another rant on the smoking prevention act

Let me quote H. R. 1256 title II section 201:

Directs the Secretary (of Health and Human Services) to issue regulations that require color graphics (italics mine) depicting the negative health consequences of smoking to accompany cigarette label statements.

GovTrack.us. H.R. 1256--111th Congress (2009): Family Smoking Prevention and Tobacco Control Act, GovTrack.us (database of federal legislation) (accessed Jun 27, 2009)

Color graphics of lung cancer in a 7-11 store or a Walgreens? That is way beyond the point of unacceptable. 20% of Americans smoke. 20% of Americans are obese. (so overweight it is a major threat to their health. Mainly from Heart Disease, high blood pressure and Diabetes) Is congress going to mandate that Hostess show color graphics of the negative health consequences of twinkies, ding dongs, ho hos, cup cakes and snow balls? That will really enhance the shopping experience for families and children. I have a feeling the tobacco industry will go after this requirement and win.

smoking prevention act redux

One more problem I have with this act is the glaring hypocrisy in both the act itself and in the politicians involved with it. If nicotine is addictive why does the act not allow the FDA to ban nicotine entirely? Alas, I am repeating myself from an earlier post. Banned or outlawed items cannot be taxed. Notice the act allows the nicotine levels to be lowered. This means smokers will have to increase their cigarette consumption to get their daily fix of nicotine. This will increase the tax revenue while exposing smokers to more of the thousands of ingredients in cigarette smoke(several of which are carcinogens and other toxins hazardous to human health). If our politicians are willing to live with the increased health hazards smokers incur in exchange for more tax dollars to spend, it's time for Americans to really wake up and demand better of our elected leaders. It could not get much worse.

When President Obama gladly signed this bill, he said it was to prevent future generations of America's children from picking up the habit. I am a big fan of irony so this statement really takes the cake. He admits to being a former heavy smoker and to "falling off the wagon" since the inauguration. He also said he would not smoke in front of his wife, his kids or in the White House. The reporter he told this to was in a generous mood and did not press him about the Rose Garden, the Presidential limo, Air Force and Marine Corps One etc. Mr. President, America's children are not dumb. They will see it as another "do as I say, not as I do" advice and lose a little respect for you. Good Grief, you promised your wife you'd quit if she let you run for the Presidency. If she can give up her lifestyle and home for 4 years in exchange for being one of the most powerful and influential women in America, You can quit smoking. People do it every day. Chew the gum, wear a patch, get an electronic cigarette.

I have a suggestion on how to manage your stress and lower the urge to smoke. Stop trying to do everything you want done in one year. Don't trust me, read the US Constitution. Unless you're impeached, you've got 4 years to accomplish things. Make this year's goal economic recovery first. To aid this just get one health care reform a done deed. Put a cap on malpractice claims payouts. The health care providers and insurers will appreciate this and might be more willing to help with your other goals later on. The only people who will oppose you will be the American Trial Lawyers Association.

another comment on the family smoking prevention act.

Remember President Obama's promise not to raise taxes on anyone making less than $250,000 a year? What he meant to say was no raises via federal income tax. Unless you have been living in a very remote country or under a really huge rock, you know that our politicians have lots and lots of ways to tax us. The recent increase in the federal tobacco tax is going to be paid by smokers unless they decide to quit. Incomewise, guess who does most of the smoking??? If you say the poor and lower middle class people, you can move to the front of the class. Let me quote Jane Gravelle, senior specialist in Economic Policy Finance and Government Division of the Congressional Research Service. (yes, the US Congress's research service)

It is generally recognized that cigarette taxes are one of the most regressive taxes, that is, a tax that falls more heavily on lower income individuals as a percentage of income.

At first glance, it seems President Obama is defeating his own goals by putting a very regressive tax on smokers. Bear in mind, this report is dated June 19, 2007 before that latest excise tax increase. I then had an epiphany moment. The rationale for the tax increase was to fund the State Childrens Health Insurance Plan. So, the smokers are actually helping to insure their children. Around here, Marlboros went from $4 and change to $5.25 to $5.60 a pack. I am sure poor people have no problem ponying up the extra money knowing it funds their kids health insurance. Way to go President Obama and Congress!!!

To read Ms. Gravelle's report go to http://opencrs.com/ and put order code RS22681 in the search box. The name of the report is "The Cigarette Tax Increase to Finance SCHIP".

A Few Comments on the Family smoking prevention and tobacco control act.

Today, June 22, 2009 President Obama signed into law the family smoking prevention and tobacco control act. Let's review a few of his remarks during the ceremony. I am getting these quotes directly from the whitehouse's blog. Just go to whitehouse.gov and click on the blog.

Obama accused the tobacco industry of targeting young people, exposing them to a "constant and insidious barrage of advertising where they live, where they learn and where they play. Most insidiously, they are offered products with flavorings that mask the taste of tobacco and make it even more tempting."

R J Reynolds agreed to stop this in 2006, so I'm not seeing a whole lot of benefit from this, especially when one of the most popular cigarette flavorings, menthol, was exempted.

Also, the remark about "constant and insidious barrage of advertising where they live, where they learn and where they play." If where they learn means public schools, I do not recall ever seeing a cigarette ad at my grade or high school. ( I got my h.s. diploma in 1971 in Richmond, Va. The home of Phillip Morris) They were not for sale at my schools, kids who smoked had to buy them in stores. Seniors were allowed to smoke on a huge section of an oak tree outside the shop class if they had a note from their parents. Everyone else had to take their chances in the restrooms. My, how times have changed. But alas, I digress.

Mr. President, now that you are a de facto president of Government . . . wait I meant the new and soon to be improved General Motors, will you restrict auto ads aimed at younger people? Think of the lives you could save. Probably none. Let's get real here. With a few exceptions, most products are marketed to younger people. They are the next wave of customers and marketers want to establish brand loyalty with their newest prospective customers. Cigarette makers are providing a wanted product to consumers, just like car makers, insurance companies, banks, grocery stores etc.

I don't smoke. I used to but gave it up when the bad effects of smoking overwhelmed my desire to smoke. This is how most smokers stop. They just get tired of it and quit. I used to work for Social Security. I was amazed at the number of people I interviewed to start their disability benefits for lung cancer who had 2 packs of smokes, one in each shirt pocket. I know some people will smoke until the day it kills them. I cannot stop that and neither will this bill. More to come on this later.

A Few Comments on Health Care Reform

Guess who said this.

And again I will say we must do this together. I pledge to you that I will do my best to see that business and labor and Government work together for a change.

But all of our efforts to strengthen the economy will fail—let me say this again; I feel so strongly about this—all of our efforts to strengthen the economy will fail unless we also take this year, not next year, not 5 years from now but this year, bold steps to reform our health care system.

No, it wasn't President Obama telling the AMA how he was going to reform the USA's health care delivery and financing system within 90 days. This is a quote from former President Bill Clinton's 1993 state of the union address. Due to the secrecy used to cover byzantine health care rationing, "Hillary Care" never came to be. If it had we would have deficit spending every year of the Clinton Administration and a health care system much worse than we have today. Maybe that's why Obama appointed HRC Secretary of State, to keep her out of his attempts to reform our health care system into what he thinks it should be.

Another question. Who was the first president(or presidential candidate) to advocate health care reform. Not Bill Clinton, but Theodore Roosevelt back at the beginning o of the 20th century, not the end of it.

The only change brought on by congress in our health care system was medicare back in 1966. It was part of LBJ's Great Society platform. It was the first government sponsored enterprise (GSE) to deal with our nation's health care financing. Now Obama and Kennedy want another GSE to help reform some of the shortcomings of our current system. Yes folks, you read me correctly. They want a public health insurance plan to compete with private health insurance. They believe this competition will keep private health insurance on its toes and hold down increases in health insurance premiums. Yeah, Right!! When Medicare was introduced most private insurers decided to not offer primary coverage to medicare beneficiaries. They only offered medicare supplement plans to cover deductibles and coinsurance. I doubt this public option, if it is ever enacted, would do what President Obama and his fellow reformers expect it to do.

And one more comment. This public insurance plan sure sounds like it will become for health insurance what Fannie Mae and Freddie Mac are for housing. This makes me hope congress does not enact this plan. If the 70-80% of Americans are happy with their current coverage why are our leaders doing this public plan???
Also, in Kennedy's plan are 2 interesting provisions. One, all employers will be required to cover their employees or pay into a public insurance pool for people who cannot get or afford existing insurance. Second, Medicaid Coverage (basically health insurance for children,the disabled and seniors (age 65+)with limited income and resources) will be provided to all families whose income is less than 500% of the federal poverty level. For a family of four, this is $110,000 yearly !!!

The first question that comes to my mind is this. IF, employers are required to "play or pay" (give their employees health insurance or fund an insurance pool with their hard earned revenues) won't they be more reluctant to pay more cash compensation to their employees? IF so, won't fewer and fewer employees get raises and bonuses? Won't this mean more and more families will make less than 500% of poverty level income? If so, they will also be eligible for Medicaid. Who will be the primary insurer, medicaid or the employer's insurance? If I were an employer, forced to cover my employees with health insurance and found out several of my employees were receiving medicaid coverage as well, I would want to drop all insurance coverage like a very hot potato.

Second question, how will all these draconian and duplicitous measures make our health care system any better? Or, even better how will it make our economy any stronger or better? Every regulatory process (i.e. burden) the government imposes on employers is actually a really great boon to industry...if you are in the offshore outsourcing industry. Otherwise, it is a boon to the unemployment services industry, the welfare industry etc. When and if the congress and the US government finally figure out that many of their rules and regulations discourage business from hiring US workers, then we will get a better economy and with it, an even better health care system.

P. S. President Obama, Rome was not built in one day nor was it toppled in one day. What's your hurry and urgency on health care? You've got 3+ years to accomplish something. 70-80% of Americans like their current health care arrangements and are alarmed and disturbed by the prospects of changes you propose. Every President before had a full plate of issues just as you do. Why not focus on more demanding issues like Afghanistan, Iraq, the Middle East first and then slowly increase your focus on health care. Look at the Bill Clinton quote above. IF the USA managed to get by for 16 years without his calls for health care reform, maybe we can limp through another 16 months for better results. (no changes can be a very good result)

GM's one very small & very expensive step toward economic recovery

June 1, 2009 GM filed for chapter 11 bankruptcy. 6 months ago, GM's former CEO Rick Wagoner said bankruptcy was unthinkable. He said American car buyers would not purchase cars from a carmaker in bankruptcy for fear of loss of warranty support. For the latest on this and other interesting tidbits of info on this monumental bankruptcy, go to GM's official bankruptcy website, www.gmreinvention.com. There you will find reassurances that current GM customers have nothing to worry about, GM asked the bankruptcy court to require continued honoring of all warranties, parts needs and promotions. Even customers of dealers that will not have their contracts renewed have nothing to worry about. Other GM dealers will gladly step up to the plate and fulfill any customer needs. I hope none of the unrenewed dealers were the only GM dealer within a 25-50 mile radius of their city/town. That would create a major inconvenience for existing customers and a discouragement for future prospective customers.

GM also plans to trim its dealerships down to 3600 by the end of 2010. From its 5969 dealers in 2008, this is a 40% reduction. At the end of 2008 GM had 20% share of the USA auto sales. Toyota had 19% share with 1500 dealers in the USA. Either GM is going to increase their market share or further reduce the number of dealers. Only time (36 to 60 months) will tell.

Now, for the really bad news. What can the owners of GM stock expect now. Go to gmreinvention.com and click on investors. This is how GM will respond to investors that try to file a claim with the bankruptcy court:

Why can't stockholders file claims with the court?
The Bankruptcy Code is clear that stock is an "interest" and not a "claim." Stockholders will be
instructed as to how they can establish their proof of interest. If a stockholder does file a "proof
of claim," the company will object to that claim on the basis that the stockholder does not have a
valid claim according to the rules of the Bankruptcy Code.

In 25 words or less, current GM shareholders are toasted road kill. Now we know why diversification of your investments is so important. If any of the GM shareholders are highly dependent on their GM share dividends in their retirement, they are in a world of pain. I hope most shareholders saw the writing on the wall before the US government did and bailed out. Ultimately, the bankruptcy court will decide if the shareholders will get any compensation. Let's face facts, folks. If the GM shares were worth anything, GM would not be in chapter 11. The share price reflects the market's and investors' valuation of the company as a profitable ongoing concern. The only good news for shareholders is if they also have a GM credit card, they will keep the bonus points and use them to purchase their next GM vehicle, if they feel so inclined and can still afford one. The stock of one of the (formerly) largest corporations in the world gets trashed but credit card points remain intact??!! With priorities like these, I no longer wonder how we got into this recession.