Where to start

I spent much of my vacation catching up on my reading. Here's a summary. A WSJ article on July 31, 2009 discussed the controversy over the independence of Amtrak's Inspector General. Congress wonders whether the IG can be independent, since the rail system appoints its own. The current IG is Lorraine Green, a former senior executive at Amtrak. Congress questions whether Ms. Green will have a conflict of interest, and whether they should strip agencies, such as Amtrak, of the ability to select their own independent inspector generals.

A WSJ editorial on July 28, 2009, by William McGurn, discussed what readers should take from the recent arrest of 40 New Jersey mayors, government officials, and one rabbi, in a recent FBI corruption sting. He noted that while N.J has created 6800 private sector jobs between 2000 and 2007, it has created 55,800 public sector jobs suring that same time period. This ranks it dead last on the Small Business Survival Index. The editorial quoted an FBI agent saying "big government is a leading reason New Jersey has a 'corruption problem'...characterized as 'one of the worst, if not the worst, in the nation.'" The editorial went on to say "The more extensive governments' reach, the more opportunities the governing class has to steal from and shake down the productive class. Perhaps the way to understand this is to look at what the federal prosecutors say New Jersey's mayors, representatives and officals were allegedly selling when they were busted."

Once again, in the WSJ, two articles discussed the FASB decision to amend the controversial mark-to-market rule. A report by the Financial Crisis Advisory Group stated that FASB should resist pressure from Congress to change rules, such as mark-to-market, that might seem politically popular. The article took readers back to the hearings (perhaps grillings is more correct) FASB chief Robert Herz attended that had him be subjected to such threats as the one from PA Rep Paul Kanjorski in which he told Mr. Herz that either he would "change the 'fair-value' accounting rules or Congress would change them itself. 'We want you to act,' Rep Paul Kanjorski, the Pennsylvania Democrat who leads the (House Financial Services Committee) subcommittee, told Mr. Herz at the hearing. 'You do understand the message we are sending?'"

The other article appeared on the back page of the Money & Investing section. It showed how that same mark-to-market amendment is now helping banks such as Wells Fargo and State Street show better second qaurter earnings, than they would have otherwise.

All of this news in a week that, once again, featured the Health Insurance crisis at center stage. When government gets involved, political pressure and favoratism eventually takes over. Say what you want about the Federal Reserves moves to support the banks and the economy during the crisis, beginning with Bear Sterns. (I have agreed with some and disagreed with others) The one item that Ben Bernanke has committeed to, over and over again, is the Fed has an exit strategy. Eventually, the markets will have to funtion without the Fed's assets backing them up. There is no such plan for health insurance, nor can I think of any state or federal payment transfer-type program that has ever had an exit strategy.

Originally Social Security was to simply be used as a supplement to an individuals savings in his/her retirement. now, for many, if not most, Social Security is the primary or only income they have. The ink used to report fraud in Social Security, Medicare, Medicaid, and other government programs can be measured in gallons per citizen. Why do we think it will be diifferent under the health insurance proposals? This is scary considering a great deal of the financing for the program is to come from reduced fraud and costs.

First, there is not one example of national health insurance working in any other country. Britain, Sweden, France, and others have shown it will be impossible for President Obama and other supporters will be able to fulfill their promises. And the above articles show how hard it is for politicians to stay out of politics or graft long enough to do the right thing.