Sending the Wrong Economic Signals

An estimated 52 million people watched the President address the nation on Tuesday night. It was an opportunity for the President to lay out his agenda, especially for the economy. Many people are anxious, and I’ve even heard concern from some of my left-leaning friends about the government’s response to the struggling economy. The message the President sent to the nation has exacerbated that concern by sending the wrong signals.

If TARP and the stimulus have you nervous, you probably won’t feel better about the massive budget proposal that President Obama introduced. If you believe that private enterprise and the free market are the best means to drive the economy and create jobs, let’s work together to achieve those policies. The President is surely not a believer in the free market, as he indicated Tuesday.

Medicare Proposals and Expanding Government

I wrote about the President’s Medicare proposals at Rebuild the Party, in the Conservative Healthcare Solutions forum.

Obama Not Serious About Energy Independence

It has become apparent that President Obama’s plans of energy independence and security were just empty promises.  Between curtailing the building of new coal power plants and now this decision, it is unclear how this Administration plans on powering America’s future. Maybe we should dam the Potomac.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8vjuGJCg4ao&refer=home

Josh adds: Interior Secretary Ken Salazar’s move to cease the development of oil shale is another poor indicator of the President’s priorities. Adding the plans for cap and trade, it appears that the administration is more concerned with appealing to the left-wing environmentalists than living up to the promises of energy independence.

Democrat Hostility Towards Drug and Device Makers

Last year, the Supreme Court ruled in favor of federal preemption in Riegel v. Medtronic. The ruling protects medical device makers from state-law claims for injuries or damages caused, as long as the devices receive premarket approval from the FDA (DISCLOSURE: I do work for a drug and device manufacturer.  It should go without saying, but all opinions expressed about the effects of this ruling and the government’s policies on this subject are my own).

Some Congressional Democrats are seeking to reverse these protections through legislation. Again, I don’t expect many people to feel bad for drug and device makers, but such an attack on the industry should be noted, along with potential consequences.

Legal and regulatory clarification is needed in many areas of the health care industry to reduce costs. Removing these protective barriers for the industry would be a gift to prosecuting tort lawyers, and would be a step in the wrong direction for health care reform. Increased liability and murkier legal and regulatory systems would only add costs to manufacturers, which will hurt the overall market with potentially higher prices and less innovation.

A recent blog post at the Corner explains how the stimulus is also hostile to the health care market. The advisory board the stimulus creates will have negative effects on drug and device makers, as we can confidently predict that the recommendations will not be favorable. It’s no secret why the industry was lobbying against this provision.

The increase to welfare programs like Medicaid, for which everyone unemployed will be eligible thanks to the stimulus, could also do manufacturers a disservice. As government increases its control of health care, they will attempt to negotiate below-market prices for goods and services, driving down profits for manufacturers and hurting innovation. It’s likely that Democrats will continue to push policies that punish brand name manufacturers, who already endure significantly more oversight to ensure product safety than generics do.

President Obama is supposed to address health care in his upcoming discussions about the budget. One thing being mentioned, as I’ve been warning, is a cut to Medicare Advantage. See my earlier posts to familiarize yourself with this topic. While we should welcome a debate on health care, we should be cognizant that the left’s policy is one of hostility towards drug and device manufacturers, and is therefore bad for the health care marketplace.

UPDATE: A court ruling in California a few months ago opened up brand name drug makers to liability for products made by generic manufacturers. Generic drug makers are also lobbying Congress for a distinct advantage of market exclusivity when patent terms expire.

This report by the Pacific Research Institute summarizes the changes that the new administration has already made to health care.

Governor Jindal on the Stimulus

Louisiana Governor Bobby Jindal’s stock is rising in conservative circles. He is getting plenty of press these days, as a potential front-runner for the GOP in coming years, and for rejecting stimulus money for his state.

Governor Jindal was on Meet the Press this Sunday, and did a fine job fielding questions about the economy and his stance on the stimulus (video and transcript here). One of the most notable explanations he gave was how the stimulus was designed to force states to rewrite their unemployment laws. David Gregory argued that this wasn’t true, but Jindal understands and articulated how this stimulus was designed to expand welfare and increase states’ dependence on the federal government.

Jindal spoke again to the press about the stimulus economic responsibility at the Obama summit (H/T Hot Air).

New Uighur Ruling Questions Scope of Boumediene

The latest development in the Chinese Uighur case may raise more questions about Boumediene. Andy McCarthy writes that the U.S. Court of Appeals for the D.C. Circuit reversed an earlier ruling of a federal judge to release the jihadists in this country. I noted this earlier, including the previous dissent of Judge Rogers.

As McCarthy notes at the Corner:

This, folks, is the line of scrimmage for the coming battle.  In Boumediene, the Supreme Court held that alien enemy combatants held in Gitmo somehow had a federal constitutional right to habeas corpus (i.e., civilian judicial review of the lawfulness of their detention).  Key to that conclusion was that the detainees were held at Gitmo, where the United States exercises de facto control, which, Justice Kennedy reasoned, extended both the Constitution (which generally does not apply outside the U.S.) and judicial oversight.  So, the question naturally arises, was Justice Kennedy’s rationale limited to habeas corpus (the only right at issue in the Boumediene case) or did it extend to all rights under the Constitution?

This case is one to keep an eye on.

With many complicated questions to answer for detention cases like this, it’s safe to say that the President’s call to close Guantanamo without having first developed another plan was irresponsible at best. I noted recently that the President ordered DOJ guidance from the Bush administration to be ignored, but then the Obama administration supported the same policies of rendition.

Paul Mirengoff at Power Line has the new Pentagon report saying that the treatment of detainees at Guantanamo is in compliance with Geneva Convention requirements. What will the President do with this information, other than use it to delay the closing of Gitmo until he can figure out something else?

Clarity is needed from all branches of government on these issues of national security and civil liberties.

California Budget Passes as Maldonado Compromises

The budget has finally passed in California, with Republican Abel Maldonado providing the deciding vote, and cover for others to join him in crossing the aisle. Dave Cogdill, who was removed from GOP leadership this week, also voted in support, as did Roy Ashburn. Here is a full list of Republicans in the state assembly and senate who (EDIT) effectively voted for the budget by voting to have a ballot initiative for open primaries that Maldonado asked for in exchange for his budget vote. (Budget roll call here)

The key in obtaining Maldonado’s vote was a compromise: Maldonado received some concessions in spending, removal of the 12 cent per gallon gas tax increase and the potential 5% income tax surcharge, and ballot measures to establish open primaries and to ban legislative pay increases during years of deficit.

There will also be a ballot measure in May to decide a cap on state spending.

In return, all Californians will receive a .25% marginal tax rate increase, which is included in the $12.8 billion in tax increases during the current recession. (EDIT) The .25% income tax increase would be dropped to .125% if California gets the money it needs from the federal stimulus.

Maldonado may have gotten the concessions, but his Republican career is likely over. I previously listed the contact information for four GOP state senators who helped this budget pass (Denham here), and I hope they get a few phone calls.

Correction: When I originally wrote this, I included all the Republicans who voted for the open primaries budget measure as having voted for the actual budget (the argument for why those who voted for the open primaries are considered as having effectively voted for the budget itself is made in one of the links above). I’ve corrected the post to indicate the Republicans who specifically voted for the budget versus those who indirectly did so via the ballot measure support, and I’ve added the budget roll call for clarification.

Democrats Bail Themselves Out

The Twilight Zone continues.

Yesterday, President Obama signed the $787 billion stimulus into law, perpetuating what Amity Shlaes calls the myth of the 1930s, and paying off Democrat constituencies. The passing was inevitable, as long as the Democrats had the guts to do so without Republican support. No House Republicans voted for either version of the bill, and only three GOP Senators offered supporting votes.

Now, the President is unveiling his housing plan. For the measly price of $275 billion, the plan will help homeowners renegotiate their mortgages:

The plan, which could cost as much as $275 billion, would enable as many as five million homeowners who owe more than their home is worth — a problem known as being “under water” — to refinance loans through government-controlled mortgage giants Fannie Mae and Freddie Mac. The administration set aside $200 billion in new backing for the pair, which would play a central role in the rescue.

In addition, the government plans to spend $75 billion to encourage lenders to modify loan terms for people at risk of foreclosure or already in foreclosure proceedings. Lenders and the government would jointly lower monthly payments to 31% of homeowners’ income. To encourage servicers, the plan includes incentives such as $1,000-a-year “pay for success” fees if a borrower stays current on the loan.

Federal bankruptcy judges will also be allowed to reduce mortgages. That sounds a lot like the 90s when the Clinton administration pressured lenders into these bad mortgages.

CA State GOP Leader Ousted Over Budget Debate

As California Democrats look for the remaining vote for the budget, Republicans removed State GOP leader Dave Cogdill, who voted for the budget. Governor Schwarzenegger says negotiations will not reopen.

The Republicans who may give in are Roy Ashburn (Bakersfield), Dave Cox (Fair Oaks), Abel Maldonado (Santa Maria), and Cogdill (Fresno). The links are to the contact information for each.

California Budget Fails Weekend Vote

The weekend attempt to pass the state budget failed narrowly (only Dave Cogdill voted aye for the GOP). Yesterday, state lawmakers were sent home after the Democrats again were unable to sway the final vote needed.

State Senators are being told that if they don’t pass the budget today, they could be locked down. This would give Democrats a chance to twist arms for the final vote. Roy Ashburn of Bakersfield appears open to supporting the budget if he gets concessions on future spending limits, and it is being said that he will wait for one more Republican to support the budget. Abel Maldonado may be that Republican.

Steve Poizner, a GOP candidate for governor, suggests attempting a short term plan instead.