Joe Sestak and Occam's Razor

It’s the Friday before a Holiday weekend so it must be time for the White House to clear up some troubling events with a minor press release. This is how the Obama Administration has always dealt with such issues. After all, the number of people available for comment is scarce and the stories that will be written will hit the papers and television news over the weekend when relatively few people are paying attention.

A brief press release issued this morning by White House Council and long time Obama associate, Bob Bauer, to answer the growing question about Congressman Joe Sestak’s claim that a White House official offered him a job if he would agree to abandon his primary challenge against Senator Arlen Specter. Bauer’s statement said that Chief of Staff Rahm Emanuel used former President Bill Clinton as an intermediary to offer Rep. Joe Sestak (D-Pa.) an unpaid, executive branch advisory board position to “avoid a divisive Senate primary”. Bauer denied rumors that Sestak was offered a nomination as Navy secretary, and said all discussions were “consistent with the relevant law and ethical requirements.”

If this statement is correct and the White House acted in a manner “consistent with the relevant law and ethical requirements”, why did it take ten weeks and a media storm before the White House would respond to this controversy and why did the White House contact Congressman Sestak’s office as well as Sestak’s brother and campaign manager, Richard Sestak, before issuing this statement? According to Bob Bauer, the White House has “concluded that allegations of improper conduct rest on factual errors and lack a basis in the law". In other words…..we looked at the issue and everything is fine so just trust us. Really?

For the past ten weeks, Joe Sestak has held firm in his account of the exchange. He said not once, but a number of times that he had been contacted by a member of the Obama administration and he was offered a high-ranking administration job in exchange for dropping his primary bid. When asked about the rumors that he was offered the nomination for Secretary of the Navy, Sestak declined to elaborate, saying that doing so would be just getting into politics. Now that the White House has contacted Sestak and his campaign manager prior to today’s press release, Sestak’s account is now mysteriously saying something completely different.

Sestak released his own statement today saying "Last summer, I received a phone call from President Clinton. During the course of the conversation, he expressed concern over my prospects if I were to enter the Democratic primary for U.S. Senate and the value of having me stay in the House of Representatives because of my military background," Sestak added. "He (President Clinton) said that White House Chief of Staff Rahm Emanuel had spoken with him about my being on a Presidential Board while remaining in the House of Representatives. I said no."

"I told President Clinton that my only consideration in getting into the Senate race or not was whether it was the right thing to do for Pennsylvania working families and not any offer," he continued. "The former President said he knew I'd say that, and the conversation moved on to other subjects."

Was Sestak having a “Blumenthal moment”? If you recall, Democrat Dick Blumenthal who is running for the Connecticut Senate Seat has been accused of lying about his military service by hinting that he was a Viet Nam veteran. Blumenthal has since apologized and even though there are at least eight different occasions that this happened on film, he simply said he “misspoke” a few words that were taken out of context. The few words were silly things like “in Viet Nam” instead of “during Viet Nam” and “when we returned from Viet Nam” instead of “when my duty with a State-side reserve unit was over”. You know….easily mistaken comments. Could Sestak have simply misspoken a few words, confusing a “high ranking administration job” with a “non-paid appointment to an advisory board”? Perhaps he also confused Bill Clinton with Secretary of State Hillary Clinton when he said he was contacted by a member of the Obama administration? Let’s face it….those high pressure jobs add years to your looks so maybe it was an honest mistake now that Hillary has added a few more wrinkles and some gray hair.

I am a huge fan of Occam’s razor. Occam’s razor (or Ockham's razer) is a theoretical principle proposed by 14th-century English logician, theologian and Franciscan friar William of Ockham that "entities must not be multiplied beyond necessity" (entia non sunt multiplicanda praeter necessitatem). In essence; that the simplest solution is usually the correct one. In this case, before we can arrive at the simplest solution we must identify the actual questions.

The obvious questions are:

1- Why did the White House refused to comment on this matter for ten weeks?

2- Why was Bill Clinton asked to “intercede” on behalf of the White House?

3- Why did Representative Sestak refuse to elaborate on the issue beyond his initial statement for the past ten weeks?

4- Why was Representative Sestak’s office and campaign manager contacted before the White House press release was issued?

5- Why has Representative Sestak’s account of the incident changed so drastically?

The simplest solution to all of these questions is that the press releases from both the White House and Joe Sestak are lies meant to cover up the true nature of the offer made to Joe Sestak and the identity of the person that made that offer. I’m sure the White House contacted Sestak after his initial statement and told him of the legal ramifications of his allegations. Sestak has nothing to gain by causing the White House embarrassment by further implicating them in what was obviously a criminal act. After all, Sestak is now the Democratic candidate for Specter’s Senate seat and will need the support of the White House and the DNC if he has any hopes of succeeding this November. That easily explains Sestak’s reluctance to elaborate on the offer that was made.

The dismissive non-response to the press’s questions issued by White House Press Secretary Robert Gibbs tells me that they initially believed that this would all fade away after the primary, but to their surprise, it didn’t. Legal analysts were scouring US code looking for possible violations of law and the ramifications of those laws being violated meant someone was going to have to be sacrificed if there was any truth to Sestak’s story at all. Since this was fast becoming an issue that could affect the upcoming elections, fellow Democrats joined in the call for explanations and that could not be ignored. Some way had to be found to “help” Joe Sestak back away from his claims without damaging his race for the Senate but the real trick was that it had to be done in such a way that the White House was also clear of any wrong doing.

Ten weeks seems like a plausible amount of time for legal council to review the incident and issue recommendations. I'm sure those recommendations included the need to portray a series of events where someone that was not a member of the administration (Bill Clinton) would speak with Sestak only to suggest that his chances for success in the primary were limited so he should just drop out of that. “Oh by the way…Rahm Emmanuel would like to place you on a Presidential Advisory Board as a non-paid advisor while you retain your all important seat in the House of Representatives.” No government employee and no promise of power or money would skirt all of the problems. While that scenario certainly plays well with respect to the laws against using the power of a government office to interfere with a primary or general election, it does not sit well with the good Congressman’s previous and frequent statements.

As convoluted as this story is, it certainly does not play well with respect to Occam’s razor either. It makes no sense that the White House would risk the political damage of letting people believe that they were stone-walling the issue for ten weeks if Sestak’s original story of the attempted bribe were not true. It makes no sense that Joe Sestak would suddenly change his story so drastically on the day of the White House press release and risk his chances in the November election if he were not coached by the White House that this was the only acceptable way out of this for the both of them. It makes no sense that the White House would attempt to entice Sestak with a non-paid position on an advisory panel when the man was running for the United States Senate. Knowing that Sestak is not one of the wealthier members of Congress like Kerry or Kennedy, that wouldn’t fly at all so they further complicated the story by adding that he was told he could serve on that board and keep his seat in the House; something that Congressional rules currently prohibit. Curiously, Joe Sestak has been avoiding any direct interviews in the wake of the statement he released today that directly contradicts his previous assertions.

About the only part of the story that makes any sense is the Bill Clinton connection. Billy misses the limelight (not to mention access to female White House aides) so he doesn’t mind being drawn into something like this. Actually, Clinton was the perfect name to use in place of Rahm Emmanuel. He is not a member of the White House staff nor is he a paid employee of the Obama administration and if this ruse fails and an investigation is forced upon the White House, we all know that Bill Clinton has no problem lying to special prosecutors, Grand Juries or to the American People.

Paul

Obama's Recession

Any discussion about who is ultimately responsible for the recession would not be complete without a clear definition what a recession is. In economics, a recession is a business cycle featuring a general slowdown in economic activity over a period of time; usually two fiscal quarters or longer. The other criterion for identifying a recession is an increase in unemployment of greater than 1.5%. It is clear based on the generally accepted criteria that the recession began under George Bush with the third quarter of 2008 showing a 2.7% decrease in GDP and the decline jumping to 5.7% in the forth quarter of 2008 and a corresponding increase in unemployment from 5.8% to 7.2% over the same period.

Except for the last two quarters of 2008, unemployment during the Bush administration had cyclically fluctuated between four and six percent just as it had during most of the Clinton administration. Clinton stepped into office with unemployment at 7.3%; remaining at or near that level until October of 1993. Of course the banking system was still generally believed to be in good shape then and since we found out that most of the deregulation that nearly collapsed the system had not occurred yet, it probably was. I find in curious that the real reduction in unemployment during the Clinton years did not take place until he abandoned his plans for healthcare reform. Apparently, the business community had the same reservations about the future of their profitability with Clinton-care as they do with Obama-care. While Clinton did not lower taxes, his advisors did convince him to reduce the capital gains tax and that made the risk of investment more palatable.

Obama has not enjoyed a reprieve from high unemployment because the threat of his agenda has kept the business community from investing in labor or expansion. The measly incentives he proposed to help small business during his State of the Union Address lost weight and credibility when juxtaposed against his assertions in the same speech that he intended to follow through with healthcare, cap and trade and the hair-brained scheme of debt forgiveness for student loans for anyone that could avoid paying them for twenty years (ten, if you were employed in the service of the government).

There is nothing in the President’s agenda that does not take from those that earn wealth only to be given to those that don’t and that is what is killing new job creation. In fact, it took all eight years of the Bush administration for unemployment to rise 3%; Obama nearly achieved that in his first year in office. The President may have inherited a large national debt, high unemployment and a sagging economy; but he did not inherit the agenda proposals that have made all of these indexes far worse. That agenda is all his (or at least, it belongs to whoever is pulling his strings).

For all the damage that his proposals have wrought on the economy and no matter how many people tell him that this is what has stalled business, he still intends to follow through. I haven’t decided if that is just stubbornness on his part or if these are the marching orders from his number one White House visitor, Andy Stern. I think it is fair to question his motives and when you follow the money and the intent of the people that are pressing heavily for these socialist programs like Andy Stern, some interesting things happen.

Obama has recently made some very impassioned speeches where he says that he promised healthcare would pass and that is exactly what he is going to do. Well, he promised to close Guantanamo Bay in the first year and it is still open. He promised transparency in his administration; that healthcare debates and meetings would take place on C-Span. Not only have the meetings on healthcare barred C-Span coverage but congressional Republicans have been barred as well. He said there would be no more back room deals and then offered $300 million to Mary Landrieu for her vote and only God knows how much for Ben Nelson. Bernie Sanders got billions for community health services but in all fairness, that was to expand national programs and not just those in Vermont. All of that money and more had been handed out in closed door, back room deals.

Obama also said there would be no middle class tax increases. Those of us that watch this nonsense knew that was a lie of semantics from the start. His plans and programs, not to mention the FY2011 budget, call for a whole host of new taxes on goods and services; taxes that will be passed on to you by the businesses they affect. He could stand firm on his promise of not taxing you directly while taking it from business knowing they were taking it from you. Now apparently he is going to make the same mistake George H.W. Bush made. Remember “Read my lips – no new taxes”? Bush reneged on that and Clinton never let you forget it during the campaign.

Now that Obama has blown through four years worth of Bush deficit spending in his first year in office, the nation is crying for fiscal conservatism. Fiscal conservatism for most of us in this country means cutting spending to live within our means. For a tax and spend Progressive, fiscal conservatism means making sure you have enough tax revenue to cover your planned spending. It was announced this week that the President is considering a middle class tax increase now that the Congress has passed “Paygo”. Paygo simply means Pay as you go; a mandate that Federal spending increases have to be offset by a decrease in spending elsewhere or an increase in taxes. So now, in a recession, the President wants to tax the middle class twice; once directly and then again by turning overtaxed businesses into tax collection middlemen. That is why they are trying to sell us on the notion that the recession is finally easing.

There was a modest gain in GDP and a slight easing of unemployment last month. Both of which are easily explained by the billions spent in stimulus money and the increase in government employment as they ramp up for the 2010 census. Neither of these small increases are the result of real economic growth and neither will be lasting. So now that he is planning to raise taxes to show his fiscal conservatism, where are the corresponding spending cuts? Well, the President of semantics has the answer to that too. He increased discretionary spending 25% in 2009 and will add another 20% in 2010 but he promises to freeze discretionary spending in FY2011. Mr. President that is not a spending cut; that is freezing your insane increases so they can’t be cut.

Early in the Twentieth Century, America had a similar crisis. After World War I, America was faced with a deep recession brought on mostly by huge increases in the personal income taxes imposed to pay for the war. By 1920 we had slipped into depression and unemployment had topped 12% but unlike this President, the drastic steps that were needed were actually taken. Congress halved government expenditures and slashed taxes to nurture the economy. The result was a period of unprecedented growth not seen since the creation of America and that brought the country out of depression within two years when unemployment had dropped to just over 3%.

Until there is a recognition that government is the problem and not the solution there will be no meaningful progress in spending cuts, debt reduction or economic development. If there is ever going to be an epiphany in Washington on this, it certainly will not begin with this President. If America can elect a Congress this November that can put an end to Obama’s agenda that will be a good start. They might even be coerced by an active and involved electorate to propose legislation to finally restrain the wasteful ways of Washington. The bad news is that unless those daring individuals are elected in numbers sufficient to override a Presidential Veto; that new legislation will have to wait until a responsible President can be elected in 2012.

None of this would be needed if Washington actually obeyed the Constitution and had not ignored the Tenth Amendment for the past hundred years. Tomorrow, we will discuss what our government would look like if we had a Federal Government that actually resembled the intentions of the founding fathers.

Paul

The Healthcare - Frankenstein Connection

Like hundreds of other really bad horror films, the healthcare bill has been revived for yet another sequel. Just like the movies, most of the actors are the same; except of course, the ones that were killed off in the previous movies. The main character has been resurrected for each new film even though the end of the previous films seemed to suggest this ghoulish figure had met its demise.

In the original healthcare fright, Universal care was created by the evil doctor, Baron Von Clinton. That was more of a suggestive film since the horror remained hidden from view behind the closed doors of the conference room where it was created. It threatened the nation until it was eventually killed by common sense.

In the first sequel, “Son of Clinton”; Clinton’s protégé, Barack Obama, recreated the evil doctor’s work but this creature escaped the house and invaded the Senate. Then there was “The Curse of Clinton” featuring Max Baucus. The creature was altered by a committee of meddling scientists. Larger than ever, it left the Senate and returned to the house where it was created. This lead to the next film in the series; “The Bride of Clinton”. The Bride of Clinton” staring Nancy Pelosi, has reached monstrous proportions after an additional 900 pages had been added. This one threatens to challenge your senses as early as Thursday in a theater near you.

In the original Frankenstein movies, the real menace was not the monster, but the scientist that dabbled in the areas of life and death traditionally reserved for God. In his attempt to create life, this misguided doctor created a monster. While he could reanimate the dead, he could not give the beast something he had no knowledge of; a soul. Just as Frankenstein created his monster through ignorance, Congress has now created their own monstrosity. They may know legislative language but they have no idea of what it would take to actually create a soul for this document.

They are not doctors so they do not understand medicine. Most have been in public service their entire lives so they have no idea how business functions let alone how to run a business. There is only one Congress so competition is simply an exercise in theory to them. They are legislators and anytime legislators try to write laws that directly control the mission of business or that attempts to hamper personal choice, it is doomed to end in failure.

Frankenstein was so engrossed in his quest to discover the secret of life that he never bothered to consider if he should. Congress is now so obsessed with passing healthcare legislation that they have cobbled up this hideous 1900 page monster from the dissected pieces of all of the other dead bills and now they intend to breathe life into it before they know the full scope of what it will do once it has opened its eyes.

This bill is intended to eliminate private insurance despite the Presidents promises. Within the bill it is stated that in 2013, people with private or small group healthcare plans will be transitioned to the ”exchange” where they can then get a plan acceptable to the Federal Government. Similarly, the only employer provided healthcare plans that can be “grandfathered” in, are plans that meet the benefit descriptions required in the bill and that are in effect prior to the first year of this legislation. Of course we all know that healthcare plans are annual contracts and the benefit levels and deductibles change quite frequently when the contracts are renewed. It’s safe to say that even though you have a plan that qualifies under the grandfather clause, that plan will no longer qualify if it changes in any way during contract renewal. The few employer based plans that remain grandfathered will most likely be the so-called “Cadillac” plans that they intend to tax out of existence by tacking a 40% surcharge onto the premium to help fund the public option or that cease to exist when they are forced to compete against a heavily subsidized public plan.

The plan creates a healthcare benefits board that consists of the Surgeon General and twenty-six additional government and non-government people that are appointed directly by the President or appointed by other Presidential appointees. This board will determine the benefit levels in the plan, the rate at which doctors and hospitals will be reimbursed (for the public option) and yes, the allocation of resources. It is this board that will be the “death panel”; not the end of life counseling everyone was afraid of.

You see the real aim if this legislation is not to insure that all American’s have affordable healthcare. Independent studies have already concluded that private insurance costs will triple under this plan and the premium costs for the public option or “Consumer Option” as Nancy Pelosi wants to call it, will only be marginally lower than private plans unless you qualify for the redistribution of wealth (subsidy for low income families). It is not about insuring the uninsured as the CBO states that this bill will only cover 2% of people under the age of 65.

The CBO says it will cost 1.05 trillion dollars in the first ten years even though the actual benefits don’t fully kick in until year five. That means that if the government keeps its promise to make the required cuts (which they have never done in the past) and keeps its promise to eliminate waste, fraud and abuse (which they have never done in the past), this bill will actually cost close to 3 trillion dollars in year five through year fifteen. In fact, the bill’s “budget neutrality” is a myth of creative accounting unless private care is eliminated, everyone is forced into the public option, allowing the healthcare benefits board to mandate lower reimbursement rates for healthcare providers; which is exactly what I think this is designed to do.

This bill is not about care, your costs or the uninsured. It has everything to do with the Federal entitlement programs that already exist. Medicare and Medicaid were in serious trouble three years after they were created. In 1968, Congress raided the Social Security Trust to use those funds to shore up Medicare and Medicaid. They then placed Social Security as a line on the Federal Budget and stuffed it full of IOU’s. Now that the baby-boomers are retiring, people are living longer than ever and Medicare and Medicaid are still a financial train wreck, the government needed to find an innovative way to get more money from the public to keep the Ponzi scheme alive. The healthcare industry represents one sixth of the United States economy and having that money run through the government entitlement machine first would keep the gears of that machine greased for an awfully long time before it would be in crisis again; or so goes the logic.

The problem with that logic is that the government has never managed any public entitlement program effectively, efficiently or with even a modest degree of success. As I said before; they not businessmen nor are they doctors; they are legislators and truthfully, they aren’t very good at that either. If this is in fact a plan to restore solvency to the Federal Budget only one of two things can happen. It will fail miserable (as usual), bankrupt the Federal Government and collapse our economy or it will reduce the healthcare system in this country into the same bureaucratic nightmare that England has had since World War II, where hospitals have longer lines than airports, benefits are rationed and care is determined by placing a value on life.

So here we are, November 3, 2009 and today’s election may spell life or death for the healthcare debate as President Obama is, in essence, on trial in three east coast races. A loss for Democrats in the three most visible races, New York’s 23rd Congressional District and the New Jersey and Virginia gubernatorial races will signify that the nation is not in support of massive spending bills and the cut-throat politics that are being employed to pass them.

To borrow a phrase from the Clinton campaign…”It’s the economy stupid!” People that are out of work want to see government action that provides incentives to businesses that actually create lasting jobs. A half-assed stimulus plan that provides a momentary bump in GDP is not being seen as meaningful. The lucky people that still have jobs live in fear of losing them as every piece of legislation currently under discussion threatens new restrictions and taxes on the people that employ them and they know that if these bills pass, their employers will have to make hard choices about who will stay, and who will go. The real engine of the economy is on hold. No one in business is expanding until they know what their liabilities will be. Investors are holding off as well; after all, why should anyone place capital at risk if the potential gain might be taxed until the profits resemble what can safely be acquired through T-bills?

The trend is definitely over and the sun is setting on the FDR Democrats. Massive spending legislation, omnibus bills, high taxes, new entitlement programs and especially non-accountability in government are all out of fashion now. If NY, NJ and VA all turn on Obama, look for a mudslide in 2010. I say mudslide only because that describes the people that will be displaced far more accurately than “landslide” ever could.

Paul