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Thursday, February 09, 2012


Mittmobile Tuneup Time

It was all supposed to be over after Florida, and it sure looked like it was, until Tuesday night, when inexplicably, the Mittmobile was driven off the road, not by Newt but by Rick Santorum. The erstwhile Pennsylvania Senator, unabashedly campaigning for the pro life, religious right vote, got enough votes out to easily win all three of Tuesday's "beauty contests," including, most shockingly, Colorado, but not very many delegates, which Missouri and Minnesota pick later. The Romney people were justly penalized for taking a victory lap following their Florida triumph, and now they have to get back to work.

Besides Mitt, the real loser for the night was Newt, who seems to have pretty much worn out his welcome. The winners, besides Rick were Obama, who still lacks for a dangerous looking opponent, and those diehards in the "draft Governor Daniels" movement, who take heart the longer Mitt takes to wrap this thing up.

So now Santorum has fully inherited the mantle and also the supporters of Mike Huckabee, and we'll see how far it takes him. At least he should get a cable show out of all this.

The Obama people have also been cheered by better employment and economic figures, and that has boosted the President's standing in the polls a bit. Nevertheless, one shouldn't get too cocky, since we still face a huge deficit, and there is no progress being made of any kind against it. We are about to begin another kabuki dance over the extension of the payroll tax reduction, as if that is really important to consumer spending. For those still holding out hope for the obvious political solution (Simpson, Bowles), I am afraid it will be 2013 before anything meaningful is done about much of anything.

It's not much better in Europe where the populous is outright antagonistic to the spending reductions that are needed to achieve deficit reduction. The Greeks complain about austerity, but they will need to be on austerity for over 300 years to make any progress at the rate they are going. And this while their government has to pay MID-DOUBLE digit interest rates to borrow money! Of course maybe in the context of Greek history, a few hundred years doesn't seem like a terribly long time.

Since there was such positive reader reaction to Professor Brad Smith's excerpted column in our last post, I thought I might excerpt a very interesting op ed from today's WSJ penned by University of Chicago Professor John Cochran. Entitled, "The Real Trouble With the Birth - Control Mandate," the opinion piece made points that impressed even this 21st century blogger who generally accepts a world with contraception, birth control, and other sinful practices. Here's a sampling:

"When the administration affirmed last month that church-affiliated employers must buy health insurance that covers birth control, the outcry was instant. Critics complained that certain institutions should be exempt as a matter of religious freedom...Critics are missing the larger point. Why should the Department of HHS decree that any of us must pay for "insurance" that covers contraceptives?

Insurance is supposed to mean a contract (covering) large, unanticipated expenses in return for a premium...There are good reasons that your car insurance company doesn't add $100 to your premium and then cover oil changes and that your health insurance doesn't charge $50 more per year and cover toothpaste. You'd have to fill out mountains of paperwork, the oil change and toothpaste markets would become less competitive and you'd end up spending more...

How did we get to this point? It all leads back to the elephant in the room: the tax deductibility of employer provided group insurance...The pre-existing condition crisis is largely a creature of tax law. You don't lose your car insurance when you change jobs...

Why did HHS add this birth control insurance mandate to its implementation of the new health care reform law? 'Because it promotes maternal and child health by allowing women to space their pregnancies,' says the HHS advisory panel. 'To increase access to important preventive services,' echoes White House Press Secretary Jay Carney. Notice the doublespeak of "access" and "cost." I have "access" to toothpaste because I have two bucks in my pocket and a competitive supplier. Anyone who can afford a cell phone can afford pills or condoms... HHS isn't limiting this mandate to the poor anyway. We all have to pay. The very poor typically don't have employer-provided insurance in the first place...It's not about access and it's not about insurance...Americans choose to spend their money on other things. They prefer a new IPod to a "wellness visit" to a doctor...There is a liberal dream that by mandating coverage, the government can make something free. Sorry. Every increase in coverage means an increase in premiums. Your employer could be paying you more in salary instead. Or, he could be lowering prices and selling his product to you and all consumers more cheaply...

Perhaps there is a social interest in subsidizing birth control? If so, this is an awful way to do it. The minute pills are "free," under insurance, the incentive for drug companies to come up with cheaper versions vanishes. So does their incentive to develop safer, more convenient, male-centered or nonprescription birth control. And by making pills free but not condoms, the government may inadvertently be contributing to an increase in sexually transmitted diseases...

The critics fell for a trap. By focusing on an exemption for church-related institutions, critics effectively admit that it is right for the rest of us to be subjected to this sort of mandate. They accept the horribly misnamed Patient Protection and Affordable Care Act, and they resign themselves to chipping away at its edges. No, we should throw it out, and fix the terrible distortions in the health-insurance and health-care markets.

Sure, churches should be exempt. We should all be exempt."

So the Super Bowl was an entertaining game, and the Giants narrow victory was about what we expected given that the Pats most potent offensive weapon this year was playing hurt and ineffective. Still it was ironic that on the final Hail Mary pass, Gronkowski was the guy who nearly came up with it. The Giants deserved to win the game though, and they certainly played very well from the point they were
7-7. One disappointment was the commercials, which I thought were mainly a festival of inanity. On the other hand, Madonna acquitted herself quite well for a middle aged lady, though I feel she did not displace Tom Petty from the top spot for Super Bowl halftimes.

At our party, someone actually asked who those people were singing America the Beautiful to open things up. I was incredulous. As a country music fan, how could it be that someone might not know who Miranda Lambert and Blake Shelton are? Of course I would have committed a similar faux pas had just about anyone come out to rap the venerable tune.

We're a little late on February jazz in NYC, but here are highlights still coming if you're so inclined. Birdland has John Pizzarelli Feb 28-March3. Reservations a must for most of those shows. Anat Cohen leads a quartet at Columbia University's Miller Theater this Saturday. Next weekend, the Mingus Big Band headlines at Jazz Standard. Also this weekend, Charles McPherson and the legendary Tom Harrell bring their quintet to Dizzy's Club Coca Cola while Benny Golson, 83 years young, leads a quartet at Jazz Standard. And of course all of the great regular fare at Birdland, Bar on Fifth, etc. throughout the week.

We have a lot of transactions to report. On January 30, we sold 100 shares of Barnes Group (B) at 25.60, a nice gain from the split adjusted 8.31 we paid on 3/22/99. The next day, we bought 500 shares of TAT Technology (TATT) at 4.50, a value buy of a stock that has so far been a big zero for us. On 2/1, we bought 300 more shares of IDT at 8.84, a "zero" buy. Since then, we have been selling: On 2/3, we sold 100 shares of Standex International (SXI) at 43.64. We paid 30.25 way back on 5/11/98. It must be said that previous management teams were pretty passive. On 2/6, we sold 200 more shares of Presidential Life (PLFE) for 12.04. We had bought them for 8.84 on 6/17/09. Today, we sold 300 more shares of Pulte Home, (PHM) which has been doing much better, but these were shares we had a huge cost basis because they were actually Centex shares that came in the merger. We paid an average price of 48 for these shares between 2005 and 2007, so this is a nice loss in the taxable account. Today, we also saw our ADPI shares tendered away, as American Dental Partners has been merged out of existence. We received 19 per share for all 1100 shares purchased in 2006, 2007, 2008 and 2011 at an average price of

Hello Redwave:
Please expand on your alternative means by which we as a society could better go about subsidizing birth control. You allow for the possibility that doing so may have social value and then simply dismiss the current administration's effort as an awful approach. What is your constructive alternative? Are you going faith based or some kind of Ron Paulesque magical markets driven fantasy answer?
You compared this to coverage for tooth paste and oil changes, but I think the harm from skipping those desirable things falls heavily on the short-sighted who choose to skip them. That is by no means clearly the case for the harm done by the shortsighted, who become unintentionally pregnant and yet are unprepared to raise that child towards a productive adulthood. Remember the harm may go beyond just the addition of more entitlement society obligated voters.
I’ll look forward to your response.
Warmest Regards,
Dr. C.
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