1 Person, 1 Hour

A Better Social Security

- Pay scheduled benefits for current retirees and previously earned benefits for current workers

- Workers would put 3% of income into a Federal Thrift Savings Plan style program with a 100% government match up to $1,000

- Workers would not accumulate additional social security credits

- Federal guaranteed minimum benefit

- Peg future payroll tax rate to levels needed to pay current retirees benefits, previously earned benefits, minimum guaranteed benefit and savings match

Advantages: As people retire with decreasing claims on the old system, the payroll tax rate required would drop by roughly half. Workers would retire with more money. The poor would accumulate capital, reducing wealth inequality. The system would be permanently solvent

Disadvantages: Politicians would lose Social Security as a political weapon.

A Better Medicare

- Replace Medicare, Medicaid and SCHIP with one new program

- Retain current Medicare benefits for everyone currently 55 and over

- People currently under 55 would use the new system permanently

- Provide individual health insurance tax deduction

- Phase out employer health insurance tax deduction

- Create dedicated refundable health insurance tax credit (health insurance voucher) on a sliding scale for the low income

- Institute adjusted community rating and guaranteed issue

- Persons choosing not to take the health insurance deduction/credit would have that money placed in a health insurance pool

- The health insurance pool would be used to purchase private insurance for the uninsured

- Insurance for the uninsured would be purchased from several companies based on who could provide the best coverage for the amount in the health insurance pool

Advantages: Every American would have health insurance. The current $60 Trillion Medicare unfunded liability would be avoided. No one would loose their insurance when they loose their job. Every American would be able to choose the free market insurance product that fits their life best.

Disadvantages: Politicians would loose the ability to buy votes by adding benefits.

A Better Tax Code

- Individuals and corporations would have the choice of using the current tax code or a new flat tax

- The flat tax rate would be revenue neutral by static analysis (approx. 19%)

- Flat tax deductions for individual health insurance and retirement contributions only

- Exemptions of $15,000 per adult and $5,000 per dependent

- Eliminate capital gains tax

Advantages: The economic distortions of the tax code would be eliminated. Economic growth would increase, producing greater tax receipts at a lower rate

Disadvantages: Politicians would not be able to sell tax loopholes to the highest bidder.

My point is not that these are the best solutions, but that they took 1 person 1 hour. Congress has been unable to solve any of these problems for decades. The problem is not policy, it’s politicians and it’s our fault for electing them.

Our Next President - Naughty or Nice?

A number of media stories have cropped up lately that are very critical of Rudy Giuliani. The attacks have taken a variety of forms, but there has been a unifying theme; that Giuliani as Mayor was a mean son of a bitch. Since the New York media leans hard left, I understand why they would be pushing this stuff.

I don’t know if it’s true. I wasn’t there when he was Mayor. I only know the image he is presenting now on the campaign trail, a down to earth guy with a self depreciating sense of humor. But maybe it’s all true. Maybe Giuliani was willing to throw elbows, play hardball and run roughshod over people to get things done.

In the fat, lazy 1990’s, that wasn’t what we wanted. We wanted a happy President who felt our pain, but the 1990’s are gone. Now we’re in a global war with radical Islamic terrorists who are willing to blow up their own children if that’s what it takes to come here and kill us.

In this new age where our survival hangs in the balance, I want my President to be tough as nails with the determination of a pit bull.

The New York Times says that Rudy is really a son of a bitch. I hope they’re right.

It’s Time to Choose

I write editorials fairly frequently. I enjoy writing and it’s nice to see them published. I usually try to write something witty and insightful. But not today.

Today, I’m writing because I’m scared. America, the country that I love, is headed for disaster and no one seems to care.

Medicare is going to bankrupt my country. Yeah, I know. “Medicare? That’s sooo boring! I want to read about something exiting and emotional like Iraq or illegal immigration.” Today, quite frankly, I don’t care what you want to hear. Today, I’m writing to tell you what you need to hear.

We have written into law promises that we can not pay. Medicare is facing a deficit of 60 Trillion dollars. In case that number is too big to have any meaning for you, that’s five times the value of everything America produces in a year, all goods, all services, everything.

We have hard choices to make and we need to start with the basics. Why was Medicare created? It was created because some elderly American’s couldn’t afford decent health care. Instead of focusing on that limited problem, we have created a system that promises to pay all the medical bills of everyone over 65 and in doing so, we have insulated American health care from the normal market forces that enforce financial discipline in every other sector of our economy.

This has happened not because it’s good for the country, but because it’s good for politicians. Every politician knows that they can get votes by promising more benefits to voters. The fact that they are destroying the country in the process is irrelevant. They know that when the bill comes due, they will be long gone. If you try to take a benefit away, voters will take your job away. If you try to save future generations from disaster, well, the young usually don’t vote and generations unborn aren’t in your district.

I know this sounds cynical. It’s very hard to believe that our leaders would care more about their jobs than about their country. Is it really possible that they want a partisan political weapon more than to see future generations prosper?

I’m very sorry to tell you this, but the answer is yes.

Don’t believe me? There is an easy test to find out for yourself. If you ever have the opportunity to ask your congressman a question, ask this: “Do you think someone making $20,000/year should pay Bill Gates medical bills when he turns 65?” They will dance around the question and make a variety of convoluted excuses, but the basic answer will be Yes.

For the future of our country, this is insane. For politics, it makes perfect sense.

You have a choice. You can rise up and threaten candidates with your vote. You can demand they put the good of the nation ahead of their partisan political self interest. Or you can ignore a problem that seems so abstract, so far off, and let the disaster come.

Choose now.

Politics 101 - How to Make Everyone Hate You

Welcome class.

Today we will discuss how to alienate voters in a political campaign. Please open your textbooks to Chapter 12 - John McCain.

At the top of page 85, it lists the cardinal rule of politics: Know Your Target Voter. Let’s examine how McCain selected his target voters.

In the 2000 campaign, McCain targeted Republican and Independent voters who rejected the religious right and politics as usual. He appealed to this audience in a speech in February 2000:

“Neither party should be defined by pandering to the outer reaches of American politics and the agents of intolerance, whether they be Louis Farrakhan or Al Sharpton on the left, or Pat Robertson or Jerry Falwell on the right.”

His target was the “Reform Voter”. In a general election, this would have been a winning strategy, but was not quite enough to overcome the influence of traditional conservatives in the primaries.

Approaching the 2008 race, McCain shifted to target the traditional conservative base. He embraced Jerry Falwell and tried to portray himself as the establishment candidate. He thought he could add this voter block to the reform voters he attracted in 2000.

Does anyone in class know why this was destined to fail? Anyone? …No Mr. Spicoli, it’s not lunch time, put your hand down.

The answer is that in politics, as in life, you can make an enemy much faster than you can make a friend. By abandoning his maverick image and embracing the establishment right, he immediately lost the support of reform voters, but could not attract traditional Republican base voters, who still remembered their opposition to him from 2000.

Is everyone following me? I still see some confused faces, so I’ll give you an example.

Let’s say you meet two strangers. You give the first one a candy bar, and you punch the second one in the face. You now have one friend and one enemy. Ten minutes later, you punch the first one in the face and give the second one a candy bar. Do you still have one friend and one enemy, just with the rolls reversed? No, you now have two people who are angry at you, and don’t trust you.

McCain compounded this dual alienation by shifting again in the middle of the campaign to lead the fight for comprehensive immigration reform. Instead of a punch in the face for the traditional base, this was a kick to the groin.

By not remaining focused on his target voters, McCain lost both the reform voters he attracted in 2000, and traditional base voters in 2008.

I see we’re about out of time for class today. For next Thursday, please write a 10 page paper contrasting McCain’s voter targeting with the Giulani campaign’s consistent targeting of defense/fiscal conservatives and social moderates.

Class dismissed.

The Great Education Experiment

Of the 50 largest public school systems in the country, 14 give their students less than a 50-50 chance of graduating in 4 years. Across the nation, 1/3 of all high school students don’t graduate on time.

Without functional schools, the next generation of Americans will not succeed and America will fail with them.

Our schools are crying out for reform, yet our public officials refuse to take action. The usual pattern is for special interest groups to claim any specific reform will hurt the children, when the truth is it will hurt them. School boards, unions and politicians protect their jobs while the children are forgotten.

We won’t have bold education reform until we prove what works in the real world …so let’s find out.

Detroit has by far the worst large school system in the country. Only 22% of it’s 9th graders graduate after 4 years. The next worst is Baltimore with a 38% graduation rate. If ever there were two school systems ripe for experimentation, these are it.

I propose using these two cities to conduct a grand experiment. One randomly chosen city would turn its school system over to the Heritage Foundation, a highly respected, conservative think tank, to run for 7 years. The city would continue to provide the current level of funding, but give Heritage absolute authority to implement cutting edge conservative educational reforms. The other city would turn its public schools over to the Brookings Institution, an equally respected liberal think tank, for similar experimentation with liberal reforms.

An obvious question is, why would these two cities agree to give up control over their schools? The altruistic answer is that they have proven themselves incompetent to educate their children. But if these schools are failing specifically because administrators and politicians care more about their own power than the education of our children, they will need additional motivation.

The irresistible incentive would be a 4 year college scholarship for every graduating senior in both cities. $20,000 per graduate would be sufficient to pay tuition and fees for a 50/50 mix of community college and lower cost state universities. Even if graduation rates skyrocket (which is the goal, after all), the total cost of the experiment would be under $1 billion. Congress thought it was a brilliant idea to spend $320 million to build a bridge in Alaska to an island of 50 people. With respect to our wise representatives, this would be a better way to spend our money.

The results of this grand experiment would be able to guide us in restoring our educational system for a generation. We wouldn’t have to argue and speculate about what to do. We would know.

A Brief Window of Opportunity

Every generation or so, a brief window opens when it is possible to get something big done.

A large part of the outrage against the Republican 109th Congress was over irresponsible spending. Every American has now heard of “earmarks” and the infamous “bridge to nowhere”. That outrage has developed into a consensus that pork barrel spending is out of control.

The line item veto has been requested by every President in the last generation and has been accepted by both parties as an effective measure to control wasteful spending, yet a constitutional amendment to give the President the line item veto has never passed.

The problem is that members of Congress don’t want to give a President of the other party increased power over spending. That’s why the next few months are an unusual opportunity.

A line item veto amendment would not be ratified by the states before the next President takes office and right now, no one knows which party will have the White House in 2009. There is no incumbent President or Vice President on the ballot and opinion polls don’t show a significant advantage for either party.

Republicans have an incentive to pass the amendment to reclaim their image of fiscal responsibility. Democrats have an incentive to pass it to show that they are better stewards of the public’s money than Republicans were.

All that’s needed now is a nudge. That’s where Presidential primary politics comes into play.

Both parties have a front runner that needs to solidify their position. Rudy Giuliani and Hillary Clinton could conspire …sorry, I meant rise above partisan politics, to jointly ask Congress to give the line item veto to the next President.

This would benefit them both. They would have more control over the budget if elected, they would be seen as rising above partisanship (which the public loves), and they would solidify themselves as presumptive nominees by showing that they are taking action to solve America’s problems even before they step foot into the oval office.

This window of opportunity opened when the two candidates became front runners and gained an incentive to work together to solidify their positions. It will close when they are assured of the nominations and start running against each other.

In politics, opportunities are everywhere. They lay on the ground like leaves in the fall. I will never cease to be amazed that millions are spent on consultants who can’t see them.

Battlefield Congress

Politics is an inseparable part of war. It is a front that must be defended. If you don’t, the enemy can win as surely as if they destroyed your army in the field. In the Iraq war, this front is undefended.

Eventually, Democrats, joined by an increasing number of Republicans will impose a schedule for withdrawal from Iraq. If the President fails to develop a plan to fight that political aspect of the conflict, he will loose the war.

Think of it in classical military terms. You are fighting a war on multiple fronts. You are making slow progress that could lead to victory with enough time, but on one front the enemy is massing an overwhelming force that can not be stopped. Any first year West Point cadet will tell you that the appropriate tactic is a delaying action.

DOD defines a delaying action as “An operation in which a force under pressure trades space for time by slowing down the enemy’s momentum.”

In other words, retreat slowly in one place, to buy time for your other forces to win the war.

After Gen. Petraeus gives his report in September, it will be too late. Pressure in Congress to impose an immediate withdrawal will become irresistible. Only before that point does the President have the option of announcing a time table for withdrawal that is long enough and flexible enough to leave open the possibility of victory.

Just prior to the September report, the President should announce:

“The Baghdad security plan has improved the situation on the ground sufficiently to begin the transfer of primary security responsibility for all of Iraq’s provinces to Iraqi forces. Therefore, consistent with military realities on the ground, we set a goal of transitioning from our current 155,000 man combat force to a 75,000 man training, advisory and counter terrorism role to begin within 6 months and to be completed within 18 months.”

With this announcement, the President would de-fang critics who are demanding immediate withdrawal. Any who complain that it isn’t fast enough or that the President leaves himself too much wiggle room in “consistent with military realities on the ground” would look like extremists who will accept nothing less than immediate defeat.

It would dramatically increase the support of the American people, who at heart, just want to be reassured that the war isn’t going to go on forever, and most importantly, it would buy the President additional time to produce a positive result in Iraq.

Embracing a time line of his own design would give the President a free hand in the conduct of the war until nearly the end of his Presidency. Failure to recognize the imperative of defending the political front deprives the President of that advantage.

Let the Good Times Roll

The Democratic party is on a roll. The public wants the war to be over and Democrats want to end it for them. You’ve got to think it’s good news when the electorate wants what you want to give.

There has always been an appetite for pacifism on the left. Sometimes it was a guilty little secret pleasure to be ignored. Sometimes it has been an irresistible hunger. Today the Democrats are like a chocoholic being told that Mama’s Triple Fudge brownies are not only good for you, but you’re going to get paid to eat them.

Yup, it’s good times. They are going to let their anti-war side run wild and the public is going to love them for it.

…so why do Democrats look so scared?

The party leadership that was around during Vietnam remember what happened the last time they let loose into a full anti-war frenzy and for all the arguments about whether Iraq is another Vietnam, the political situation does have amazing similarities: An unpopular war with a large majority of the public wanting our troops to come home, an activist minority pushing the party to the left and party leaders in an “I’m more anti-war than you are” contest.

In the early 70’s Democrats heard the voice of the people and gave them what they wanted. They ended the war and expected the public would reward them. It made perfect sense, and it didn’t work.

In 1976 Jimmy Carter was able to win the White House thanks to the hangover from Watergate, but how many seats did Democrats pick up in the House and Senate? Zero. And just 4 years later Republicans had a landslide for President, a pickup of 35 seats in the House and control of the Senate for the first time since 1954.

Democrats were asking “What the [expletive deleted] went wrong?”

The problem was that they gave the public what they wanted, not what they needed. Americans don’t like seeing their neighbors get hurt, so their ‘want’ was for the war to stop, but after they got what they wanted they took a step back and realized that what the Country needed was to win. In short order, the American people decided that the Democrats could not be trusted with national security and it took the party a generation to repair the damage.

The same political dynamic is playing out in the nation today. The war has been longer and harder than the public expected and they want it to be over, so the Democrats are again yielding to their anti-war instincts and rushing to give the public what it wants.

If we succeed in Iraq the anti-war crowd will look foolish and the Democrats will suffer for it. If we fail in Iraq, just like the late 70’s the public will soon shift focus to the fact that they don’t like America loosing a war and will be looking for someone to blame. The country will again turn against the anti-war movement and the Democratic party will pay the price.

Democrats have ignored the lessons of history. They think they are flying high. That’s how falling off a cliff feels until you hit the ground.

The Jobs Americans Won’t Do

The justification for the President’s temporary worker program is that there are some jobs that American’s just won’t do.

Farmers argue that they need unskilled immigrant workers because without them, crops will rot in the fields and food prices will skyrocket. In California’s San Joaquin Valley in 1960 under the Bracero guest worker program 56,000 unskilled Mexican farm workers picked 2 million tons of tomatoes. When that program ended in 1964, did crops rot in the fields? Did ketchup become a luxury good?

Of course not. Farm owners started to invest in automation. The result was that 5,000 high skilled, high wage workers were able to harvest 12 million tons of tomatoes. Nearly six times the harvest with one tenth of the workforce. Put another way, that’s a productivity increase of over 6,000%. If our health care system had that kind of productivity increase, we wouldn’t be worried about the future of Medicare.

It’s a perfectly understandable pattern. American industry has little incentive to invest in labor saving automation as long as there is an unlimited supply of low skilled, low wage workers.

But what about jobs that can’t be automated? If we don’t import cheap, unskilled immigrant labor, who is going to clean our hotel rooms?

If low wage immigrant workers were not available, Hilton would not close it’s hotels. They would respond to supply and demand in the labor market and pay a U.S. worker trying to support her 3 kids the $15/hour she needs to pay the mortgage and finish her education.

Low wage immigrant labor does not make these jobs possible. It just makes them possible at low wages.

The other argument for a temporary worker program is that if we give people a legal channel to work in the U.S., there will be less illegal immigration. It will reduce pressure on the Border Patrol and let them focus their resources on the few people still trying to cross the border illegally.

There’s just one problem with this argument. It’s called math.

A 2005 Pew Hispanic Center national survey showed that 46% of Mexicans would cross the border into the United States if they had the opportunity. Out of a population of 109 million, that makes 50 million Mexicans who with varying degrees of intensity, want to come here. Subtracting 400,000 legal guest workers, still leaves 49.6 million who want to come here and are willing do it illegally.

A guest worker program can only reduce illegal immigration if it absorbs a large fraction of the pool of potential illegal immigrants. Given that the population of Mexico, Central and South America is over half a billion, no temporary worker program can ever be large enough to put a meaningful dent in illegal immigration.

If the goal of a temporary worker program is to subsidize business with low wage workers, then it may have merit, but we need to be aware that there will be a price. That price will be reduced productivity and lower wages for U.S. workers.

Law and Order starring …Rudy Giuliani?

So we have a new immigration bill. The left doesn’t like it, the right hates it, and the middle …well, they aren’t so hot about it either. And yet it seems destined to pass and become law. Since there is so much emotion around illegal immigration, it seems highly unlikely that this new bill will make the issue go away.

So after the legislation is passed, where does the debate go?

The biggest problem with the 1986 reform was that the “promise” of enforcement to prevent future illegal immigration in exchange for amnesty, wasn’t kept. Conservatives are desperate not to let that happen again, so we’re starting to hear rumblings about the next big fight. Enforcement.

Since the right has already been burned once, they are going to be obsessive about the enforcement provisions of the new law. They will be looking for the first microscopic hint of backsliding and when they find it, conservatives are going to scream bloody murder.

When the enforcement fight starts (about 9 seconds after the bill is signed), Republicans are going to be looking for a leader to save them from a repeat of 1986. There is going to be an opportunity for a major Republican presidential candidate to grab the issue and become that leader.

That’s where Rudy comes in. The only thing standing between him and the nomination is low support from the right wing of the party, so he would benefit from showing leadership on immigration enforcement more than any other candidate. He also has the most credibility in the party as being tough on crime. The biggest criticism of Giuliani as Mayor was that he was, if anything, too ruthless in enforcing the law.

If Giuliani positions himself as the tough as nails crime fighter who can enforce the law and shut down illegal immigration, the right wing of the party will line up behind him in a New York minute.

The only question is, will he see the opportunity and take it?

The Logic of Immigration

Immigration reform is an emotionally charged issue and the most contentious part is the decision about what to do with the 12+ million illegal immigrants already here. Should they be allowed to stay?

Sometimes examining the most extreme cases can help shed light on a difficult question, so let’s do that with the “path to citizenship”.

Case #1:

A 26 year old man came here illegally from Nicaragua 8 years ago. He speaks no English, has made no attempt to assimilate and has supported himself by leading a violent street gang that controls the drug trade in a large American city. He is personally responsible for half a dozen vicious murders.

Should he be given a path to citizenship? The obvious answer is no. Everyone would agree we should track him down, slap him in handcuffs and throw him out of the country.

Case#2:

A Mexican couple crosses the border illegally with their 6 month old son. He is put up for adoption and grows up not knowing he is in the country illegally. He speaks only English, graduates from Harvard with honors, then turns down a high paying corporate job to become a Marine Corps officer. While in combat, he is seriously wounded saving the lives of dozens of civilians and is awarded the Congressional Medal of Honor.

Should he be given a path to citizenship? Most Americans would insist that he be granted citizenship immediately. We are obviously a far better country having citizens like him.

Most illegal immigrants are neither mass murderers nor national heroes. They fall somewhere on a continuum between the two extremes, but the point is still valid. Some illegal immigrants are nearer the former case, are destructive to our country and should be expelled. Others are closer to the second example and are already valuable members of our American family.

If we accept this simple logic that we as a nation would be better off if some fraction of the illegal immigrant community were granted legal status and acknowledged as the good Americans they are, and some fraction were compelled, as best we can, to leave, then the only remaining question for our policy makers is: By what standards do we decide who should stay and who should go?