Unintended Consequences

 

 

"Oh! what a tangled web we weave"

Walter Scott
Marmion, Canto VI, Stanza 17

 1808

Fact # 1 -  With large corporate presence in companies such as Medtronic, Boston Scientific and St. Jude, Minnesota’s proportion of workers in this industry is much higher than anywhere else in the country.

Fact # 2 - Under the recently passed Health Care Law (ObamaCare), medical device manufacturers in Minnesota, as well as the rest of the country, will pay a 2.3% tax on company revenues effective January 1, 2013.

Fact # 3 - Many medical device companies have long term pricing contracts which go back years. Quite often this new unexpected cost cannot be passed on to the customer. As the profit margins are many times razor thin in this industry, a unrecoverable additional cost of 2.3% on total sales can be catastrophic.

This is really a story of unintended consequences. When this bill was cobbled together shortly after President Obama started his first term, many did not understand what is it and how exactly it was going to be funded. Shortly after the ink was drying on the paper, rumors started floating around that part of the funding for this bill would come from some kind of sales or excise tax on medical devices. I remember this well - I along with many thought this was urban legend as a tax on life saving medical devices would cause extreme hardships to patients who rely on them.

In March 2010, then Speaker of the House, Nancy Pelosi told a gathering her now infamous quote - "It's going to be very, very exciting, Congress has to pass the bill so you can find out what's in it, away from the fog of controversy." Wow! That was over 2 1/2 years ago and we are still finding out goodies that were tucked away in this 2,000 page monster of a bill.

Some of other taxes we are finding out about are the following:

• Increase Medicare tax rate by .9% and impose added tax of 3.8% on unearned income for high-income taxpayers: $210.2 billion
• Charge an annual fee on health insurance providers: $60 billion
• Impose a 40% excise tax on health insurance annual premiums in excess of $10,200 for an individual or $27,500 for a family: $32 billion
• Impose an annual fee on manufacturers and importers of branded drugs: $27 billion
• Raise the 7.5% AGI floor on  medical expenses deduction to 10%: $15.2 billion
• Limit annual contributions to flex spending accounts to $2,500: $13 billion
• All other revenue sources: $14.9 billion

As bad as this is, it get worse. According to Denny Rehberg (R-MT), "The Health and Human Services Department  was given a billion dollars of  implementation money, and that money is gone already on additional bureaucrats, information technology programs, and computerization." In fact, in the ObamaCare bill, the phrase, "the Secretary shall determine," appears 1,563 times. The net result? Rehberg continues "There's already 13,000 pages of regulations, and they're not even done yet.".  

Now I can tell you from my own experience in almost 25 years working with the Federal Government, Statutory and Regulatory additions in most ANY piece of legislation are often "cost drivers". Not only costly, but the reporting requirements are often onerous.

So what do we know? Not nearly as much as we should. I did not intent to get too "wonky" about the tax and regulatory aspect of this law. I mostly wanted to point out what it is doing to a very important state industry. Was there deception used in putting together this bill. I don't know for sure. But I do know this - it was done mostly in the dark and not with the transparency we were promised. And that, is a big, big problem we are going to have to live with for some time.

"When first we practice to deceive!"

For Whom the Bells Toll

"No man is an Island, entire of it self; ... any man's death diminishes me, because I am involved in Mankind; and therefore never send to know for whom the bell tolls; It tolls for thee."

John Donne
Devotions upon Emergent Occasions; Meditation XVII
1624

This is the weekend of my 45th high school class reunion. It will be great seeing all the men and women I graduated with so long, long ago. Some are retired, some still work. Some are married, some widowed, some widowers, some never married and some remarried. Most have kids, and some have grand kids. It is a mixture of people who have traveled through life during the same time, but have taken different roads. It is decades upon decades of stories contained within those lives led, waiting to be told, waiting to be shared.
 

One of the very special parts of this reunion is two of my classmates spent countless hours researching and putting together a DVD which recognizes classmates who have passed on. As much information as known is provided for each person. Besides recognizing all who have passed, special tribute is paid to the brave young men who as service members, traveled into harm's way and made the ultimate sacrifice.

My wife and I saw the DVD last night at an informal reunion gathering. I was speechless during most of it. To say that it was well done, does not do it justice. It was simply magnificent. It is not only a tribute, but also a work of art to those who will never be able to see it.

For whom do the bells toll? They toll for dozens upon dozens of fine young people who left this world much, much too early. The bells toll for the young men who heeded a nation's call and went to a land far away to fight for something so special, it was worth giving all. It was for those who just one or two years out of high school, who had not yet tasted life, died defending freedom and liberty.

Again, to quote John Donne, "any mans death diminishes me, because I am involved in Mankind". With our classmates who have gone on before us, their passing has diminished us. They were not only our brothers and sisters, but also our friends. They were our companions who traveled with us through our most formative years. In short they were us, and for them, the bells still toll.

S.O.S.

 

 

Not to date myself, when I first went into the Navy I needed to learn the main source of long range communications - Morse code. It was reliable and universal - most countries used it. Every watch we were expected to check the emergency frequencies to listen for either an SOS (three dots, three dashes, three dots) which stood for distress, or HM (four dots, two dashes) which stood for emergency silence. If we heard either of these (it happened to me more than once), we worked with the Coast Guard or other nearby assets to effect rescue.

Today, SOS stand for something far more sinister. In July 2006, a 527 organization was established to help elect Democrat friendly Secretary of State positions, mostly in battleground states. The SOS Project stood for Secretary of State Project and was funded in large part by MoveOn.Org (George Soros). Even though Minnesota was not a battleground state (we usually always vote DFL) the SOS Project found a long time progressive named Donald Mark Ritchie to run for Secretary of State in 2006 . He won, and the rest is history. In 2008, after the closest Senate race in state history, our newly minted Secretary of State waded through numerous possibilities (or probabilities) of voter fraud to declare Al Franken the winner and then improperly seat him as the new state Senator. He turned out to be the 60th vote in the Senate which allowed the very expensive and controversial ObamaCare to become law. The evil and vile start to the SOS project in 2006 was able to bear bitter fruit as early as March 2010 with the passage of the ObamaCare law.

Fast forward to today. Our golden boy, Mark Ritchie continues to pay dividends to Mr. Soros by acting in direct violation of the Hatch Act by ignoring the terms of his constitutional office. He is ACTIVELY campaigning against the Voter ID Amendment which will be on the November ballot. This is an impeachable offense. In addition, he was recently "slapped down" by the Minnesota Supreme Court for how he torted the title and meaning of the amendment. This is nothing short of outrageous!

In Morse Code, SOS means "distress". For law abiding citizens of Minnesota, the SOS Project also means "distress" - distress of our voting rights. We have the right to ensure every LEGAL vote is counted, and counted only once. The lesson we all need to remember is elections have consequences, even for an office like the Secretary of State. By allowing Mark Ritchie to become Secretary of State, we got Al Franken which allowed ObamaCare to pass. And because of the passage of this onerous law, we got the device tax which is the reason we are losing hundreds of well paying jobs in Minnesota. Like I said - distress.   ... --- ...

Post script: For those who served, SOS has one more meaning. It has to do with Chipped Beef on Toast. For some of us, it was served too often and tasted so bad, it was called SOS, which stood for "S..t on a Shingle". Maybe , just maybe, this is what inspired the SOS Project.

The Tip of the Spear

"We make war that we may live in peace"

Aristotle

One of my favorite movies about the Viet Nam War is We Were Soldiers. It is the true story of LTC Hal Moore and a group of very brave men he led into one of the first US Army battles fought in the Viet Nam War. LTC Moore was a career soldier - a warrior. When he found out he was going to Viet Nam battlefields, he learned as much as he could as quickly as he could. One thing that stuck in his head was how French, who were driven out of Viet Nam, had been soundly defeated, almost massacred, in the 1954 Battle of Dien Bien Phu. They were defeated by a battle tested, battle hardened group of North Vietnamese regulars commanded by the legendary General Giap. LTC Moore knew this is what was waiting for him and his untested group of young soldiers. At the Battle of Ia Drang in November of 1965, against incredible odds, they became the "tip of the spear".  

In that battle, young men died and many others were wounded. From that battle until the war ended in 1975, over 58,000 brave young men and a handful of women were killed, fighting for freedom and democracy in a land so far from home. By all accounts, it was a bad war - in the end, Viet Nam fell to the Communists. However, as in past conflicts, the bravery shown by the young men who went in to harm's way, acting as the tip of the spear, was second to none.

After a period of tranquility, the United States once against was called upon to face a new menace. In an act of naked aggression, Saddam Hussein had invaded a sovereign country and occupied it. Condemned by the United Nations, it was up to the United States and a coalition of willing allies to stem this tide. Brave men and women, many of whom were the children of the warriors who fought in Viet Nam, heeded the call. In January 1991, our troops who had been training in the Middle East as Desert Shield, became warriors once again as Desert Storm commenced.

Most of the 800,000 troops that participated in Desert Storm had never seen battle. It was estimated that the Iraq Army numbered over 1,000,000, which made it the fourth largest army in the world. Saddam had threatened our forces with "the Mother of all Battles" and American blood was to be spilled throughout the desert. Rumors abounded that Iraq had WMD of all shapes and sizes ready to be used on our troops once they crossed the Kuwait boarder. Knowing this, as well as going up against superior numbers in a land few were familiar with, did not deter the resolve of our troops. In January 1991, the United States and it's allies conducted a very effective air campaign which lasted thirty-nine days. On February 24, 1991, a massive wave of allied ground troops crossed the Kuwait boarder and became the tip of the spear in what became a 100 hour ground war.

The war ended with less than 400 US dead and very few wounded. The war did not end with unconditional surrender - it ended with a truce between Iraq and the coalition requiring the withdrawal of all Iraqi forces from Kuwait and restitution to be paid to Kuwait for deaths and damages. Saddam was allowed to stay in power so long as the conditions of the truce remained in effect.

This leads up to March 20, 2003, the start of the Iraq War. Many believe this was a war of revenge by the current president George W. Bush due to the attempted assassination of his father, George H. W. Bush, by Iraqi agents. In reality, this war was a continuation of the 1991 Gulf War, caused by numerous and continual violations of the 1991 cease fire and truce. I won't go into the specifics in this article, however more information on what started this war can be obtained at my previous article called "Stop the War! What War?". That being said, the Iraqi War was much grittier, dirtier and deadlier than the 1991 Gulf War. The coalition of allies to support this effort was not as large as the coalition for the Gulf War resulting in the United States played a much larger role.

The Iraq War lasted from March 2003 until December 2011. During that time, 4,500 brave troops were killed and 32,000 were wounded, some very severely. We had to relearn a  method of warfare not used for decades - house to house close order combat. It was tough, dirty and dangerous. We learned a new term of warfare - IED (Improvised Explosive Device). IEDs used a very crude yet effective technology. They caused many deaths and crippling injuries to our soldiers, even if riding in a shielded tank or Bradley. By the time the war ended, Saddam had been captured, turned over to the new elected Iraqi government, tried and executed. We left Iraq knowing it was a different, and better, country than when we first went it. Thanks to the men and women operating at the tip of the spear, the Iraqi people were free.

That brings us to the current conflict. The Afghanistan War has now become the longest war in United States history. It is the first conflict which resulted from the War on Terror as the United States started operations shortly after the 2001 terror attacks. In the very beginning, the Americans operating as the tip of the spear were trained CIA operatives as well as Special Forces. They worked with the Northern Alliance in rooting out the Taliban and embedded Al Qaeda operatives.

After eleven years of very difficult conflict in a mountainous country which borders Pakistan, a country which is at times both friend and foe, the mission of this conflict has become constantly more nebulous. Knowing that fact, and with the recent advent of "green on blue" murders by Afghan regulars on allied forces, our troops fight on. They are the tip of the spear in an unforgiving land, fighting entrenched forces, against enemies which often looks like friends.

My purpose in this article was to shine a light on the brave souls who daily protect and defend us against all who would do us or our country harm. Even though the time line began in the sixties during the Viet Nam War, this unselfish bravery really started generations ago. Uncommon valor and bravery took place during both the World Wars, Korea, and numerous other conflicts since our founding. So long as there is evil in this world which threatens democracy and freedom, there will be the heroes, the real heroes who stand in the gap, who truly become the tip of the spear.

 

Reset; Reboot

 

 

 

 

"Those who cannot remember the past are condemned to repeat it"

 

George Santayana

Lately, it seems like we can't go one day without hearing (or reading) about this being the worst economy since either the Great Depression or the Carter years. Regardless if this is true or not, one thing is for certain - "things ain't like they use to be".

Ever since the "Dot Com" bust followed by the 9/11 market meltdown, I have wondered how robust (or fragile) our economy really is. I have looked at it as an investor, as a citizen and most importantly, as a "baby boomer" now retired. Like many of us, I had been living in a fog - generated by Wall Street. And like many of us, I went though the 80's and 90's fat, dumb and happy - totally oblivious unless one peeked underneath the economic covers. My 401k was zipping along nicely and visions of a very comfortable (and early) retirement were dancing in my head. Because I was employed at IBM, working side by side with many technology companies, I became heavily invested in the NASDAQ. In March of 2000 when the NASDAQ soared above 5,000 (some thought it could go even higher) few realized the profit projections made by many of the Internet based companies were beyond normal market speculation. In other words, they were smoke and mirrors. Once the NASDAQ went into free fall, many began to look at the tech market through a different lens. Licking our wounds from the carnage that resulted from the NASDAQ collapse, we fled to the more stable Dow investments. As we all know, the second shoe fell at 8:45 EDT on September 11, 2001.

After a few months, the slow recovery started after having a major attack on our financial infrastructure. To help speed the recovery, our government told us to "go out and buy something". We did, however we set our financial sights on shorter and shorter financial objectives. Long range strategic thinking all but disappeared and was replaced by making the current quarter and "beating the street". Stock price inflated, bonuses and options handed out like candy, and CEOs were enriched beyond reason. We will worry about tomorrow, tomorrow - we were living the dream and ignoring the developing nightmare which no one wanted to believe. Everything was for the moment - it was financial hedonism. Our financial house, which was once built on a solid foundation, was now dependent on soft wood which would soon become sand.

Poor management and strong arm tactics from the United States Congress (thank you Barney Frank!) resulted in giving out "NINJNA" (no income, no job, no assets) loans to people who did not have a prayer of paying them back. Mortgages were bought and sold many times without anyone paying attention to their value. By the time the toxic nature of these mortgages were realized, the poison had already been ingested. It was not only risky people that were getting ill advised loans - it was also companies which were not capitalized properly. We were watching a perfect storm of financial collapse which seemed to happen overnight. However, if we had been watching the ball instead of having a ball, we would have seen this coming long before October of 2008.

Since the crash of 2008, we have been dusting ourselves off and attempting to determine what happened (and most importantly, how it happened). Because of ill advised knee jerk, panic responses, we are taking a rapid fire dose of financial cures which may be far worse than the disease itself. This is not political - it was embraced by two administrations and members of both parties of congress. TARP, stimulus, buyouts, rescues, give aways, and on and on. We are trying to fix the economy by spending an amount of money which is nothing less than staggering and absolutely unsustainable. Currently, our national debt is over $16T. If we add in the projected liabilities and payouts for Social Security, Medicare and Medicaid, the total amount we are leaving our children and grandchildren could reach far beyond that. In other words, compared to the financial opportunities our parents left us, we am leaving a real mess for our kids.

Enough about history - now what? First, if we try to fix the economy so we go back to where we were, we will take this ride all over again. We are now living in a brave new world with not one straight path to follow, but rather numerous circuitous routes. We need to rethink and re-do. One of my former managers use to say when things got really screwed up, a "do-over" was in order. We need to take a "do-over" right now with every aspect of our economy. We need to reboot or hit the reset button. Yesterday's solutions will not work in today's world. We need to look at education, health care, manufacturing, investing, infrastructure - basically everything. And we need to reset the economy without going into bankruptcy during the journey. However, not all change is good - things that worked well in the past and are sustainable should be retained. Things that did not work well or are not sustainable should be taken out with the trash.

The "E" Plan

 

 

“Failing to plan is planning to fail”

 

Winston Churchill

During World War II

Last week, a long time Face Book friend posting something very disturbing. A man deep in the faith, most of his posting had to do with Christ and his teachings. However, this one did not. It was  a warning. He heard something from a law enforcement customer of his who lives in another state. This person deals closely with the Department of Homeland Security. Even though this is anecdotal, I will repeat what he was recently told. "You did not hear this from me. However, I will tell you this - don't travel too far from home from now until Nov 1st, as you might not be able to get back." And that was it - that is all that was said.

The timing on this was not good as I had just promised my wife we were going up to Duluth on a day trip. What did this obscure warning mean? Is there an attack planned? An EMP attack that will render most cars unusable? What if we get up to Duluth, 140 miles from home, and something happens? To solve this dilemma, I was left with two choices. Choice #1 - stay home - forget seeing the fall colors on the North Shore this year. Choice #2 - go anyway, only go with a plan. In other words, have an emergency plan (an "E" plan) for everything you do, even a day trip.

The old saying of "live for today, but plan for tomorrow" is morphing into "live AND plan for today, and also plan for tomorrow". Watching a new show called "Doomsday Preppers" has enlightened me. First, I am amazed at the amount of planning these folks have done in anticipation of an unknown event which may or may not materialize. Second, unlike many of them, I refuse to hide in a hole and wait for the end times. That being said, being prudent these days is prudent (redundancy intentional).

Back to the Duluth trip. Many military planners I have dealt with look for a worst case scenario, and plan for it. A worst case scenario for us being 140 miles from home would be an EMP event, natural or unnatural. If that would happen, the car would be rendered useless. We had our bikes on the bike rack - worst case, we had rudimentary (EMP proof) transportation home. It might take four days, but our bikes would get us there. We also had some water and food in backpacks that would become "E" packs if needed. We went to Duluth, had a great time, and never gave the worst case scenario a second thought.

I believe the mother load for all "E" plans revolve around the primary residence. If the power in a region would go out for reasons such as abnormal sun spot activity, terrorism, EMP pulse, or just the old age of the grid, very little in your house will function. Turning on the tap will not result in running water, the toilet (which is dependent on water) will not work, the food in your freezer and refrigerator will start to spoil, your furnace and your stove will not work. I remember reading during Katrina many people would have given anything for one bottle of potable water. Again, as in Katrina, if we have a wide spread event where utilities and distribution systems are damaged, THE GOVERNMENT WILL BE OF LITTLE HELP. If there is one lesson to take away from Katrina, it is that.

The purpose of this article is not to describe how a plan should be prepared. An "E" plan is like the family budget - unique to needs or circumstances of the family. An "E" plan should cover weather events, as well as other natural or unnatural disasters. Most grocery stores have only a two day supply of food on hand. In an emergency, that two days would be gone in two hours. If the distribution systems are gone, your house will be your store. Potable water is the most important thing to have. Without drinkable water, you and your family will not survive more that a week.

A friend of mine recently told me he was more prepared today than he was yesterday and not as prepared as he will be tomorrow. The "E" plan we have for our family is a work in progress. To paraphrase my friend, it is better than yesterday, but not as good as it will be tomorrow. Winston Churchill said during World War II, "Failure to plan is planning to fail". Amen to that.

The Pulse

 

Note: All information used in this fictional article came from unclassified public domain, open sourced information contained on the Internet.

There were three teams. All had been through training in various locations such as Pakistan, Yemen and Syria. The mission was clear, the resolve was absolute. America, the "Great Satan" was about to take a trip through time - back to the 18th century. At last, this was going to be the great equalizer for the world's greatest super power.

It really was not going to be that hard. The technology has been around for decades. Actually, it was discovered by accident. In the later years of World War II, when Project Manhattan was in full swing, atomic testing was taking place on the Bikini Atoll. A strange effect was noticed when a bomb was detonated - electronic devices and lamps, as far away as Hawaii, would fail. It was the dawn of the EMP pulse.

During the Cold War, EMP was part of the Soviet order of battle. The theory was in a thermonuclear exchange, the first shot would be a high yield, high altitude detonation over the center part of the country. This would leave the majority of transportation, utilities and electronic devices useless. A salvo of surface detonations on a helpless and immobile population would follow. Yes, it would have been that bad.

The attack plan by the terrorists was incredibly simple. In 9/11, where our own assets were used against us, it turned out to be a very low cost, yet very effective event. This attack would be more costly as it would involve using assets bought mostly on the black market. Whereas 9/11 was an attack on our financial sector, this one was designed to bring America to her knees. It was going to take considerable planning and resources, carried out in a most clandestine manner to pull it off. Higher cost, higher risk, unbelievable reward.

Three barges were obtained. They all needed to be retrofitted, have the appropriate blast suppression and ablative applied, and all done without causing one speck of attention or suspicion. Each had to be able to transport and launch one Scud missile tipped with an 80 kiloton nuclear warhead. The Scud is a liquid fuel rocket that is about 38 feet long and 3 feet in diameter. Even though the Scud variant to be used is more accurate than previous versions, absolute accuracy did not matter with this launch. All the missile needed to do was go straight up for thirty miles and detonate it's payload.

The nukes were not that hard to find on the black market. During the collapse of the Soviet Union after the end of the Cold War, some lower yield devices "fell through the cracks". Even though we and the Russians have been actively seeking the "bread crumbs", the trail has long since gone cold. Current speculation is that some ended up in Lebanon's Beeka Valley with other toxic goodies left over from Saddam Hussein and Syria. Although tricky to smuggle three of these low yield devices without triggering the NEST (Nuclear Emergency Support Team) System, it was not impossible.

Aided in part by the disarray and budget cutting of United States intelligence assets, the plan came together. The three barges finished retrofit, the Scuds were obtained and loaded, and the nukes were successfully brought to the staging point. All was accomplished with the appropriate subterfuge to confuse any spy satellite which happened to pass by.

The barges left the staging area and began their journey to America. One was to be stationed 200 miles off the coast of Virginia, one 200 miles off the coast of Louisiana and the third 200 miles off the coast of California. Once in position, at a designated time all would launch their payloads. The resulting EMP pulse from the simultaneous detonations would cripple 90% of the population centers in the United States. In the following weeks and months, millions would starve or freeze to death. Mayhem, bedlam and anarchy would follow. The damage would be so wide spread, so complete to our infrastructure, the government would be powerless to help.

As I said in the prologue to the article, this story is fictional. My purpose it is not to alarm as much as it is to inform. This is a nightmare scenario that many of our enemies would like to see come to pass. Regardless of what our Administration tells us, there are still bad guys out there who would like to do us, our families, and our country great and permanent harm.
As a country and as citizens, we need to stay vigilant. We need to stay alert, stay aware, and stay prepared.