Crohn’s Disease: Living with a Patient
As a long time Crohn’s patient, I am often sought out for advice on handling the disease by newly diagnosed patients and their families. And while awareness of Crohn’s is much greater than it was twenty years ago, most people really don’t understand much about the disease or the way it impacts a patient’s life. So I’ve decided to write a four-part document that hopefully explains to new Crohn’s patients and the general public what to expect and how to cope. These posts cover the medical symptoms tips for patients living with the disease and tips for people who know someone living with Crohn’s.
So, you’ve just found out a friend or family member has Crohn’s Disease. You probably have a thousand questions swirling around your mind and no idea where to begin asking them. What do I do? Where do I go? Can I get it?
First, don’t worry about catching Crohn’s from someone who has it. While the origins of the disease are unknown, the one thing that is certain is that it isn’t communicable. Second, read the posts regarding symptoms and treatment to get an idea of what your loved one is experiencing – and what they’re likely to go through in the future.
One of the least understood aspects of Crohn’s Disease is the frequency and degree of pain that Crohn’s can inflict on those afflicted with the condition. I’ve compared it labor pains – and my wife has told she doesn’t think I’m far off. When flaring, the constant pain has a dual effect on patients: first, intense pain impairs anyone’s ability to think clearly. Second, the pain meds some doctors prescribe are narcotics which will cloud judgment even further. This relates to the first two things you can do for your Crohn’s patient.
You shouldn’t let them make important decisions alone. You won’t intrude in their personal business by simply asking, “Are you sure?” if you think they’re making a foolhardy choice. Chances are once they’ve achieved remission, they’ll thank you for dissuading them from buying the $5,000 TV. If you’re a close relative (such as wife, husband, mother, father, etc.) speak with their doctors often. If possible, go with your loved one for medical appointments. In this way, you can be an important resource for them, gathering information about treatment plan, medications, future tests and the like when they are at their most vulnerable. You can also gain peace of mind by being fully knowledgeable and participatory in their treatments.
Often, what Crohn’s patients need more than anything else are the simplest things. During a flare, they may not be hospitalized and can often appear “normal” to the casual observer. But they’ll experience extreme fatigue and intense pain when symptomatic and doing everyday tasks can take their toll. And since Crohn’s patients are susceptible to stress (even more so during a flare), the pressure of not being able to attend to those little things can compound an already difficult situation. Offering to pick up a meal or do the dry cleaning might take you an extra 5 minutes, but can relieve your friend of what may seem to them an impossible task.
Perhaps the simplest and easiest – yet one of the most important – things you can do for your friend is keep them in good spirits. Depression is common among people with Crohn’s. Stop to think about it for a moment: how would you respond if you were constantly in and out of hospitals, suffering through intense pain, having to run for a bathroom every ten minutes and getting poked and prodded by teams of doctors? A phone call; dropping by to say hi or simply sending the occasional “Hang in there” text message can do wonders.
It is also important to understand that even when all seems well, your friend may not feel 100% comfortable getting out and about as they once did. For a person with Crohn’s, one of our greatest fears is needing a restroom NOW and not being able to find one. You might want to go to the beach or to the park; they may not say so, but they’ll lack the confidence in their bowels to make such a trip feasible. It’s still important for them to get out of the house and socialize, though – think of an alternative they might enjoy. Shopping malls, movie theaters and other venues with easily accessible public toilets are all good.
There are also various references available for people who know someone with Crohn’s Disease. A great resource for families and friends is the Crohn’s & Colitis Foundation. They do tremendous work in assisting both Crohn’s patients and their support network. Another terrific resource is the Cleveland Clinic, one of the leading research centers in Crohn’s. Both organizations are non-profits; if you’re so inclined, they appreciate donations.
The important thing to remember is that your friend hasn’t changed. Yes, they now have a terrible illness – but the person inside is the same person they were the day before they were diagnosed. They still enjoy doing the same things, but they will need a little more reassurance, a little more compassion and a little more understanding going forward.
Crohn’s Disease: Coping
As a long time Crohn’s patient, I am often sought out for advice on handling the disease by newly diagnosed patients and their families. And while awareness of Crohn’s is much greater than it was twenty years ago, most people really don’t understand much about the disease or the way it impacts a patient’s life. So I’ve decided to write a four-part document that hopefully explains to new Crohn’s patients and the general public what to expect and how to cope. These posts cover the medical symptoms tips for patients living with the disease and tips for people who know someone living with Crohn’s.
In this post, I’ll cover what living with Crohn’s is like.
Once diagnosed with Crohn’s Disease, odds are your doctor gave you some version of “you’re going to need to make some changes.” They probably prescribed a bunch of new medications and told you that you’ll need to take them for the rest of your life. You were told that you’ll need to make some changes to what you eat and what you drink. Since the odds are you’re still young, you’re probably feeling as if life is essentially over. That’s normal, but as I and millions of other “Chronies” can tell you – life isn’t over. It just got more interesting. If you haven’t read through the posts on symptoms and treatments yet, take a few minutes and do so now. One of your best weapons in the fight against Crohn’s disease is education and this is good place to start. I also suggest going through the Crohn’s & Colitis Foundation’s website. It is an invaluable source for information.
Your first major change is that you and your doctors are about to become fast friends. Before my diagnosis, I didn’t have a regular doctor. I was a typical, healthy 25 year old and only went to see one if there was something really wrong – and it had to be really wrong before anyone could force me to step foot into a doctor’s office. The gastroenterologist who diagnosed me was as strange to me as an alien who dropped in from Mars. He was a nice enough guy, but I didn’t particularly like him and because of that, wasn’t sure I should how far I should trust him. So rule #1 about living with Crohn’s: find two doctors that you not only like but can absolutely trust with your life: a gastroenterologist (for your guts) and a general practitioner (for everything else). Because how you handle those relationships will go a long way in determining how well you live your life. In my case, I’ve had the same primary care physician for 10 years now and GI doctor for 8. The reason is not only are they very good doctors, but we have a great relationship. They know me by sight, including my medical history. How well? About three years ago, I had my left knee rebuilt and was in the hospital for the pre-op when my GI doctor was racing down the hall past my room. When she spotted me lying in bed, she put on the brakes, turned around and walked into my room – concerned I was having a flare. Then she made sure my chart mentioned my Crohn’s and that I’m allergic to tetracycline before continuing on to where she was headed. That type of relationship with your doctor is crucial to not only living with Crohn’s, but living well. Besides the peace of mind you get from that type of relationship, it has practical implications. When Cimzia was first approved for use, my GI doctor called me with the news and asked if I was interested in trying it. Had I waited for my scheduled appointment, I would have waited another four months before beginning treatment.
That brings up my next point: make certain you keep all of your medical appointments. Things come up that we never expect in our lives, but it is critical that seeing your doctor regularly. Even if you’re feeling well, your doctor may spot something and be able to put out the fire before it begins. Make certain you take all of your medications as prescribed. There’s a good chance some of them will need to be taken multiple times a day (mine do). A tip: nowadays, almost everyone carries a cell phone. And many of us carry a smartphone. A great way to remind yourself to take your meds is to set reminders on your phone. In many cases, you can synch those reminders with your computer, too.
It’s also important to have a good support network, other than the medical professionals. Friends and family are going to be important as you live with Crohn’s. Some of the people you consider friends won’t want to be bothered with helping out when you’re having a flare – it’s actually a fringe benefit to Crohn’s. You’ll find out who your real friends are and who was just a hanger on. Part of the reason is mental. Nobody may have told you this (although you might have suspected), but living with Crohn’s can have some very down moments. You need to mentally prepare yourself for frequent hospital stays and often feeling like – pardon the pun – crap. There are times when you will be so physically ill you can’t leave the house; having a friend or family member willing to run errands during those times is invaluable. Depressed feelings go hand-in-hand with so often being unable to do much more than run to the bathroom, with the frequent hospitalizations and being isolated. Having friends who are willing to drop by, make hospital visits and just generally keep your spirits up is more valuable than having a million dollars in the bank.
I also suggest finding a Crohn’s patient network, or if you’re ambitious starting one yourself. There are a lot of us Chronies out there – probably more than you imagined. Nobody has an exact count, but it’s estimated that as many as 43,000 people in the United States have Crohn’s. There are also on-line support groups available, such as the Crohn’s Disease Support Network, MD Junction and Daily Strength. Why join a support group? Because while having friends and family is important, it’s also important to be able to discuss how Crohn’s is affecting your life with other people who have experienced exactly what you’re going through. If you’re reading this, chances are you want to find out more from someone who’s been there and done that. Support groups offer that and more.
IF you’ve read this far, you are almost certainly wondering what in the world you did to deserve this. After all, all I’ve written about is that you can expect pain, hospital stays, frequent bathroom trips and finding people to talk to. None of that stuff is fun and you’re probably saying to yourself, “My life is OVER!” Well, now for the good news: your life is hardly over. You’ll need to make some changes, sure, but consider them course corrections. Having Crohn’s doesn’t preclude you from living a full, happy and productive life. If I’m not proof enough of that, Wikipedia has a list of some pretty famous people who also have Crohn’s Disease – and it includes athletes, actors, musicians, politicians and others. The steps I’ve outlined above are just preparatory to living the life you want. Here’s some common, everyday hints and tips for not only surviving but thriving with Crohn’s:
Work
While it’s true that some Crohn’s patients are permanently disabled, the vast majority of us work for a living. And most of our employers are glad to have us, even if it means having to make a few accommodations to allow us to work. The key is to make certain you let your employer know that you have Crohn’s Disease ahead of time. I obviously haven’t held the same job for the past 20 years (who has, nowadays?) and one of my keys to finding productive employment is to always let prospective employers know I have Crohn’s. I may have lost a few jobs because prospective employers didn’t want to bother with it, but I’ve always looked at it as their loss. Your co-workers will understand the reason you take a few extra bathroom breaks during the day, pop pills at odd times and are occasionally late arriving.
Eating Out
Eating out can pose a special challenge for Crohn’s patients. Rule #1 about eating out: avoid fast food. While McDonald’s, Taco Bell, Wendy’s and Burger King are cheap, quick and tasty dining alternatives they play havoc with our insides. They’re just as fast coming out as going in. Like everything related to our diets, you can’t necessarily rule them out forever. But it should be on your “last alternative” list. Rule #2: be proactive about asking how food is prepared and what ingredients are in a dish. I made the terrible mistake of not asking several weeks ago and paid for it for two days. Remember, it’s your health and your right to know what you’re eating. I’ve yet to find a restaurant that isn’t willing to tell me.
Along with eating out is drinking. Again, this is the “anything in moderation” meme. If your friends are going out to get hammered, volunteer to be the designated driver. If you’re having a beer after work with a couple of buddies, listen to your gut. If your symptomatic, it’s probably best to have a glass of water (or ginger ale) instead. If you’re otherwise healthy, one or two drinks is probably ok. But more than that and you will be asking for trouble. And if you’re drinking anything alcoholic, eat something – it helps slow the absorption of alcohol and your stomach will thank you. Trust me on this one – a hangover with Crohn’s is twice as bad as any you ever had without it.
Traveling
There might be no greater horror for a Chronie than being on the road and needing to find a bathroom – NOW – and not being able to find oneThis has happened to everyone with Crohn’s; you’re not alone in this experience. But there are a few tips that can reduce the chances of it happening. First, map your route and the public restrooms along the way. There are some great on-line resources for this, generally localized to your region. If you happen to have an iPhone or Blackberry, download the SitOrSquat app. It’s a terrific resource for finding a public toilet. (For the rest of us, you can text 368266 and get back a list of nearby bathrooms). Tip #2: check with your doctor if it’s ok to take an anti-diarrheal before heading out. If so, then go ahead and pop that Immodium® or Kaopectate®. Third, do your best to use a toilet before leaving.
Even doing all of this won’t prevent accidents from happening. They will, so it’s best to be prepared. I always carry an emergency pair of underwear in my briefcase, along with some baby wipes and one of those plastic bags you get from the grocery store. Most of my friends understand why my briefcase goes with me everywhere (even to the beach, although I don’t take it on the beach). Ladies, you can do the same with your purse.
Dating
Most of what I covered above applies to dating, as well. Your date will just need to be understanding if you need to excuse yourself from the table during dinner, or take a leave of absence during a movie. But one thing to note about Crohn’s is that stress can bring on symptoms – and dating can be a stressful event. As with work, let your date know ahead of time that you have Crohn’s. If they beg off or stand you up, well, then they definitely weren’t right for you, were they? Romantic situations can be difficult (after all, excusing yourself and running to the bathroom can ruin the mood), but you and your significant other will figure those out as you go along.
Starting a Family
One of the most important decisions a person ever makes is if and when to start a family. For a Crohn’s patient, the decision becomes even more difficult. I can’t tell you whether or not to have children, or when the time is right. I can only relate my personal experience and that I wouldn’t trade my three sons for all the tea in China. But things you definitely want to consider include the possibility of passing along Crohn’s (about 1 in 3 Cronies have a family member who suffers). You also need to take into account how well your Crohn’s is responding to treatment and how the additional stress of children may affect you. Finally, while all prospective patients need to take into account their financial situation, Crohn’s patients need to be especially mindful of the fact that as a result of their condition, they may face periods with reduced (or no) income.
Stress
Moderating your stress level is key to living well, either with Crohn’s or without. It’s just that for those of with Crohn’s, we need to pay a bit more attention to it than most people. If you perused that list of famed Cronies, then you’ll notice quite a few of them had stressful occupations. (Imagine the stress Dwight Eisenhower was under, first as the man tasked with defeating Hitler and later as President of the United States!). None of them could reach the pinnacles of their professions without learning to manager stress and the good news is you can, too. Whether it’s working out in a gym, running, prayer, meditation or something else, find it and practice it. For me, it’s a combination of prayer and working out. I work out at least three times a week and every morning starts off with a bible reading and prayer.
Outdoor Activities
If you’re anything like me, you probably enjoy being outdoors and doing things. And there’s absolutely no reason you can’t, even though you have Crohn’s. I played baseball until age and bad knees caught up to me, I’m still an avid bicyclist, I play golf and I still love taking hikes through the woods and spending time on the beach. If you enjoy the great outdoors, just follow the tips for traveling above and you should be fine. If you’re also into organized sports, most leagues are willing to grant you a “time-out” so you can use the restroom.
Ok, I think I covered most situations here. But if you have any other questions, feel free to drop me an email at rayrothfeldt@aol.com.
Crohn’s Disease: Treating the Symptoms
As a long time Crohn’s patient, I am often sought out for advice on handling the disease by newly diagnosed patients and their families. And while awareness of Crohn’s is much greater than it was twenty years ago, most people really don’t understand much about the disease or the way it impacts a patient’s life. So I’ve decided to write a four-part document that hopefully explains to new Crohn’s patients and the general public what to expect and how to cope. These posts cover the medical symptoms tips for patients living with the disease and tips for people who know someone living with Crohn’s.
In this post, I’ll cover some of the treatment options available and the improvements made since I was first diagnosed. But before deciding on a treatment or treatments, discuss all of these options with your doctor. You may want to read to read the section on symptoms before reading this post, so that you understand why certain treatments are used.
When I was first diagnosed in April 1991, there weren’t any truly effective treatments for Crohn’s Disease. The treatments were either drastic – an ostomy – or did their best to mask the symptoms . Medications included a form of sulfa, antibiotics, oral steroids and anti-diarrhea solutions. Since these medications rarely induced remission of the disease (that is, a significant reduction of symptoms), most of us with Crohn’s were hospitalized often. Between 1991 and 2000, I was hospitalized 18 times for Crohn’s or Crohn’s related symptoms. All told, I spent 318 days in a hospital bed during those ten years.
The principle reason treatments were so ineffective was that so little was understood about the disease or how it functions. Fortunately, great strides have been made over the past ten years. Thanks to the work of researchers, current treatments are much more effective. I’ll go through each of these.
Corticosteroids
Corticosteroids are artificial hormones often given to patients in during “flare-ups” (periods of extreme disease activity). During a flare, what happens is the tissue surrounding the disease inflames, causing the extreme pains for which Crohn’s is noted (I’ve joked that I know what labor pains must feel like – my wife actually agrees!). Corticosteroids such as Prednisone, Prednisolone and Deltasone work by reducing the inflammation. These drugs are artificial replacements for the corticosteroids generated by the human body, but are given in much higher doses than the body normally makes. I’ve received as much as 120mg of prednisone a day, or about 60x the body’s normal production. While they are as close to a miracle drug as any for ending flare-ups, they pose serious risks with extended or frequent use. The first is dependence; when receiving such massive doses the body stops producing its own. This is why they are usually prescribed for short periods and ramped down while prescribed. Prolonged use can also lead to cardiovascular disease, osteoarthritis and cataracts. Also, patients taking corticosteroids should note that weight gain and mood changes are common when taking them.
Sulfonamides
This type of medicine is used to help maintain remission. It’s been used since I was first diagnosed, but the delivery of the active ingredients in sulfonamides has improved greatly in that time – meaning lower and less frequent doses are needed for the same effect. The first medication I was prescribed was Sulfasalazine; I had to ingest three 600mg tablets 4 times a day. If you’re not interested in doing the math, I was taking 7200mg every day, without much positive effect. Today, I take 1200mg of Lialda daily. The most commonly prescribed sulfonamide for Crohn’s today is Asacol (or its generic equivalents, Mesalamine and 5-ASA ), usually at a 800mg dose three times daily. The side effects are relatively minor, such as excessive gas and bloating. In rare cases, it can exacerbate pre-existing heart and lung cases. And some studies link these drugs to reduced fertility in men.
Antibiotics
Everyone has bacteria lining their digestive tract. We actually need them to help with proper digestion. But during Crohn’s flare-ups, the bacterial populations literally explode. Nobody is quite sure why, or what the connection may be. Regardless, most gastroenterologists will prescribe one or more antibiotics during a flare-up. The most common is flagyl, given intravenously.
Anti-TNF medications
The first major advance was in understanding the role an antigen called tumor necrosis factor
(or TNF) plays in Crohn’s and the use of anti-TNF drugs in fighting Crohn’s. TNF forms naturally within the body and is one of our immune system’s defense mechanisms against cancer. It works by inflaming the cells around the cancer cells, in essence choking them. Nobody is quite sure why Crohn’s patients suffer this type of inflammation, but studies in the mid and late 1990’s showed that anti-TNF drugs actually reduced the chronic tissue inflammation. Since then, drugs like Imuran or 6-Mercapturine (6-MP) have been introduced. They can’t actually induce remission, but they are effective in maintaining remission once it’s been achieved. The big downside is since they reduce the body’s principle anti-cancer agent, patients taking them are at much higher risk for developing cancers. Recent studies show the possibility that Crohn’s patients who have been on one of the anti-TNF medications for extended periods are at substantially higher risk for a type of leukemia.
Biologics (TNF-A inhibitors)
An offshoot of anti-TNF medications, biologics as used in Crohn’s treatment are designed to essentially “turn-off” the immune system. There are three currently in use: Remicade, Humira and Cimzia. Each has some unique side-effects; ask your doctor about them. In 1998, Remicade was the first of these drugs approved for use in Crohn’s, so it has the longest track record. However, it also has the most common allergic reactions and needs to be administered by IV over a course of several hours. Humira and Cimzia are similar to one another, but whereas a Cimzia injection can last 4 weeks, Humira needs to be injected every other week. Generally speaking, since the immune system is kept in a very depressed state while taking these, the patient is very susceptible to any airborne illness and contracting one can be deadly. If you are planning to take one of these, know the risks and make certain you discuss them with your doctor. I’ve been taking Cimzia for close to a year and it has made a HUGE difference in my quality of life.
Surgery
Crohn’s patients often require surgical procedures. These can range from the relatively benign (colonoscopy for examining the lower GI tract and removing polyps for closer examination) to a full-blown ostomy. Before undergoing any surgical procedure, make certain you discuss all of the implications with your GI doctor and meet the surgical team. You should also try to have a trusted friend or family member with you for these consultations – odds are if you’ve reached this point, the pain has also become nearly unbearable. Whether you’re fighting the pain au natural or with painkillers, you won’t be in the best command of your mental faculties.
Diet
For Crohn’s patients, diet is truly a four-letter word. We obviously need to eat, but many foods (including what can seem like most of the yummy ones) will cause an exacerbation of symptoms. Eat too many of them and you may wind up with a full-blown flare. Match that with the fact that as a Crohn’s patient, you need to ensure good nutrition even more so than most people and you stand a good chance of being baffled by your diet – or going insane J. Your best bet is to avoid foods that are hard to digest, such as nuts, popcorn and seeds. As for everything else, keep a log of everything you eat and if you experience increased symptoms, then avoid it in the future. Personally, I try not to exclude anything unless I’m in a flare – I just make certain my “avoidance” foods aren’t a constant part of my diet.
Also, you may want to consider nutritional supplements if you find you can’t get enough nutrients from eating. These can range from vitamin supplements to more robust liquid supplement shakes, like Ensure or Boost. In any case, working with a registered nutritionist is always a good idea. And one more thing: most Crohn’s patients find eating large meals tend to make them symptomatic. Try to eat smaller meals and eat more often. For instance, I typically eat 6 times a day – I cover this in more detail in the lifecyle adjustments post.
Alternative Medicines
There are quite a few alternative (or herbal) therapies out there for Crohn’s patients. I do not recommend any of them, although parts of them can be helpful. For instance, I find mint tea can help calm my stomach if I overdue it. Regardless, before trying any of them, be sure to check with your doctor and investigate them fully to find out how they can interact with your medications or each other. Just because they’re herbal or all-natural doesn’t mean they can’t have side-effects.
Ongoing Care
Perhaps the most important part of treatment is your ongoing care. Your doctor will likely send you for seemingly endless tests. CAT scans, GI studies, barium enemas, X-rays, colonoscopies, blood tests and more are part of the typical “Crohnie’s” regimen. Undergoing these and maintaining your relationship with your doctor are crucial in keeping Crohn’s at bay.
State Government Run Amok
Be afraid. Be very afraid.
In the past, I’ve written about all kinds of government ineptitude. Mass Transit agencies that can’t get
passengers where they’re going. Local governments warring over heliports. Billions wasted on projects nobody wants or needs. Bureaucracies duplicating tasks.
Like all Americans, I may pay for government fecklessness through higher taxes and astounding regulations that often don’t make sense, even to those charged with enforcing them. Rarely am I directly impacted, as with most of us.
Enter the New Jersey Motor Vehicle Commission. But I offer fair warning: before doing so, suspend all belief in reality and sanity.
My story begins innocuously enough. In accordance with state law, I needed to renew my drivers license. Aside from having to spend an hour or so of my time in line at the Jersey City MVC office, this task generally isn’t painful. I go in, I fill out a form, a stand in a line, I pay my licensing fee, get issued my renewed license and I’m on my way. I imagine for 98% of New Jersey residents, the story is much the same. So you can imagine my shock at being told:
“I’m sorry, but your driving privileges were revoked in January.“
Thus began a saga that is now ongoing for a full month. Over that time, I’ve discovered more about the way government agencies fail to communicate, audit their records properly, admit errors and update said records than I ever imagined was possible. My journey through the empty vastness of government sanctimoniousness isn’t over yet, so neither is my growing frustration with the way such incompetence can seriously impede normal commerce. Over the course of the next few days, I’ll fill you in the details and keep you abreast of further developments.
Suffice it to say, this bit of personal experience makes for a far better story than any piece of fiction I could ever dream up. Feel free to drop comments and current updates by following me on Twitter.
Of Trains and Automobiles
Earlier this week, George Will published an opinion piece in which he argued that the reason the liberal wing of our democracy is in love with mass transit is…well…because they see it as a means of imposing a collective social order on Americans. Now, I normally like George, even if he can be a bit long-winded and leave me scrambling for a dictionary. I happen to think that most people who live in our urban metropolises understand the need for mass transit systems, regardless of political bent. I find it hard to believe that anyone who lives in New York or the immediate suburbs can imagine the city without the subway and extensive commuter rail systems. The same holds true for the citizens of Washington DC or Portland or Chicago or any of the other two dozen or so metro areas served by decent mass transit. It’s also hard to imagine that residents of densely crowded metro areas wouldn’t like alternatives (think Los Angeles and Atlanta). So, George probably is just a little off base with his premise. But I can understand where George (and frankly, many conservatives) get his premise: for too long, the discussions of trains and cars has been framed as an either/or proposition. But as any of us who live with both can tell you, the discussion needs to be far more nuanced than that.
The President, in announcing his high-speed rail initiative, failed miserably in seizing the chance to reframe the debate, succumbing to the decades-old “either/or” arguments. What’s more, he missed the opportunity to focus rail projects where they’re vitally needed. And he failed to propose a viable means of funding them.
First, the President envisions a country in which high-speed rail is an inter-city solution, rather than an intra-city one. That flies directly in competition with airlines (for long distances) or autos (for shorter distances). In terms of consumer cost, trains can’t compete. For instance, I can fly from New York to Boston for less than it costs to take the Acela. Round trip on the Acela, without 30 day advance booking, is approximately $290. Flying on a regional carrier costs about $250. Take away the federal subsidies for Amtrak, and rail becomes even less competitive. As for autos, I can drive to Philadelphia in about two hours. Total cost, including tolls and even the currently insane price of gas: around $35. Acela to Philadelphia, one-way: $118.
The second issue with this proposal is convenience. The President said something to the effect that he imagines being able to board a train in one place, and then debark at another within steps of your final destination. This is obviously the sign of somebody who doesn’t understand the way rail systems are designed. If I fly, 9 times of 10 I’ll need to rent a car in order to get to my final destination. That other 10% of the time, I’ll need to hire a taxi. If I take the train, 9 times of 10 I’ll need to rent a car to get to my final destination. That other 10%? I’ll need to hire a taxi. If I drive, I don’t need to worry about hiring a vehicle (and the additional costs that incurs). Once you take into account the time it takes to either find a cab or rent the car, driving my own vehicle often takes less time than taking either a train or plane. Another similarity between the rails and the skies is that you’re limited as the number and size of bags you’re allowed to carry-on, which in both cases is insanely inconvenient if taking a prolonged trip, or even a short trip with the whole family. When driving, of course, the only limitation I face is amount of luggage I can put in my car. One other note on the subject of convenience: the President’s vision also includes not having to pass through TSA checkpoints when boarding these high-speed rail cars. I’ll take that one with a grain of salt, as the TSA is already working on plans for “securing” the nation’s passenger rails.
Finally, the matter of funding comes into question. Building and maintaining railways is an expensive proposition. The reason there aren’t any private passenger rail companies today is they aren’t profitable – not even close. Amtrak lost $1.3 billion in 2010 and the American public will end up paying that from our taxes. The Acela service, which is the high-speed line between Washington and Boston, carried roughly 1/5 of Amtrak’s total passenger load of 27.2 million, yet it also lost money. The total ticket revenue from those 27+ million people was $1.6 billion, yet that barely covered ½ of the total operating expenses. That means we subsidized every passenger riding Amtrak to the tune of around $48 each. (If you’re interested, you can look all of this up on Amtrak’s financial statements.) The only hope that a high-speed rail system has for financial health is dramatically higher ridership than we’re currently seeing. The question is, will Americans prefer to travel by train? Over the last 70 years, the answer has been a resounding “No.” We simply prefer the convenience of the car to the train for intermediate distance travel and the speed of the airplane for long distance travel. Before you get on my about these being “high-speed” trains, picture the hullabaloo raised by folks who have a train barreling through their community at 300mph. And at 300mph (which is the current top speed for passenger service anywhere), you’re still traveling around 200mph slower than a plane.
In plain talk, trains can’t compete financially, technologically or convenience-wise, with the way we currently travel. Heck, even if gas went up to $10/gallon, that drive to Philly would still be cheaper and faster than taking the train!
So, refocus your attention where it’s needed, Mr. President. Improve light rail service in our cities. Improve connections between the suburbs and the downtown areas. Figure out a way to make those services profitable – or at least self-sustaining – then come back to us.
Happy Birthday, President Reagan!
Ronald Reagan was a once-in-a-generation leader; the kind of President who America has been lucky enough to produce every quarter century or so. At least, that is, until lately. Since today is the centennial of his birth, it seems only fitting that our nation look back on what his true legacy is and why nobody in current politics seems up to his measure.
I’m sure if he were alive today, the Gipper would be aghast at the current state of political discourse. While there have always been some extreme differences in the view of what role government should play between conservatives and liberals, Reagan was able to bridge them and enact legislation that positively affected every man, woman and child in the United States. Reagan commanded respect, but more than that, people on both sides of the political divide genuinely liked him. And the reason was that Ronald Reagan was genuine; you knew where he stood and you knew where you stood with him.
Reagan was also an eternal optimist. He believed in the promise of America and he firmly held that American Exceptionalism was not a passe term for the history books. He knew our country had a leading role to play in the world and he wasn’t about to be deterred from taking the lead. “Morning in America” wasn’t just a campaign commercial; it was his attitude about life and about what our nation really stands for.
Many forget the challenges he faced upon assuming office on January 20, 1981. The nation, pummeled by a decade punctuated by Watergate, the loss in Vietnam, the Oil Embargo, 3 Mile Island and Jimmy Carter, no longer believed that government could be trusted to do anything right. Stagflation – characterized by high unemployment, high interest rates, high inflation and low growth – was being heralded as the new economic normal. Overseas, America was reeling from Soviet assertiveness in Asia and Europe. Worst of all, a band of militants had invaded the US Embassy in Iran, capturing and holding 52 US citizens. Despite the vaunted power of the US, the country was helpless to rescue them – and humiliated in the process.
Yet, within two years of his inauguration, inflation had disappeared, jobs were growing at the fastest pace since World War II, interest rates were returning to normal levels and the nation’s economy was booming. While people still weren’t ready to entrust their lives to the government, a wave of patriotism swept across the land and it once again became acceptable to salute the flag, as well as the men & women who served under it. Overseas, the Soviets were sent back into retreat – a retreat that, by the end of the decade, would see the end of communist rule in all but a few small countries. America demonstrated that we would stand by our allies, repelling Cubans from Grenada and dispatching Marines to serve as peacekeepers in Lebanon. Those who would dare tweak our nose soon discovered that America was no more paper tiger, much to the chagrin of nations like Libya and organizations like the Red Brigades.
But all these accomplishments were possible only because of Ronald Reagan’s demeanor and personality and the way he interacted with others. I’ve already mentioned his optimism, but it went far beyond that. He had a gift – he same gift that FDR and Kennedy had before him. The gift to inspire others to do more than they believed they could, to believe in themselves and to believe in the American Way. The Reagan Revolution, in retrospect, was about more than converting lifelong Democrats into Republicans. It was about restoring our faith in ourselves.
That’s why, when I look at the political landscape today, I wonder where that leader is today. I simply don’t see one, in either party. President Obama had his chance, but allowed himself to be dragged into the partisanship that has defined Washington for the past two decades. None of the Republican presidential aspirants have the ability, either. In other words, all of our leading politicians not only play on class and economic divisions, they rely on that strategy to generate votes. Rather than reminding us that we are one nation and that when we act with one voice, we are unstoppable; they continue to survive in a divide and conquer mode. I’ve yet to hear any of today’s crop echo President Reagan’s sentiment that “If we love our country, we should also love our countrymen.” And it our great loss that none are on the horizon.
So, rest in peace, Mr. President. You are sorely missed.
September 12th: the day after
Today is September 12, 2010. It is time for America to move forward and stop looking at the reflection of 9 years and a day ago.
This is not to suggest that Americans should ever forget the events that unfolded on that tragic day; far from it. But our nation has suffered other terrible days and we learned to overcome, to adapt and to move on to tomorrow. 9/11 should join that list of days. Not forgotten, but placed alongside the other brutal and bloody events that have shaped our history. Pearl Harbor in 1941. Gettysburg in 1863. Chosin in 1950. Khe Sanh in 1968.
What makes September 11, 2001 so painful for those of this generation is that happened on our watch. It seemingly came without warning. Nearly 3,000 of our fellow citizens perished in what still seems to most of us to be an act of willful murder – without provocation and needlessly. Nobody had declared a war. Nobody had ever used a means of mass transportation as a deadly weapon. And it all unfolded before nearly everyone’s eyes on live TV.
The reality is, that while 9/11 is tragic and the loss of life horrific, it certainly wasn’t unexpected by anyone who was paying attention to the world around them. Like the attack on Pearl Harbor two generations before, the tensions between the US and the unannounced enemy had been escalating for decades. This was not the first terrorist attack on US citizens or property by Islamic radicals – that dubious honor belongs to the Iranian Embassy takeover in 1979. There were subsequent attacks in the intervening years: Beirut in 1983 and the USS Cole in 2000 among them. But since we’re still enthralled by those nine year old images, we refuse to move on to the next stage of the fight.
Our Nation seems stuck in neutral. Rather than addressing the reality of being at war and throwing all of our resources at the enemy, we’ve settled for half-measures that lead neither to victory nor defeat, but a sort of Twilight Zone-ish never ending battle. Afraid to confront an implacable enemy abroad, we’ve willingly stripped away our own liberties little by little. No one questions virtually disrobing before boarding a flight anymore. Where once the idea of government promoting a “See something, say something” campaign would have been resisted on invasion of privacy grounds, today we laud those poor saps for doing their “civic duty.” Rather than react like our grandparents after Pearl Harbor; rather than show the resolve required of great nations as after Gettysburg, rather than displaying the fighting spirit of our parents at Chosin, our generation has decided that American values are not worthy of a fight. Instead of demanding our leaders throw everything but the kitchen sink at those who would do the United States harm, we would rather strip away the Constitution, one layer at a time; much the same way an inexperienced cook peals away bad layers of an onion hoping to find a useful piece beneath. But like the novice chef, what we’re likely left with after all of that peeling is a pile of garbage.
It’s your choice, America. Sit around, flaccid and impotent. Or do the same as we demand of our volunteers for military service: defend the Constitution of the United States from all enemies, both foreign and domestic. Until we accept that we must do the latter, we risk losing something far more important than a battle to the Islamists. Failure to stand and fight will result in the loss of our being Americans.
Fidel learned what Obama won’t
There are numerous reports circulating on the web that Fidel Castro has seen the light. According to Jeffrey Goldberg of The Atlantic, Castro told him “The Cuban model doesn’t even work for us anymore.”
Huh? What? The leader of the Western Hemisphere’s oldest communist dictatorship admitting communism doesn’t work?
Shock value aside, you have to wonder if (a) Fidel is losing his mind or (b) he’s finally seen the light.
Here’s guessing (b). A little later in the article, Goldberg reports his interpreter said, “I took it to be an acknowledgment that under ‘the Cuban model’ the state has much too big a role in the economic life of the country.”
That’s a WHOA moment if ever there was one. One of the last communist dictators on earth acknowledging government control of the economy doesn’t work. In case you’re wondering, even though Cuba has instituted some economic reforms the country is hardly a bastion of capitalsim. The typical worker earns $20 a month. In the same article, Goldberg describes how the Havana Aquarium was opened especially for Fidel. Just so he could watch a dolphin show. Oh, and all the employees “volunteered” to work on their day off, including the aquarium’s director (who happens to be a – hold onto your hat – nuclear physicist.) You can’t make this stuff up.
Barry takes a break
The question that went unasked in the article is, if the leader of the Cuban revolution realizes that the socialist model failed, why hasn’t the Democratic Party here in the USA? For that matter, why hasn’t our President? This report came out on the same day that President Obama looked to Trotsky and Lenin for political inspiration. He invoked class warfare (tax hikes on the wealthy) and suggested stronger government intervention in key industries is needed to get America back to work. It’s kind of sad, actually, that the last great communist dictator understands what the leader of the free world fails to grasp.
Of course, if Obama and the Democrats get their way, we could wind up with the one thing Cuba can lord over us Americans economically: full employment. Of course, we’ll all earn $20 a month. Oh, and we’ll all have to “voluntarily” give up our days off whenever the President wants to watch a dolphin show.
Besides, who doesn’t want a 1958 Chevrolet in the driveway?
Michael Agosta for NJ-9
New Jersey’s 9th Congressional District, which covers most of Bergen County and in Hudson County, parts of Kearny and Jersey City as well as Secaucus, is currently represented by Steven Rothman. It’s time to change that and elect Michael Agosta to Congress this November.
Steve Rothman is a likeable person. Anyone who doubts that he is doing what he believes is best for the citizens of his district, the state and the nation in general are seriously deluded. Unfortunately for the rest of us, Rothman’s views of what’s best too closely follow the ideas of Karl Marx. That is, Rothman is an unabashed socialist. He honestly thinks every problem we face is best solved by a huge dose of government intervention and wealth redistribution. He doesn’t call himself a socialist, of course; but his voting record speaks for itself. He is ranked as a far-left liberal, having voted for nearly every proposed tax increase and government program that’s been introduced since he took his seat in 1997. Perhaps the best thing to be said about Rothman is that unlike his predecessor, Robert Torricelli, nobody suspects Rothman of undue corruption.
Michael Agosta, unlike Rothman, is a political neophyte who espouses the ideals of smaller government and personal responsibility. He is a man of good standing, although the Democratic Party has certainly tried to impugn his character over the past two weeks. A former Federal Air Marshall and soldier, Mr. Agosta’s national security credentials are born of the front-lines, not of a government-sponsored think tank. And on economic issues, Michael Agosta understands that the only way to revive the economy is to get people back to work – and to do that, we need to reduce taxes and hold the government accountable for their actions.
This November, vote for Michael Agosta. Vote to return America to Americans, not politicians.
Let the “Silly Season” begin
Once every two years, Labor Day signals the opening of the “Silly Season.” What is this “Silly Season” you ask?
In a nutshell, the “Silly Season” is when the general populace joins political junkies in paying attention to the politicians running for office in November. And the politicians, on cue, begin campaigning in earnest. But what it makes the season silly is the way the politicians act. Suddenly, Democrats begin espousing conservative ideals. Ordinarily, they’re joined by Republicans discovering their love of liberal programs.
But this year promise to be sillier than most. With an unsettled economy, unemployment rising and public dissatisfaction in both political parties rising to all-time highs, Democrats are in serious trouble heading into the
campaign season. Many Congressional seats once considered safe for the Donkey Party are now in play; seats once considered as being in-play or toss-up’s are now leaning Republican. As reported in yesterday’s New York Times, the DNC is cutting loose many candidates, hoping to minimize losses in the November mid-terms.
In short, what many Democrats are discovering is that the positions they’ve spent the past four years carving out are not exactly what the country wanted. The reason they won most of their seats – including the Presidency – was national dissatisfaction with the Bush administration. The initiatives the current administration have pushed through have proven even more unpopular than the ones proposed by GWB. How bad is it? 56% of Americans want the abomination that passed as health care reform repealed. Republicans now lead Democrats in all ten of the major issues polls.
Not surprisingly, in light of these developments many Democrats are running as far from their own party as possible. It’s amazing how many Democrats are now against the very health care package they passed earlier this year. (Remember when Nancy Pelosi declared that once we knew what was in the bill, we would love it? Oops.) Even President Obama is finding his conservative voice, as reports suggest he will ask Congress to pass “targeted” tax breaks on Wednesday. To add to the sense of desperation from the Democrats, many are hoping to cast their opponents as extremists who would destroy the fabric of American life.
Of course, Republicans are tempted to equally join in the insanity, but so far have held the line on leaning left. They fully understand that the nation has peeked behind the Progressive curtain and been repulsed by the view. This is turning into one of the strangest elections ever seen, where the minority party is the one fending off negative attacks. Normally the reverse is true, but Republicans don’t need to go on the attack in this cycle. The news, even left-leaning organizations like MSNBC and the NY Times, can’t help but report the dismal employment numbers. So Republicans are remaining more or less silent, except to point out that the news hasn’t been good since the Obama administration took over. That’s attack ad enough. Besides, the left is self-immolating itself well enough that the Republicans don’t need to join in.
So kick back and enjoy the Road to November. It promises to be a fun – if bumpy – ride.
How Bret Schundler inadvertently saved NJ’s schools
All of the furor over the NJ Department of Education’s faux pas, the one that “lost” $400 million in federal education aid, overlooked an important fact. States that are eagerly lining up for the “Race to the Top” funds are simultaneously throwing away more of their discretion in how to educate their youngest citizens. You may be asking yourself how that could be true; after all, isn’t the “Race to the Top” about improving educational opportunity?
Nominally, the answer to that question is yes. But like most federal diktats, the “Race to the Top” became a maze of byzantine rules and regulations far more than a program funneling money to states with innovative ideas for promoting education. The reason New Jersey was denied acceptance into the program is bizarre, even in bureaucratic terms. The scoring criteria included a minimum per-pupil spending increase. Had state officials used budget data from 2008 and 2009, the increase would have been represented; because they used current budget data, the state’s reduction in per-pupil spending was presented.
Only in the bizarro world of Washington D.C. would the state that ranks third in per-pupil spending wind up penalized for getting its fiscal house in order. Yes, New Jersey cut per-pupil spending this year, but what of it? Integral programs to education are intact, despite the hew and cry raised by the NJEA during the long debate leading to the final budget (unless, that is, you consider ice dancing and lacrosse integral to education).
Bret Schundler wasn’t fired for a clerical error. He was fired for lying to the governor about the clerical error. In that respect, Governor Christie had no choice but to fire Schundler; no leader can have morally challenged people on their executive team. But somebody should award Schundler a “Best Mistake of the Year” award. By losing out on those funds, New Jersey is exempt from federal oversight of any “Race to the Top” program mandates. Is it that important? Yes, if you think that the federal Department of Education has yet to live up to the stated reason for its creation. (The unstated reason, of course, was President Carter’s tit-for-tat with the NEA during the 1976 campaign).
In 31 years of federal mandates, administrated by the ED, American children continue to fall further behind their contemporaries in other nations. “No Child Left Behind” has effectively left an entire generation of children behind, unprepared for entry to either college or the workforce. Recent studies consistently demonstrate that higher percentages of students require remediation upon entry to college today than 30 years ago. The Department of Education is meeting its stated mission of ensuring that all students receive the same level of education. Even if the level is well below what an actual education should be.
Due to a clerical error and Governor Christie’s returning power to local school boards, New Jersey is poised to surge to the top in primary education. Which seems a far better option than a Race to the Top.
You’re a US citizen, but you can’t drive in NJ
NJDMV & You - Imperfect Together
According to an article in yesterday’s Jersey Journal, birth certificates from Puerto Rico, issued prior to July 1st are invalid under New Jersey’s 6 point verification program. Talk about a fiasco! American citizens are being denied driving privileges solely due to the circumstances of their birth. In the meantime, citizens of notoriously corrupt nations – such as El Salvador and Nicaragua – are not facing such draconian measures.
This is another example of regulations and bureaucracy standing between citizens and their rights. If you’re old enough, you remember when NJ didn’t even offer a photo ID; now, you need to prove you are who you are 6 different ways in order to legally drive. Of course, under the current system a birth certificate is not required to get a license. But the alternative documents for identification aren’t readily available to most citizens: fewer than 10% have a DD-214, for instance.
A driver’s license remains a privilege and not a right. However, in a state like New Jersey denying someone those privileges often means denying them the means of earning a living, food shopping, getting the kids to school – in short, denying them the basic standard of middle class life. Denial of privileges should only be done in extreme circumstances (repeated DUI, for instance). And revoking privileges for life is rarely done in this state, and usually after repeated major moving violations. Permanently revoking them because a government official in another jurisdiction may have done something illegal? Unheard of.
Of course, the impetus for this is 9/11 and the federal government’s mandate on personal verification. As any good libertarian can attest, that is a very dubious proposal. The very idea that the government doesn’t trust its own citizens and imposes a need for verifiable identification smacks of the draconian measures instituted by Nazi Germany and Soviet Russia in the name of “security.” So, while the idea of a national ID card keeps running into roadblocks put up by liberal and libertarian organizations, the essence of the mandate managed to sneak through. New Jersey’s Puerto Rican population suffers as a result this time. Next time, it could be people born in Arkansas. Or even New Jersey.
In other words, New Jersey is penalizing Puerto Ricans, solely because they were born in Puerto Rico, in fear of losing federal highway funds. All because the federal government is afraid that another terrorist attack will launch from a poorly documented citizen. Really?
Besides, when was the last time somebody from Puerto Rico blew up a skyscraper?
As an aside, Sen. Bob Menedez is Puerto Rican. Anybody wondering if his driving privileges are being revoked?
We’re Moving!
Great news, everyone. I’ve been picked up by Enquirer.com!
Over the next week, I’ll be working to migrate this blog over to my new location, which you can find here. While that process is under way, I’ll be cross-posting, so for the next few days you can still find me right here. In the meantime, bookmark the new site and I’ll see you there!
Economic Revival: Fact or Fiction?
This article appeared in yesterday’s edition of Forbes. The authors, economists employed by First Trust Advisors, postulate that the economy is in recovery is underway. The only thing holding us back is unwarranted pessimism.
Phil Gramm’s thoughts on the economy have come back, it seems. You remember Gramm – during the 2008 election, he spouted off that the only thing wrong with the economy was the public’s perception. Shortly thereafter, Gramm joined the long unemployment line that was merely a figment of his imagination.
The indicators they point to, such as the increasing trade imbalance and devalued housing stock, are rife with the reasons the economy is in such a mess. Once again, we have economists pointing to debt-fueled consumption as the way to end the current economic slump. Nobody in their right mind is going to increase their debt load in this climate and for good reason. Basic common sense; the type of common sense missing from many economists and politicians psyches, tells us that we cannot borrow our way to prosperity any longer. Yet these types of articles continue to be published and their views continue to corrupt our discourse.
What is needed to get the economy rolling again is demand. The right type of demand, fueled by sustainable methods of production and innovation, not by gimmicks derived from debt restructuring, is the surest way to sustainable growth. So how do we get there – and remove the parasites who feed on debt?
We start by demanding government remove the binders on innovation and consumption. By continually bailing out mismanaged companies and decrepit industries, governments are preventing new industries and companies from establishing roots and flourishing. Regardless of the political unsavoriness that allowing large companies to fail and industries to wither presents, the process of “creative destruction” is essential to a growing and vibrant economy. The same way you prune dead shoots from a rose bush to allow larger blooms to grow is the same way the government should approach handling the economy.
Pursuing such a policy will cause employment displacement – but government officials can hardly claim the policy of propping up failed businesses hasn’t resulted in the same (nearly 1M newly unemployed this month can attest to that). This is where the government can assert a positive force, by providing short-term financial assistance to those displaced by the new economy. Likewise, government can fuel new growth by ensuring those displaced receive the training they need to compete.
Unfortunately, we’ve already wasted more than $1T in bailing out failed industries, leaving a huge debt sinkhole without anything to show for it. Instead of prudent financial management, it looks like our leaders – enamored with, and products of, the culture of debt – consigned the nation to a long period of economic malaise. While the second half of the program outlined above was made infeasible by the debt policies pursued by the federal government, the first half can be attained. The economic pain will not be any worse than what the nation currently feels. But given an intransigent White House and bickering Congress, it doesn’t seem likely they will change course.
The Fed Announces It’s Time to Panic
It isn’t often that the political right and left in this country agree on anything, but if two articles I read this morning are any indication, we may have finally found common ground on the issue of the stagnated economy. More significantly, articles in Forbes and The Huffington Post are both sounding the same alarm bells about the Fed’s actions yesterday. If there are two publications more diametrically opposed in terms of editorial slant, I can’t think of them. After all, on most issues the Huffington Post is slightly to the left of Fidel Castro and Forbes founder (and namesake) is the epitome of neo-conservatism.
What the Fed did yesterday is press the panic button. I’m sure the President and congressional Democrats can’t be too happy about that – after all, various administration members have assiduously assured us that the economy is all fine and those of us complaining are simply making mountains out of molehills. The Fed (or more accurately, the Federal Reserve Board of Governors) said, “Um, maybe not. The economy is slowing and we’re headed for a second recession.” As their statement said,
“Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months…investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls…the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”
In case your wondering, when the Fed uses terms like “slower than anticipated,” that is simply a banker’s way of saying that things are really, really bad. How bad? In the January 2010 report, the “anticipated growth rate for GDP” was 2.8% – 3.2%. If you prefer, the Fed was anticipating anemic growth already – if they’re now saying the actual rate of growth is even less than that, then it’s safe to say we’re approaching negative growth. If the economy was shedding jobs during a period of supposed growth (albeit anemic growth), what happens when growth turns negative?
Thus, the Fed is panicking. That is, nine of the ten members of the Board of Governors are panicking. (I’ll get back to the tenth in a moment). It’s perfectly understandable, since the only thing that can make a banker afraid more than a lack of government bailouts is the thought of angry mobs demanding their deposits. The actions the Fed took yesterday – converting the sizable investment in mortgage bonds they currently hold into treasuries and keeping the funds rate near 0% – indicate an organization that is under the misled belief that there isn’t enough money in the economy today.
The nine members who voted for these policies ignored a huge source of money that is available, but lacks the impetus to spend. As has been widely reported, corporations are sitting on approximately $1.8 trillion in cash assets. That equals about 12% of estimated GDP for this year – or nearly double the economic “stimulus” spent by the federal government since 2008. Those huge cash reserves, if invested back in the economy, would represent the most effective stimulus possible, since those funds would be directly spent on investment, including capital expenditures and employment. But by depressing interest rates, the Fed is holding down any incentive for businesses to invest.
This point was brought up by Thomas Hoenig, the one member of the Fed Board who didn’t vote to hit the panic button. (Told you I’d get back to him). In a nutshell, Hoenig is worried that by depressing interest rates while pumping more money into the economy, all the Fed is accomplishing is creating another bubble. Nobody is prescient enough to tell you what industry that bubble will encompass (my guess is health care), but it’s certain to come. As Hoenig pointed out, in 2003 the Fed took similar actions – and gave us the housing bubble, which led to the current recession. In 1997, the Fed took similar actions – and gave us the tech bubble.
It can be argued, and perhaps rightly, that the Fed’s overzealousness in 1997 and 2003 was warranted, since monetary policy was the best option for jump-starting stagnating economies. There is a major difference this time around, and that difference is the vast cash reserves companies have built up during this recession. The Fed’s current monetary policy is a huge disincentive for those companies to invest in what are typically long-term assets with high immediate and near-term costs; namely people and equipment. How? First, by limiting inflationary pressures, there is no reason to invest cash into something that will lose value in the near-term. Once inflation does kick in (and it will; the amount of money currently floating around plus artificially depressed interest rates guarantees it), every dollar invested now loses value not only through depreciation but also in the natural devaluation that comes with inflation. (If inflation were held at the Fed’s target rate of 5%, a dollar today would only be worth 95 cents next year). It makes much more sense, from a business perspective, to invest that money into something that almost certainly will appreciate in value. It is the mindset that explains the stock market’s insane gains this year.
So what should the Fed do? I argue the Fed should look for ways to take money out of the economy – raising interest rates and selling those securities it purchased over the past 2 1/2 years. By thus shrinking the money supply, those business currently hoarding cash are forced to begin spending again. Why? Cash flow is the lifeblood of business. Right now, business can ignore normal consumer markets because they’re making huge profits by investing their capital in the stock market, in many cases buying back their own stock and driving the prices up, ensuring positive cash flow. Once the excess cash is removed from the economy, the financial markets will react as they always do to inflation: prices will drop and indices will decline, drying up the current avenue for establishing business income. Those same inflationary pressures will force businesses to reconsider investing in long-term capital – investing their cash before its purchasing power declines.
Unfortunately, the Ben Bernanke’s and other Greenspan disciples (including the Treasury secretary) are not of a mind to engage in this type of monetary policy, fearing that jump-starting the economy by raising inflation will result in the type of over-inflation from the 1970’s and wind up uncontrollable. Oddly, many left thinking economists (notably Paul Krugman) are like-minded, although they prefer government spending over monetary policy to pump more cash into the economy. Either way, I can’t help but wonder if they’re seeing the same economic landscape those of us in the real world see. Oh, and if they realize that the policies of “priming the pump” we’ve pursued for the past 2 years haven’t worked and may very well have pushed the real economy off the cliff.
My biggest fear is they don’t see it – and they’ve taken the very social order of the first world with them in their mad dash chasing after rainbows.
Joe Fed Makes Twice What You Do (and for Doing 1/2 the Work)
More depressing news from Washington. According to this article in USA today, if you work for the federal government you’ll earn; er, make about twice as much as if you worked in the real world.
I did some back of the napkin calculations to see how much money that wastes in a year, even assuming we need all of those federal workers. (I don’t think we do, but until we get the private sector hiring again, leave ’em where they are). The number is…staggering. This is based on the average fed worker receiving $121K in annual compensation, the number specified in the article.
(Number of federal employees x $121,000) / 2=estimated overpayments
(2,150,000 x $121,000) / 2 = $130,075,000,000.
That is 130 billion, 75 million dollars.
Or, as my dear departed Granddad would say, “that’s a shitload of samoleans!” (I never really found out what a “samolean” was, but I always assumed it was something mean that traveled in big packs – like government employees).
I don’t know about you, but if the Keynesians want to spend some government dough around, I’d suggest they have a way to pay for it without adding to the debt. Simply tell all those federal employees they’re getting a 50% reduction in pay. It would also accomplish something else: all those beauracrats would actually begin to understand what it’s like to take drastic pay-cuts, only to see your job disappear 6 months later.
We can only hope…
Time for a New Consensus
One thing is becoming painfully obvious: the way we, as Americans, view economic opportunity is out of step with the way the world operates today. It is time that we recognize this and address it in a positive manner, without the political fire-bombing that is hurled daily on both the left and the right.
The left is stuck with an early 20th century Keyensian view of economics. I’d argue that particular view didn’t really work then and won’t work today. Massive infusions of government capital during the 1930’s into public works projects did build some marvelous edifices, such as the Hoover Dam, but did not absolutely nothing to end the Great Depression. America didn’t return to full employment until the advent of World War 2 – the result of increased war production and more than 10 million men entering military service. Once the war ended, the economy again returned to near-Depression era levels of unemployment. What finally proved the cure for the economic ills of the 1st half of the 20th century was that in the post-war period, only the US remained capable of providing the goods and services needed by the world. It was an export economy, fueled by international demand, which put America back to work.
The right seems permanently wed to supply-side economics. Strict adherence to that model might have worked, but we’ll never know. While government receipts during the supply-side era (1981-2008) outpaced inflation by (See fig. 1), government spending at all levels increased at an even more dramatic pace, leaving us with unsustainable levels of debt and continuing government deficits – and a seemingly insatiable public demand for services that we cannot afford.
Fig. 1
The current model being followed is a strange amalgam of the two diametrically opposed economic philosophies, with government interventions and expanded spending coupled with “targeted” tax breaks. In one sense, this new model has worked: businesses are sitting on a virtual mountain of cash. But in a much larger sense, these haven’t worked to stoke the economy – and for one simple reason, the demand needed by businesses to invest that capital doesn’t exist now. Employment data continues to remain bleak, representative of the fact that businesses are not investing in human capital. Part of the reason is undoubtedly tied to regulatory uncertainty, since anyone running a business needs to properly plan and account for the funds allocated for human resources. But that uncertainty alone cannot account for the downward pressure July’s economic data displayed on employment.
What is needed is recognition by both those on the right and the left that a new demand model is required for our current age. Modern technologies have made many labor-intensive occupations of the late 20th century redundant. Cloud computing and SaaS technology reduce the need for office and technical staffing, closing off two of the high-growth industries of the past 30 years. Manufacturing tasks that once required dozens of people can now be fully automated, with only one operator required. (Just last night I watched a documentary on Zippo lighters – the entire assembly line only needs 5 people to run it; a perfect example). Even many low-wage jobs have been replaced – the other day I went food shopping. No cashiers were available; the entire checkout line was self-service with two people running 20 checkout lanes.
In other words, there are two possibilities now facing the country:
- Current unemployment levels are now the “new normal” and a return to sub-5% unemployment is unlikely. In this event, the current social services are inadequate and need serious revamping. Unemployment insurance as currently exists needs to be discarded, replaced by a system that is more proactive in returning the unemployable to the workforce while ensuring that people are not discarded like yesterdays news. Such a program needs to be structured so that chronic unemployment and other abuses are not permitted. In short, in such a world, unemployment services should not be a state duty, they should very much be a federal-corporate symbiosis. It is impossible – and against a state’s interests – to train somebody for employment opportunities in another state, but it is in a company’s best interest to do so.
- Current unemployment levels are an aberration; a temporary result of career displacement due to a technology upheaval. Such upheavals have occurred before and the nation weathered those storms, most recently in the late-1970’s as the nation shifted from a manufacturing base to a services based economy. In this case, the government needn’t do much of anything, except make career retraining available and mandatory, in order to continue receiving unemployment insurance payments. Once, that is, the new employment needs are identified.
I’m not going to pretend I’m smart enough to know which of the two scenarios is correct. What I do know is that until we begin to honestly discuss them, no action can be planned or undertaken. But as I mentioned at the top of this post, neither side seems ready to abandon decades-old dogma. I doubt either will over the next 90 days, as we begin a new national election cycle and both sides seem to only care about scoring political points by feeding raw meat to their adherents.
It’s up to the American people to put aside our natural inclination to fear in uncertain times and force our political leaders to engage in an honest discussion of the situation. And if they won’t?
Then it’s up to us to replace them this November with people who will.
Show Us, Missouri
Tomorrow is primary day in Missouri. Though I live in New Jersey, there is one item on the statewide ballot there that has captured my attention. If you live in Missouri, I certainly hope you’ve studied Proposition C and plan to vote for it. Missourians, this is your opportunity to show the rest of the nation that government intrusion on the personal liberties of Americans will not be tolerated.
For the uninitiated: Proposition C is a ballot measure that would, by statute, exempt all Missourians from the oppressive federal mandate to purchase heath insurance or face stiff penalties. By its passage, Missouri would send a message to the folks in Washington that Americans do not want the government subverting personal liberty in order to cover for a mess the federal government created. Although other states have enacted similar measures, those have been passed by legislative action – not by direct vote. With this ballot initiative, the good people of Missouri have the chance to show that it isn’t only legislators who are opposed to the “progressive” ideal that the Nanny State knows what is best for you and your family. It is ordinary Americans who are opposed to an usurpation of the long-established tradition that “those rights not especially enumerated in the Constitution are considered as belonging to a free people…The powers delegated by the proposed Constitution to the federal government are few and defined.” James Madison wrote that phrase in the Federalist Papers, and he meant it to illustrate to a skeptical populace that the federal government would not and could not take away a fundamental freedom simply because it had not been mentioned in the Constitution.
Certainly, decisions about which types of products to purchase are a fundamental right. Should the federal government assume he power to direct the citizenry to purchase a particular product (in this case, medical insurance) then our nation has ceded the a fundamental right. More, the nation will have undermined the very Constitution and the principle on which the nation was founded. If you do not have a fundamental right to decide when, whether and how to purchase any product, then are you truly free to pursue life liberty and happiness?
The Obama administration realizes the fallacy of their central argument during the run-up to passage of Health Care Reform; that essentially, the Commerce Clause grants this power to the federal government. This is why, in their preparations for the defense of the indefensible in court, they have resorted to declaring the mandate is essentially a tax – a power that is reserved by the Constitution for the Congress. If that is the case, then this is the largest tax hike in history and also paves the way for a federal take-over of the entire health care industry. In short, the Obama administration is trying to lay the groundwork that by declaring medical insurance is a de facto tax, then those who provide that product are, in essence, appendages to the federal government. To anyone who has any concern about personal freedom, this is an affront to the very ideals of national identity.
Already, the “progressive” forces are hard at work to discredit Proposition C’s passage. They are making numerous and rather spurious claims that its passage are only due to an intemperate electorate that will be heavily Republican on primary day. They are claiming that it will not hold any import, since a state law cannot supersede a federal mandate (this, by the way is currently winding its way through the court system and is certain to end in a decision by the Supreme Court).
What “progressives” are afraid of is a state law, passed not by legislative fiat but by popular vote, that directly tells an over-reaching federal government it has overstepped its bounds. The reason is, as always, the ideal of progressive theology is that individuals are not intelligent enough to make sound decisions and only an apparatchik of federal authority should have such authority. It was this very notion, in the past called “monarchism,” that both angered and frightened those that created our nation from the dust of their boots. It is the same principle applied by socialists and communists in defining the role government.
So Missouri: pass Propostition C. Do it in overwhelming numbers. And show the rest of us that our nation still exists for the purpose of guaranteeing the ideals of liberty and freedom.
You can read the full Proposition here.
Obama’s “View”
In case you missed it, Barack Obama finished the job started by Bill Clinton and completely sunk any credibility in the Presidency this morning. Yes, he made a guest appearance on ABC’s The View.
(For those of you who have actual lives, The View is a daytime talker hosted by 5 ancient would-be stars, who spend copious amounts of time kvetching that the World Doesn’t Conform to their Liberal View. Riveting television it isn’t, unless you’re one of those unhappy souls who likes listening to your mother-in-law for hours on end.)
Since I didn’t really have anything better to do, I sat and watched what passed for an interview. I mean, I could have spent the hour pulling my toenails out with tweezers and had more fun, but I thought the President might actually say something insightful. Or witty. Heck, I’d even have settled for pithy. You know how every once-in-a-while, a pitcher will toss up an “eephus” pitch and the batter will swing and miss the 50mph offering? That’s what I felt like I was watching. Question after question, the Venerable Ones would toss the One a softball. And question after question, the One would swing and miss. It was worse than watching the really fat, drunk guy at the company softball game (you know the one – the guy who falls down after every swing).
I realize the MSM will be talking about how Obama used the forum as a way to talk about how well job creation is going, how his handiwork saved the country from financial ruin and about how he loves his family. But you know what I heard, over and over again? A President who is so full of himself, he can’t understand why the United States of America isn’t simply jumping on his gravy-train to freedom. He never missed an opportunity to complain about how he’s being mistreated by the opposition; about how the media is constantly blowing things out of proportion and how stupid all of us out here in the heartland must be. He made one paean to the fact that the economy sucks – I forget the exact wording, but it was something like “I realize that Americans are hurting because I read their letters every night” – but quickly said that the economy would be so much worse if not his profligate spending. He mentioned that there are real differences on basic issues such as the role of government, but tried to sweep them under the rug as being personal attacks on his person.
Sorry, Mr. President. Before this appearance, I questioned your policies, but never questioned your intellect. But now I’m left wondering if the Nation didn’t somehow elect the most narrow-minded idiot we’ve had in the White House since Benjamin Harrison.
Political Baseballs 
