The Limits of Power (Part 1)

In the US, many consider the "Department of Defense" a misnomer. For a country with troops in over 100 nations, "Department of Offense" seems more accurate. In truth, US military troops overseas aren't intended to defend America or Americans. Under the guise of defending America, they defend the fiat dollar. To actually defend America, a much smaller military would do.

In The Limits of Power: The End of American Exceptionalism, author Andrew Bacevich, a modern day Smedley (War is a Racket) Butler and Professor of International Relations at Boston University, predicts the end of the American Empire caused by a misguided foreign policy based on "an outsized confidence in the efficacy of American power as an instrument to reshape the global order."[1] Bacevich decries a US foreign policy that uses military power to prop up a financial system enabling continual overindulgence by Americans: what Bacevich calls "the crisis of profligacy."

In an August 15, 2008 interview by award winning journalist and former Johnson administration press secretary, Bill Moyers, Bacevich elaborated on "the crisis of profligacy":

BILL MOYERS: And this is connected, as you say in the book, in your first chapters, of what you call "the crisis of profligacy."

ANDREW BACEVICH: Well, we don't live within our means. I mean, the nation doesn't, and increasingly, individual Americans don't. Our saving - the individual savings rate in this country is below zero. The personal debt, national debt, however you want to measure it, as individuals and as a government, and as a nation we assume an endless line of credit.

As individuals, the line of credit is not endless, that's one of the reasons why we're having this current problem with the housing crisis, and so on. And my view would be that the nation's assumption, that its line of credit is endless, is also going to be shown to be false. And when that day occurs it's going to be a black day, indeed.

The Limits of Power Overseas

In The Limits of Power, Bacevich describes the folly of military officers and national security experts who propagate a fantasy of a military so powerful and with bombs so smart, that war is quick, clean, and effective.[2] A West Point graduate and 20-plus-years career soldier, Bacevich writes that:

"...events in Iraq and Afghanistan have demonstrated definitively that further reliance on coercive methods will not enable the United States to achieve its objectives."[3]

Now that Gen. Stanley A. McChrystal's "confidential memo" calling for more troops in Afghanistan has been leaked to the public, President Obama (D) would do well to listen to Bacevich:

"America doesn't need a bigger army. It needs a smaller- that is, more modest-foreign policy, one that assigns soldiers missions that are consistent with their capabilities. Modesty implies giving up on the illusions of grandeur... reining in the imperial presidents who expect the army to make good on those illusions. "[4]

The Limits of Power at Home

Bacevich wrote The Limits of Power before the 2008 election, but his logic applies to any administration. They all try to give Americans something for nothing, and fail miserably every time. Bacevich's description of the existing system in Washington, D.C. as a "gang that couldn't shoot straight" forecasts ominous prospects for the future of healthcare after it is re-formed by bureaucrats:

"Regardless of which party is in power, the people in charge don't know what they are doing. As a consequence, policies devised by Washington tend to be extravagant, wasteful, ill-conceived, misguided, unsuccessful, or simply beside the point. To cite examples drawn from just the past several years, think of the bungled efforts to 'reform' the Social Security and health care systems or to fix immigration policy. Think of the inanity of the never-ending 'war on drugs.' "[5]

Bacevich sees symptoms of American overindulgence in the trade imbalance in manufactured goods as Americans export fiat dollars and import manufactured goods (pdf). Bacevich calls the time from 1965 to 1973 a "tipping point" in American history, the start of an excessive consumption by Americans enabled by the US military presence overseas:

BILL MOYERS: You say in here that the tipping point between wanting more than we were willing to pay for began in the Johnson Administration. "We can fix the tipping point with precision," you write. "It occurred between 1965, when President Lyndon Baines Johnson ordered U.S. combat troops to South Vietnam, and 1973, when President Richard Nixon finally ended direct U.S. involvement in that war." Why do you see that period so crucial?

ANDREW BACEVICH: When President Johnson became President, our trade balance was in the black. By the time we get to the Nixon era, it's in the red. And it stays in the red down to the present. Matter of fact, the trade imbalance becomes essentially larger year by year.

So, I think that it is the '60s, generally, the Vietnam period, slightly more specifically, was the moment when we began to lose control of our economic fate. And most disturbingly, we're still really in denial. We still haven't recognized that.

Just as Bacevich predicts the end of the American empire caused by a misguided foreign policy based on force, I predict the end of the fiat dollar and our financial system caused by misguided domestic policies based on “an outsized confidence in the efficacy" of government power "as an instrument to reshape the domestic order." Policy experts, government bureaucrats, and profligate Americans, who want something for nothing, continue to believe an illusion of an all-wise and capable federal government with unlimited resources to solve all problems, despite all evidence to the contrary.

Let's see what happens when the "gang that couldn't shoot straight" gets its hands on healthcare "re-form."

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[1] The Limits of Power: The End of American Exceptionalism, Andrew Bacevich, Metropolitan Books, N.Y., N.Y., p. 7.

[2] Ibid. p. 127. Listen to any politician bloviate on strategy and you'll hear about "surgical strikes." E.g. This September 22, 2009 NY Times article, "Obama Strategy Shift in Afghan War," outlines V.P. Joe Biden's proposal, which is just what Bacevich is talking about:

"Mr. Biden proposed scaling back the overall American military presence. Rather than trying to protect the Afghan population from the Taliban, American forces would concentrate on strikes against Qaeda cells, primarily in Pakistan, using special forces, Predator missile attacks and other surgical tactics."

More current examples of defense policy experts: "So Who Were the Advisers for McChrystal’s 60-Day Afghanistan Review?" and "Meeting the Challenge: Time Is Running Out."

[3] Ibid. pp. 162-163. While Bacevich explicitly acknowledges the limits of coercive methods in the Middle East, and sees the flaws of the imperial presidency, he doesn't connect the dots and acknowledge that domestic coercion is an equally limited strategy. E.g. He concedes there are arguments with "indisputable merit" for a draft on page 155.

[4] Ibid. p. 169.

[5] Ibid. p. 71.

Deciding For Everyone

"My guiding principle is, and always has been, that consumers do better when there is choice and competition. That's how the market works." President Obama (D) in a joint session to Congress September 9, 2009

"The plan I announced will provide more security and stability to those who have health insurance. (Applause.) It will provide insurance to those who don't. (Applause.) And it will slow the growth of health care costs for our families, our businesses, and our government. (Applause.)" President Obama speech at a rally in Minnesota September 12, 2009

If only it were true Mr. President.

Bill Clinton smoked, "but didn't inhale," and George Bush didn't believe in "nation-building." Now Barack Obama promises us both a free market and a free lunch in healthcare with his promises to expand health insurance coverage and rein in costs. Does this President really believe it will be a free market with all the regulations being proposed?

The latest unrealistic promises are nothing new for the federal government, as Walter Williams explains in his September 2, 2009 column, "Washington Lies":

"At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That's nine times Congress' prediction. Today's Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?"

The President is concerned about the growth in healthcare spending. His solution is more regulation by the federal government. Contrary to what President Obama proposes, the market works when individuals decide what's best for themselves, not when the federal bureaucracy gets more and more involved controlling prices and deciding for everyone. Healthcare is in trouble now because of too much government intervention. Things won't get better when the federal government intervenes even more.

In their book, Patient Power, John Goodman and Gerald Musgrave describe what's wrong with third-party payers whether they are private insurance companies or the government:

"The central focus of third-party paying institutions is to eliminate 'waste.' Yet bureaucratic institutions (operating principally through reimbursement strategies chosen by people remote from actual patients and doctors) usually cannot eliminate waste without harming patients. Third-party payers may seek to eliminate waste by controlling price, or quantity, or both."[1]

A September 13, 2009 NY Times article about kidney recipient Melissa Whitaker, is an example of a third party payer's attempt to control the "waste" of excessive healthcare costs. In an attempt to control wasteful spending, Medicare limits anti-rejection drug coverage to three years after a transplant. Medicare paid for her first kidney transplant which cost over $100,000. Three years after her first kidney transplant, when the Medicare coverage limit expired, Whitaker couldn't afford to pay the approximately $17,000 to $36,000 per year on her own to continue taking her anti-rejection drugs. Eventually her transplanted kidney failed. Medicare then paid for dialysis for four years at $9,300 a month, more than three times the cost of the anti-rejection drugs, and paid $125,000 for a second kidney transplant.

Like the President, Whitaker looks to healthcare "reform" in Washington to solve the problem that occurred in her particular case. Like the President, she hopes more of the same will make things better--more government regulation, more bureaucratic third-party payment rules about what's best for the patient--the very things that contributed to her situation.

Hospital administrator Gabriel Vidal disagrees with the President's "more of the same" prescription, and points to the third-party payer as the problem:

"Unfortunately, since Obama uses faulty logic to diagnose the problem, his solutions will only make matters worse faster. The correct framework within which to diagnose the problem is to admit that costs are out of control because they do not reflect prices created by the voluntary exchange between patients and providers, between customers and producers, like every well-functioning industry."

President Obama believes that government knows best what everyone needs, so he would think the government should decide for everyone how the healthcare system should work. His healthcare "reform" means more third-party payers, more "Medicares," and more health insurance companies deciding what's best for patients. The authors of Patient Power explain why that is exactly the wrong thing to do:

"No one cares more about you and your family than you do. And the further removed decisionmakers are from you and your family--geographically, economically, and politically--the less likely they are to make the decision you would have made with your health care."[2]

The correct diagnosis for what ails our healthcare system is: third-party payers control medical decisions that should be between doctors and individual patients and their loved ones. President Obama has happily acknowledged that the government is very involved in healthcare and believes even more government involvement is a good thing. His ideal is a single third-party payer: the taxpayer. Many Americans recognize this and don't want the lives and health of their loved ones increasingly subject to politicians making medical decisions for them.

"I am not the first President to take up this cause, but I am determined to be the last." President Obama in a joint session to Congress September 9, 2009

If only it were true Mr. President.

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[1] Patient Power Solving America's Health Care Crisis, Goodman and Musgrave, Cato Institute, 1992, p. 23.

[2] Ibid. p. 33.

Teachable Moments

"...an important key to teaching children ethical behavior is learning to recognize teachable moments through which your children can develop the habit of being aware of ethical challenges." Steven Carr Reuben

On September 8, 2009, President Obama (D) gave a motivational speech to schoolchildren across America. Many Rs were unhappy that the President used his office to talk to school children. Do you think they were as upset when George H.W. Bush (R) addressed public school students on October 1991? Do you think Ds demanded a special GAO probe of President Obama as they did in 1991 when they ordered a special probe by the GAO in response to Bush's speech?

The President's message was one of personal responsibility. He called on students to stay in school and take personal responsibility for getting their education. The message was one that a parent might deliver to a child, and some parents were upset about the President assuming this role. A news commenter in this NBC video, revealed his bias, declaring that parents who were upset about Obama speaking to their public school children "aren't smart enough" to raise them. One thing is obvious, those parents aren't smart enough to realize that they're supposed to love Big Brother.

To help students benefit from an address by their leader, the Department of Education prepared an online letter with some classroom activities for school teachers about President Obama's speech. One of the Department of Education-prepared discussion questions (pdf) for pre-K through grade 6 students included these questions:

• Why is it important that we listen to the president and other elected officials, like the mayor, senators, members of congress, or the governor? Why is what they say important?

Both of these questions start with one extra word which prejudices the question, presenting a false choice to the student.

Department of Education discussion questions (pdf) for grades 7 through 12 included two questions that started with one extra word to prejudice the student by presenting a false choice again:

• How will he inspire us?
• How will he challenge us?

The following Department of Education discussion question stresses the apparent main point of the President's speech:

• We heard President Obama mention the importance of personal responsibility. In your life, who exemplifies this kind of responsibility? How? Give examples.

Here are some additional questions for parents and teachers to consider:

• What article in the US Constitution authorizes a department of Education?
• Where was "personal responsibility" when the President and Congress forced taxpayers to bail out the banks?
• Where was "personal responsibility" when the President and Congress forced taxpayers to bail out automakers?
• Where is the "personal responsibility" when the planned healthcare reform forces taxpayers to pay for all citizens to have health insurance?
• When the President ended his speech he said:

"I’m working hard to fix up your classrooms and get you the books, equipment and computers you need to learn."

Does he mean he's taking personal responsibility and spending his own money to pay for all the things a student needs to learn? Or was he channeling Ted Kennedy?

And finally, an extra credit question for all Americans:

How does President Obama inspire children to learn personal responsibility when the policies of his administration reward the irresponsibility of some at the expense of others?