The president we need

In a recent column, George Will offered a profile on the president of Purdue University and former governor of Indiana, Mitch Daniels. Mr. Daniels gave a commencement speech at Purdue. His address shines a light on the current political season.

He stated that diplomas pronounce the recipient is a bachelor of this or a master of that. But what is more important is that employers know that diplomas tell little about the recipient's readiness for work or for life. This is important because diplomas can bestow credentials that are not credible and many studies show that happiness comes from, as Daniels said, "earned success." This, many times, requires effort to surmount setbacks. And yet, one of the most persistent beliefs today is that life is more or less a lottery.

Six days prior to Daniels' speech Obama told graduates at Howard University: "Yes you worked hard, but you have also been lucky. That's a pet peeve of mine: People who have been successful and don't realize they have been lucky. That God may have blessed them; it wasn't nothing you did."

Nothing? Hence the progressive agenda: Government must regulate, redistribute and manage society to create fairness to offset life's pervasive randomness a.k.a luck. Obama's words are, of course, in line with his 2012 statement that "if you have a business, you didn't build that. Somebody else made that happen."

Daniels also said, "I hope you will tune out anyone who, from this day on, tries to tell you that your achievements are not your own. I am not saying that luck never plays a part; of course it can." But, unless it is bad luck, "it almost never decides life's outcome."

Although luck plays a role in the lives of most people, you can move the odds in your favor by common sense behavior, making good choices and working hard.

However, what I liked most about Daniels' speech are the quotes he shared:

from Thomas Edison, "Opportunity is missed by most people because it is dressed in overalls and looks like work."

from Samuel Goldwyn the movie pioneer, "The harder I work, the luckier I get."

from Frederick Douglass, "We may explain success mainly by one word and that word is work."

And one of my favorites, source unknown, "luck is where opportunity and hard work meet."

Progressives understand that their government-centered society is convincing the more people believe that work - individual effort- does not lead to success. Thus, government grows as despair grows, and that continues as progressivism instills in people the demoralizing belief that they are victims of circumstance.

"Even more absurd" Daniels said, than the idea that life is just a lottery is the idea that "most of us are victims of some kind, and therefore in desperate need of others to protect us against a world of predators and against our own gullibility."

Daniels words to that graduating class explain why the current presidential campaign offers little. Hillary is a progressive committed to large government to remove luck from our lives and to distribute equity to all the "victims", meaning to everyone. Trump comes across as a whiner warning us that we are being victimized by the Chinese, unworthy allies, etc.

Purdue has the president our nation sorely needs.

ObamaCare - What We Can Expect

In past posts I have opined on my view of the consequences of ObamaCare, specifically commenting on Mr. Obama's claims that premiums will go down under his landmark legislation. I believe, and have stated, the opposite will occur.

Following is a summary from an article on the subject from an insurance industry publication:

In spite of promises that health reform would lower premiums, Americans are finding different outcomes. Despite Obama's assurances that the average family's premium will be reduced by $2,500 annually, the opposite appears to be happening. According to the Kaiser Family Foundation, the average family premium for employer-provided health insurance rose 4.5% so far this year, more than twice the inflation rate. In 2011, average premiums rose by 9.5%, increasing family premiums by nearly $2,000/year.

For workers in companies with fewer than 50 employees, Kaiser found that family premiums increased 8% this year increasing premiums by more than $1,100.

Ohio officials estimate that by 2017, premiums in their state will rise from a minimum of 55% to as much as 85%!

And here is the key point. Because Obamacare forces insurers to provide benefits it does not cover pre-Obamacare, the cost of insurance will go up.

Another driver of higher premiums is the fact that insurers must cover everyone, regardless of health history, a change that will attract sicker enrollees at the expense of healthier ones. Add to this the fact that many uninsureds will ignore the mandate and pay the penalty (tax). As a result, the assumed financial foundation of Obamacare, increased revenue from insuring millions of people, will not happen. The risk will not be spread as Obama assured us it would and the result will be ever increasing premiums.

For all those people who voted for Obama, believing that his health care plan will provide more benefits at less cost, I remind them of the old adage of be careful of what you ask for. You may get it (but ultimately not like what you get).

What About Public Equity?

Much has been said in the media about the "evils" of private equity, implying that investor return is paramount and the fate of the worker secondary. In an earlier post I opined on the track record of Bain Capital, detailing how many companies were acquired and the over-all results. The conclusion was that private equity companies work within our capitalist system. As a result, there are some "winners" and some "losers" but over-all there were more on the upside than the downside. I pointed out that capitalism does not guarantee that everyone will be a winner.

Since the president is now in full re-election mode, he has been very critical of Governor Romney's tenure at Bain Capital depicting Romney as a dollar hungry capitalist only interested in profits and returns to investors. He went on to say that that may make you successful in private equity but is no qualification for the presidency. And this coming from a community organizer, non-tenured law professor and junior senator who had not completed one term when he ascended to the presidency! On closer examination, we can see that Governor Romney is far more qualified to be president than Obama was when he was elected.

If Obama is going to double down on his attacks on Romney and say that Romney's record in private equity is fair game, then Obama's record in public equity is also fair game. And that record is not very good.

There is an excellent opinion by Marc Thiessen published in the Washington Post on May 24 titled:

"Forget Bain - Obama's public equity record is the real scandal"

Following is a summary of that opinion piece.

Obama has invested billions of taxpayer dollars in private businesses. Most of those investments have turned out to be complete disasters - leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions.

Here are just a few examples of Obama's public equity failures:

Raser Technologies: In 2010 Obama gave them a $33 million taxpayer-funded grant to build a power plant in Utah. According to the Wall Street Journal, the company has filed for bankruptcy protection. The company has fewer than 10 employees and owes $1.5 million in back taxes.

ECOtality: Obama gave this company over $126 million in 2009 for the installation of 14,000 electric car chargers in five states. At the State of The Union address in 2010, Obama highlighted them as an example of a stimulus success story. According to the company's SEC filings, ECOtality has incurred more than $45 million in losses and has declared they may not be able to sustain profitability.

Additionally, ECOtality is under investigation for insider trading according to CBS News.

Nevada Geothermal Power: The Obama administration gave this company a $98.5 million taxpayer loan guarantee in 2010. It has been reported the company is in financial turmoil, their cash reserves have been drained and their auditor concluded there is significant doubt about the company's ability to continue as a going concern.

First Solar: The Obama Administration gave this company more than $3 billion in loan guarantees for power plants in Arizona and California. According to Bloomberg Business Week, the company fell to a record low in Nasdaq trading May 4 after reporting $401 million in restructuring costs tied to firing 30% of its workforce.

Abound Solar: The Obama administration gave this company a $400 million loan guarantee to build photovoltaic panel factories. According to Forbes the company halted production and laid off 180 employees in February.

Beacon Power: This green energy storage company received a $43 million loan guarantee from the Obama administration. Last fall this company was delisted by Nasdaq and has filed for bankruptcy.

This is just a sample of Obama's dismal track record in dispensing taxpayer money:

A company called SunPower received a $1.2 billion loan guarantee. As of January they owed more than they were worth

Brightsource got a $1.6 billion loan guarantee and has posted net losses of $177 million.

And of course, there is Solyndra, the solar panel manufacturer that received half a billion in our money in loan guarantees and went bankrupt, leaving taxpayers on the hook.

Obama says all projects received funding "based solely on their merits." If so, then I wonder why it is that fully 71%, as quoted in Peter Schweizer's book "Throw Them All Out", of the Energy Department's grants and loans went to "individuals who were bundlers, members of Obama's National Finance Committee or large donors. These cronies raised over $457,000 for Obama and were rewarded with grants or loans in excess of $11 billion!!!

Now that is quite a return on investment! I guess that is why the Energy Department Inspector General has launched more than 100 criminal investigations.

To conclude, Mr. Thiessen said:

"Now the man who made Solyndra a household name says Mitt Romney's record at Bain Capital 'is what this campaign is going to be about.' Good luck with that , Mr. President. If Obama wants to attack Romney's alleged private equity failures as chief executive of Bain, he'd better be ready to defend his own massive public equity failures as chief executive of the United States."

What Is Taking So Long?

The US economy finally seems on a course to sustained recovery, but why is it taking so long?

Strong job creation and economic growth as measured by the gross domestic product creeping back to pre-2008 levels at close to 3.5% were predictions from Goldman Sachs a year ago.

But the Goldman analysts were one of many to predict incorrectly that 2011 would be a great year for the stock market and that higher corporate profits and increased consumer spending would all translate into decent job growth and the final nail in the recession.

The recovery looks real; it was the third month in a row in which the economy produced more than 200,000 jobs. Unemployment is holding at 8.3%.

The bigger issue is what is taking the economy so long to recover?

President Obama and his supporters are right that it takes time to dig out of a hole so deep.

But his critics also have a point. The administration's policies helped delay the rebound and make it more tepid than it might have been.

You can begin with Obama's signature first-term economic "achievement" the $800 billion stimulus plan that was supposed to create all those shovel-ready jobs and stop unemployment from rising above 8%.

We all know how that turned out, with unemployment hovering between 9% and 10% until just recently and the GDP floundering such that even some Obama supporters have attacked the stimulus' futility. Much of the money went to states to plug their budget deficits and reduce government layoffs; another amount went for ridiculous green schemes proposed by politically connected companies like Solyndra.

As for all the shovel-redy jobs, the president himself has joked about how they weren't as shovel-ready as he expected. But this is no joking matter.

Obama's biggest economic mistake was not just the wasted stimulus but a war on US businesses that he continues to wage today.

Even as evidence mounted that his stimulus plan was a failure, the president ignored the nation's economic woes and spent most of 2009 and 2010 pushing for the least business friendly mandate to come out of Washington in years- his universal health insurance plan.

Timing is everything.

Obama was not pushing a new mandate during an economic boom when employers might shrug off the costs and ignore the uncertainty, but when, as he puts it, the economy was in the ditch. Instead of giving the private sector reason for hope, he gave it more to fear - so businesses retrenched and the "recovery summer" the administration predicted for 2010 never came.

Nor did it come last year. Again some problems were clearly out of the president's control like the euro crisis which was a drag on the global economy. But so were Obama's policies.

Businesses react rationally when it comes to hiring more workers and here is what they have had to consider since 2009:

A president who does not miss a chance to bash millionaires and billionaires and who always talks up the "justice" of raising their taxes.

A financial reform law that raises costs so much that banks cannot afford to take normal business risks and lend to entrepreneurs.

An administration that is so hellbent on serving its union allies that it sues Boeing for opening a nonunion plant in South Carolina where unemployment is almost 10%.

Now that Obama is in full re-election mode, he has dropped the Boeing suit. But he still stalled the Keystone Pipeline which would have produced some real shovel-ready jobs and also more oil. And while he has put some anti-energy regulations on hold, nobody thinks he is likely to delay them if he wins re-election.

THE BOTTOM LINE IS ANYONE LOOKING TO GIVE THE PRESIDENT CREDIT FOR THE RECOVERY NEEDS TO EXPLAIN WHY IT TOOK SO LONG AND TO TELL US WHAT, EXACTLY, OBAMA DID TO MAKE IT BETTER.

In previous post I have opined on Obama's lack of leadership and business experience both of which are proving to be the major impediments to the recovery.

Happy Anniversary

Two years have passed since the passage of President Obama's landmark health insurance reform.

I think most people would agree it is time for a report card.

Before passage in March 2010, Obama promised:

Hearings on the law would be broadcast on C-SPAN, I do not believe there were any.

Bi-partisan committees, yet Republicans were virtually locked out of closed door meetings.

We would all embrace it - did you get that impression from the town hall meetings?

We would see lower premiums - industry people are telling me premiums are rising 25% to 40%.

America's dissatisfaction with ObamaCare continues to grow and the Supreme Court will be taking up the issue of the individual mandate very soon. More than 20 states have filed suit against the federal government to rescind ObamaCare, an unprecedented action in U. S. history. Burdens placed on states to implement health insurance exchanges will bust budgets so most states have done nothing to establish the exchanges.

The Obama Administration continues to deny medical loss ratio (MLR) exemptions for states where companies are threatening to leave the market, thus nullifying the promised increase in competition; meanwhile many exemptions have been granted for special groups, notably unions.

Former Democratic presidential candidate Howard Dean predicted that as many as one-third of the nation's small businesses will dump their employees onto the exchanges. He quoted from a McKinsey study that concludes most small businesses are not going to be involved with health insurance anymore once this all takes effect.

This law, when fully implemented in 2014, will cause states to be overwhelmed by the glut of people thrust onto their exchanges. The amount of subsidization and sheer size of this all-encompassing law will turn what was once a health insurance system in need of some tweaking into a crippled and mangled mess, leaving the states and the economy on life support.

If the health care system needed some fixing two years ago, President Obama himself could not have predicted any better the situation our nation will face if the law survives the Supreme Court review and goes into full effect. He said: "If all we are doing is adding more people to a broken system then costs will continue to skyrocket , and eventually somebody is going to be bankrupt, whether it is the federal government, state governments, businesses or individual families."

I could not have said it better myself!

Happy Anniversary, America

A Slippery Slope

The United States Department of Health and Human Services announced on January 20 that almost all employers, including Catholic employers, will be forced to offer their employees health coverage that includes sterilization, abortion-inducing drugs and contraception. Almost all health insurers will be forced to include these "services" in the health insurance policies they offer and almost all individuals will be forced to pay for that coverage as part of the health insurance policies they purchase.

This ruling should be of great concern to all Americans regardless of religious belief, or position on pro-life/pro-choice issues. This ruling should be a red flag to all Americans of the danger of an Administration that has no respect for the rights of others and one that has the attitude of being the smartest guys in the room.

In so ruling, the Administration has undermined both the principle of religious conscience and the First Amendment to the Constitution in an unprecedented and profound way. Unless the ruling is overturned, faithful Catholics will be forced either to violate their consciences or to drop health coverage for employees and suffer penalties for doing so. The Administration's only concession was to give Catholic institutions one year to comply. This is not only inadequate but insulting as the Administration is basically saying this is the law of the land so take it or suffer the consequences of non-compliance. It betrays the faith of many Catholics who, until now, have supported this Administration with an honest will.

Catholic leaders across the country have made it clear they cannot comply with this ruling without compromising long held convictions and undermining Catholic identity. This ruling interferes with the basic right of Catholics to work for the common good.

In this ruling we have yet another example of an Administration that wants to force social change upon us in the worst possible way led by a President who cares little for the rights and convictions of the citizenry.

This ruling has nothing to do with abortion or contraception but has everything to do with this Administration displaying their arrogance toward the people and it has everything to do with individual liberty. Again, this president is forcing us to do something thru legislation just as he did with the Individual Mandate. This is another smoke and mirrors move, someone must pay for these mandates. The president keeps saying these "benefits" are free but someone must pay for it!


If this Administration can force us to buy insurance and pay for benefits we do not want, what is next? Whenever the government issues a mandate, in reality it is eliminating choice.

This ruling exposes Obama's steps toward unlimited power for the central government and its unique disdain for people who do not think like him. No change in wording will change Obama's position on the issue.

With his recent policy tweak, Obama asserts that insurance companies will do -for free- what faith based organizations do not want to do. Nonsense! Insurance companies will simply price their products based on actual cost. The courts are already considering the constitutionality of Obama Care. How can a government supposedly of the people, by the people and for the people punish the people if they do not want to shop at Obama's health care store?

Even though this issue is a direct threat to religious liberty, it is much bigger. It threatens the very essence of liberty by allowing government to dictate matters of individual discretion. Even if there was not a direct and wholly unconstitutional assault on the religious convictions of Catholics and other Christians, it is simply not the government's right to demand that an employer provide something that it does not want to give, or that employees do not want. If the president can demand employers to provide contraceptives or even abortion today, then next he may demand some other form of health coverage. He could then insist all employees be covered for dental and cosmetic surgery. Maybe I need a face lift but it is not a necessary function of the president to demand it.

The president's attempt to move the cost to the insurance companies is lame and laughable. It is not about adding forced benefits for people, it is about taking away the right of self-determination from people. No president has been granted that authority or power from the Constitution and it simply fails to meet the test of the "consent of the governed."

We should all object to the notion that we are required by the dictates of the president without Constitutional or legislative process to surrender the terms of our faith.

Nancy Pelosi was right about one thing, they needed to pass this legislation so we could all understand it. Well, they passed it and now we know. Speaker Boehner should put the ObamaCare bill back on the table for a vote. Let's see who is willing to put his or her name on it now that we know what is in it!

Obama is acting like a thug with a cavalier attitude that people of faith should cast aside their beliefs in favor of politically correct thinking. This is incredibly insulting and ignorant of the very nature of faith.

Contraception access is not the issue. It is available from many sources. The issue is who pays and whether all, including faith based organizations, must be made to kiss the ring of the American monarch and swear loyalty to his value system.

Henry the Eighth would be proud.

It is time for Obama to repent and Congress to repeal.

The Constitution is king, not Mr. Obama!

A Foreigner's Perspective

In a recent edition of the London Times, Irwin Stelzer, business advisor and director of policy studies at the Hudson Institute, wrote an op/ed piece on the Republican presidential candidates. I found his opinions to be very interesting so following is a condensed version of his piece which also includes some of my own thoughts:

Politics makes for strange bedfellows. With the exception of Mitt Romney, all the candidates have decided that it is evil to take over failing companies in an attempt to restructure them so they can grow and create jobs. What these candidates have forgotten is that this so-called creative destruction has enabled risk-taking businessmen to create the capitalist system that has created the greatest material prosperity the world has ever seen. They are all saying that Romney's successful stewardship of Bain Capital disqualifies him from becoming the party's nominee to face Barack Obama in November.

Why? Because in the process of restructuring companies headed for the rocks two bad things sometimes happen: there are layoffs before the leaner company went on to success and the rescue effort failed.

This criticism is not coming from Democrats who have no use for the unpleasant aspects of American capitalism. This criticism is also not coming from European defenders of the social democratic system to which Obama wants to "transform" (his word) America.

This criticism is coming from candidates trying to get the support of conservatives who in their eagerness to derail Romney are advocating capitalism without risk or failure, which is akin to religion without sin: it will not work.

According to the Wall Street Journal, during Romney's tenure Bain gathered capital from investors and lenders and invested in 77 companies. Some 22% of those companies filed for bankruptcy or went out of business, some struggled along, some produced extraordinary profits for Bain's investors - roughly 50% to 80% annually. LIke oilmen who drill exploratory wells knowing that nine out of ten will be dry holes but the successful one will cover the cost of all ten and yield a profit, private equity firms gamble on the overall success of their portfolios.

It is unfortunate that the debate about American capitalism is being cast as a debate about the role of financial architects because one of the forces that drives capitalism forward is the private equity firm like Bain Capital that creates new, re-organized companies.

But there is more to capitalism than finance. There is investment by risk-taking, innovative entrepreneurs of the sort that populate Silicon Valley and garage laboratories all over America. John Maynard Keynes refers to "animal spirits" that reside in people possessed of a spontaneous urge to action than inaction, a group of people that Barack Obama knows nothing about and cares not to understand.

Romney, born to wealth, hardly qualifies as a hero of capitalism. He is a successful investor and good manager who, among other things, revived Staples which now employs over 70,000 and Domino's pizza with 145,000 workers.

Unfortunately, he opposes a president who has little use for bankers, an absolute distaste for "the rich", who he defines as "millionaires and billionaires" and any family earning more than $250,000 a year. It is Romney's misfortune that his Republican colleagues are giving so much ammunition to the Democrats.

If voters think government is simply a large business and the skill required to manage Bain is the skill needed to restructure government, Romney is their man. If they think that an entirely different world view from that of Obama is required, Romney also qualifies,no matter what one thinks of his Bain experience.

Two things are certain. First, running a private equity firm is not a disqualification for the presidency as might be the case for lobbying on behalf of Fannie Mae and Freddie Mac. Second, if Ron Paul decides to head the third party Libertarian ticket, he might siphon off as much as 6% of Romney's vote (assuming Romney is the candidate) and virtually assure Obama an extension of his stay in the White House.