Wednesday, June 28, 2017

A Several Front War Looming? Milton Friedman and Too Many Feathers. Eight Years Of Carping Instead of Solving.

This from a very dear friend and fellow memo reader: "Why doesn't the media report that since Obamacare over 28 million Americans remain uninsured. The CBO missed their projections by a wide margin. Projecting over 24 million would be insured on Obamacare yet, only 10 million are currently enrolled Also, health insurance cost has increased 105% or over $3,000. per policy. The Democrats accept no blame for this disaster they imposed on Americans. 

Anything would be better than Obamacare and no one will die if the Republicans pass an improved health care bill. Total BS by desperate Democrats!!!"
Is Iran seeking to escalate a war with Israel on its northern border near the Golan? (See 1 below.)

Also, is it conceivable that America could also be in simultaneous confrontations with Syria and Iran and N Korea with China and Russia standing aside? 

Iran's intention is to control The Middle East and Obama's Iran deal and billion dollar cash "ransom" and release of many terrorists is the basis for their believing it is possible.
Oh, owing money for a long period and never doing anything about it actually does catch up with politicians.  If you do not believe this, ask legislators from Illinois. 

Milton Friedman, one of the nation's finest economists, was a tenured professor at The University of Chicago but no Liberal politician would accept his warning that there is no "free lunch."

Illinois is a preview of what can happen to our nation.  It is all a matter of time.  Even the back of a strong horse can be broken by too many feathers.(See 2 below.)
In the final analysis I suspect Republicans will eventually change Obamacare and make some improvements but not as many as they should.

If they fail to do so, there is no way they will not be blamed for failing to accomplish a key promise made to the American voter. They had eight years to come up with a response because what they predicted actually happened .  Rather they chose to carp from the sidelines and missed an opportunity to prove they were serious.

What Republicans proved, once again, is you never want to watch how sausage or laws are made. (See 3 below.)
After many months and a lot of money we have learned the following:

a) Comey leaked his private visit with the president in order to force the appointment of an independent prosecutor.

b) There is no evidence of Trump colluding with Putin/Russia.

c) Obama withheld information he knew Russia was involved in tampering with our election.

d) A.G Lynch was involved in assisting a Clinton victory, perhaps under orders from Obama. (See 4 below.)
1)Iran's flag on Israel’s border: ‘We are coming’

Living with the Iranian threat is not a new phenomenon, but it is an increasingly complex one because of the Syrian civil war. Iran is reaching a peak of influence and power in the region. Lebanon seems to be having a flag sale. Iranian flags, Hezbollah, the UN, Spain, Palestinian flags. They are all flying provocatively along the border with the northern Israeli community of Metulla. Just meters from the fence that separates the countries, not far from the site of a 1985 terror attack, Hezbollah has festooned the roads with signs of its presence. It’s purposely done so Israeli residents can see the flags and the billboards next to them. In Metulla there is a memorial for the 12 Israeli soldiers killed in the 1985 suicide bombing, while just across the border a huge billboard celebrates the same killing.

I spent Tuesday touring the Lebanese and Syrian borders with Israel to see the tense situation in the north of the country. The flags across the border seemed representative of the situation that prevails today. Next to the Hezbollah flags is a small post that has a UN logo. Near it the Amal Shia Lebanese movement has erected a large banner reading “to he of pure hands and a generous soul, thank you speaker of parliament Nabih Berri.” On the banner is the Iranian flag. Here is a visible presence of Iran just a stone’s throw from Israel.  It’s not the only Iranian symbol here. On a hill overlooking new houses being constructed in Metulla is another huge poster with a photo of the Dome of the Rock. The face of Ayatollah Khomeini glowers down over the dome and Hezbollah has written “we are coming” in Hebrew and Arabic. They’ve put a giant Palestinian flag next to the poster.

The message is clear, as it is disconcerting.  Here is Iran glowering down on Israel from the north. As we toured the border area with Lt. Col. (Res.) Sarit Zehavi, the head of Alma, an organization that gives briefings on Israel’s security Challenges on the Northern Border, what should be a tense situation seemed quiet. This area has known war for many years. There is an old British police fort here from the 1930s when terror also struck at Jewish communities. Zehavi stresses that the situation along the Lebanese border has not affected tourism or housing prices, and the new construction is evidence of that.

Living with the Iranian threat is not a new phenomenon, but it is an increasingly complex one because of the Syrian civil war. Iran is reaching a peak of influence and power in the region. Its tentacles stretch across Syria and Iraq and Hezbollah is emboldened. Hezbollah leader Hassan Nasrallah boasts of bringing thousands of foreign fighters to help him attack Israel. He sees Shi’ites from Afghanistan and Pakistan and Yemen joining the assault. Iran’s Supreme Leader Ayatollah Khamenei tweeted on Monday that “today the fight against Zionist regime is wajib (obligatory) and necessary for Muslims. Why do some evade this duty?” He also claimed “Palestine is the number one issue of the Islamic world.” From his 300,000 followers on his English language page, he only got several hundred likes on his statements.

So, is the relative quiet in northern Israel an illusion? Are the Iranian flags just meant to intimidate and sow fear, or are they a much deeper problem to be taken seriously? The feeling one gets as a visitor is that of a kind of mirage. There is Hezbollah, a vicious dangerous terror group with more than 100,000 missiles, a few hundred meters away, but familiarity breeds a bit of contempt. The first time you see the flags it’s surprising. The second time, interesting. The third time, boring. The flags are just the visible expression of what goes on quietly in villages near the border, and of what Hezbollah’s Iranian masters sitting 2,000 kilometers away are thinking. They’d like to boast of conquering Jerusalem or show of some murderous and symbolic attack against Israel. But traversing the border, in the shadow of the flags, is the Israeli army, its Humvees and other vehicles, watching for threats.

How Bad Is the Crisis in Illinois? It Has $14.6 Billion in Unpaid Bills

Two years without a budget has left a mammoth past-due backlog, with hospitals, dentists and university towns feeling the pain

Scaffolding protects students from crumbling molding at Eastern Illinois University, which is receiving less state money.
Scaffolding protects students from crumbling molding at Eastern Illinois University, which is receiving less state money. PHOTO:MICHELLE KANAAR FOR THE WALL STREET JOURNAL
SPRINGFIELD, Ill.—This is what happens when a major American state lets its bills 
stack up for two years.
Hospitals, doctors and dentists don’t get paid for hundreds of millions of dollars of 
patient care. Social-service agencies help fewer people. Public universities and the towns 
that surround them suffer. The state’s bond rating falls to near junk status. People move 
A standoff in Illinois between Republican Governor Bruce Rauner and Democratic 
Speaker of the House Michael Madigan over spending and term limits has left Illinois 
without a budget for two years. State workers and some others are still getting paid 
because of court orders and other stopgap measures, but bills for many others are piling 
The unpaid backlog is now $14.6 billion and growing. Illinois is even late paying its 
utilities bills to Springfield, its own capital city. On July 1, the beginning of the next 
fiscal year, billions of dollars in road projects are scheduled to grind to a halt.
“Right now, our state is in real crisis,” said Gov. Rauner last week, on the eve of a 
special legislative session where lawmakers are trying to hammer out an agreement 
before the state enters its third budgetless year.
Susana Mendoza, the state’s Democratic comptroller, is in charge of doling out limited 
funds to organizations demanding payment—a job she likens to handing out crumbs to s
tarving children. She predicted unpaid bills will soon top $16 billion. “It is almost hard to say those numbers out loud because they seem so insane, but that’s where we are right now,” she says.

The Republican draft budget includes a temporary income-tax increase. Gov. Rauner has 
also pushed for spending cuts in areas including state pension benefits, which are 
protected under the state constitution, and social services. He also wants to freeze 
property taxes and ease workers-compensation protections to attract new businesses.Any 
solution to the state’s dismal finances will need a three-fifths legislative majority to pass. 
Looming behind the fiscal train wreck are an estimated $250 billion in unfunded pension liabilities, the worst in the nation, according to Moody’s Investors Service. S&P Global 
Ratings has warned that it could lower the state’s rating to junk as early as this week if it 
doesn’t pass a budget.
Democrats, who are completing their own spending plan, complain that some provisions 
in the Republican plan, such as changes to workers-compensation insurance and a local 
property-tax freeze, are outside the scope of the budget.
The governor’s spokeswoman says mismanagement of the state’s finances predated his 
term, and that the governor is working “to find consensus on a budget that is truly balanced and…will ensure Illinois thrives in the long-run.”
A spokesman for Mr. Madigan, the house speaker, says a compromise has been hard to 
broker because the two men’s visions on how to fix the state are so far apart.
Illinois remains the business center of the Midwest with numerous Fortune 500 
companies based in and around Chicago, major rail infrastructure and one of the nation’s 
busiest airports. That hasn’t stopped the deadlock from rippling through towns from Rock
 Island on the Mississippi River to Charleston in central Illinois. Hospitals and doctors 
are feeling the brunt as the state delays Medicaid payments and insurance payments for 
state employees.
Peoria-based OSF Healthcare, a network with 10 Illinois hospitals, is owed about $115 
million for bills over four months old, the equivalent of 18 days of operating expenses, 
says Chief Financial Officer Michael Allen. “We have to be cautious about our future,” 
he says. “There’s just no end in sight.”
The state owes Illinois dentists $225 million, and some of those bills go back 23 months,
 according to the Illinois State Dental Society. Some dentists in college towns or other 
areas with lots of state workers are selling their receivables to keep their heads above 
water. Others are asking state employees to pay in cash, says Ronald Lynch, a dentist in
“There are dentists who have to do this just to survive,” says Dr. Lynch. “It’s very 
stressful.” Dr. Lynch, who hasn’t asked for such cash payments, says he is owed about 
$250,000, forcing him to forgo a salary so he can continue to pay bills and his employees.
Health care is the capital’s biggest employer apart from the state itself. Springfield’s two 
hospital systems—Memorial Health and HSHS St. John’s—say they together are owed 
more than $200 million by the state. Edgar Curtis, Memorial Health’s chief executive, 
says he has put off a $100 million capital-expansion project because of the uncertainty.
 “We hate to see projects being shelved because of what is going on at the state level,” 
he says.
The Coliseum building at the state fairgrounds in Springfield closed indefinitely earlier 
this year after the state failed to come up with funds needed for repairs. The closure has 
cost the city tourism dollars from horse shows and other events.
The Coliseum building at the state fairgrounds in Springfield closed indefinitely earlier this year after the state failed to come up with funds needed for repairs.
The Coliseum building at the state fairgrounds in Springfield closed indefinitely earlier this year after the state failed to come 
up with funds needed for repairs. PHOTO: MICHELLE KANAAR FOR THE WALL STREET JOURNAL
Springfield Mayor James Langfelder, a Democrat, says sales-tax revenue has declined by
 $2 million since 2015, which he attributes to state employees making fewer purchases. 
On top of that, the state owes the city $5 million for utilities on buildings it rents from 
the city.
“At first, we tried to meet with legislative representatives, we tried to highlight the 
urgency of this,” says Mr. Langfelder, referring to the impact of the budget crisis on the 
city. “Now, you are almost numb to the fact. We just do whatever is in our control.”
Over the past two years, Eastern Illinois University has received at least $53 million less 
than it would have if the average funding levels of the prior five years had held.
Professors in the chemistry department haven’t been able to print in color since the 
department’s printer ran out of yellow ink a year ago. Biochemistry professor Mary 
Konkle says she decided to leave her tenured position when she no longer had funding to 
order equipment or chemicals for her research.
“It wasn’t my plan to just be here a couple of years and move on,” she says.
Less than a decade ago, university enrollment was at its peak of 12,000. Then it began 
slipping by a few hundred a year. The decline picked up speed after the state’s budget 
troubles began in 2015. Since then, enrollment has dropped by about 1,500 to 7,400 last 
Rallies and press coverage about the state budget mess raised fears the school might 
close, keeping students away. Administrators say it is doubtful that they will have even 
7,000 students this fall.
Biochemistry professor Mary Konkle packed up her belongings recently after deciding to leave Eastern Illinois University when she no longer had funding to order equipment or chemicals for her research.
Biochemistry professor Mary Konkle packed up her belongings recently after deciding to leave 
Eastern Illinois University when she no longer had funding to order equipment or chemicals for her research. PHOTO: MICHELLE KANAAR FOR THE WALL STREET JOURNAL
In Charleston, where the university is based, empty storefronts litter Lincoln Avenue, the 
main thoroughfare running by campus. Jerry’s Pizza, a staple for professors and students 
since 1978, closed last October, citing the university’s shrinking population. “For Rent” 
signs are posted outside rows of apartments that cater to students, with one ad offering 
free iPad minis to students who sign a lease.
“Had we had 12,000 students here, the businesses would probably all still be here,” says 
John Inyart, a former Charleston mayor who owns an auto-repair shop across from the 
university’s main hall. He has had to cast his net wider for customers as faculty and 
students dwindle, he says.
“Any community that had a university was kind of like Teflon. You had that stability in 
your community, with stable good paying jobs,” says Cindy White, chairwoman of the 
local chamber of commerce. “Well, now, that’s not so much anymore.”
If the state doesn’t pass a budget in the current special legislative session or allocate 
emergency funding, about 700 road projects under way across the state—worth $2.3 
billion and employing 20,000 people—will come to a stop.
“While we are hopeful the situation is resolved before then, the department is notifying contractors that all construction work is to shut down on June 30,” says Gianna Urgo, spokeswoman for the Illinois Department of Transportation. “Contractors will be advised
 to secure work zones to ensure their safety during any potential shutdown.”
Among the projects under way is a multiyear, $40 million rebuilding of several main thoroughfares that cut through the heart of Urbana, home of the state’s flagship university.
The roads are now effectively closed, limiting access to retail businesses, says Urbana 
Mayor Diane Marlin.
“We’re on a very tight construction schedule, and a lot of the work has to be done this 
summer before 44,000 students come back,” she says. “So even a slight delay is a big 
Some social-services agencies have given up on receiving state funding. Others have 
closed entirely, leaving some rural communities without mental-health clinics, domestic-
violence shelters and drug-treatment clinics, despite an opioid crisis gripping some towns downstate.
A bookstore in downtown Charleston recently went out of business, as troubles of Eastern Illinois University ripple through the local economy.
A bookstore in downtown Charleston recently went out of business, as troubles of Eastern Illinois 
University ripple through the local economy. PHOTO: MICHELLE KANAAR FOR THE WALL STREET 
Illinois has lost more residents than any other American state for the third year in a row, 
with 90% of the state’s counties seeing a drop in population, shrinking the state’s tax 
base. In 2016, a net of 37,508 people left, according to census data, putting the 
population at its lowest in nearly a decade.
Illinois was one of just eight states in the country, and the only Midwestern one, to lose 
residents last year.
“It’s not just the budget crisis; it’s that people don’t have any confidence in what the 
state is going to do next,” says Laurence Msall, president of the Civic Federation, a 
nonpartisan Chicago-based government-watchdog group backed by business leaders. 
“There is fear of an enormous tax increase. The uncertainty is driving people from the 
In 2014, the state’s gross domestic product was growing faster than any other bordering
state. In 2016, Illinois grew slower than all bordering states except for Iowa, with which
 it was tied.
In the Quad Cities, a metro area that spans the Mississippi and encompasses both Illinois 
and Iowa, population on the Illinois side has decreased by 2.5% between 2010 and 2015. 
Cities on the Iowa side have grown 3.7%.
Among those who have crossed the river is Kelly Daniels, an English professor at 
Augustana College in Rock Island, Ill.
Mr. Daniels bought a home in Rock Island a decade ago, in part because of an incentive 
that helped cover part of his down payment. Now married with a young child, Mr. 
Daniels was looking for a larger house when he decided to move. He was tempted by 
lower property taxes and what he saw as Iowa’s relatively brighter prospects, compared 
with Illinois’s dysfunction.
“It’s not like Iowa is paradise,” said Mr. Daniels, who grew up in California.

The ‘bipartisanship’ to expect if Senate Republicans fail.

The idea persists in some media and GOP ranks that if the Senate bill dies, this will 
produce a blossoming of bipartisanship. The left will have been repudiated by Obama
Care’s woes, and the right by the GOP Congress’s failure. Everyone can then sit down in 
the glorious middle and work out a compromise. It’s a lovely thought—like peace on Earth and the end of original sin. It is also a fantasy.

If Republicans fail, Democrats will have zero political incentive to cooperate except on 
their policy terms. Americans know that Republicans run Congress and the White House,
 and that they promised to do something about the problems of ObamaCare. Do 
Republicans really believe voters in 2018 will blame GOP failure on the President who 
left town two years ago? Democrats can tell you how well that strategy worked in 2010.
Then there’s who Republicans would negotiate with—and over what. Last week 
Governors John Kasich (R., Ohio) and John Hickenlooper (D., Colo.) offered a five-point bipartisan reform outline that was laughable in its lazy generalities: “Improve 
affordability . . . Restore stability to insurance markets.”
Well, sure, but how? Reaching these goals requires hard policy choices on which the 
parties are philosophically divided. Democrats want to stabilize markets with more 
taxpayer money and federal rules. Republicans want to deregulate markets and let 
insurers offer more plans that better suit the variety of insurance consumers. Democrats 
want to expand Medicaid to cover ever-more Americans. Republicans, or at least most of 
them, want to put Medicaid on a budget to provide better coverage to the neediest.
When Senate Republicans reached out to Heidi Heitkamp this spring to negotiate on 
health care, the North Dakota Democrat told Politico she had these demands: No per 
capita Medicaid block grants to the states and no rollback in ObamaCare’s Medicaid 
expansion. And that was merely “the price of admission for me sitting down.” Ms. 
Heitkamp is the second most conservative Senate Democrat after West Virginia’s Joe 
Ms. Heitkamp would never get a real chance to negotiate in any case. If their current 
effort fails, Republicans would then need 60 Senate votes to pass anything, and that 
gives Mr. Schumer the whip hand. His price for cooperating would include the Medicaid 
status quo; preserving the individual and employer mandates; tens of billions in higher 
subsidies to lure insurers back into the failing exchanges; and probably a limit on the 
policy flexibility the Trump Administration could allow states.
Does that sound like something Rand Paul might support? Or Mike Lee ? The more 
conservative Republicans who defect, the more Mr. Schumer would demand in return for 
more Democratic votes. Majority Leader Mitch McConnell would have to scramble to f
ind even 15 Republicans to vote with Democrats as the GOP majority splinters.
This is the Senate reality, not some Kasich Kumbaya circle. Republicans can either set 
aside their narrow self-interest and fix ObamaCare on their terms, or they can collapse in 
disarray and bail it out on Mr. Schumer’s. In 2018 they can defend an accomplishment or 
try to explain away a failure. Americans will know the difference.
4) Expect a Coverup

Russia may have indeed affected the election, through the farcical Mr. Comey.

By Holman W. Jenkins, Jr.

In the Sunday Washington Post’s 7,000-word account of what President Obama knew 
about Russian election meddling and what he did about it, one absence is notable. 
Nowhere in the Post’s lengthy tick-tock is Mr. Obama presented with evidence of, or 
described as worried about, Trump collusion with Russia.
Moscow intervened in the election eight ways from Sunday, but it’s clearer than ever that 
what’s occupied Americans for the past six months are baseless accusations about the 
Trump campaign.
Among the evidence on Mr. Obama’s desk was proof that Vladimir Putin was personally 
directing the Russian espionage effort. For a variety of sensible reasons, though, the 
White House and U.S. intelligence also concluded that Russia’s meddling was “unlikely 
to materially affect the outcome of the election.”

President Obama made at least one inevitably political calculation: Hillary Clinton was
 going to win, so he would keep relatively mum on Russian interference to avoid 
provoking “escalation from Putin” or “potentially contaminating the expected Clinton t
riumph,” in the Post’s words.
Strangely missing from the Post account, however, is one Russian intervention, revealed 
by the paper’s own earlier reporting, that may really have, in farcical fashion, elected 
Donald Trump.
This was FBI Director James Comey’s ill-fated decision to clear Hillary Clinton publicly 
on intelligence-mishandling charges. His choice, it now appears, was partly shaped by a 
false intelligence document referring to a nonexistent Democratic email purporting to 
confirm that then-Attorney General Loretta Lynch had vowed to quash any Hillary 
On April 23, the New York Times first alluded to the document’s existence in an 8,000-
word story about Mr. Comey’s intervention.
On May 24, the Post provided a detailed description of the document and revealed that 
many in the FBI considered it “bad intelligence,” possibly a Russian plant.
On May 26, CNN adumbrated that Mr. Comey “knew that a critical piece of information 
relating to the investigation into Hillary Clinton’s email was fake—created by Russian 
intelligence—but he feared that if it became public it would undermine the probe and the 
Justice Department itself.”
“In at least one classified session [before Congress],” CNN added, “Comey cited that 
intelligence as the primary reason he took the unusual step of publicly announcing the 
end of the Clinton email probe. . . . Comey did not even mention the other reason he gave
 in public testimony for acting independently of the Justice Department—that Lynch was compromised because Bill Clinton boarded her plane and spoke to her during the 
Why has this apparently well-documented, and eminently documentable, episode fallen 
down the memory hole, in favor of a theory for which there is no evidence, of collusion 
by the outsider Mr. Trump?
The alternative history is incalculable, but consider: If Mr. Comey had followed 
established practice, the Hillary investigation would have been closed without an 
announcement, or the conflicted Ms. Lynch or an underling would have cleared Mrs. 
Clinton. How would this have played with voters and the media? Would the 
investigation’s reopening in the race’s final days, with discovery of the Weiner laptop,
 have taken place? Would the reopening have become public knowledge?
The noisy, obnoxious ways Russia meddled amounted to nothing. The public was able to 
discount them. It was only through a bumptious act of our own law-enforcement 
community, in a way the public didn’t know at the time may have been influenced by 
planted Russian intelligence, that the Kremlin conceivably really may have affected 
an extraordinarily close race in the Electoral College.
What also emerges from the Post’s tick-tock, as well as from public testimony by U.S. 
intelligence chiefs, is that Russia did not seek to hide its meddling. The Russian goal was 
to sow confusion and bring disrepute on the U.S. leadership class. If so, any 
investigation of Russian meddling that fails to focus on the Comey actions will amount 
to a coverup.
Expect a coverup: The truth is absolutely unacceptable to the establishment that Special 
Counsel Robert Mueller represents. There is no appetite for the truth among Democrats: 
They cling to Mr. Comey’s legal exoneration of Mrs. Clinton in the server matter.
There is no appetite among Republicans: Messrs. Comey and Mueller are Republicans, 
promoted in their careers by Republican presidents. There is no appetite in the Trump 
White House, which doesn’t want its win tainted in history by a Russian dirty trick.
There is no appetite in the Kremlin: Mr. Putin knows that relations with the American 
superpower are slipping toward an all-out hostility that he can’t afford.
In the U.S., to acknowledge the truth would be to complete the task Russia set itself in 
discrediting the U.S. leadership class.
A coverup is the only way to go.

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