Rangeling up Some Cash

The Wall Street Journal says that Charlie Rangel has “won the personal lottery.” Rangel, Chairman of the Ways and Means committee, is now being investigated for failing to report up to $780,000 in income and assets.  Those who defend Rangel claim that this was an accident. But Larry Kudlow wants to know how it is possible that someone does not know he has a $500,000 checking account.  I'd like to know too!

It is, of course, possible that Rangel made a mistake (or rather, several mistakes). But even if that is all he did, his actions have serious implications for the healthcare debate. The Democrats and their supporters have been trying to convince skeptical voters that the government ought to be trusted with running America’s healthcare system.  Some have asserted that the only problem with governmental authority has been that Republicans have had it. The Rangel case proves conclusively that neither of these things is true.

If Rangel made this sort of colossal mistake accidentally, he is incompetent.  Rangel should be able to understand these things. He is a lawyer, who the Democrats have put in charge of one of the most powerful positions in congress. Was this wise? Not at all. And this is not the first time the Democrats have put someone tainted by financial improprieties in charge of critical financial decisions.  No one has yet forgotten Timothy Geithner.

There is, of course, also the possibility that this was not a mistake. If Rangel purposely failed to report his income and assets, then he clearly believes in one law for the governors and another for the governed. Can we trust someone with that sort of view to make the best decisions for us? It would be hard to argue that we can.

Comments

[A.I.]

FAULTY LOGIC ALERT: KB says, "The Democrats and their supporters have been trying to convince skeptical voters that the government ought to be trusted with running America’s healthcare system. Some have asserted that the only problem with governmental authority has been that Republicans have had it. The Rangel case proves conclusively that neither of these things is true."

Point one: Quite aside from any logical fallacy, no current proposal would have government running America's entire health care system, or even the insurance component. Service providers remain private and private insurance is not banned.

Point two: Rangel is not "the government". While he is quite influential, he still is only one member of one branch of a government that also includes a massive unelected bureaucracy. There are checks and balances to minimize any negatives effects he might have. So saying one should mistrust government because of Rangel (if he is guilty) makes about as much sense as saying one should not trust the investment industry because Bernie Madoff was a crook.

Point three: Rangel's personal foibles have not been show as translating to failure in exercising his legislative authority any more than Richard Nixon's problems prevented his foreign policy achievements. However, believing government can't do anything right, as so many Republicans do, is hardly a basis for establishing or maintaining successful programs or proper execution of government authority. So Republican's could logically be the "only" problem with government authority if only Rangel is used to assert they aren't.

Of course that last is just a problem with logic. In fact, there are other problems with government authority and with corporate authority. Government offers some balance to corporations and fortunately, the bureaucracies running many of the programs Democrat's have instigated are quite insulated from day to day politics.

[A.I.]

FAULTY ATTRIBUTION ALERT: I didn't notice Miranda wrote the piece. My apologies to both she and KB.

[Miranda]

A.I.:
Thank you for your comments and for the accidental compliment.

You are right that Obama's plan does not officially turn America's insurance companies public. However, it allows the government to dictate how the insurance companies must act and who they must include. Under "America's Affordable Health Choices Act", the Secretary of Health and Human Services appoints a Health Choices Commissioner who is responsible for deciding for the insurance companies everything from what the word "dependent" means to them, to which "risk group" every person is a part of and how premiums must be restricted and raised. Private or not, the government is given a great deal of control over the industry and the entire healthcare system.

Perhaps the most disturbing aspect of the plan is that it places so much power in the hands of so few. Now, this might be alright in some cases. If we were dealing with Plato’s “benevolent tyrant”, maybe this legislation would be just fine. But a benevolent tyrant is supposed to act in interest of his country, not in his own self-interest. Can we trust the Democrats to appoint this kind of person?

No. They have made Rangel not only Chairman of the Ways Committee, but also Vice Chair of the Joint Committee on Taxation. And he has been guilty of tax improprieties before. The Democrats should have wised up by now. They did not. Rangel is not the only Democrat with this sort of problem. Daschle, Richardson and Geithner come to mind. We can’t count on the Democrats to make wise decisions all the time, so I believe that allowing them to place so much power in the hands of a handful of people is wrong.

I suppose my complaint ought to be broken into two parts. I do not trust the Obama administration to appoint competent, ethical people to positions of power and I do not trust the Democratic congress to design a fair and ethical healthcare plan. Especially not when one of the top tax crafters fails to abide by taxation laws.

Rangel’s “foibles”, as you say, may not reflect on his management abilities, but they do reflect on the competencies of his counterparts.

[KB]

A.I.: Your resourceful defense of wayward Democrats reminds me of an old Russian joke. Your version goes: Democrats are never guilty of misconduct. When they are guilty, it is okay because it's never illegal. When it's illegal, it's okay because its never relevant. Should it be relevant, then see number one.

I was having a bit of fun with you there, but I might have a point. I agree with you that Wrangle "is not the government." No, but as Miranda puts it, he is a rather powerful member of the majority party, and party which does itself no credit by protecting him. I suspect that this habit of Democrats has cost them a great deal. If the Democrats in Congress has laid down the law for Bill Clinton after his first bimbo eruption (Jennifer Flowers), and said: we will cover your butt this time, but never again, maybe he wouldn't have felt like he could get away with anything. He did, and wasted an enormous talent and unprecedented opportunity. I think this proves there is a God.

But you also say this: "saying one should mistrust government because of Rangel (if he is guilty) makes about as much sense as saying one should not trust the investment industry because Bernie Madoff was a crook." I'm sorry, but the latter makes plenty of sense to me! One Bernie Madoff does deep and maybe irreparable damage to the investment industry. Imagine for a moment that Madoff were protected from prosecution and kept in business by friends in the Executive and Legislative branches of government. How much confidence in the investment industry would that inspire?

One Charlie Rangel kept afloat by his colleagues clearly does undermine both confidence in the majority party and in their vast projects. It gives fodder to conservative critics and reinforces the skepticism most Americans have regarding Congress as a whole.

Also your qualifier (if he is guilty) suggests an aversion to the reality of the case. Whether Rangel is guilty of a crime is not the point. The fact that he is now rapidly revising his story is the story. There is no reasonable doubt that Rangel has been playing fast and loose with the rules.

[A.I.]

KB, I think you confuse irrelevant with germane. Using my previous example, Watergate certainly was not irrelevant in terms of maintaining trust in the Nixon administration. At the same time, it was not germane to opening relations with China--an undeniably monumental breakthrough in American foreign relations. So a flawed President that ultimately resigned over misdeeds was none-the-less able to accomplish great things while in office.

Rangel may well be as flawed as Nixon. As with Nixon, his party is defending him now, but that may not last. If enough credible, damaging information surfaces, some will break ranks and again like Nixon's, Rangel's political career will be over. But none of this means Rangel, while in office, can not play a positive role in health care reform.

The whole point of this discussion boils down to a question of "Who ya gonna trust?". Defacto to what you Miranda and you KB argue is that only the health insurance industry should be trusted. You say tax evasion, promiscuity, and other illegal and/or unsavory activities by some officials in government mean it can't be trusted in a management role. In fact, we know some folks running the private sector are no less imperfect. So applying your logic, we can trust neither.

That may be a fairly reasonable position to take. If so, would it not make sense to pit government and private against each other with the expectation that competition will keep both relatively honest? And does that not sound more than a little like what is being proposed with the so-called public option?

[Miranda]

Dr. Blanchard: Thanks for weighing in. When I've thought of things Bill Clinton might do, proving God's existence never crossed my mind.

A.I.: The fact that someone does not trust the government does not mean that he trusts the insurance companies. It is possible to be wary of both. But I think that the substantially more corrupt than most of the companies in the industry.

The burden of proof is on the government in this case. If the two entities are equally corrupt, why waste money substituting one for the other? If the insurance companies are even slightly less corrupt than the government, then we ought to stick with them. I believe that the insurance companies are far less corrupt than the government. And because it your side that wants change, it is your duty (or at least, that of the government) to convince the people that the new system will truly be better and not worse.

[A.I.]

Sorry Miranda, but you saying the government bureaucracy is corrupt does not make it so. Thus, the bureaucracy has no burden of proof as you put it because you are basically saying they are guilty until proven innocent. In fact, it's your job to prove them corrupt. And I don't mean the isolated member of congress or appointee, I'm talking agencies (the bureaucracy itself) being corrupt.

There are examples of industry corruption, but it may surprise you to know I don't consider that the major problem with the current system. Rather it is poorly regulated for-profit entities operating in a non-competitive environment. The big insurers have divided up the country in a fashion reminiscent of the mafia of old. Each has a near monopoly on it's own area of the country. Rather than bargain for lower prices from providers, they pass higher costs on to the insured. Instead of striving to provide more for less as happens when there is competition, they provide less for more as in imposing exclusions for pre-existing conditions while increasing rates on the basis of risk factors.

All of this would be corrupt is there were rules against it. And the problems with the current system might be corrected to some extent by establishing tougher regulations as KB has suggested. But, it seems to me introducing a nationwide competitor setting higher standards would be far more effective. Thus, the public option.

If you think my purpose is to demonize the health insurance industry, you are wrong. What they are doing is what business is supposed to do: with few exceptions, they are using all legal means available to maximize profits. That includes lobbying the heck out of congress to keep the current system intact or even make it better for themselves by adding customers. And quite frankly Miranda, you play right into their hands.

[Miranda Flint]

A.I.: Fair enough, but, then, neither does you saying that the insurance industry is corrupt.

I believe that bureaucracies are inherently corrupt. That is my opinion, but it is based on observations.

Examples of governmental corruption are all throughout the news. A Google News search for “bureaucratic corruption” turns up thousands of stories. Here are a few of them:
There is, of course, the case Blagojevich (http://www.foxnews.com/politics/2008/12/09/report-illinois-governor-taken-federal-custody/)

Then there is the case of the Miami-Dade County Commission (http://www.time.com/time/nation/article/0,8599,1919916,00.html?iid=tsmodule)

And the corruption in the Racine County child-care fraud case(http://www.jsonline.com/watchdog/watchdogreports /56276582.html)

These are just a few of many. Perhaps I am cynical, but I believe that, if there are any pure bureaucracies, they are the exception rather than the rule. What assurances do we have that Obama’s bureaucrats will behave in a more ethical manner?

High school debaters are taught that when they build their cases, they must prove not only that there is a problem with the status quo, but that their plan would offer a significant advantage over it. I have seen some evidence that some insurance industries are corrupt, but I have seen nothing that shows that Obama's plan would offer any sort of significant advantage over the status quo. I think the president should be able to defend his plan as well as, if not better than a high school student.

The presumption of innocence is meant to apply to individuals in criminal cases. We are not conducting a criminal trial here, nor are we trying an individual. Rather, we are discussing the nature of government and the evidence of corruption in it. I can’t prove that this particular bureaucracy is corrupt, because it has not yet been created. I can only look at the behaviors of its creators and the examples of similar governments. I have done that, and corruption runs rampant through both.

Creating stricter regulations might be effective in preventing corruption in the insurance industry. Turning power over to an organization that is likely to be just as corrupt as the insurance industry, (if not more so), does not seem to me to be a very good alternative.

[A.I.]

Your own links above (only the second two work) would argue against stricter regulation as a solution Miranda.

I too was a debater in High School and for a little while in college. If paying upwards of twice as much for care as countries with a combination of public options and private plans or single payer qualifies as a problem, then there is need to move away from the status quo. If being on a cost trajectory that will soon make medical costs more that 20% of GDP is a problem, we need change. And the list goes on. So, whether you want to admit it or not, the status quo sucks compared to what is being done elsewhere.

Part two of the debate challenge is to offer alternatives that fix or at least reduce the existing problems. In the broad sense, it should be obvious that public insurance works. Despite anecdotal flack spewed by the Right and any corruption in their systems, the rest of the industrialized world is getting comparable care for less money while insuring virtually their entire populations. Medicare has given seniors in this country the kind of decent care and emotional security common to all citizens of countries that guarantee universal access. In short, a public option has the capacity to rein in costs while establishing universal access.

Next part of the debate, lay out alternatives that would achieve these goals more effectively and/or economically.