The rule of law

I am very impressed by Barry Ritholtz.  His latest article is one of his best ever.

The rule of law must apply to the big banks.  The government should not be in the bail-out business because it undermines their willingness to apply the rule of law to those banks.  Barry has the details.  Go and read.

The shadow government

If you care about government spending, debt, or the future of America, then go read this article.  Warning: It's Rolling Stone, so there's ample profanity.  If you understand how we're being stolen from then you'll be tempted to partake in the profanity.

Bankers talking about moral hazard

Bankers talking about moral hazard is something like rapists talking about chastity.

The New York Times is reporting that Bank of America is refusing to write down mortgages, as they have been paid and ordered to do by the government.  Their main argument is moral hazard.  They believe it would be bad business to reward home owners who took out larger loans than they could actually afford.  Seriously.

Tar and feather is too good for these people.  I have a strict non-violence policy, but the gall of these people is pushing my limits.

They are busy paying billions in bonuses to themselves, the crooks who wrecked the economy, and they claim to worry about the moral hazard of rewarding someone else?

Their secondary argument holds a little water.  They claim to be unable to figure out who to give how much write-down to.  This boils down to claiming that they are incompetent.  "Oh, the figures are just too hard to compute."  I've worked with the mortgage modification program people at Wells Fargo, and I would accept the argument that they are incompetent to do the math.

Well, I'll help them out.  We'll make it simple for them.  Any mortgagee who wants it gets a free re-fi, on these specific terms--regardless of their credit rating, payment history, LTV, etc.  If they currently do not pay PMI then they do not have to pay PMI on the new mortgage, either.
* Take the current principle balance and refinance that amount for 30-years at a low fixed rate.
* The rate they get depends upon the amount of their current principle balance, according to this sliding scale:
- Less than or equal to $100k -> 3%.
- Between $100k and $150k -> 3.125%
- Between $150k and $200k -> 3.25%
- Between $200k and $250k -> 3.375%
- Between $250k and $300k -> 3.5%
- Between $300k and $350k -> 3.625%
- Between $350k and $400k -> 3.75%
- Between $400k and $450k -> 3.875%
- Between $450k and $500k -> 4%
- Between $500k and $600k -> 4.25%
- Between $600k and $700k -> 4.5%
- Between $700k and $800k -> 4.75%
- Between $800k and $900k -> 5%
- Between $900k and $1M -> 5.25%
- Between $1M and $1.5M -> 5.5%
- Between $1.5M and $2M -> 5.75%
- Between $2M and $5M -> 6%

Obviously the sliding scale will be endlessly debated and negotiated, but I think that the government could cram this down the mortgage companies' throats.  And I think it would do a tremendous amount of good for the economy.

I'll take myself as an example.  We're not in the moral hazard set.  We paid down 10% and took out an 80% and a 10%.  We owe less than the market value of the property.  We have never been late on a payment.  And our credit ratings are still excellent.  We've been in our house a few years.  We would take this deal.  Based upon that sliding scale we would save about $350 per month.

Unprincipled

The Independent is reporting that the Obama administration is asking King Saud to arm the Libyan rebels.  It seems that the Obama administration isn't reading my blog.  If they were reading my blog they would know that King Saud is opposed to the rebels in all of the countries of his region.  Arming Libyan rebels provides moral support to the rebels in his own borders.

If this report is true--and I'm assuming that it is--then this signifies a new low for the administration.  They are hopelessly out of touch.  They do not understand which way the wind blows for their allies or their enemies.  King Saud has surely dismissed the administration as clueless imbeciles.

The administration has failed to form a coherent strategy for dealing with the uprisings.  Do we support them?  Do we support them within the borders of our allies?  Do we support them when the likely new government will be less friendly than the existing government?  And how do we express our support or opposition?

This series of uprisings is the most important event of this administration, and they have utterly failed.

More good news from Egypt

Women have been suffering under the Egyptian regime.  It's no secret that women and children suffer more under dictators and other totalitarian regimes.

CNN is reporting that women in Egypt are feeling more free to express themselves, and feel more optimistic about their prospects for better treatment.  In one example, a lady was recently verbally sexually harassed by an army officer.  She slapped him and drove away.  She would never have gotten away with that a month ago.

My new hero: Dr. Gene Sharp

Gene Sharp is a retired college professor.  He is an introvert, thinker, and writer.  His field of study is the non-violent overthrow of dictators and establishment of democratic governments.

His seminal work is called 'From Dictatorship to Democracy'.  It is available as a PDF for free.

The New York Times has a nice article describing his life and writings, and explaining how his writings ended up in the hands of the protesters in Egypt.  (I can't link it here because they have hidden it behind their paywall.)

Dr. Sharp's writings are primarily focused on the first half of the struggle--toppling the dictator.  My interest is in the second half of the struggle--building a democracy.

If I ever achieve my life's goal, it will only be because I was able to stand on this man's shoulders.

Told you so

The Independent is reporting that Mubarak ordered in the tanks and the army refused; and that this confrontation was the moment that the army decided Mubarak would have to go:

"But the critical moment came on the evening of 30 January when, it is now clear, Mubarak ordered the Egyptian Third Army to crush the demonstrators in Tahrir Square with their tanks after flying F-16 fighter bombers at low level over the protesters."

This is what I wrote on Monday the 31st, before that story broke:

"If I were a gambling man then I would place my money on the military reporting that they received the order to massacre, refusing the order, arresting Mubarak, and then seizing control.  This gives the military control and a large measure of goodwill.  Notice that they don't have to actually get the order to massacre, they just have to say they got it.  There will be no way for Mubarak to prove otherwise once he is in jail."

At this point I haven't heard enough promises from the military for democratic elections.  I would not wager on how long it will be before that happens.

More on Egypt and the revolutions in the Middle East

Of course there are a ton of articles floating by about Egypt and the Middle East.  Here are the four biggest, in my opinion:

1. 20 reasons why the world is burning
This article is required reading to understand why this is happening now.

2. The Muslim Brotherhood is saying it will not run a candidate in democratic elections in Egypt
I can't decide if this is genuine good news, or if the Muslim Brotherhood is simply biding their time.  On it's face, though, this is fantastic news.  If democratic elections happen in Egypt, and if the Muslim Brotherhood keeps this promise, then the next government of Egypt will almost certainly be secular (read: not radical Islamic jihadist.)

3. Saudi King Saud pressured Obama to support Mubarak
I predicted this one.  It is vitally important to Saud for Mubarak to not fall.

The real story in Egypt

I found a fascinating article by a western-educated Egyptian.  Click, read, and cry for all that they have lost.

My heart is in Egypt

My heart is in Egypt right now.  If I were free to go, I would have been there a week ago.  But I am not free to go.  So I will write this article instead, and explain what I would do if I could go.  Because I am American, they would not listen to me anyway.

If I were in Egypt I would find the people who wrote this protesters' manual.  I would hide with them in whatever closet they are holed up in.  And I would talk their ears off about what's next.

Transition to what?

Mubarak is trying to hold on to power and save his own life.  He needs the military to protect him.  He is giving more power to the military in order to get their help.  When Mubarak leaves, the military will be in the best position to take over.  Military dictatorships have a poor history of turning power over to democratically-elected civilian governments.  In the short-term, the protesters need to pay more attention to who will be in power after Mubarak leaves.

It is unfortunate that they began the protests without a a new constitution to offer, or a clear non-military candidate or two.  Now they need to find a core group of protest leaders to form a provisional government that will work with the military to administer free and open elections as soon as possible.  They will need to elect two bodies:

• A constitutional congress that will have no powers except to write a new constitution.
• A transitional government that will manage the country while the new constitution is being written.

The transitional government will be tasked with making as few decisions as possible.  Just keep the trains running and power on.  They should draft business people for these positions--people who want to go back to their businesses as soon as possible.

There are two basic types of government:

• Governments based upon people: dictatorships, kingdoms, secret police states, mafia states, etc.
• Governments based upon laws: representative democracies, police states

The stories I'm hearing about the protesters lead me to believe that they want to form a government based upon laws.  This means that the constitutional congress will be where all the action is.  That is where I would like to be--offering advise and helping them form a good law-based government.

Democracy is not enough.

I would bring three books with me to Egypt:

• The Constitution of Liberty by Friedrich Hayek
• The Other Path by Hernando De Soto
• The Mystery of Capital by Hernando De Soto

What is the point of government?  Peace, safety, freedom, economic opportunity, and justice.  These are outcomes that only democracy can provide.  But there are many forms of democracy that fail to deliver.  Kim Jung Il and Adolph Hitler were both democratically elected and re-elected, after all.

So, what does it take to build a good government?

I've identified 7 features of government and 4 features of society that are required in order to achieve peace, safety, and the rest.

Government Features

Equality Under the Law

1. Every person who is excluded from having a voice in the government will have no rational choice but to oppose the government.
2. A government that can exclude someone else will eventually exclude me.
3. A government that can grant special status to someone else will exclude me from that group, and will eventually exclude me entirely.
4. If anyone is above the law then they will eventually establish themselves as dictator.
5. Corruption cannot be allowed at any level in government, because corruption favors the rich--the poor cannot afford to pay the bribes.
6. The rich gain and the poor suffer as the body of law grows, because only the rich can afford the legal expertise to remain innocent.
1. A country where everyone is guilty of something will devolve into a prison.
7. The rich gain and the poor suffer as the process of complying with the law gets more complicated (licenses, permits, and the like), because only the rich can afford the legal expertise to operate businesses.
1. The poor will be limited to operating in the grey or black markets, where they lack legal protection.
8. Corporations and religious groups are organizations, not people.  Organizations must be treated fairly, with respect to each other.  But organizations must be governed under a distinct set of rules specific to them.

Popular Control

1. Only the people may change the constitution.
2. The people define the government's goals, priorities, and long-term vision.

Protection of Rights

1. The primary purpose of government should be to protect the rights of the people.
2. A people who fail to understand and properly value these basic rights will achieve the bad outcomes that they deserve:
1. Freedom of Speech
2. Freedom of Property
3. Freedom of Religion
4. Freedom of the Press
5. Freedom of Assembly
6. Freedom of Vocation
7. Freedom of Contract
8. Freedom of Sexuality
3. Governments are not the only infringers on these rights.  Corporations and religious groups must be constrained to protect these rights

Limited Government

1. A government that can change the rules under which it operates will slide into corruption, allowing the rich to buy special privileges.
2. A government that can kill citizens will eventually kill me.
3. Governments are good at enforcing the rules by which everyone must operate--making and enforcing laws
4. Governments are very inefficient at delivering services.  
1. Some services can only be reasonably delivered by government, like military protection.  In these cases, the governments operations must be monitored closely for waste and corruption.
2. Some services could be provided by the free market, like mail delivery.  In these cases, the government contracting process must be monitored closely for corruption.
3. All of this monitoring is an expensive overhead.  The best way to reduce the overhead is to limit the scope of government.
5. Find creative ways to limit government spending.  Make them report everything they spend in clear terms.

Separation of Powers

1. Government is, by definition, a concentration of power.  Power corrupts.  Don't give any person any more power then you absolutely must, and don't let them hold on to that power any longer than you must.
2. There are certain categories of power within government.  These must be clearly and irrevocably separated:
1. Legislative: write laws
2. Police: enforce the laws
3. Judicial: apply and interpret the laws
4. Executive: manage the government itself
5. Ambassadors: official interactions with other nations
6. Military: defense and war
7. Measurement: measure and report the government's performance
8. Oversight: watch the watchers

Balance of Powers

1. The parts of government will have to interact with one another.  Each part needs to be reigned in by other parts.  Each line of power needs to be carefully laid out, to avoid any one part gaining too much power over the others, or to avoid having two or three parts forming a ruling coalition over the others.
1. Within those interactions there will be some natural power struggles.  These interactions must be planned out. For instance:
1. The police are completely subject to the judges when it comes to detaining and punishing wrongdoers.
2. The military is completely subject to the legislature to for funding.
2. Some un-natural power struggles need to be established, to keep any one part of government from gaining too much power.  For instance:
1. Military senior commanders must be approved by the judges before they can take office.
2. Executive branch officers are nominated by the legislature and confirmed or rejected by a jury made up of judges, police, and military personnel.

Regular Orderly Transition of Power

1. No one may serve in more than one part of the government at the same time.
2. No one gets to hold on to any power for an extended period of time.
3. No one gets to control how or when they will relinquish power.
4. When the people are unhappy, they must have a non-violent means for replacing the government and amending the constitution.

Social Features

Participation

1. Government must be watched, or it will devolve into corruption.
2. The people must tell the government what they want, or they won't get it.
3. Some people must serve in the government for a time, and then return to private life without gaining undue advantage in the marketplace from their time of service.

Criticism

1. The people must speak up when they have a problem with the government.
1. They cannot wait and let problems fester for too long before they do something.
2. They must continually exercise their right of criticism so they don't lose the right through lack of use.
2. Criticism must be public, so the public can weigh and judge the importance of the criticism.
1. Kooks will abuse the right to criticize, and use it as a platform for their craziness.  The public should be the judges of legitimate problems versus craziness.
2. The better your government gets, the more that legitimate problems will look and sound crazy at first.
3. The government must be strictly forbidden from silencing critics.
4. The government must have mechanisms for accepting criticism and making positive changes, when the people agree that the problem should be addressed.

Independence

1. The people must understand that the government cannot meet their every need.
2. The people must accept responsibility for the outcomes of their own lives, so long as they have been dealt with fairly.

Freedom-Loving

1. My freedom to swing my arm ends just before I hit my neighbor's nose.
2. People who are not dedicated to freedom will be too thin-skinned, constantly imagining that their noses have been hit.
3. Freedom will be constantly challenged by would-be authorities.  The people will have to continually defend freedom, primarily against religious authorities.
1. When a religion has the authority to enforce its will on non-believers then freedom of religion has been violated, and a religious kingdom has been established.  All non-believers are outsiders, and rationally must work to overthrow that government.

What's Next in Egypt?

Maybe the powers behind the scenes in Egypt already know all of this.  Even if they do know it, it will be incredibly difficult to pull off.  If the protesters are not simply massacred, then a military dictatorship is the most likely outcome of their present course.

If I were a gambling man then I would place my money on the military reporting that they received the order to massacre, refusing the order, arresting Mubarak, and then seizing control.  This gives the military control and a large measure of goodwill.  Notice that they don't have to actually get the order to massacre, they just have to say they got it.  There will be no way for Mubarak to prove otherwise once he is in jail.

Life in Egypt will go from bad to worse under a military dictatorship.

What's Next in the Region?

America has been a big supporter of Mubarak for a long time.  In response, Mubarak has been an ally of the US and Israel.  No matter what happens now, America and Israel are losing that ally.  This is a dark day for the US, and a terrifying turn of events for Israel.  Calling Obama "the President that lost Egypt" is somewhat unfair.  From the moment this broke out Obama has had no option for saving Mubarak.

American could have supported the rebels, but at the price of losing Saudi Arabia.  Doing that would not have likely won friends in the new Egypt, because America was the biggest military supplier of Mubarak's government.  And it would have been very difficult for America to denounce Mubarak, seeing as how they are giving him so much money every year.

It may not be Obama's fault, but the importance of this for Mid-East relations is still immense.  This weakens every state in the region.  The likely benefactor of that instability is Al Qaeda.  They will gain influence either by supporting existing countries or by supporting the overthrow of enemy countries.

Egypt has a fairly healthy current tradition of religious moderation.  Christians and Muslims have been living in peace there for a long time.  I pray that won't change.  But I'm afraid that religious freedom will be curtailed by the next government--no matter who runs it.

Saudi Arabia is already locked in its own civil war--the pragmatic king against his religious extremist cousins fighting through their proxies.  Saudi Arabia is the biggest domino in the region.  Egypt is the second biggest.  Iran is third, and already unstable.  Iraq was fourth, and still unstable.  Expect more wars and civil wars in the region.

Talks with Israel will be on hold until several of these major countries stabilize.  But when talks resume Israel will have no friends in the region.  There is really only one issue that the citizens of these regions can agree on, and that is hatred of Israel.  This period of instability would be a good time to get out of Israel.

Tunisia

If you make time to read one article about the unrest in Tunisia, make it this article.  As usual, the Telegraph produces commentary that is thoughtful, compelling, and takes a broad view of the issues.

Congratulations! You're a felon!

The Espionage Act is going to be used to make it a crime to read this article that references the leaked wikileaks documents.  That's an expansion of how the act has been used in the past, but that is exactly where our government is heading.  We're only an eyelash from thoughtcrimes (1984), and Fahrenheit 451.

The misguided goal of expanding the interpretation of this too-broadly-written law is to trap Julian Assange.  It will trap everyone who has watched the news in the last few weeks.

I'm ashamed.

I'm not ashamed of being a felon under their unjust expansion of a poorly written old law.  I'm ashamed that my government so thoroughly abuses its power.

Julian Assange

I've been quiet on this guy.  I've been busy working on other things.  I've read the headlines and the interview published recently.  I'm not going to rehash anything you've seen elsewhere.

I'm not including any links in this article because there are serious problems with the media coverage on this guy--more on that below.  Julian is the internet's first real lightning rod, and I'm afraid that he will soon be it's first martyr.

Julian's idea is that the powerful (people/companies/nations) are abusing those without power, and that he can end the abuse if he exposes enough of the powerfuls' secrets.

I heartily agree with him that the powerful are abusing the powerless.  I'm not sure if Julian understands that this has been going on since the dawn of civilization, and that the abuse is trending down.  I don't think he cares about that.  I think he is only fixated on the current situation--which is pretty good by historical standards, but still quite awful in absolute terms.

Exposing the deceits and deceptions of the powerful will definitely hurt them.  And since I am powerless, at some level I am inclined to cheer that.  But I do not follow the chain of logic from hurting the powerful to improving the lives of the powerless. In fact, I have grave doubts that hurting the powerful will accomplish anything useful.

For example, the US government is powerful.  The US government is an easy target for Julian because it employs so many potential whistle-blowers, and it contains many potentially embarrassing secrets.  The best result that Julian can hope for is the utter collapse of the US government.  That seems to be the limit of his vision.  But what will actually happen if the US government collapses?  Will the world be better or worse off?


Total collapse is unlikely, even though it seems to be Julian's ideal goal.  A more likely outcome is (a) a diminishing of the power of the US government, (b) some sort of reforms to how the US government wields (abuses) it's power, and (c) some serious improvements in the way that the powerful guard their secrets.  Will that actually benefit the powerless?  I say no, it won't.  I have two reasons for that opinion:
1. Diminishing the power of the US government leaves a power vacuum that will be filled by someone else.  All of the candidates for filling that power vacuum have much worse track records of abuse.
2. The power abuse reforms will probably remain limited to the US government, but the improvements in secret-keeping will accrue to all of the powerful.

If I thought his actions would achieve his intentions then I would join his team.  But I am convinced that his actions will result in the opposite of what he intends.  So I must oppose him.

Attacking the US government in this way challenges it to defend itself.  It will establish laws, treaties, and technologies to protect itself.  Those laws and treaties will, unfortunately, protect all of the other powerful also.  We're only seeing the beginning of that.  The trumped-up rape charges are a sham.  Hopefully some whistle-blower will expose that particular abuse of power soon.  But it doesn't really matter what they grabbed him for.  Now they have him.

I imagine that the CIA (with the cooperation of every security service in the western world) is hacking every part of Julian's life while he cools his heels in isolation.  They will have all of his secrets before they release him.  If they are as good as they advertise then they will find his poison pill and delete it.  I'm not sure if Julian adequately planned for that, but I expect that he did.  In fact, I expect that the security services are walking into a trap that will expose their illegal hacking of Julian's life.

This type of whistle-blowing is going to increase.  The internet just makes the free-flow of information too easy.  Most of the journalists in the mainstream media are crying in their drinks that they don't have Julian's cajones and data.  That's why the mainstream media has cooperated with him so far.  Expect the powers-that-be to get their ducks in a row and put an end to that soon.

This ideal of activism is exactly what sends most journalists into that profession in the first place.  Expect serious journalists to buck the new world order that is coming for them, and leave for independent pastures.  Even if they throw Julian into Guantanamo and delete all of the secret data he has, another Julian will rise up soon enough.  The whistle-blowers are clearly willing to dish their dirt.

Right now the best discussions of wikileaks are happening out on the fringes of the internet where polite society fears to look.  Those are sites that I will not link for various reasons.  But the biggest reason is that I expect the US government to soon go into full attack mode against anyone who keeps a copy of the leaked data.  I don't have a copy, and I won't link to it because getting caught up in that mess is counter to my future plans.

If there were some way that Julian could have attacked smaller targets first, and built up to the more powerful targets later, then that strategy would have been better.  But there was no way to establish his bona-fides and launch his project on small targets.  I expect the next Julians to start smaller.

My own strategy is to develop alternatives to the abuse of power.  Democracy 2.0 is all about reducing the powerfuls' abuse of power.  But I'm coming at the problem from the opposite direction.  I'm avoiding challenging the powerful directly.  I'm keeping the discussion as hypothetical as possible.  I'm idealistic instead of accusative.

I do hope that Julian survives and learns to improve his strategy.  But I don't expect him to.  I expect the powerful to kill him.  Power corrupts, after all.

Their true colors

The Republican party has finally officially openly declared their priorities.  Guess what.  It's not you.

The lame duck Congress has several major issues that it needs to deal with.  The senate Republicans have announced that they will filibuster every bill other than an extension to the Bush tax cuts that includes all of the cuts.  If they were willing to accept only some of the cuts then they would have that bill passed already.  The Republican party is holding out for the cuts for the top income brackets.

One of the bills that they refuse to vote on until after the tax cuts is funding unemployment benefits.  Now I may be a little biased here, because my unemployment benefits have expired because they refused to pass the funding bill before they left for Thanksgiving.  I'll be getting my last unemployment benefits check in two weeks.

But the top income earners are going to get their tax cuts.

I understand the socio-economic theory.  The top earners have been successful, and the unemployed have not.  So the successful should be rewarded ahead of the unsuccessful.  Rewarding the unsuccessful first just encourages more unsuccess.  The top earners are more likely to spend their wealth and drive the economy.  The unemployed are merely going to pay their bills,which does not help the economy recover as much as new spending does.

I understand the theory.  I think it is probably mostly correct.

However, it is against my interests to vote for this theory.  I will do so no longer.

The problem with the two-party system is that I have no good alternative to support now.  The Democrats (and Tea Party) are fools and incompetent.  The Republicans are less foolish and less incompetent, but their policies are contrary to my best interests.  I am left no way to participate in the system.  So, from this moment on I am officially against the system.  The system left me no choice.

I've solved the federal budget crisis

But I still can't find a job.  (sigh)

The New York Times has an interactive budget-balancer puzzle.  I've tried my hand at it (you can click the second link to see what I selected.)
38% savings from tax increases.
62% savings from spending cuts.

The shortfall is $418 for 2015, and I raised $537.  The shortfall is $1,355 for 2030, and I raised $1,805.  I did that by evaluating each proposal on it's merits and selecting the ones that I thought were good ideas.  I didn't look at the amounts each proposal saved.  I would funnel the additional savings to paying down debt.

Unfortunately, I'm afraid that the current two-party system is designed to generate results that no one wants.  So we will never get a fair or reasonable result from Congress, no matter who is in charge of what.

More Congressional incompetence

Once again, Congress shows that it does not understand the consequences of it's actions.  They passed this big healthcare overhaul without really thinking through how businesses and people would react to it.

If you raise the taxes on milk then people buy less milk.  But if you raise the taxes on alcohol then people buy less milk.

People rarely respond to rules, like taxes or healthcare mandates, the way they are intended to.  If you pass a tax on alcohol then you are probably expecting people to buy less alcohol.  When Congress passed their healthcare mandates they expected companies to just suck it up and pay for the additional coverage.  But the Department of Health and Human Services has realized that many employers will simply drop their healthcare coverage entirely and leave their employees worse off.  So the DHHS is now handing out exemptions to the healthcare mandate.

Soon every company in America will apply for a waiver.  Those that don't get it will drop their employee healthcare coverage.  Those employees will be forced to buy their coverage from the government.

So the mandate will end up having no effect except to leave many workers worse off, and to improve the profits of companies that don't get the waivers.  This is stupid.  Even if you think that Congress's goal was to socialize healthcare then you must agree that the whole DHHS waiver maneuver seriously undermines it.

You have to design laws with people's responses in mind.  When we do this, how will people react?  What could people do to subvert this rule?  What will the long-term effects be?

If you really want every employee in America to be insured then a mandate is the wrong way to do it.  That's a stick.  You need a carrot, or at least a carrot and stick approach.  How about a graduated scale of payroll taxes?  Uninsured employees cost X% more in payroll taxes than insured employees.  I'm sure there are many similar approaches that would make companies choose to provide appropriate minimum levels of insurance.

I don't really know who Urban Institute is, but they wrote a great article describing what they call 'Evidence-Based Policy'.  This is the sort of planning and thinking that I believe needs to happen before a law is written.

But those implementation issues are not the real problem.  Adding health insurance increases the cost of each employee.  If push comes to shove, many companies will choose to lay off workers rather than absorb the extra cost of providing additional insurance.  There isn't a carrot that you can attach to that.  It's simple math.  So your healthcare mandate (or whatever other rule you implement to replace it) will decrease overall employment.  And it will do it at the bottom end of the employment scale--low earning part-time jobs go first.

This is why the Democrats are going to lose big in this coming election.  They chose to decrease overall employment during a recession.

Corruption

One of my key themes for Democracy 2.0 is ending high-level corruption.  This story jumped out at me as particularly emblematic of my concerns.

A senior representative calls and leaves a voicemail for a lobbyist asking for campaign donations.  She cites things she has done for the lobbyist in the past and promises more goodies from the stimulus spending.  If you have ever had any illusions of the innocence of lobbying, this should open your eyes.

Our current election process is so dependent upon cash that it creates a race to the bottom for corruption.  Each candidate has to work to out-corrupt the others to get the cash that they need for their campaign.  This is exactly the opposite of the system we should want.

Atlas Shrugged

When I read descriptions of the new healthcare plan I can't help thinking of Atlas Shrugged.  There are a lot of things that Ms. Rand got wrong.  But her descriptions of the socialist solutions was right on.

Bureaucracy and nepotism.  Government people giving away powers that they don't have the right or power to give.  The willful blindness to obvious problems.

It is clear that priority one is building a class of workers who are dependent on the system, so they will act in defense of the system and vote for their patrons.  Healthcare is obviously only a secondary consideration.  And fiscal responsibility is a rejected proposition.

This will end badly.