Right in San Francisco

Obama's Foreign Policy Problems

   The problem with foreign policy is that it is complex and that words are not enough - military or economic muscle is frequently necessary. While the US represents about 40% of global defense spending at 3.3 % of our Gross Domestic Product (per the Congressional Research Services), most of our European and Asian allies spend in the 1 to 2 % range, and our adversaries spend relatively more - North Korea (25%); Iran (4.6%); China (4.1%); and Russia (4.8%). Over time it may be desireable to reduce our burden for protecting Japan and Europe, but for now it is necessary for a US president to be adept at managing the dangerous world stage. A few recent examples give one pause about Obama's experience and instincts:

    1. The Georgia - Russia conflict was triggered when the Georgian president disturbed the status quo by trying to exert control over two break-away provinces that had a significant Russian presence.  In Russia's perspective, this provided an opportunity to regain some of the Soviet Union's territory and to avenge the West's separation of Kosovo from Russia's long time ally, Serbia. The democratically-elected presidents of Ukraine, Poland, Latvia, Lithuania, and Estonia flew to Tbilisi to show solidarity with Georgia. The US flew 2000 Georgian soldiers back from Iraq and placed a military relief contingent in Tbilisi as a tripwire. McCain called for strong economic and diplomatic consequences for Russia; Obama  claimed that McCain's saber rattling encouraged the Russians.

  2. Pakistan - a nuclear-armed country with a growing Islamist insurgency, a teetering democracy, and a Taliban threat on the western border - provides perhaps a greater threat. The delicate compromises to shut down AQ Khan's nuclear export ring, gain a truce with India in Kashmir, disown the Taliban in Afghanistan, and turn over al-Queda leaders from the frontier area cost President Musharaf his job and resulted in a search for an accomodation with the major factions in the Pakistani parliment. In this sensitive quagmire, and in an effort to show his strength in the face of his calls to abandon Iraq, Obama called for attacking  Pakistan if they did not do more.

 3. In a June speech to the American Israel Public Affairs Committee, Obama found it necessary to counteract the effect of his earlier commitment to meet without preconditions with President Ahmedinejad of Iran.  There he promised to do everything in his power to prevent Iran from obtaining nuclear weapons, to give aid to Israel without the longstanding balance with Egypt, and to support Jerusalem as the undivided capital of Israel - a key negotiating point which is unacceptable to the Muslim world.

  Nobody knows what the next four years will bring with North Korea, Cuba, Russia, Syria, or a number of other countries, and a bias toward negotiation is certainly desireable, but this is no place for a naive rookie.  In this arena, I'll take a Kissinger over a Carter any day.

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   This week's You Tube. Some of these campaign ads are getting a little too rough.

Healthcare - Part II

     Several readers have expressed concern about the extent and quality of care in the government's basic portion of any two-tier system with supplemental individual insurance.  Concerns are both egalitarian and personal - and everybody knows somebody whose medical needs have been very expensive. Obama promises an obviously unaffordable standard equal to what congress gets; McCain focuses instead on changing from company-sponsored plans to portable individual plans.  But, before getting to the question of how extensive the taxpayer's program should be - and how it should be funded and administered - it is first necessary to determine how it can be made affordable by society, and neither candidate is willing to address that in an election year. So, some thoughts:

    1. First, do no harm. We have excellent high end care and the world's best pharmaceutical and medical device companies - an endangereed species in the globalized economy. Populist attacks should be avoided.

   2. It is necessary to break the hold of many special interest groups:

         -   Insurance companies. In the medical field, they serve a purpose in educating the public, spreading risk over a large population, and processing claims. And someone does need to bear the brunt of saying "no".  But it may well be that a single-payer government system (perhaps as part of Medicare) would be more cost-effective.

         -  The bar.  Providers should not be subjected to lawsuits when, in good faith, they use standard industry practices. Liability insurance costs must not drive doctors from their practices.

         -  The pharmaceutical companies. Instead of prohibitions of governmental price negotiation and reimportation, they should be required to take a global view of marketing their products, and treat US consumers no worse than foreigners. Phony obstacles to generics should be eliminated. On the other hand, if it is the governments's policy to provide below-market cost drugs to poor countries, the government should pay the difference, without expecting the pharma companies to do so.

        -  The AMA. There should be support for more nurse practitioners and classroom space in medical schools. There should be effective guidelines for diagnostic testing, and no financial or legal incentive for doctors or hospitals to conduct excessive tests.

       -  Hospitals. There should be greater development of smaller neighborhood clinics.

       -  Libertarians. There should be less opposition to data bases with patient medical records, perhaps on an "opt in" basis.

  3. Other cost issues need to be addressed.

       -  "End of life" medical costs absorb a high portion of the total, and will increase as the Baby Boomers age and improved treatments extend life expectancies. Constraints are needed.

       -  Illegal immigrants cannot be left to bleed on the sidewalk, and need to be addressed as part of a broader issue, but should perhaps be deported after treatment.

       -  There should be a wellness component in any plan, providing education as well as better care for those who take care of themselves than for those who choose unhealthy lifestyles.

  4. Experts need to set the specific criteria for government insurance coverage within a two tier system, where private insurers offer supplemental coverage. The government program objective should be universal coverage at a level that society can afford - a long term political battle that will result in expansion over time.

    You will know that the politicians are serious when they address how the nation can make healthcare affordable, rather than how they can extract another $100 billion per year from businesses and taxpayers. The website of McCain has some cost reduction thoughts and Obama's has a few, but both focus on expanded programs and increased funding rather than affordability. Based on past history and the future Pelosi/Reid Congress, I'd place my bet on McCain to pay attention to the cost side of the equation.

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      This week's You Tube is a cute little musical video about healthcare insurance companies - probably the easiest target next to tobacco companies.

Bill Bowen - 8/22/08

The Healthcare Conundrum

    Let me begin by saying that I generally oppose tax increases, favor investments such as education and basic research, and oppose large new entitlement programs. Some of that will show through in today's posting.

     First the good news - the candidates for whom healthcare was a signature issue, Clinton and Romney, both lost in the primaries. Second, the bad news - both McCain and Obama favor very expensive plans, they will be pushed for more by the Pelosi/Reid Congress, and programs such as national healthcare are virtually irreversible. With the conventional wisdom that there are some 45 million Americans without insurance and that there are significant inefficiencies in the current system, there is little question that a big federal program is coming.

    Campaign-style descriptions are on the McCain and Obama websites; a good detailed comparison is available from the Henry J. Kaiser Family foundation.

    The core of the McCain proposal is to offer tax credits ($2500 per individual; $5000 per family) for individual private insurance plans, and to move away from company-sponsored plans.  The Obama approach would require most businesses to offer health insurance or contribute to a new public program, which would include low-income subsidies.

    Some elements are similar - no exclusions or penalties for pre-existing conditions, allow re-importation of prescription drugs, increased research - including stem cells, and cost reduction through application of information technology.

    Many elements reflect the roots of the parties. For McCain, that means legal reform to protect the industry from many lawsuits,  use of nurse practitioners and walk-in clinics, and encouragement of the states to develop innovative insurance approaches. For Obama it means required inclusion of all children, required company plans at a level equal to that currently enjoyed by Congress, regulation of the fees and administrative costs of insurers, and expanded funding for education of health care providers.  The inclusion of illegal immigrants is not addressed, but is likely for Obama. 

    The Obama campaign pegs its annual cost at $50 to $65 billion, including an expansion to Medaid, but not including the cost to the companies providing much of the funding.  The McCain campaign has not provided a cost estimate. Whatever the real cost, it would certainly be significantly more with Obama's plan  - and more yet once Congress gets involved. This against the background of the looming Social Security and Medicare shortfalls, and global economic competition with China and India.

    Our best hope is that this is just like a dozen other issues - just campaign rhetoric. But I doubt it.

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This week's You Tube: One of the better political ads of the season.  Can you imagine the howl if George Bush or John McCain had said any of these things?

George Soros - The Left's Money Machine

   The funding of American politics is incomprehensible. Contributions by individuals are limited to $2300 per campaign, but "bundlers" can gather hundreds of thousands of dollars. Larger individual amounts can be contributed to umbrella committees which then allocate the funds among multiple recipients. Corporations and unions can contribute unlimited amounts to Political Action Committees or 527 groups for issue-oriented advertising. The Obama campaign trumpets its legions of small contributions, and rails against McCain's contributors, while receiving most of its money from large contributors itself. For proof that controls do not work, one need look no further than billionaire George Soros.

    Soros was born in Budapest in 1930, migrated to England to study at the London School of Economics, and to New York in 1956 where he worked on Wall Street. He became a spectacularly successful currency speculator. Notably, in 1992 he earned $1.1 billion by leading a run on the Bank of England, and was convicted of insider trading in France. With a net worth in excess of $10 billion, he turned to political concerns, managed principally through the Open Society Institute which he founded in 1979. 

    Soros' philosophy and objectives can be found in a dozen books which he has authored, most notably On Globalization (2005) and The Bubble of American Supremacy:Correcting the Misuse of American Power (2003), and in his many many essays. Among his contentions:

      - International institutions have not kept up with global capital markets and corporations, resulting in the latter's increasing domination of national markets. Rich countries write the rules; poor countries are falling further behind. (He would not mention that over 300 million people in India and China have been lifted from poverty by capitalism in recent years.)

      -  The United Nations needs to become a stronger central government with power moved from the core members of the Security Council to the General Assembly. As the richest country, the United States should underwrite a massive fund for "public goods" to be drawn on by poorer countries, and give up the Bush objective of world domination.

    While financial connections are often hidden, he has been generous in his support for organizations that share his goals:

          -  By some accounts, he has donated more than $5 billion overall (with an early focus on promotiong democracy in central and eastern Europe), with some $750 million in the US. Among his causes have been gun control laws and repeal of drug prohibition laws. He is the primay supporter of MoveOn.org (of General BetrayUs fame), and a dozen other liberal advocacy groups, most with virtuous names.

           - In the 2004 election he spent some $24 million to defeat George W. Bush, which he called "the central focus of my life".  In this election cycle he has formed The Fund for America and Progressive Media, with a budget of $40 million to run ads against John McCain. Through June 30, he was a major contributor to 527 groups, second only to the Service Employees International Union.

     So.... The Democrats are happy so long as the millions come from the left, and there is no comparable conservative sponsor.   Money spent for attack ads by Soros' network of front organizations dwarfs that available to conservatives. Any sanctimonious claim of small donors, the vast Right Wing conspiracy, and the influence of evil corporations should be met with a question about George Soros.

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    This week's You Tube: This happened just before Obama read the polls and decided to accept the McCain proposal for off-shore drilling.  Does an energy policy of inflating your tires sound like Dukakis or Carter?

   

The Horse Race - An Optimist's View

     There are a couple of ways to be an optimist about Senator McCain's chances. One is to look to the comeback that he made in the Republican primaries, and the comeback in Iraq that he championed.  Perhaps the public will belatedly wake up to the superiority of his adult foreign policy; the differences in energy, trade and tax policies; and the tremendous downside of a Washington controlled by Nancy Pelosi, Harry Reid, and Barack Obama.  The ability of McCain to overcome the unpopularity of George W, the length of the war, and the stuttering economy seems to ebb and flow, to be affected next by vice presidential selections and the implications of growing budget deficits. One can hope, with or without audacity.

     But it is not really a national election; it is 50 state elections, and most are irrelevant.  To see which are relevant, how close they are, and how they add up toward the necessary 270 electoral votes, I use a combination of fivethirtyeight, Realclearpolitics, and 270towin. The first two are great for poll results; the latter provides an interactive map which allows you to play your own "what if's."      

    First, a comment on polls. All are not created equal. The pollsters would argue about the phrasing and sequencing of questions, the weariness of the populace with polls, a lack of honesty about biases (race; age;religion), the identification of "likely voters" (slightly more conservative than "all voters"), the implications of the move from landlines to cell phones (reduce younger sampling), and such. The reality is that polls sponsored by Fox and the Wall Street Journal lean to the right; those by Newsweek, the New York Times, and CBS lean to the left. Rasmussen is pretty good. Averages help, but they are averages. Changes over time are probably as meaningful as the absolute numbers. Data is sparse in some states.

     That said, 15 states (including D.C.) with 190 votes are solidly Democratic while 22 states with 174 votes are solidly Republican. There may be some head fakes to try to get the other party to waste campoaign money, but 68% of the country doesn't count, including large Obama majorities in California, New York, and Illinois. 

   A second group of states has a history and a polling leaning one way or the other. Of these, I would give Iowa, Minnesota, Pennsylvania, and Wisconsin to Obama for 48 votes, and Missouri and North Carolina to McCain for 26 votes. That leaves Obama with 238, and McCain with 200 of the 270 needed.

    So, for the states that are currently within a few percent, the McCain strategy comes down to Florida (27), Ohio (20), and another 23 between  Michigan (17), Virginia (13), Colorado (9), New Mexico (5), Nevada (5), and New Hampshire (4).  Since Governor Ted Strickland of Ohio took his name off of Obama's potential VP list, the main players in this scene are Virginia Governor Tim Kaine for Obama, and governor Charlie Crist of Florida or Mitt Romney (who might bring Michigan and the Mormon vote in Nevada) for McCain. I would assume that Florida is winnable without Crist on the ticket, but that Michigan is not winnable without Romney.

     Two points for the reader. It is very close at the state/electoral college level, and if you live in one of the swing states, everything that you can do will matter. For the rest - send money.

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    This week's You Tube: a re-writing of the history of Obama's position on meeting with Ahmedinijad of Iran, put in a broader context. With Iraq apparently solved and North Korea on the edge of solution, Iran will become the critical foreign policy challenge of the next administration.

  Bill Bowen - 8/1/08