Jindal now targeted by national mainstream media

Wonder why the media have been looking at Republican presidential contenders for three years, 11 months from now, and paying quite a bit of attention to Louisiana Gov. Bobby Jindal? The push on to make him the frontrunner way in advance has more to do with the left’s agenda than covering a good horse race.

Ever since Jindal succumbed to the electoral politics bug, liberals have recognized the danger he presents to their agenda. Jindal does not apologize for his conservatism but neither does he come off as much of an ideologue; he articulates it well both at a philosophical level but also in terms that demonstrate its superiority to the typical citizen; and, worst of all from the liberal perspective, his life to date explodes the myths of racism and upper-class warfare that liberals desperately want to con Americans into thinking, particularly when it comes to conservatives and Republicans.

The only missing ingredient that could make Jindal a virulent political force against liberalism, now with its most complete control over policy-making at the federal level in history, is a sustained record of success in governance. A candidate with this quality not only would win a decision in 2012 over president-elect Barack Obama, given that Obama appears at this point not be to wavering from his stated agenda, but would score a Reaganesque knockout of Democrats and liberals.

Smart liberals know two things, that if they really do try to implement their agenda they are going to make quite a mess of things principally economically, and that they cannot allow conservative candidates with credibility who effectively communicate the flaws and internal contradictions of liberalism contrasted to conservatism to emerge to point out the problems the undiluted Obama agenda is sure to bring. As things go sour on many fronts, they have to be able to distort and to distract to deflect the public from making this realization.

If Jindal can establish a good governing record to go along with superior communication, liberals lose. They can’t do much about the communication aspect, but they can try to frame Jindal’s record. And this is where the media, who will provide many willing, if not eager, allies, can come into play.

By focusing on Jindal now, they want to be there every step of the way to control the public’s image of him. This is a longer-term version of the tactic utilized against Alaska Gov. Sarah Palin in the wake of her vice presidential nomination, where because of the compressed nature of the campaign quicker hits with less time for rebuttal from forces outside of the media made her easier prey. With Jindal, they want to be able to spot episodes that potentially can be exploitable to damage Jindal’s credibility, and only through constant monitoring can this be maximized.

History shows that the presumed “frontrunners” in presidential nomination contests often fare poorly, precisely because there is so much attention paid to them that any warts discovered can be emphasized time and time again to fatigue potential supporters. Worse for Jindal, that he is an ethnic minority member and conservative invites, if history is any guide, even more media scrutiny and criticism (such as that paid to another potential GOP presidential candidate of the future, former Ohio Sec. of State Ken Blackwell).

So let’s recognize this mainstream media attention for what it is for many: the opening salvo of a national campaign that hopes to neutralize Jindal as a force to be reckoned with in 2012. Whether he will be able to resist that will depend in part on his political skills, and some may be fortune simply beyond his control. Regardless, the battle is commenced.

Thanksgiving Day, 2008

This column publishes usually every Sunday through Thursday after noon (sometimes even before; maybe even after sundown on busy days) U.S. Central Time except whenever a significant national holiday falls on the Monday through Friday associated with the otherwise-usual publication on the previous day (unless it is Independence Day or Christmas or New Year's when it is the day on which the holiday is observed by the U.S. government). In my opinion, there are six of these: New Year's Day, Memorial Day, Independence Day, Veterans' Day, Thanksgiving Day, and Christmas.

With Thursday, Nov. 27 being Thanksgiving Day, I invite you to explore the link above.

New Big Charity coming, but likely in delayed fashion

Yesterday I referred to the final site selection for the new Medical Center of Louisiana – New Orleans as a “minor victory” for the state, because while it had gotten a commitment from the federal government to provide the money-saving option of intertwining it with a new Veterans’ Administration hospital, controversial work remains to be done that could delay the opening of the advertised state-of-the-art facility past its scheduled opening date of 2013 – perhaps way past then.

First, there’s the matter of the historical structures located in the district, bordered by Canal, S. Claiborne, Tulane, and S. Rocheblave. Only as an extreme last resort could these be molested, so either they must be incorporated into the new facilities and/or campus, or moved. But there are nearly 200 such structures and only $400,000 budgeted for removal, at just $20,000 each. If preservationists and owners are successful in getting, by government acquiescence or judicial fiat, more money to move more things, costs could skyrocket and slow the building down tremendously.

(As practical matters go, the Deutsches Haus should be built around and allowed to operate unmolested, even subsidized, as long as the medical staff frequent it only on their off hours and well before their next shift begins. Better than sending them across the way to the unpredictability of a reconstituted Nick’s Bar, where, if the campus is planned right, parking might actually improve. Most importantly, if done right, parking for the Canal Street parades could improve as well and the city could make a little money from those tired of driving all around Mid-City hours before a parade to find a parking spot leaving an inch of space on both end and a 1 percent chance either it’ll get sideswiped or washed by desperate paradegoers).

Jindal needs to do what it takes to reform health care

The most important thing that Louisiana can do as it stares down a large budget deficit is to reform its provision of indigent health care. While some prepare to address that, others want a continuance of the old ways that threaten the state’s very fiscal health.

Let’s review representative spokesmen in this policy struggle. Department of Health and Hospitals Secretary Alan Levine has argued that in 2009 the Legislature needs to clarify the legislation passed under Democrat dominance in the Legislature and pushed by Democrat former Gov. Kathleen Blanco that tinkered with the existing system. That basically put the state on the hook to pay whatever it was billed that appeared to conform to law, with no real effort to induce efficiency into the system, but, because the state is so involved in health care by direct provision of it through its outmoded charity hospital system, it didn’t really care since the federal government would pay for so much.

The problem is, to a lesser extent the state must match these payments and as Levine as made clear current rates of consumption are unsustainable. The 2007 legislation created a “medical home” concept that would assign the indigent to facilities (many state-run) but that would continue a fee-for-service billing. Levine and his boss Republican Gov. Bobby Jindal did an end run around that introducing a coordinated care regime that would allow only indirect billing by providers by routing everything through administrators of insurance-like plans, who because they must report to shareholders of some kind would have far more incentives to hold down costs, thus potential revenues to the providers. House Speaker Jim Tucker appears sympathetic with his desire to have his members meet with the apparent agenda of selling this idea.

Carrying the water for the current vested interests in the existing system is Democrat state Sen. Joe McPherson, who has interests in nursing homes which make the vast majority of their money off of government. Under the planned regime it would force more efficiency onto institutional providers meaning they must improve their performances and probably would steer business away from them to more community-based solutions. This they do not want because it means more work and fewer revenues. McPherson and his gang want less specificity in the law because then it gives them more freedom to reject what Jindal wants to do and to force their own, static “solution” onto the problem which would not be close to what is needed to improve care and control costs.

But Jindal, if he has resolve, has the upper hand in this contest precisely because of the looming budget shortfall. With a Republican House he probably can expect approval there of legislation steering the state onto the coordinated care track. The Senate, where McPherson plants himself, with 24 of 39 senators being Democrats is another matter. In normal times, it might be tough to move enough Democrats onto Jindal’s side. However, the huge deficit permits Jindal the chance to identify and make severe cuts to programs favored by potential opponents of the overhaul, with the perfectly legitimate rationale of the big deficit, with the ultimate weapon of a line item veto. Enough of those threats, and the nattering nabobs of negativity like McPherson will be cornered into submission.

Today was announced a minor victory for the state, the rebuilding of the Medical Center of Louisiana – New Orleans hospital (“Big Charity”) in tandem with a Veterans Administration hospital that will bring significant cost savings to the state (the proposed structure still might be a little grandiose for state needs and taxpayers’ sufferance, but it seems better than the original Blanco plan that favored the continued inefficient institutional focus of the state’s health care). Hopefully, Jindal will continue on this tack and do what is necessary to get the single most important reform to state policy into law as quickly as possible.

Dynamics give Cao unusual chance to win the Second

Given that Democrat Rep. Bill Jefferson has a tremendous legal cloud over him and the presence of the inspiring story of his challenger Republican attorney Anh “Joseph” Cao in the contest for the Second District Dec. 6, does Vietnamese Cao have a chance to defeat black Jefferson even in a district where half the registered voters are black Democrats, Republicans make up only a little over 11 percent of the electorate, and only a minority of the roughly 7.5 percent that comprise “other” race voters are Vietnamese?

Actually, if you go by the numbers, yes. We must recall that in the upcoming election that now Republicans will be able to vote, and few if any will vote for Jefferson, and that some substantial portion of the vote for his runoff opponent was an anti-Jefferson vote that could transfer to Cao in the general election.

Most Republicans are white, and the statistics show that blacks outnumbered whites nearly 3:1 in the primary, but only 2:1 in the total electorate. Further, Jefferson did experience some slippage among blacks in that primary vote. Looking at precincts (about 20 percent of the total) that were at least 90 percent black and less than 2.5 percent white, the Jefferson vote on average was 10.5 points less than the percentage of blacks minus the percentages of other races and of white, meaning only about 90 percent of blacks voted for Jefferson.

That noted, whether these race defectors would support an Asian Republican is another matter, but surely there are some that would as some of these district showed much lower supports rates for Jefferson, some only supporting him in the mid-60s range. More intriguing is the question whether the other race population will defect in much larger numbers. Analyzing the relationship between race and vote, while black percentage registration almost perfectly correlated to vote for Jefferson (positively, while about the same high statistics was noted for white percentage registration but negatively), the statistic for other races was a bout half as power and also negatively related to Jefferson vote proportion. This suggests a much more even splitting of the vote among these voters.

More intriguingly, Jefferson seemed to gain little white support in the runoff. Only about 4 percent of all precincts had at least 80 percent white and no more than 5 percent black populations, but of those, the Jefferson vote on average was only 5 percent more than the black population in the district. Again, partisanship may make some whites support Jefferson against Cao, but this suggests that, reversing the typical pattern, there could be more defection among blacks from Jefferson than willingness to support him among whites.

Finally, turnout must be considered, which overall counting a vote for any office was a little over 54 percent, varying depending upon race and partisanship. Relevant here is that it was about 60 percent for white Democrats, 59 percent for Republicans, 57 percent for black Democrats, and 45 percent for other race voters. Therefore, we can run a model using these turnout figures and assuming Jefferson gets 5 percent of the white vote and 90 percent of the black vote, Cao gets the reverse but all Republican votes, and they split anyone else left over.

The overwhelming black Democrat advantage would give Jefferson the advantage at about 60 percent, whereas in the primary he won with only 56 percent. Since Cao is getting all the Republicans, it should be closer but what this demonstrates is that Jefferson did worse in the runoff in the higher-turnout districts which tend to be more affluent. This is what gives Cao a chance.

Two years ago when the last runoff in December was held for the district, turnout was miserably below 20 percent. If lower-income blacks disproportionately do not turn out relative to whites, Republicans, and higher-income blacks, that recipe may fall right for Cao. By the numbers, if black Democrats fall to their 2006 level of turnout, about 14 percent, while the others double their historical rates to about 30 percent, Cao gets a majority of about 4,000 out of 52,000. This would be 10,000 fewer votes than in 2006, however, and of that extra 10,000 Jefferson probably would get most. Yet if Cao gets better than half of other race voters (the least likely to turn out), any lower turnout among non-black Democrats could be offset.

This is a longshot. Still, the unusual dynamics witnessed in the Democrat runoff, no doubt a product of Jefferson’s tainted status, is what gives the GOP any chance at all to grab this seat.

Excise unhealthy union greed with no auto bailout

With hat in hand, Shreveport Mayor Cedric Glover went to Washington to ask for (what is accurately termed even if he doesn’t like it) a “bailout” for American auto manufacturers. Shreveport was home to one of the largest General Motors production lines in the country until sagging company fortunes cut its production by over half. Glover equated the request with the loan Chrysler received almost three decades ago which it paid back, but this is a bailout because it throws American taxpayer dollars at a situation made untenable by the greed of unions.

As in almost every commercial enterprise, personnel costs are the largest single component for the automakers, and it is union demands which have escalated total compensation to absurd levels that have made American companies noncompetitive compared to their foreign rivals:

The average private sector worker earned $25.36 an hour in 2006 – $17.91 an hour in cash wages and $7.45 an hour in benefits such as pensions, paid time off, and health insurance. Autoworkers at Japanese plants located in the United States earn substantially more than this: between $42 and $48 an hour in wages and benefits. The typical United Automobile Workers member at the Big Three earned between $71 and $76 an hour in 2006 – almost $30 an hour in salary and over $45 in benefits.

Typical benefits include extraordinarily generous health care plans where a member pays less that $250 a year for family coverage, long paid vacations (15 –year employees at Chrysler got five weeks off in 2006), the JOBS Bank program that continues to pay almost all of a workers pre-layoff salary after their exhausting regular unemployment benefits that only recently was limited to two years, and “30-and-out” which until recently allowed all workers to retire after just 30 years service with generous benefits that means, for example, GM pays for three times the number of retirees than it had employees.

As a result, every American buying an auto made in Detroit pays an extra $700 to $1,000 to support health benefits far more generous than most Americans receive, and hundreds more per vehicle to support these other freebies, whereas the same car made by a foreign manufacturer in the country would cost over a thousand dollars less.

It is this perverse transfer of wealth from consumer to unionized workers that is the main cause for an ailing domestic auto industry, and a bailout only would compound the problem by allowing subsidization of this inefficiency. Fortunately, this bonanza at consumers’ and shareholders’ expenses partially was reined in by some reforms in the past couple of years, but too late to stave off these financial troubles.

In fact, in the current crisis provides a perfect opportunity to correct these wrongs. By declaring bankruptcy, the Big Three (likely with some different management) would have far greater latitude to do so. (Don’t forget that in declaring bankruptcy, it’s not like they’ll stop producing immediately: they’ll continue to make cars, even if slightly fewer – after all, Japanese manufacturing in the U.S. with its far lower compensation continues without major difficulties.) A bailout would do nothing more than transfer wealth from taxpayers to a privileged set of workers and prop up an diseased industry that will make its day of reckoning even more painful unless compensation is pegged at a realistic, sustainable level.

But that’s the entire point, isn’t it? With a new regime determined to “spread the wealth” coming to Washington that’s more interested in redistributing wealth to its allies such as unions and Democrat-run Michigan than in its creation for all, no doubt this bailout will occur in the early months of 2009, and the usual scapegoats will be blamed – society’s most productive people, for example. Naturally, the only thing that would be spread by this action would not be wealth, but economic malaise. Regardless, politicians like Glover need to quit chasing for votes and do the right and sensible thing instead by refusing to go along in recreation of the problems that got us to this juncture in the first place.

Review of dedicated funding desirable for possible unlocking

One idea Gov. Bobby Jindal has suggested as a way of dealing with budgetary inflexibility is to unlock state dedicated revenues. The idea should be developed into a broader review matching funding to purpose.

First, it must be understood that, even though the state took in around $30 billion last year, it had discretion to spend only about 30 percent of it. The other 70 percent is locked in a variety of formats. Some, approaching half of the locked amount, comes from federal grants to be spent on some legally-defined function. Others arise from some legal obligations of the state, such as repaying debt. Yet others are self-generated by agencies themselves, either through their statutory activities or through ancillary operations which also stay in the agency. Only the last of these essentially could be altered, as the state really can’t violate federal and financial obligations without severe penalty, and that would create financial chaos as agencies creating “surpluses” would be raided and thereby discouraged from performing these activities (not that this hasn’t been done before; in the past, revenues that exceeded expenses in the charity hospital system would be removed from the LSU system that runs it).

What Jindal refers to is the 36 different statutory dedications made by the Legislature for a variety of purposes. For example, it’s not commonly know that within the 4 percent state sales tax paid, 0.03 percent is redirected to the Tourist Promotion District that generates nearly $20 million a year to aid tourism across the state. These divert more than 15 percent or a little under $2 billion from the state’s general fund which leaves almost $9 billion for “discretionary” spending from the general fund. In times of deficit, normally it is from this pot only that cuts may be made in programs (as opposed to cuts in general government operations which can occur anywhere through tactics such as travel curtailment, position freezes, etc.).

Jindal must resist siren song to spend, not save

Recently it has been argued here that with a surplus for the last state fiscal year but a looming deficit for the next that Louisiana bankroll the surplus now and dole some of it out in the future. The need to do so is greater than ever and it will be a challenge to use the savings, collected in the Budget Stabilization Fund, in the most responsible way.

When House appropriators meet today, one option they say they will investigate to tackle an estimated 2009-10 operating deficit of $1-1.3 billion is to tap the fund. Legally, the initial portion of “excess” mineral revenues and a quarter of any declared nonrecurring budget surplus goes to the fund and the remainder is voluntarily entered into it. Up to a third of the balance at the beginning of this fiscal could be used next fiscal year so long as none is used this fiscal year.

This year’s ending balance looks to be about $854 million which technically is not the baseline on which the one-third amount eligible to be released is calculated as the Constitution states it is to be calculated from the beginning balance of the state’s current fiscal year, so it appears roughly $275 million would be available to shore up next year’s budget. That figure could have been over $450 had Gov. Bobby Jindal saved more than spent earlier this year (any appropriation into the fund cannot make the fund’s balance exceed four percent of the previous year’s revenues, and federal recovery dollars had boosted state revenues to $34 billion the fiscal year before Jindal assumed office).

So, a fund withdrawal still would leave a substantial deficit. Further, it essentially locks out using the fund again until another year has passed, so this is a temporary and incomplete solution at best. While economic growth from increased business confidence from ethics laws changes and tax cuts enacted earlier this year will occur, it won’t be overnight. All of this means that lawmakers are going to have to make hard choices.

Let’s say that the amount does get deducted, leaving about $575 million in the fund, and revenues come in at last year’s figures (even with further reductions in federal recovery aid), maintaining the $1.2 billion cap on the fund and leaving $625 that could be pumped into it for fiscal year 2009-10. Jindal therefore could ask to dump $550 million into the fund during any special session held to deal with the surplus, or if one does not occur during the regular session.

At the same time, Jindal must cut state spending deeply, and there are some legislators that are going to want a form of “compensation” through the use of the nonrecurring surplus, getting capital projects built to make up for losses to their favored recurring programs, especially when they point out committed funds could not be used for another year. Jindal must resist adding this sweetener and make sure the hard and correct choice is made, saving now and spending cuts (combined with fundamental reform) to ensure a solid state fiscal footing for the future.

Less, not more govt will overcome LA migration problem

Recently released census numbers only underscore the outmigration problem Louisiana has faced for many years, and add fuel to the fire for those who have argued for policy change to stem this tide. Unfortunately, the solutions offered typically range from the minimal to ineffective and ignore what really must be done.

It seems that Louisiana continues to be near zero population growth, courtesy of more emigration than immigration with births exceeding deaths taking up the slack. More worrisome is that a significant proportion of the migrants away are the prime productive – and therefore biggest taxpaying contributoring – citizenry, where well over half, or about twice the Louisiana average, had attended college and about a quarter made over $50,000 annually.

But some recommendations to deal with this rest upon the erroneous idea that government somehow has to prime the pump. For example, we get from the Council for A Better Louisiana the notion that government has to fund “research alliances,” even though that has been tried – and produced next to nothing – in most instances. Or also offered is appears-good but useless legislation such as attempting to bribe people to stay in the state by the state funding in part a down payment on a house – not understanding that a short-term incentive does not address the long-term disincentives present in the state.

In part, these ideas do little because they fundamentally misunderstand the nature of human economic activity and place too much faith in government to replicate the voluntary, beneficial exchanges promoted by free markets. The philosophy on which these public policy solutions need be built is neither novel nor complicated and best may be summarized by Edmund Burke’s quote, “To make us love our country, our country ought to be lovely.” In other words, if conditions that cause people to flee are mitigated, fewer of them will leave, and if they especially target the prime productive citizens, so much the better.

At least Gov. Bobby Jindal seems to understand what to do here, for the most part. He correctly noted that ethics reform he took the lead on will bring greater confidence in government to the citizenry that their tax dollars would not be wasted or misdirected. To a lesser extent workforce changes also will help although this is more of an attempt to realign resources than create incentives to generate new ones. But Jindal did not mention the most prominent successful such effort at beautification, this year’s tax cuts disproportionately directed at the most productive citizens, probably because he only belatedly jumped on board in support.

The latter, combined with restructuring of state spending that either will allow the state to do more with what it has or to make itself smaller and do the same, is what really will make a difference. The more government is gotten out of people’s way and the fewer resources it takes from them, the more attractive the state becomes for those who wish to pursue their passions for excellence. A state that taxes too much, regulates too much, misdirects resources to trivial pursuits relative to needs, allows politics to interfere too much with administration, and sees as its primary mission spreading the wealth is the state that will drive away those it precisely tries to attract.

Regrettably, the Louisiana of the recent past fit this description. Some, and in fact a growing number, like Jindal are trying to change it. But until we rid ourselves of the peculiar notion that it is more government and government itself, not the people, who create wealth, that kind of policy will deter those most capable of contributing to society through their marketplace activities from residing in the state, and the migration problem will continue apace.

LA indigent health care reform takes good first steps

Finally, the Gov. Bobby Jindal administration has issued its plan for reform of indigent health care in the state, which we then learned the changes hold great promise and look to annoy some special interests.

Essentially, the plan argues that money is being spent inefficiently that concurrently produces lower health care outcomes regarding the poor and indigent. This stems partly from procedural issues – making a variety of services “free” (since the procedures are performed and the state billed or it directly provides with no cost to the recipient) encourages wasteful usage – and from legal/bureaucratic constraints (since the state relies so heavily on state-run care through its charity hospitals it must depend proportionally far more heavily on a federal program designed not for preventive and ordinary care so patients are steered to more costly care).

The practical impact looms considerably. The administration of the present regime has costs rising far faster than the system can sustain in the long run, threatening to double its proportion of existing state general revenues in the 2004-2011 period from about 10 to 20 percent. Any attempt to rein in this spending under existing rules could threaten to make the system totally state run, if to make up the growing deficit reimbursement rates to the private providers, already low enough to discourage many from participating, get reduced further.

The plan proposes largely to remove the state from direct care and claims administration. Instead of concentrating on providing or paying providers with little control over consumption, the state wants to negotiate with networks that put together elements of health care any pay, in essence, the insurance premiums for each qualifying eligible recipient. It then would be up to the network to manage the care in a way that minimizes costs while adhering to mandated standards of quality; the better job it does, the more profit it can make (some of which will be required to be passed down to the actual providers).

In all, it creates a fundamental shift in the way indigent health care is provided in the state, one following in concept other states whose programs are judged to be successful. As a result, some interests vested in aspects of the current system are not too keen on this transformative change.

One is some lawmakers themselves. When the 2007 enabling legislation was passed, some probably intended that the legislation mainly assist the existing charity system run by the Louisiana State University System which would allow them to brag to constituents how they provided free health care to them. The “medical home” concept they figured would be created within the charity system, each component serving as a “home.” Jindal’s plan scrambles that arrangement by defining a “home” as members of a network put together not by providers, but by health care managers. By doing this, not only did the advantage the charity system’s parts and other hospital groups have disappear (by already having many functions put together), especially the charity hospitals’ bureaucratic natures may prove to be a disadvantage in what has become a far more market-driven process than many probably envisioned.

This is why some cautious words about the reforms are being issued by the LSU System (whose head of these operations is none other than the former Secretary of Health and Hospitals Dr. Fred Cerise who shaped the 2007 legislation) because it knows private sector outfits will eat into its revenues derived from providing indigent care. But more alarming to it is this new system potentially will transfer much money out of it. Already one aspect of the plan, to change the nature of W.O. Moss Regional Hospital in Lake Charles, does remove money that would have gone to LSU, and that could grow considerably. Like any government bureaucracy, LSU always prefers more than fewer resources so expect some resistance from it.

And then there are some opponents who just do not like the idea of less government and more free enterprise in indigent health care provision, even though it represents best practices, for ideological reasons, and others such as some physicians because it will make them have to pay more attention to their own business dealings. But the fact is, as long as the state is vigilant in quality control, the best way of increasing system efficiency is to bring more market elements into it.

The Jindal reforms at present speak to increased coverage at reduced costs. Whether the former can be had with the latter remains an open question, and specific details still need working out that potentially could blunt its philosophy (such as those imposed by a new Democrat administration in Washington that is hostile to the liberty provided by free markets). Regardless, this is a welcome, refresh, and absolutely vital step addressing one of the more arcane yet most significant area of Louisiana’s budget and its quality of life.