The Gathering Storm!

Aetna CEO Ronald A. Williams gave an interview on the Charlie Rose show.  For those of you interested in reading the entire interview I have provided a link to the BusinessWeek article.

 Here is what Mr. Williams predicted:

 Health insurance premiums will increase dramatically for the following reasons:

  1. This bill levies significant taxes on the insurance industry that will have to be paid during the first year.
  2. The recent premium increase was the result of a combination of inflation from hospitals, physicians, drugs, devices and technology and a major change in demographics: 

There are a lot of baby boomers and they are getting older.

Healthy people are cancelling their insurance, reducing the amount of premium available to pay claims.

Young people are not buying insurance at all.

  1.  He thinks that there is a significant chance that smaller health insurance companies will go insolvent as a result of this legislation.
  2. The Obama administration started out talking about health-care reform, but they shifted to focusing solely on health-insurance reform.  As a result, nothing was done to change the fundamental factors that are causing the increase in health care premiums. 

If he is right, and I believe he is, then we are going to experience immediate and sustained economic fallout from this legislation.  Here are things to watch for in the coming weeks and months:

  1. Large corporations will have to make a significant one-time adjustment to earnings.  Certainly, any Fortune 500 company that provides drug insurance benefits to retirees will have to do this.  This plan reduces the tax deduction for providing drug benefits for retirees.  Since this is a retiree benefit, under ERISA accounting standards the company must book the anticipated costs now.  They cannot wait until they occur.  
  2. Insurance premiums are going to go up rapidly.  Some carriers will simply stop accepting new customers at all.  This plan requires insurance companies to change underwriting rules by accepting people who are ill, or who have pre-existing conditions.  That may be a noble thing to do, but it will result in an increase in costs.  In addition, there is already a proposal to cut Medicare fees to doctors and hospitals by an additional 21%.  Medicare fees are already inadequate to cover costs.  Doctors and hospitals will have to increase charges to insurance companies to cover this shortfall.
  3. More and more doctors and hospitals will decline to treat Medicare patients.  Doctors who treat Medicare patients are already losing income because of inadequate compensation.   
  4. Companies are not going to be able to absorb the cost of increased heath care premiums.  They will cut benefits and increase co-payments.  They will increase employee contributions, and they will have to lay off a significant number of workers. 
  5. All of the above developments are likely to take a poor performing economy and make it immediately worse.

The Obama administration will try to fight back by demanding that large employers and insurance companies prove that their costs have really increased.  There will be hearings, charges and executive orders to try and prevent companies from taking the actions I have described above.  But, these costs are all too real, and companies who fail to make these changes will not be able to survive economically. 

Pelosi, Obama and Reid (“POR”) now own health care reform.  If you think we have “buyer’s remorse” with regard to putting Democrats back in power, it will be nothing compared to the remorse that will be felt by those politicians foolish enough to hitch their political careers to this turkey.


Shortly after World War II my father saw an ad in the paper for an official U.S. Army training rifle for $10.  Since my dad was an avid hunter, he sent in a check for $10 and explained that he wanted to use the rifle for deer hunting.  A couple of weeks later he got a letter returning his check, along with an explanation that these were training rifles, they were made entirely out of wood, and they couldn’t actually fire a bullet.  My dad’s best friend also sent in his check, but instead of getting a refund, he got a wooden training rifle.  My dad teased him about this great purchase for next fifty years.

Pelosi, Obama and Reid made a very similar mistake.  They passed a bill that they hadn’t even bothered to read.  They obviously did not understanding the consequences.  The White House was shocked when Caterpillar, AT&T, Deere & Company, and AK Steel Holdings all announced a one-time charge to earnings of several million dollars because of the impact of the health care reform package.  In some cases, employees also got letters explaining why some of them were about to lose their jobs.  The Obama Administration immediately blamed this on “Republican CEO’s” making up things to embarrass the President.  It turns out that at least one CEO met directly with Obama and warned him about this.  He cautioned Obama that this would damage the economy, but Obama not only did not listen, he basically accused this CEO of lying.  The lobbyist who attended the meeting said the CEO was embarrassed for Obama, because he was so unprepared and did not appear to even understand the problem. 

Today, insurance companies are explaining that, contrary to what President Obama just said, the bill does not require insurance companies to provide coverage to children who are ill until 2014.  The law does require them to cover pre-existing conditions.  Democrats are shocked to discover that the bill was improperly worded.  Yah thunk? 

Folks this has only just begun.  It is becoming increasingly apparent that the people plotting to take over the health care system, may have done nothing more than provided undeniable proof of their own incompetence. 



From the Los Angeles Times:

Obama visits troops in Afghanistan.  Notice that the people in the front row are not even looking at him.  Wow!

 Democrat president Barack Obama shakes hands with US troops in Afghanistan 3-18-10  

 Bush visits our troops in South Korea.  Very different reaction.

Republican president George W Bush visits U S Troops in South Korea

Any questions?



In 1969 I was stationed at Pleiku AB, in Vietnam.  The first day I got there the base was hit with several rockets and mortars as the result of an attack by the Viet Cong.  The first notice of an attack was often the sound of a rocket exploding.  Instantly the more experienced veterans would shout “incoming.” to make sure everyone knew we were under attack.  The reason was that Pleiku was also close to an Army base that fired artillery.  It was really important to understand the difference between “outgoing”, or shells fired at the other guys, and “incoming” shells aimed at us.

Health insurance costs are already skyrocketing.  For small business owners the cost of health insurance is increasing by a minimum of 15% and in some cases as much as 80%.  We are soon going to see some significant fall out from these increases.  The Obama administration will try to use this as evidence of the need for health care reform.  If they are successful in convincing people of that, he may just succeed in transforming this country.

The major reason for the increase in cost of private or employer sponsored health care is current government mandates.  Doctors and hospitals are already required to treat Medicare patients for fees they consider to be inadequate.  They are also required to treat uninsured people with chronic illness without any reimbursement at all.  As a result, doctors and hospitals must increase the costs they charge to insurance companies.  This situation has been made even worse by the Obama administration deciding that insurance companies can no longer exclude pre-existing conditions.  While we would all like to see coverage available for people with pre-existing conditions, the reality is that someone must pay for that.  Today, it is the insurance company, but apparently Obama thinks they can just absorb this with their outrageous 3% profit margin.

We must communicate the truth to people, or there is a significant chance that health care reform will gain undeserved support from the American people.  If people believe the insurance industry is the problem, as Obama claims, then they will support the health care reform bill.  But if they understand the real cause, which is poorly designed and implemented government mandates, then we can stop this mad rush to socialized medicine.

Those Darn Christians

When Dr. Hassan attacked our soldiers at Fort Hood it was described in the MSM as the isolated act of an individual with no hint of a connection with Islam.   Even now, the MSM may, reluctantly,  refer to this as an act of terrorism, but they are very careful to not mention Islam or Muslim.  Just because the shooter was shouting Allahu Akbar while mowing down innocent people does not mean he was motivated by his religion!  Of course when it comes to Christians, there are no such restraints.  The  headlines scream CHRISTIAN MILITIA!    Sadly, I doubt that the MSM even understands how completely biased they have become!

Truth or Consequences

In 1758, Samuel Johnson wrote the following:

Among the calamities of war may be jointly numbered the diminution of the love of truth, by the falsehoods which interest dictates and credulity encourages.

[The Idler 11 November 1758]

It is vital to recognize the truth about health care reform.  The goal of Pelosi, Obama and Reid (“POR”) is get everyone to accept this bill as reality and only discuss making some minor changes to “improve” the bill.  POR was desperate to get this bill passed regardless of political consequences.  The bill is over 2,400 pages long, and no one even pretends to understand all of its provisions.  So, one must ask, “why the rush?”  The reason is that this was never just about health care reform.   It is about changing America into a socialist country.  Health care reform is just the first in a series of proposals by POR that are designed to completely transform this country.  Even if this bill is changed significantly to make it more acceptable, it will ultimately facilitate a transition to nationalized health care.

Hidden within this bill was the complete federal takeover of the student loan program.  Anyone who needs to borrow money to get a college education in the future will have to apply to the federal government.   If you are concerned about political correctness now, just hang on to your seat because we are in for a wild ride.   POR is saying that everyone has a right to an education.  But the question that must be asked is “What kind of education?”  There are already proposals that people who seek government careers will not have to pay back their student loans.  I am absolutely certain that progressives are literally salivating over how they will be able to use student loan guidelines to transform our entire educational system.

There are other great ideas just over the horizon.  POR is going to try and push through cap and trade legislation, while they still have momentum.  Even though the most noticeable impact of this legislation will be increased energy costs and enormous damage to our economy, the real problem is down the road.  This cap and trade legislation will give the federal government almost unlimited power with regard to regulating personal behavior.  There will be more and more regulations regarding how we live our daily lives.  I can hardly wait to hear the new proposals from the people who are proposing a ban on “Happy Meals” while legalizing marijuana.

All of this will allegedly be done in order to make the system fairer.  They may or may not use the term “social justice,” but whatever it is called, the end result will be the same. 

Fredrick A. Hayek once wrote:

I am certain that nothing has done so much to destroy the juridical safeguards of individual freedom as striving after this mirage of social justice.

[Economic Freedom and Representative Government – 1973]

Dr. Hayek personally experienced the rise of National Socialism in Germany.  He wrote the following in 1944, in England: 

I, the Author have spent about half my adult life in my native Austria, in close touch with German thought, and the other half in the United States and England. In the latter period I have become increasingly convinced that some of the forces which destroyed freedom in Germany are also at work here. The very magnitude of the outrages committed by the National Socialists has strengthened the assurance that a totalitarian system cannot happen here. But let us remember that 15 years ago the possibility of such a thing happening in Germany would have appeared just as fantastic not only to nine tenths of the Germans themselves but also to the most hostile foreign observer.

[The Road to Serfdom – 1944]

(I have provided the following link for anyone who wants to read the Reader’s Digest condensed version of his book, published in 1945:

The AP published an article proclaiming three major victories for Obama:  the passage of health care reform, the agreement with Russia to reduce nuclear weapons and the takeover of all student loans by the federal government.

But, Dr. Hayek’s words should be considered a somber warning: 

In Germany it was largely people of good will, whose socialist beliefs prepared the way for the forces which stand for everything they detest. Few recognize that the rise of fascism and Nazism was not a reaction against socialism but a necessary (and inevitable) outcome of the trend towards socialism.


The good people of Germany lost their freedom, with tragic consequences for the entire world, because they did not recognize the inherent danger from socialism.   Dr. Hayek explains how dangerous socialism is to our core values:

But when economic power is centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery. It has been well said that, in a country where the sole employer is the state, opposition means death by slow starvation.


Ultimately, it doesn’t matter very much whether the people passing this legislation think they are doing the right thing.  What really matters is that they are destroying the very fabric of our freedom by substituting government control for the free market system.

This decision was not made consciously by the American people, after a reasonable debate.  There actually was very little debate at all.  Instead, it was passed in the dead of night through a series of bribes, threats and secret deals.

A lot of people ask me what needs to be done.  We need to start by recognizing the truth.  This is not about health care reform; this is about the survival of this country.

Abraham Lincoln began the Gettysburg Address with the following words:

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.  Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure.

Once again, we face a test that will determine whether this nation “so conceived and so dedicated, can long endure.”   Liberty and socialism are mutually exclusive.  Where the government controls every aspect of our life, liberty is less than an illusion.


The Way It Is!

The Democratic talking points are to paint any criticism of health care reform as inflammatory rhetoric designed to trigger violent opposition.

Following is from our local “unbiased media outlet” the Sacramento Bee

Paul Krugman, who is famous for inflammatory remarks about Republicans, usually based on bald-faced lies, apparently is unaware of any Democrat ever saying something negative about President Bush.

The goal is to paint anyone who dare disagree with the Obama administration take over of the U.S. healthcare system as a violent, uninformed radical, prone to violence.  I wonder if they realize how many people they are insulting.  In the deluded world of the MSM, they actually believe this to be true.  In reality, it is only more proof of their ability to see the obvious.  Anyone who has actually looked at the pictures of the Tea Party movement will quickly notice that the biggest difference between this and the anti-war protests of the liberal left is the lack of violence.  Ann Coulter had to cancel her speech in Canada because her security team felt she was physically threatened.  When has that ever happened to a liberal?  Exactly!

(Picture courtesy of



Sometimes a picture is worth way more than a thousand words.  Remember that Hillary tried and failed to pass universal health care.  Here she is forced to be in a photo op with the most powerful woman in history.  The woman bragging about how she succeeded, where Hillary failed.    Look at the expression on Hillary’s face.  A little forced maybe?  


My guess is that behind the scenes the Clintons are more than furious.  Stay tuned!

One person is very, very happy!

Cuban leader applauds US health-care reform bill

(pictures courtesy of

If Castro loves it, it must be great! 



The following article, from the NYT, explains the thought process behind the health care legislation.  The agenda of this administration is nothing less than a socialist re-distribution of wealth.

Democrats have been talking about cutting Medicare for a long time.  First, they cut the payments to the Medical private insurance program.

They have proposed cutting  fees to doctors treating Medicare Patients by 21%.

Now they are trying to spin this massive cut of Medicate benefits for Senior citizens as somehow benefiting them.  After all, isn’t a one time payment of $250 a great substitute for actually paying for medical care?

We have record deficit, declining tax revenues, and an insolvent social security system.  Anyone want to bet that Obama doesn’t plan to cut Medicare benefits for seniors?

Obama has told us that he intends to fundamentally transform this country.  He has surrounded himself with extreme left wing radicals.  We all know he attended a church pastured by Reverend Wright, for over 20 years.  This church was well known to teach South American Marxism.   

His new spiritual advisor, is Rev. Jim Wallis.  Front Page published a lengthy expose on him.  Following are some highlights. 

While he was in seminary he founded a magazine called “Post American.”

He called for the redistribution of wealth and government managed economies.  He described this in religious terms as a quest for “social justice.”

In 1971, he moved his group to Washington D.C. and renamed it the Sojourners.  He was an anti-war activist against the Vietnam war.  He criticized Vietnamese fleeing Vietnam.  He described them as fleeing Vietnam to pursue their consumer habits in other lands.  According to FrontPage, he claimed they were leaving Vietnam because they had become greedy capitalists who didn’t wish to live under a socialist dictator.

Now ask yourself one simple question.  What has Obama ever done or said that would give us a reason to believe he is not a socialist, if not a Marxist?  Which of his proposals are inconsistent with this?  He has talked about the need for redistribution of wealth.  After promising to run the most ethical and transparent administration in history, it has been the exact opposite.  At best, the Health Care Reform bill was passed with a blatantly corrupt process where literally millions of sweetheart deals were cut to buy votes.  While there have always been these type of deals in Washington, D.C., it certainly has never been this blatant and obvious. 

An Israeli Prime Minister was talking to a holocaust survivor.  He asked for advice.  The holocaust survivor reportedly said: “if someone says they are going to kill you, believe them.  When Obama says he is going to transform this country, believe him. “



Socialized medicine – the reality 

One of my clients spent several years in Scotland where socialized medicine is practiced.  I asked him what he observed with regard to health care under this type of system.  He said the main impact was on the elderly.  He described an acquaintance, whom I will name, “Pete.”  Pete, who was 70 years old, was blind because of cataracts.  He just needed a simple operation, which would restore his eye sight.  But, he was on a waiting list for the operation.  He had been waiting for months and had no idea when the operation would be approved.  Sadly, Pete died alone and blind.  For Pete, the waiting list was just too long.  We need to stop this plunge toward socialized medicine because “POR” PETE’S SAKE, are we really willing to trust Pelosi, Obama and Reid?


Picture courtesy of

What savings?

One of the questions people are asking is what effect health care reform will have on the cost of health care.  According to the Obama administration, everyone’s cost will go down.  The reason for this is that so many more people will be insured, that preventive care will be much more effective.  This will save lots of money.  However, it is far from certain that increasing preventive care will actually save money.  The following link is from an ABC report on the subject.  Remember that ABC is very liberal, and it supported health care reform.

Obviously, while there may be some savings, it will be nowhere near enough to fund the additional costs associated with this program. 

A significant portion of the alleged cost savings comes from cutting payments to doctors and hospitals for Medicare.  The theory is that just by eliminating fraud, waste and duplication of effort, savings will miraculously appear.  Of course, we all realize that there is no fraud and waste in government managed programs.  Just look at how well we have done with regard to rebuilding New Orleans after Katrina.

This also ignores the simple fact that doctors and hospitals are already refusing to accept Medicare patients because they cannot afford to treat them for the inadequate compensation currently paid by the government.  Logic says that if these payments are cut further, more doctors and hospitals will refuse to treat Medicare patients.

The following link from the Sacramento Bee documents the problem.

It is difficult to read this type of article and somehow believe government is going to save billions of dollars by cutting payments to doctors and/or hospitals.  The only real way to cut money from Medicare is to stop authorizing treatment.  Think of the example I cited earlier with regard to Scotland.  If the government just passes guidelines that delays treatment, it will look like savings.  Also, if people conveniently die before receiving treatment, that also saves money.  Obama says he will cut Medicare spending.  The only way I personally see that happening is if they develop guidelines to ration care.  Cutting Medicare spending, unfortunately, is one promise I expect Obama to keep.

Since there is likely to be zero real savings, the only other possible source of funds must come from some sort of tax.  The Obama administration says they will only tax people earning more than $250,000 per year.   Really?  This is beyond stupid.  He is already raising taxes on these people.  At some point no one will be making more than $250,000, so there won’t be anyone left to tax.

In order to pay for this, the Obama administration must raise taxes on everyone.  They won’t call it a tax, they will call it a fee, a premium, or some other less offensive word, but, it will be a tax.  This bill allegedly includes $10 billion to hire 16,500 new IRS employees.  I doubt that they will be used to count the savings from Medicare.