We need a Constitutional Amendment

A scary event is about to take place in Copenhagen in December . Nearly 200 nations are meeting to approve a treaty to replace the Kyoto accord on climate change. The scary thing about this treaty is that, according to people who have read it, it will establish world government. If President Obama signs it and 2/3 of the Senate concur, it will become the “supreme law of the land” according to Article 6 of the United States Constitution. The President and 2/3 of the senate can supersede the Constitution.

This is obviously a dangerous provision. The framers probably put it in the Constitution to reassure nations we conduct relations with that the United States’ signature on a treaty is binding. But the power is too broad. We need a Constitutional Amendment that says something like

Any treaty signed by the President and approved by 2/3 of the Senate must be approved by ¾ of the state legislatures.

An alternative might be

Any treaty commitment signed by the President and approved by the Senate which is found to conflict with this Constitution as amended, shall be declared null and void

Getting on message

Good for the Republicans. More and more I hear Republicans saying that the best way to reduce medical costs is by tort reform. Tort reform makes it more difficult to bring a frivolous lawsuit against a doctor or a hospital, and this in turn reduces the cost of malpractice insurance. Texas has implemented a review panel that reviews lawsuits against doctors and hospitals. To go forward a lawsuit must have the review board's stamp of approval. This in turn has reduced the cost of malpractice insurance, and has attracted more doctors to Texas.

Will this gain traction in Congress? It's questionable because the trial lawyers are big givers to Democrats. So keep pressing your congressman and senators.

I smell a rat

After weeks of fighting to include a “public option” in the health care bill the Obama administration suddenly backs off, saying the public option “is not the heart of the health care bill”. This may be good news, but there is still much to dislike in the health care bill:

• Funding the health care system in part by taking $500 billion from Medicare over 10 years. Many doctors already refuse to take new Medicare patients, as I found out when I moved from Michigan to Texas last year. Currently Medicare pays 80% of the amount Medicare has established for a procedure (not 80% of the price the doctor quotes). If this reimbursement goes down to 60% or lower, fewer doctors will be willing to take Medicare patients. Seniors beware if you are contemplating a move.
• Not only does the bill cover the 48 million Americans who allegedly lack health insurance, it extends to illegal aliens – upwards of 20 million people. With the bill’s stringent limits on how much doctors can be paid for their services, the number of doctors in the U. S. is likely to decline, leading to rationing of health care.
• The so-called “Insurance coops” proposed by the health care bill can serve the same purpose as the public option: Giving the government control over coverage and treatment, eventually squeezing private insurers out of the health insurance business.
• The public option is still in the House version of the bill and could be reinserted in conference.

At the end of the day the health care bill is not about health care at all. It’s about the Federal government taking control of health care decisions that ought to be made by private individuals and their doctors

Town Hall Meetings

With the arrival of the August Congressional recess, lawmakers are back in their districts holding town hall meetings. This year many of the meetings are experiencing large turnouts of not always polite participants. Conservatives, especially, are deeply concerned about the program President Obama is pushing:

1. Will it increase taxes?
2. What will happen to Medicare, with partial funding of the program coming from Medicare?
3. Will it result in long waits for treatment and rationing of treatment?

Unfortunately, feeling is running so high that meetings have degenerated into shouting matches. As a conservative, I sympathize with the protesters. But are they accomplishing anything? I wonder. And the liberals are beginning to react with counterprotests. This is a recipe for violence, which no one in his right mind ought to want. Vigorous debate in a democracy is desirable. Disruption of meetings which ought to be forums for vigorous debate is not, and is destructive to democracy.
A month remains until Congress reconvenes. That’s enough time for Congress to hire a polling organization to sample every legislative district to find out what the electorate thinks of President Obama’s healthcare proposal and what reforms they advocate in health care. Then Congress can proceed with good information about what the public supports and does not support.

Dangerous lawmakers

Twice now in the past few months Congress has voted on bills that many members have not read. The Stimulus Bill was over a thousand pages and members were given barely 24 hours to read it. The "Cap and Trade" Bill was 1000 pages, and 300 pages were added at the last minute. Our President insists that these bills are so urgently needed that Congress must act quickly. But what happens to people who sign papers they haven't read? Answer: whatever the writer of the paper wrote would happen. If an individual signs a contract without reading it, he's stupid and deserves whatever he gets. But when a member of Congress votes yea on a bill he hasn't read, he's voting to bind the nation to whatever reckless provisions are written into the bill. This ought to be grounds for the voters who elected him to recall him, and possibly grounds for criminal prosecution.

To prevent mischief, the following ought to be added to Congress' rules for processing bills.

1. For bills longer than a specified number of pages, x days must be allowed for every y pages to give members an opportunity to read the bill
   
2. The bill shall have a table of contents and an index
3. The bill shall address only a single subject
4. The bill must be readable by a sixth grader of average intelligence
5. Any member caught voting on a bill he has not read will be suspended
   

A letter sent to the retirees of a large company ends with
[The company] reserves the right to change, amend, modify, suspend or terminate its employment practices, policies, employee benefit plans or programs at any time…

One can easily understand why this company includes such warnings in its employee communications. Over the years they have been sued many times.

But consider the message this sends to salaried employees: You can’t count on any future benefits from the company. Forget about all the enticements we offered you to join us. They aren’t worth the paper they’re printed on. It’s no wonder people graduating from college today often go into business for themselves. There’s no point working for someone else for 30 or 40 years if he fails to keep his promises.

Eventually this trend will take its toll on large companies. People involved in design and engineering are salaried, so they don’t have the protection of a union contract. The absence of any guarantees that would entice such people to stay on board long term will lead them to job hop or work as independent consultants. But design, engineering, software development and other technical functions need continuity, and continuity is lost when the work force is constantly shifting.

One solution might be for these people to unionize, but professionals are generally too independent to work under the constricts of a union, and experience has shown that most unions are not good for the employer, either. Another solution is 401(k) programs that don’t require employees to invest in their employer, and medical savings plans. In both these programs the money contributed to date is under the employee’s control – within the strictures of the laws governing such programs.

It’s clear that some solution is needed if our large companies intend to remain competitive and in business.

Why regulation fails

An article reported by AP June 17, 2009 says in part:

Obama's sweeping change of business regulation also embraces new powers for the Federal Reserve and new rules that would reach into currently unregulated regions of the financial markets. An 85-page draft details an effort to change a regime that Obama's economic team maintained had become too porous for the innovations and intricacies of the today's financial markets.

This of course is not the first attempt to close up loopholes in the regulatory structure. Sarbanes-Oxley was supposed to improve reporting on corporate governance and prevent disasters like Enron and MCC. Before that many other regulations were published to deal with other loopholes.

But people are resourceful. Whenever a strategy that makes money for its practitioners is prohibited by regulation, people put their lawyers to work to find workarounds, or entirely new strategies. Over time the regulatory structure begins to look like Swiss cheese, because it’s impossible to anticipate and evaluate every strategy an innovative investor or his lawyer will devise. Some of the strategies of course are perfectly reasonable and perhaps even benefit society. Legislators and regulators don’t always make that distinction.

So what’s the solution? I argue for minimal government regulation and lots of transparency in the conduct of business affairs. The transparency ought not to be achieved by government regulation however, or we will end up with another expensive nightmare like Sarbanes Oxley. Transparency can be best assured by the most basic of laws, trade associations, and customer due diligence. With less regulation customers will realize enough additional profit to more than make up for the occasional shyster that slips past law, trade association policies, the Better Business Bureau and customer due diligence.