says America is heartless. They cannot understand that allocating available health care money centrally in their own countries often kills their friends and family members by the necessary allocation of services, and that the ageing public infrastructures in Europe are less and less able to provide any reasonably timely health care service at all.

And, we are beginning in America to see Obamacare unravel.

This week, Health and Human Services Secretary Kathleen Sebelius, appointed by Obama, wrote to Congress to tell them, “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”

CLASS - the Community Living Assistance Services and Supports program - was supposed to enroll healthy working Americans in a program to provide about $50 per month to pay for extras after they retired and presumably needed more professional health care services, such as home nursing and more expensive drugs. The program was also supposed to take $80 Billion off federal health care delivery system costs in the next decade. The problem was that healthy working age American, already burdened with high health care costs, didn’t think it was a good idea and few expressed the intention to sign up. When the financial analysis models were run, the monthly premium was estimated at anything from $100 to $350 per month. That, dear readers, is a “no-go.” And, so Secretary Sebelius has effectively stopped work on trying to develop it as a component of Obamacare.

At the same time, we have seen the buy-insurance-or-be-taxed provisions lose in federal appellate courts, and the US Supreme Court will soon be forced to decide if Obama’s buy-or-be-taxed method to pay for his Obamacare passes constitutional muster.

There are also the inconvenient matters of:

1. The Senate repeal in February of the 1099 provision in the bill that required companies to complete IRS paperwork each time they purchased $600 worth of goods from any vendor (there are already more than 10,000 waivers to this requirement);
2. The House voted Thursday to block public expenditures of taxpayer dollars on abortion-related services via taxpayer-subsidized health policies;
3. The growing whispers in Washington that the creation of federal health-insurance exchanges are so far behind schedule that they may not be ready when the full program takes effect in 2014.

That is not a very good record and the fault lies squarely in two places: with the White House for pushing through Congress the Obamacare bill in such fast forward that, in fact, most members voted for it without ever reading it; and with Congress for passing something as important as a drastic overhaul of the American health care delivery system because they were acting in a partisan fashion to support the President of their own Democrat Party and because they were bullied by his people into agreeing quickly.

Many experts have said this and I say it again, with experience in services delivery when I was a Deputy Assistant Secretary in HHS under President Reagan :

1. There is nothing wrong with the American health care system that tighter cost negotiation and national insurance markets won’t solve.

2. There is no one, not Democrats or Republicans, who do not want to provide health care for those now uninsured (if they are in the United States legally), but not at the expense of changing the vast majority of the system that works, and not by making the federal government its monopoly provider.

Obamacare is a non-starter because it was ill-conceived, badly drafted and ran roughshod over American law and voter sentiment.

That is what a “no- go” is and Mr. Obama should have known better.

Is Herman Cain on to Something the Rest Don't See

Herman Cain, US Republican presidential hopeful, is Tea Partying in Tennessee this weekend. And, he’s having fun. Yesterday, his microphone system failed and so he sang a rousing version of a Broadway show tune. He often ends his meetings with a favorite hymn.

What is surprising about all this is that Tennessee loves him. He’s getting perhaps 500 people at each whistle stop meeting and the comments are positive. Statements like, “I’m glad he’s bringing God back into the debate,” or “He’s like us, he listens and he doesn’t talk down to us,” or “I came to see what 9-9-9 is all about, and I was going to vote for Obama, but Cain is kinda cool.”

And, even some southern Black voters are beginning to get Cain’s message, “You don’t have to vote for a Democrat to be heard.”

It’s still a LOOOOONG shot for Herman Cain to get the nomination, but he’s certainly more interesting than anyone else on the stumps. He’s intelligent, he listens, he’s good one-on-one as well as on the microphone, and it is clear that he’s enjoying himself.

His $2.8 Million raised during the third quarter is dwarfed by Romney’s and Perry’s $12-17 Million, but Cain says you don’t need that much money to run a presidential primary effort. This may be his Achilles Heel because the Iowa and New Hampshire primaries are coming on fast and without money to build a local presence, Cain may not have a chance. Iowans and New Hampshire GOP voters like to look their candidates in the eye and get an up-close-and-personal sense of them.

Cain is not doing this yet, but maybe he’s playing a game that nobody else has thought of. It is just possible that with a $14 Trillion national debt and Congress squabbling over how to reduce spending so that America doesn’t need to continue borrowing 40% of its annual federal budget year after year, Herman Cain understands that Americans a sick of debt, they are sick of slick politicians and they are ready for a change -- not the Obama spend-and-tax kind -- but a change brought about by a successful businessman who has something to offer besides bumper stickers and Madison avenue TV ads.

Something to think about.