When Something is Worse than Nothing

Is there anything more universally appealing than helping disadvantaged kids? Is there anyone so heartless that if asked would they support reforms, programs, investments, that help kids born to difficult and challenging circumstances that they would answer "No"? I suppose somewhere there is, but no one I know. No matter what side of the political isle one sits or straddles, helping kids rise out of a tough circumstance is laudable, moral, and simply the right thing to do.

Now comes the punch to the stomach. If we really want to help poor kids, I think we should scuttle the Head Start program. Born in 1965 as part of the Great Society, the Head Start was intended to be a poverty fighting tool working to ready low income kids for kindergarten. Head Start has been reauthorized and expanded over the years. Over 20 million kids have participated in Head Start programs. The unfortunate reality for Head Start is that it doesn't work. Studies for decades have proved this point. Most recently a 2010 HHS study clearly showed that the impact of Head Start on the achievement of its participants is fleeting at best. This is only one of many studies over decades that have consistently shown that Head Start has no meaningful impact on the achievement of disadvantaged kids. Yet we continue to spend billions.

Now comes the unfortunate reality of politics today. How would you like to run for office with a plank of your platform to defund Head Start? Can you imagine the outrage? I can only imagine the insults that would be hurled your way. No campaign for office could suceed by promising to defund Head Start. It makes me cringe just thinking about the media outcries and vilification that would ensue. But ending Head Start is exactly what we should do...just not right now.

Here's my gripe: we spend billions in federal money to help kids who desperately need help, and we get no results, we don't help the kids in any substantive or sustainable way. So we all feel better about ourselves because we fund Head Start to help disadvantaged kids, but at the end of the day, the kids we want to help are no better off than when we started. This is tragic, not in the wasted funds but in the outcomes for the kids.

What to do? I am a big believer that if you raise an issue or have a gripe, you need to have a suggestion to fix the problem. I don't know how we solve this problem. I know that we spend billions annually to help kids who really need it, and they get no help. The opportunity cost of these misallocated funds is huge in terms of wasted funds, but staggering and tragic in terms of lives that are not advanced and kids continuing to go wanting. I think that's why we don't defund Head Start right now, but rather we set a date at which time we defund Head Start - two years, three years down the road so we have a hard deadline, and then we start working on alternative uses for the Head Start funds that actually might help the kids to which they are directed. We can't do any worse than we are doing today as studies show that any gains for Head Start kids are gone by the end of first grade. The down side is pretty flat on this one. Give the families vouchers for regional schools and programs, hold the funds for vouchers for college as a carrot to get through school...I don't know the answer, but I know what we are doing today is a double whammy against the kids we are trying to help. They kids get no help and the pressure is off the rest of us to solve the problem because Head Start is fully funded.

BTW, let's not just pick on Head Start. There are a multitude of ineffective federal programs that cross the idealogical spectrum that need to go through this same process. Teen pregnancy prevention programs, smoking cessation programs etc, none of which solve their intended problems, but we keep shoveling cash out the door, feeling better all the while that we are doing "something".

I hate the cliche, "something is better than nothing." I think we can prove that incorrect with Head Start and other well-meaning federal programs. "Something" is worse than nothing when "something" delivers no results, wastes scarce funds, and take the pressure off finding an actual solution. I think we can do better than "something".

The President from the Faculty Lounge

What happens when the lofty ideas of the faculty lounge are turned loose into the semi-free market? You get a trainwreck. This most recent trainwreck is called Obamacare. It is shocking to me how many people seem to be surprised that the rollout of the Obamacare has been a disaster. Even more baffling is the surprise of people who are just figuring out that this was a terrible implementation of a respectable and decent societal objective.

Despite what Obama, Debbie Wasserman-Schultz, Chuck Schumer, and the other democrat propagandists say, republicans and libertarians to not want people to lack for the basic necessities of life. A social safety net for those who are down on their luck, made a couple of bad choices, or were born into circumstance that was less than positive is a good thing, a moral thing, and a decent thing. However, there are many means to provide a social safety net and central planning from the federal government, as we are seeing to the dismay of many, is probably the worst way to provide most any social service beyond the military, the supreme judiciary, and interstate highways.

What the faculty loungers like Obama and his inner circle of government loyalists fail to realize is that they might be the smartest folks in the room when they are in the classroom or the faculty lounge, but when they get into the real world where people and organizations have to compete to survive, where tenure equates to the coming two weeks for your next paycheck, meeting next month's payroll,  or making next quarter's earnings report, there are thousands, maybe millions of people as smart or smarter than they are. When grandiose central plans, created by a select few of like-minded minions with swanky diplomas are released into the wild, they set the rules of of the road, the limits of the game, and millions of smart, motivated people who don't have tenure or fat government pensions start figuring out how to work the new rules of the game to their advantage...how to win playing by the new rules.

Therefore, it is shocking that the Ivy Leaguers who wrote Obamacare were caught off guard when thousands of companies started limiting employee hours to under 30/week to avoid the costs of hiring or holding full time employees as dictated by Obamacare. What did the central planners think was going to happen? Companies are in business to make money, to win, to succeed in a brutally efficient market place. If there is a way to avoid costs that is not only legal, but rational, then guess what is going to happen? A room full of faculty lounge smarties and government lackeys will never outsmart a market of motivated entrepreneurs. Never. So there will always be unintended consequences as a result of the most well intended plan which will doom it to absolute failure - 100% of the time, given enough time. Obamacare is the most recent and public display of this reality. The ridiculously complex system intended to provide the sick, the poor, and the uninsured with healthcare had no chance to work. Ever. Obamacare proposed to cover 30M uninsured Americans, eliminate lifetime limits on insurance policies, and save the average household $ 2500...all at the same time? On paper and over a latte in the faculty lounge, I have no doubt that this makes perfect sense. However, in the world of rational consumers and smart business leaders, at best it is a bad joke, at worst it is a total failure with lasting negative ramifications on both healthcare and the economy.

It is clear from his statements and actions that Obama thinks he is the smartest guy in the room. Based on what we have seen from his administration on policy, I hate to break the news to him, but I'm not sure he's even the smartest guy in the faculty lounge, but I have no doubt he thinks he is.

One Party Rule...and What a Party!

I suspect that John Boehner and Barack Obama genuinely dislike each other. I also image that Harry Reid and Mitch McConnell hold real animus towards each other. It is hard to find much to like about Nancy Pelosi and I expect that she and Eric Cantor justifiably hold each other in high disregard

All of these people sit on different sides of the isle and hold differing views of what is best for America, but you know what? They are all living it up at the same party. They publicly banter, they put on grand shows of disdain for each other to convince the media and their constituents that they are fighting for our best interests, but as Michael Corleone said in The Godfather Part II, they are all part of the same hypocrisy. They are living the fat life inside the beltway, enjoying unimaginable perks and benefits while they build their net worth. While Harry Reid is certainly most dislikeable and likely corrupt, I only single him out as an example because I just recently read this troubling fact. When Harry Reid was elected to Senate, his net worth was roughly $ 1.3M. After 4 terms and counting in the Senate, Lord Harry’s net worth now exceeds $ 10M. Really? How did that happen? I wonder who his investment advisor is? Let’s face it, we all know what Senator Reid makes in salary every year, so his net worth has not growth exponentially because his is maxing out his 401K…and all of this is before Harry leaves the Senate and really cashes in as a lobbyist on K Street where the real wealth is earned after political life ends.

Do you know why democrats and most republicans hate Ted Cruz? It’s not because he is standing firm in opposition to funding the train wreck of Obamacare. It’s because he is threatening to end the party, close the bar, and stop refilling the trough at which all of our senators and representatives feed. He is talking common sense to people who lost theirs many elections ago. The fiscal path we are on as a country is one that eventually ends in collapse. It might be next year, it might be next decade, but the end of the play is the same…everyone gets financially slaughtered. However, our leaders in the house and senate are stuffing cash in their pockets as fast as they can, building their net worth, living high on the hog. Ted Cruz is threatening to knock over the apple cart, so everyone on the Hill hates him.

I don’t agree with Ted Cruz on social policies and as the darling of the “value voters” I am a bit leery of Senator Cruz. However, I would like to shake his hand and thank him for showing us the courage that used to abound in Washington and throughout the nation many decades ago, before the objective of government became handing out as much to as possible to as many as possible whether they are large, profitable corporations or truly deserving needy folks down on their luck. Ted Cruz wants to reign in an out of control spending binge in Washington and endure the bumpy ride now before the world drowns in a sea of debt and worthless currency. His colleagues on the Hill don’t like it because it threatens the life they have all come to love and to which they feel entitled. I am sure the party in DC is a great one. It is clearly a profitable one, but it is also one that we can no longer afford.

Thanks Ted Cruz for taking a stand. I am sure you got scratched off the invitation list for many swanky DC Christmas Parties this week. Good Job.

The Joke Where No One Laughs

The joke where no one laughs, the comedy that's not funny is taking place inside the beltway and is being played in prime time by the national media.

Apparently, a "cut" of $ 54B of planned expenditures is going to cost is 2.4M jobs and a point of GDP. It is going to render the military incapable of defending the country. Food inspection will cease threatening our food supply. The FAA is going to close towers snarling air travel. Head-Start (which should have been cut decades ago) will be defunded, Federal free-lunch programs will be sacked, and apparently education will grind to a halt. Wow! Who knew the ferderal government could do so much with a paltry $ 54B. I wonder what they do with the rest of the $ 3.75T they spend?

Here is the reality. In 2007, federal spending was $ 2.7T. In 2013, federal spending will top $ 3.8T. The US population in 2007 was 301 million souls. In 2013 the US population is estimated to be 313 million. So, the population has grown by 4% and budget spending has grown by 40%. That's the problem, and it's no joke. Led by the president and his croanies, the beltway gang has spent us into oblivion. The angst over cutting $ 54B of planned spending would be laughable were it not so over-blown and pathetic.

Unfortunately, absent dramatic change (and increasing taxes on achievement again is not part of the solution) the end of the comedy turns tragic. Absent considerable spending changes, the US economy will collapse. It's going to be a trainwreck. The only question is when. Is it next year, 5 years, or 15 years? I don't know the answer to "when" the collapse will happen, but there is no question about the outcome given our current course and speed.

I know how much Obama worries about his legacy. It is unforunate for all of us that his legacy is going to be the president who dismantled and crushed the greatest economic engine, the greatest creator of wealth the world has ever known. I wonder if they will teach this in federal pre-K?