Saturday, August 11, 2012

Paul Ryan Loses the Veepstakes

Paul Ryan, the Republican representative who handed President Obama his head during the televised healthcare reform debate, was rumored to be the vice presidential pick of Mitt Romney.  What Republican voters should realize is simple enough: Republicans lost the Affordable Care Act in the one forum that really mattered.  When the votes were counted, Democrats passed the Affordable Care Act, and whatever victory Paul Ryan had at the White House was rendered utterly moot.

Today, Mitt Romney stood at a podium and extolled the virtues of Paul Ryan. Republican and libertarian voters alike would do well to ask themselves one simple question: what, exactly, has Paul Ryan ever done to win for smaller, more limited government? The answer is nothing.

The Ryan budget is part and parcel of the issue.  It cuts spending by $4.2 trillion over a decade, while also yielding tax cuts in excess of $4.6 trillion.  A huge part of the Ryan budget can't be scored, because Paul Ryan won't say which deductions, credits, and exclusions he favors eliminating. He just says that there are some that should be eliminated or drastically scaled back.

What the Ryan budget does not do is illustrative of the problem with Republicans of late: it does not roll back the federal government.  It does not cut the size, scope, or authority of the federal government.

You can forget about merely cutting spending.  Those of us who support limited government should demand specifics about which agencies will be cut and why from the candidates who want our vote.  Paul Ryan has little if any interest in actually tackling the problem with concrete specifics, and this is why he stands a good chance of making the Romney ticket as vice president.

What Ryan's budget further does is force seniors into a healthcare market that is drastically strangled by regulation and federal interference.  No one in Washington, D.C. wants to acknowledge the simple truth that government regulation and interference makes healthcare prohibitively expensive.  In the early years of Medicare, there were no cost controls whatsoever.  Hospitals had a blank check to work with, and they rang the cash register over and over again.  As costs spiraled higher and higher, the federal government decided to try to contain costs by implementing controls that restricted hospital reimbursement.

This merely had the effect of inspiring physicians to pick up the slack.  As Congress implemented set rates for treatments in hospitals, hospitals cut stay times for Medicare patients by 23 percent and those patients went right to physicians as outpatients.  The physicians weren't covered under the rate plans like hospitals, and so the 1980s saw Medicare spending on physician services grow to 2.5 times what they had once been by 1990.

And so a program that accounted for a 23% increase in hospital expenditures in its early years between 1965 and 1970 continued to pile up costs.  Combined with the HMO Reform Act of 1973 and federal encouragement of expensive comprehensive policies to the detriment of everything else, Medicare effectively ballooned the cost of healthcare in the United States.  When Congress went further in 1986 by passing the Emergency Medical Treatment and Active Labor Act that required hospitals to provide emergency healthcare to patients regardless of citizenship, legal status, or ability to pay, it managed to explode costs even more.

It's the definition of modern federal leadership: require someone to do something for free while providing no financial support whatsoever, and then sit back and express shock that they're having an issue with uncompensated care.  To the extent that hospitals have $63 billion a year in uncompensated care, it is because Congress required them to provide such care under the EMTALA after first roping them in with Medicare and Medicaid.  You see, only participating hospitals are required to provide such care, and participating hospitals are those hospitals that take Medicare and Medicaid payments.

Theoretically, hospitals could suddenly refuse to take the payments.  It's unlikely, given the fact that doing so would remove them from feeding at a trough that provides them with access to funds in excess of our baseline defense budget.

Paul Ryan, aka Dear Mr. Fantasy

The Ryan budget does not address the problem in realistic terms; rather, it addresses the problem in ideological terms.  Ryan proposes that he will close, lessen, or eliminate loopholes, exemptions, and credits, but he doesn't say which ones he will close, lessen, or eliminate.  He bases his spending cuts in part on a $1 trillion cut to Medicaid over a decade. He increases defense spending, even though we already outpace the rest of the world combined in defense spending.

It's a fantasy.  For starters, Democrats are not going to roll over and allow $1 trillion in cuts to Medicaid. And when the specific loopholes, exemptions, and credits are at last defined, Ryan will likely face staunch opposition from his own party.  Transportation funding would face 25% in cuts, at a time when over half of the roads and bridges in this country are functionally obsolete or structurally deficient.

That Paul Ryan would propose such a budget, based as it is on fantasy, is not such a surprise.  He doesn't have real world experience.  In his adult life, Rep. Ryan has held exactly one position in the private sector.  He was a marketing consultant for his family's construction company.  If we are generous, we might count his experience working the grill at McDonald's in high school.

Other than these two positions, Paul Ryan has been a policy analyst and speechwriter.  Just as Barack Obama received the blessing of Alice Palmer to run for her soon to be vacated seat, Paul Ryan was the hand selected choice of outgoing Rep. Mark Neumann. He was 27 years old.  He picked up the marketing consultant position after getting the nod from Rep. Neumann via a phone call.

In many respects, the defining characteristic of Paul Ryan is that he is an ideas man with no real experience whatsoever in the private sector to familiarize himself with the effect ideas men have on men of action who work for a living.  Today, he is the vice presidential candidate for the Romney ticket.

Something Old, Something Borrowed, Something Blue

Ryan is something old; a young man in a hurry, as Vice President Cheney so caustically noted when referencing then vice presidential candidate Senator John Edwards.  We've seen such men before, who emerge out of nowhere to win a governorship in Texas and then parlay that 93 day a year obligation into bona fides for the White House.  It cost us a mere $5 trillion in debt last time we did this.

We've also seen an anointed state senator who didn't even serve a full term as a national senator emerge to claim the White House. Young men in a hurry are expensive indeed: we're approaching a fifth straight year of trillion dollar deficits.

And Ryan is also fond of borrowing the ideas of Ayn Rand and Peter Ferrara for his own peculiar yet familiar strain of libertarian ideology.  However, Paul Ryan really isn't a libertarian, just as the latter name in the preceding sentence wasn't a libertarian while at Harvard Law School.  Peter Ferrara proposed a simple idea: privatizing Social Security.

He didn't posit that taking the earnings of present day workers to fund the retirements of present day beneficiaries was wrong in any way; he simply wanted to privatize the 7.5% of withholdings that workers pay into Social Security.  The question is why.

The answer is simple enough: workers have hundreds of billions of dollars withheld each year from their paychecks, and that money represents a massive boon to the stock market if and when it is invested via a private investment account.  Never mind that many workers already have a private investment account in the form of a 401(k) or an IRA, and that the stock market is beset by rampant fraud and corruption, not to mention liquidity injections by the Federal Reserve that render stock market performance a rigged game.

Everything from the precious metals market to the LIBOR to commodities is rigged. There is no integrity in the marketplace. The last boon available to private investors and hedge fund operators is a privatized Social Security account that would inject hundreds of billions of dollars into the marketplace for hedge funds and investment banks to play with via such practices as High Frequency Trading.  It's your retirement, and your future, and your money, but these people are the gatekeepers to a market that is neither free nor legally on the level.  If the SEC signs off on mark to market accounting as it did with Enron, it's legal to inflate earnings by booking projected profits the day a deal is signed.  In other words, fraud becomes legal.

Paul Ryan has never indicated that he has a problem with such a market. In point of fact, Paul Ryan doesn't have a problem with the federal government telling you as a worker that you have to set aside 7.5% of your income to invest in a private retirement account that will in turn be invested in a stock market that is fatally flawed and thoroughly and corruptly rigged. It's akin to the Obama Administration admitting that the health insurance market is flawed, corrupt, and wrong, but still requiring you to purchase insurance coverage in that market without taking any steps to roll back the federal intervention that created the problem in the first place.

These conditions don't exist in a vacuum.  They are a direct legacy of government interference. Insurers did not gain near monopolies in states by accident. Private companies do not receive anti-trust exemptions that limit competition from the marketplace.  They receive such favorable designations and treatments from government, and government in turn treats the problems that arise as a result of lack of competition and innovation as a totally unforeseen consequence of earlier regulation.

As for something blue, look at Ryan's eyes.

Different Day, Same B.S. 

The selection of Paul Ryan represents the triumph of bullshit over substance.  Here's a man who masquerades as a fiscal conservative, whose record in the Bush years was one of feckless compliance with prescription drug benefits for Medicare recipients, a bailout for banks and the auto industry, and the assorted other spending items that led to five trillion dollars in additional debt.  Paul Ryan voted for all of it.

He is the architect of a budget plan that says something without saying anything. You have to take his assertions about cutting $1 trillion from Medicaid on faith, but you can bet your last dollar that his tax cuts will go through. Tax cuts always go through, but spending cuts do not, and as a result the gap between incoming revenues and outgoing expenditures widens further.  You can also take it as an ironclad guarantee that defense spending will go up, even though our Department of Defense routinely cannot account for monies spent.

He bested Barack Obama in a debate about the Affordable Care Act, which is not all that impressive of an accomplishment.  What is so sad about Obama's success thus far is the dearth of leadership that success has revealed on the Republican side.  How incompetent do you have to be to let a senator in his first term make the executive inexperience of your vice presidential nominee an issue?  Make no mistake, if Barack Obama had a fine go at it with Sarah Palin in 2008, there is nothing to stop him from raising every last point I raised in this piece about Paul Ryan's record.

Young men in a hurry always cost those who embrace them dearly.  John Kerry lost in 2004 in part because of John Edwards's debate performances and attendance record as a senator.  The American people lost in terms of $5 trillion and a banking bailout under George W. Bush.  While we have yet to see the full bill for the Obama Administration, it has already exceeded that of George W. Bush's performance over eight years.

Paul Ryan is a young man in a hurry. He brings nothing to the table in terms of private sector experience, having been an ideologue and a speechwriter his entire life, save one stint as a marketing consultant for his family's construction business before he ran for Congress.  His bona fides on foreign policy, like those of his boss, are thin to non-existent.

Come the convention, this will all be played out in the disorganized and inchoate campaign of Mitt Romney, who will receive the Republican nomination if the establishment has its way.  It is no accident that the heavy hitters who might have run credible campaigns all stayed on the sidelines in 2012.  Mitch Daniels, Chris Christie, and Jeb Bush let Mitt Romney take the stage and the nomination with ease because they intend to run in 2016.  For that to happen, Mitt Romney has to lose, and Paul Ryan is the perfect complement to ensure that outcome.

Today, the Romney campaign gave the Obama campaign a known quantity to stoke the fires of the Democratic base: a man who is on record as proposing $1 trillion in Medicaid cuts, privatization of Social Security, and halving transportation and job training funding while simultaneously favoring tax cuts that would benefit the wealthiest Americans by some $265,000 on average, thereby raising their after tax income by 12.5% on average.

If you wanted to nominate a vice presidential specter to enable Democratic fear-mongering, you could hardly have done a better job than Paul Ryan.  And to boot, Paul Ryan's prospective boss has now flip-flopped on the Ryan budget.  Where Mitt Romney once called it marvelous and said he would sign it into law, he now says he would not adopt the Ryan budget if elected.

That, ladies and gentlemen, is all you need to see to realize how badly the Romney campaign bungled their vice presidential nomination; and how the GOP establishment has zero intention of winning by putting a presidential candidate forward whose record almost exactly parallels that of Barack Obama's, while nominating a vice presidential candidate with no real experience in the private sector he professes reverence for, a man whose ideas are tailor made for Barack Obama's attack ads.

You can't make this stuff up. Somewhere, Gary Johnson has to be feeling pretty good about his chances of gaining votes as a fiscal conservative with an actual record of cutting government who favors limited government where marriage, abortion, and drugs are concerned.