AprŽs Le DŽluge, Who? And What?


Chances are that by the time most of you read this, the U.S. election will be over. Some people will be cheering, some people will be moaning. If itÕs close, there will be charges and countercharges of voter fraud and voter suppression.

I hope that doesnÕt happen. We donÕt need 2000 all over again. IÕd rather have a landslide, or at least a safe margin, even if itÕs against the ticket IÕm voting for – and IÕm not going to tell you which one that is, because it wonÕt change the minds of anyone here and, anyway, itÕs not the point.

The point is that, whoever wins, this country is in for a rough time. The entire world is in for a rough time. And it may not matter as much as many people think whoÕs in the White House. The most popular electoral mandate may have a short shelf life if the new President finds himself unable to deal with domestic or international crises.

Most of the talk during the last few weeks of the campaign was about the economy and how to fix it. But what was hardly mentioned is that perhaps nobody knows how to fix it. When President Bush first called for a $700 billion bailout, the idea – the only idea – was to buy up toxic loans. Congress tweaked the bill to allow for spending that $700 billion in other ways. Guess what: suddenly buying a stake in banks was ŅtheÓ answer. Or was it bailing out mutual funds? Or automobile manufacturers? Making 90-day loans to small businesses? Refinancing home mortgages?

I get the impression that this is a case of the blind leading the blind. But rather than address that issue, the political partisans have shed a lot of heat but no light in the blame game. From the Left (and even from John McCain), we have heard about how greedy speculators have run the economy into the ground. From the Right, itÕs been about how liberal pressure groups created the problem through legislation and regulatory edicts that forced banks to give mortgages to poor people who couldnÕt possibly pay them back.

Unfortunately, theyÕre both right – the idea for toxic mortgages indeed came from the liberals. But ŅconservativeÓ brokers and lending institutions were not only willing but eager to cater to that trade – as long as they could repackage those toxic mortgages as Ņcollateralized debt obligationsÓ and foist them on Fannie Mae (which was under liberal pressure to guarantee them) or on gullible buyers at other financial institutions – the kind of guys youÕd think would be too smart to fall for that kind of thing. Apparently some of them took ratings from Standard & PoorÕs for gospel, but it turned out those good ratings were about as unbiased and unreliable as Nigerian letters.

One thing that should come out of this has to do with the fact that governments have always had to rely on economic advisors, and those advisors have typically come from Wall Street. ThatÕs where Secretary of the Treasury Henry Paulson came from, and it looks as if he never had a clue and still doesnÕt. John McCain and Barack Obama have both claimed to have raised alarms years ago about the coming crunch but, if so, they did so in remarkably low voices. And the kind of people they have for advisors tend to be the same kind of clueless people as Paulson.

Where to look for better advisors? Maybe among the dissidents at those financial institutions – the kind of guys who tried to warn their CEOÕs about where they were headed and why. IÕve seen stories about brokers who quit those institutions because they didnÕt want to risk harming their own clients by serving as conduits for bad advice. No matter who the President is, heÕll need good advice, because neither candidate is – or in his best moments even claims to be – an expert at everything. Certainly neither seems to be an expert even on his own tax plan.

ŅBoth John McCain and Barack Obama endlessly repeat tax talking points that are disingenuous at best, outright falsehoods at worst,'' said Paul Caron, associate dean of faculty at the University of Cincinnati College of Law, told Bloomberg News a couple of weeks ago after going over their proposals.

The Tax Policy Center, part of the Brookings Institution, compared the candidates' proposals and said Obama would give bigger tax cuts to middle-income Americans.

Households making between $37,595 and $66,354 -- the middle fifth of U.S. income distribution -- would save an average $1,118 in taxes under Obama's plan, compared with $325 for McCain. Households making between $226,918 and $603,402 would average $8,159 in tax cuts from McCain next year and pay $121 more under Obama. ŅThe higher you get, the more you get under McCain's plan,'' said Roberton Williams, principal research associate at the tax policy group.

McCain advisor Douglas Holtz-Eakin pointed out that the Tax Policy Center sees McCain's approach as better for economic growth. But the center also says larger federal deficits from McCain's tax cuts may negate any positive economic impact. It also argues against the implication by both candidates that their health care plans somehow wonÕt be budget busters

The center estimated that ObamaÕs plan would reduce the number of uninsured Americans by 18 million people in its first year, as compared to McCainÕs one million. McCainÕs plan would increase the deficit by $1.3 trillion over ten years; ObamaÕs $1.6 trillion. But even under the Obama plan, it added, there would still be 34 million Americans without insurance in 2018.

A recent Op Ed piece for The New York Times co-authored by baseball expert Billy Beane, Newt Gingrich and John Kerry – talk about strange bedfellows! – proposes that the health care industry use the same data-driven analytical models as baseball teams:


Remarkably, a doctor today can get more data on the starting third baseman on his fantasy baseball team than on the effectiveness of life-and-death medical procedures. Studies have shown that most health care is not based on clinical studies of what works best and what does not — be it a test, treatment, drug or technology. Instead, most care is based on informed opinion, personal observation or tradition

It is no surprise then that the United States spends more than twice as much per capita on health care compared to almost every other country in the world — and with worse health quality than most industrialized nations. Health premiums for a family of four have nearly doubled since 2001. Starbucks pays more for health care than it does for coffee. Nearly 100,000 Americans are killed every year by preventable medical errors. We can do better if doctors have better access to concise, evidence-based medical informationÉ

É a health care system that is driven by robust comparative clinical evidence will save lives and money. One success story is Cochrane Collaboration, a nonprofit group that evaluates medical research. Cochrane performs systematic, evidence-based reviews of medical literature. In 1992, a Cochrane review found that many women at risk of premature delivery were not getting corticosteroids, which improve the lung function of premature babies.

Based on this evidence, the use of corticosteroids tripled. The result? A nearly 10 percentage point drop in the deaths of low-birth-weight babies and millions of dollars in savings by avoiding the costs of treating complications.

Another example is Intermountain Healthcare, a nonprofit health-care system in Utah, where 80 percent of the care is based on evidence. Treatment data is collected by electronic medical records. The data is analyzed by researchers, and the best practices are then incorporated into the clinical process, resulting in far better quality care at a cost that is one-third less than the national average. (Disclosure: Intermountain Healthcare is a member of Mr. GingrichÕs organization.)

Evidence-based health care would not strip doctors of their decision-making authority nor replace their expertise. Instead, data and evidence should complement a lifetime of experience, so that doctors can deliver the best quality care at the lowest possible cost.


We need more thinking outside the box, and not just about health care. Closely related is the third rail issue of Social Security. Neither of the candidates dares admit that that the problem wonÕt magically go away of heÕs elected. The only thing that could make it go away would be for retirees to simply drop dead by the millions.

ItÕs a fact of demographics that the population is aging – fewer people are paying into the system and more people are collecting benefits. And by the way, thereÕs no such thing as a Social Security Trust Fund; there never was. Social security taxes go into the same pot as all other taxes, and all federal outlays – from the war in Iraq to those checks the elderly rely on each month – come out of the same pot.

A widely-denounced proposal to ŅprivatizeÓ Social Security by investing Social Security taxes might have worked – but only on the assumption that stocks, bonds and other securities would keep rising in value forever. Anybody want to bet on that now? A lot of people are putting off retirement because theyÕve lost heavily in what they thought -- and with good reason at the time -- would be safe investments. Might as well make that formal for Social Security and raise the retirement age to 70. People are going to scream, but is there really an alternative? Maybe somebody somewhere has some outside-the-box thinking on that.

Then there are issues which, strangely, neither candidate has even mentioned.

„ The use of presidential signing statements to thwart the intent of Congress.

„ The unprecedented expansion of presidential power generally.

„ Awarding of huge no-bid government contracts to favored companies.

„ Surveillance and harassment of critics of the government rather than terrorists.

Both candidates also have their AchillesÕ heels.

McCain talks of staying the course in Iraq even though the Iraqi government is insisting on a timetable for withdrawal. What would President McCain do about that? Try a regime change? And even if heÕs right about the Surge having worked, he canÕt seem to admit that the war was a bad idea in the first place. Will he make the same mistake Bush did in some future crisis?

Obama is almost duty-bound to embrace an organized labor drive to certify unions based on solicited cards rather than secret ballot – allegedly because employers terrorize workers into voting against unions. ThatÕs like having your vote automatically counted for whichever party you register for -- and obviously invites intimidation. Fair elections can be assured by other means.

Both candidates are gung-ho for stepping up the war in Afghanistan. But RussiaÕs ambassador to Kabul has warned that we are making the very same mistakes the Russians made in Soviet times, and Afghans seem increasingly hostile towards us after reports of accidental killings of civilians. The best thing we have going for us is that Taliban forces are going nuts – ambushing buses and beheading the passengers. Stuff like that. But now Gen. David Petraeus, he of the Surge in Iraq (!) thinks we should cut a deal with more moderate (?) Taliban elements.

Both candidates want to give Israel a blank check rather than reasonable support. That could get us in big trouble if the Israelis decide to nuke Iran or annex more of the West Bank. Both also seem to want to get tough with Russia, even when it doesnÕt serve our interests – what can the push to get Georgia and Ukraine into NATO possibly accomplish except to piss off Moscow? Is Poland really the only place in the whole wide world to place missiles aimed at rogue states in the Middle East?

Both candidates favor Ņclean coalÓ as part of the solution to the energy crisis. But from what IÕve read in the science news, thereÕs no such thing – at least, not without spending as much to capture carbon dioxide emissions as it does to mine the coal in the first place. Sounds to me like another boondoggle, even worse that the corn-to-ethanol program that has run up food prices, but coal companies – like oil companies – have well-funded lobbies.

I could probably cite dozens of other issues, but you get the idea.