WA Free Beacon: Schweitzer wins seat on board of company he intervened on behalf of during auto bailout

Former Montana Gov. Brian Schweitzer won a seat on the board of a major mining company on May 2 and will now benefit from a deal he brokered on behalf of the company as the state’s Democratic governor.

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GF Tribune: Judge Says MPI Lawsuit Against Gallik Can Proceed

HELENA — In an order filed Thursday, Missoula District Judge John Larson said a lawsuit against former Commissioner of Political Practices Dave Gallik can proceed.

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Heartland Institute: MT Relooking Hydro as Renewable Power

Montana Sen. Jim Keane (D-Butte) has filed legislation to define hydropower as a renewable power source for meeting Montana’s renewable power mandates. 

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Now Is Not the Time for Medicaid Expansion

 Bozeman – Governor Bullock has decided to ignore the Schweitzer administration’s budget submitted last November and instead opt into Obamacare’s Medicaid eligibility expansion. This looks to be a patently bad idea; and even if it’s not there’s no reason to rush forcing Montana’s taxpayers into yet more unsustainable entitlement spending and to herd more of our citizens into a system that provides inferior care at great expense.

First let’s get a little background out of the way and then I’ll explain why it’s a bad idea.

Medicaid provides health insurance – not necessarily health care, but more on that later – to families with incomes up to 133 percent of the federal poverty level (FPL). Montana’s taxpayers currently pay about 33 percent of the program’s cost, with the federal government picking up the balance.

Last summer’s Supreme Court ruling let states decide whether to increase Medicaid eligibility to 138 percent of the FPL, which Obamacare tried to mandate. Many people portray this as “free money” since Washington says it will cover almost all the costs until 2017 and then ramp down to 90 percent of the costs after that. But that promise, like so many others that were made during the health care reform debate, simply doesn’t match the facts on the ground.
These facts argue against expanding Medicaid eligibility for two major reasons, one of them financial and the other one moral.

The financial reason is that we already know this expansion isn’t “free money” for the state. And the moral reason is that it will result in thousands of Montanans being dumped into a system that results in inferior access to care, with many of them forced out of much better private insurance plans.

Estimates of Montana’s potential share of expansion costs vary pretty wildly[i] but most come in between $100 million and $200 million,[ii] or the equivalent of between two hundred and four hundred new teachers, for example.[iii] Our costs increase for a lot of reasons, but I’ll just highlight a few obvious ones.

First, with Obamacare scheduled to cut $8 billion from Medicaid and $500 billion from Medicare, you can be sure that Montana’s health care providers will be coming to taxpayers to be made whole when their costs inevitably outpace their reimbursements under these government programs.

Next, the largest single increase will result from people who are eligible for Medicaid at the 133 percent FPL rate, but not currently enrolled, coming out of the woodwork as word gets out that eligibility has been expanded. Many of these people are technically uninsured today but would be enrolled in Medicaid and receive care if they needed it. Many others, though, have their own insurance and would simply shift from private to public coverage. Since they wouldn’t meet the new 138% FPL threshold, about 33% of their insurance costs would be shifted from them or their employers to Montana taxpayers.

And finally, for anyone who believes that the federal government will continue to reimburse states at the 100 or even 90 percent level, well, I’ve got a bridge to sell you. Washington’s budget woes are going to be transferred to the states, and states like Montana that get from Washington much more than we give are going to feel the pain first and most acutely.

Shifting our most vulnerable population to Medicaid is also immoral. Studies consistently show that Medicaid patients have poorer access to care than privately insured patients.[iv] Since Medicaid typically pays physicians 56 percent of the amount private insurers pay, fewer doctors are accepting new patients and they eventually wind up in hospitals with more serious conditions than those who are privately insured. In addition, there’s scant reliable evidence that Medicaid improves health outcomes at all, and zero evidence that it is the best way to improve health outcomes per dollar spent.

Expanding Medicaid will only worsen our health care system’s woes, increasing costs and decreasing access to quality care while adding a new entitlement burden on taxpayers and dumping thousands of low income Montanans into a failing program. There’s no rush to expand. If it works for other states we can always sign on. But this is one case where we shouldn’t lead with our chin.

Carl Graham is CEO of the Montana Policy Institute

[i] MT Department of Public Health and Human Services, “The Impact of Medicaid Eligibility Expansion and health Montana Kids Monitoring,” 12/2/2011,
[ii] For example, Kaiser Commission on Medicaid and the Uninsured, “the Cost and Coverage Implications of the ACA Medicaid Expansion: National and State-by-State Analysis,”  11/2012,
[iii] Derived from data at,
[iv] For a synopsis see The Heritage Foundation, Kevin D. Dayaratna, “Studies Show: Medicaid Patients Have Worse Access and Outcomes than the Privately Insured,” 11/9/2011,

Montana Public Radio Commentary: The Courtier Society

By: Carl Graham, CEO, Montana Policy Institute

Thanksgiving always reminds me of an old Twilight Zone episode where the aliens show up in sparkly robes with gleaming big eyes and smiles all around. Their elongated fingers carry a book called “To Serve Man,” which everyone naturally assumes is a primer for saving us silly humans from our own ignorance and evil natures. This is during the Cold War, remember, when we all assumed we were going to blow each other to smithereens at any moment.

Naturally the best and the brightest humans start lining up for a trip to the home planet where further enlightenment undoubtedly awaits and a select few will be chosen as mankind’s benevolent overlords. It’s for our own good, of course.

Unfortunately, “To Serve Man” turns out to be a cookbook and the best and brightest are on the menu instead of the guest list.

Maybe it’s just the Thanksgiving tryptophan talking, but I think that’s where this country is headed as people and businesses line up for special treatment from an increasingly centralized and powerful government. At some point they’re going to find out that they’re dinners instead of diners.

We’re already seeing the increased influence exerted by just a few large special interests with access to political power resulting in more restrictions, regulations, and costs that disproportionately fall on small businesses and families, whose voices and opportunities to pursue happiness have grown relatively weaker in the process.

I could give you any number of examples, but let’s just use one that everybody has seen in the papers. The Dodd/Frank banking reform law was passed in the wake of a financial crisis that resulted in taxpayers bailing out big banks to the tune of billions of dollars and looking for someone to blame. Although many of its rules are still being written, we already know that the law includes massive increases in compliance, insurance and capital costs for banks, along with giving politically favored large institutions a de facto “too big to fail” designation.

It’s a law that was written for big bankers by big bankers. They can absorb the increased compliance costs while small banks with much lower margins can’t. They can meet the capital and insurance requirements that stifle small banks’ ability to make local loans to farmers and homebuyers. And of course with an implicit government guarantee, big banks enjoy much lower borrowing costs than small banks giving them even more of a competitive advantage.

The result is that we will soon see our community banks – those that survive anyway – become nothing more than storefronts and loan processors for the “too big to fail” banks that the government has chosen to guarantee. Decisions will be made based on checklists developed in New York and Washington D.C. rather than on personal relationships and local knowledge. Loan proceeds will be shipped out of the state and the big banks will increasingly feed the revolving door of the regulated and regulators until only those that can maintain their political access survive. Consumers will have fewer choices with higher costs, and will have to tailor their lives to meet one size fits all requirements if they want mortgages or small business loans.

But that’s not my point.

My point is that by massively centralizing and expanding government power we’re creating a courtier society, one where access to the King’s court is more important to success than merit or effort or risk taking. Now of course I’m not saying we’re creating a monarchy, but the effect is the same when power, influence and success come from proximity to the levers of power rather than from working hard and taking risks. The politically connected will always have access to power, and so the greater that power the more they will succeed at everyone else’s expense.

The result of this centralization and expansion of power is the systematic elimination of small business in this country. The barriers to entry are becoming so high and the cost of complying with regulation so onerous that would-be entrepreneurs are increasingly unable to make any return on their investments or even go about their daily business without risking fines, penalties, or jail.

Many existing businesses will simply close up shop as regulations and reporting requirements become too expensive or difficult to comply with. Job growth will dry up – especially at the low end of the income scale – as the costs of hiring new employees increase and government becomes a competitor for labor with new and expanded entitlement programs. New entrepreneurs will increasingly look at the barriers to entering the marketplace and the myriad of obstacles erected in their path and just go do something else. The risks and rewards of starting a new business will just not be worth it, especially if their success will be demonized in the increasingly popular political tactic of class warfare.

In a courtier society power is centralized and only that power decides who succeeds and who fails. Decisions are made based on proximity to the throne rather than merit, effort, or even the law. That is the direction we are headed as government becomes increasingly centralized, large, powerful and arbitrary.

The end of this path lies in a business/government partnership where large corporations operate under the umbrella and the thumb of government, and people trade their freedom for a monthly check. There’s a name for that, but I don’t want to be incendiary on this special holiday. Just take a look at Italy in the 1920s for a good example.

And have a Happy Thanksgiving while we still have much to be thankful for.

For Immediate Release
930 Words

Carl Graham is CEO of the Montana Policy Institute, a nonprofit policy research and education center based in Bozeman.
He can be reached at:
67 W. Kagy Blvd., Ste. B
Bozeman, MT 59715
(406) 219-0508

Contrast of Facts On the Presidential Race

This is long for a blog post. Sorry about that. But I was cc’d on an email exchange between two people I know that is worth sharing. The first email was a list of President Obama’s accomplishments straight from the campaign’s website. Fair enough, but just one more political hack who spams their friends’ inboxes with campaign materials doesn’t impress me much. In fact it’s kind of insulting.

What I’m copying here – and I have to copy and paste from the email since it’s not pulled off a campaign website that I know of – is a friend’s thoughtful response to that list, providing real facts and real context from a real person. If it doesn’t read like a campaign commercial that’s because it isn’t one. It’s the product of someone who’s done their homework and thinks for themselves.

I’m in the information business and I don’t fear providing information and links from people with whom I personally disagree because I think most people are smart enough to figure out what’s right, wrong, useful, and manipulative. So I’m giving you, via link and text, a bunch of information that you can add to the mix if you’re still on the fence. I’m not going to tell you who to believe or vouch for the data and assertions by either of these takes, but please look at the link above, and then at the rebuttal below. And then do your civic duty on Tuesday.

Rebuttal to “spammer friend” of Obama campaign’s list of accomplishments:

“1. Unemployment: According to the National Bureau of Economic Research, the recession ended in June, 2009, over three years ago. Shortly into his first term, Obama promised if Congress passed the stimulus package unemployment would never top 8% and would drop below 6% by 2012. Just last month, for the first time since Obama’s election, unemployment dropped below 8%. Obama’s 43 straight months of unemployment over 8% is the longest for any presidency. As bad as that is, it is even worse if you analyze the real unemployment under Obama when you count all the folks who have given up looking for work. Taking those folks into account results in a true unemployment rate of 11.63%.

2. The Recovery Act: Most of America is now aware of the expensive failures of the stimulus just on green energy alone. These include Solyndra ($500 million), A123 Systems ($249.1 million), Abound Solar ($400 million), Amonix Solar ($20 million), and several more. Additionally, as stated above, the promised effect on employment never materialized. Despite this, digging deeper into the numbers shows the disastrous result of the stimulus. In the second Quarter of 2012, the Congressional Budget Office estimates that between 200,000 to 1.2 million people have jobs they otherwise would not have without the stimulus. Giving the President the benefit of the doubt by assuming the correct number is 1.2 million jobs, that equates to $692,500 per job “created or saved” by the Obama stimulus. Seems like we would have been better giving those 1.2 million folks a $100k each and saved the rest. While the president touts creating 5 million new jobs during his first term, it would actually have taken 9 million new jobs just to keep up with population growth. Consequently, the Obama economy is not just running in sand, it is running in quicksand.

3. Debt/Deficit/Budget: After criticizing as “unpatriotic” the doubling of the national debt from $5 trillion to roughly $10 trillion under Bush over eight years, Obama increased the debt by nearly $6 trillion in less than four years. Google or search on YouTube for “Hal Mason” and/or “United States Budget Dilemma” and you will learn the US budget cannot be balanced even if the government shut down. More specifically, you will learn the US will spend $3.8 trillion under Obama in 2012 but collect only $2.5 trillion dollars in tax revenue, a record deficit of $1.3 trillion. According to the White House’s own books, the government will spend $225 billion paying interest our debt, $2,252 trillion on entitlements and $1.319 trillion operating the government (military, energy, education, congress, courts, etc.). If you do the math, you will find that spending for entitlements in interest alone exceeds the tax revenue collected. That means we are borrowing money every day to run every other facet of government like the military, etc. Now, Washington talking about the upcoming “fiscal cliff.” After watching the Hal Mason video I came to the conclusion we already went over a cliff. Scary to think our current fiscal crisis can get even worse.

4. Health Care Reform: This was sold to the American people as costing $900 billion. This was done so Obama could say it would not add to the deficit. Now the cost is estimated to exceed $2 trillion. Obama also promised healthcare reform would result in a reduction of health insurance premiums. My health insurance agent, who is the same age and has the same number of children as me, informed me he attended agent training about the bill and what will happen in 2014 when it goes into full force. Based on the information provided, he calculated his premium will go up $300/month, or $3600/year, which means I will experience the same increase. Yet another broken promise, only this one directly hits my pocketbook (& everyone else’s).

5. Iran: Iran is 4 years closer to a nuclear bomb than when Obama took office. Despite what Obama says, the US’s relationship with Israel, our strongest allie in the Middle East, has never been weaker. Most alarming was Obama’s decision to go on “The View” to meet with Whoopi Goldberg and the gang instead of meeting with the Israeli Prime Minister.

6. Al qaeda: Obama deserves credit for authorizing our Navy Seals to kill Bin Laden. However, I think it is fair to say any President would have given the same order and I give more credit to our military and intelligence agency. While Bin Laden’s death was a terrific moral victory, we recently learned Al Qaeda wasn’t “decimated” as claimed. We learned this when an Al qaeda affiliated group attacked the US Consulate in Benghaze, Libya, and killed our ambassador (either before or after raping him according to news reports) and 3 other Americans, and then flew the Al qaeda flag over our consulate. Now I know what Obama means when he says we are leading from behind.

7. Immigration. Obama promised immigration reform in his first term. For the first two years of his presidency he had Democratic majorities in both the Senate and the House. Despite this, he didn’t get it done.

8. Auto Bailout: Both before and after the auto bailout, American automakers faced a built-in disadvantage when compared to foreign automakers, even those with plants in the US. This is because of compensation and benefit contracts with the UAW. Due to these built-in costs, US auto companies incur an increase of cost of approximately $2000 per vehicle manufactured as compared to non-US companies. Had the US auto companies gone through a bankruptcy they would’ve had to make the structural changes necessary to eliminate this disadvantage. Instead, the US taxpayer bailed them out, leaving the structural defects in place which led to the failure in the first place. These defects include $22 billion in unfunded pension liabilities worldwide for GM alone ($10 billion in US alone, according to Bloomberg). The bailout was like handing a drunk man a drink for his drive home. The latest estimate is that the US taxpayer will lose between $20 to $30 billion on the GM portion of the bailout alone. Additionally, it should be noted that as part of the bailout the Obama administration forced hundreds of dealerships to close, costing thousands of jobs. Since dealerships are not owned by the auto companies, and these dealers bought products from the auto companies which were then sold to the public, I don’t understand how eliminating dealers, who ultimately sell the products, helps auto companies. Seems to me that since someone else is footing the bill to keep the dealership open, and the auto companies make their money selling their product to the dealers, the auto companies would benefit from having more dealers to buy and sell their products. I guess I just don’t understand Obamanomics.

9. Gay marriage: Obama was against gay marriage (2008) before he was for it (2012).

10. Leadership: For me, the biggest issue is leadership. I am reading Bob Woodward’s book “The Price of Politics” and have been watching Woodward on TV criticizing Obama’s leadership failure (which is surprising because neither Woodward nor the Washington Post are known for loving conservatives). In the book I learned even the Democratic leaders in Congress are frustrated with Obama’s lack of interaction and communication with them. Most telling is the story of how the White House had to scramble on election eve of 2010 to get John Boehner’s (the Republican minority leader) phone number so Obama could call and congratulate Boehner on presumptively becoming the new Speaker of the House. After 2 years of being President, Obama did not have the phone number of the Republican leader of the US House of Representatives. Incredible! How can you expect to change the tone in Washington DC if the executive branch is not communicating with the leaders of the legislative branch, especially with the leaders of the other party? Even Bush was able to sit down with Ted Kennedy and write an education reform bill in his first term.

The discussion on leadership leads me to a comparison of Obama and Romney. In 2008 I saw nothing in Obama’s history to suggest he was prepared to be President. Four years of Obama has not changed my opinion, especially after seeing him jet off to Vegas for a campaign event on 9/12 with the knowledge that Al qaeda killed our ambassador and had its flag flying over our consulate. Then, for more than a month he and his administration continued the narrative that Benghazi was the result of an anti-Islam video. We now know Obama and White House knew it was an organized attack before Obama landed in Vegas.

Compare Obama’s record with Romney’s and it is not even close. Romney succeeded in private business, saved the Salt Lake City Winter Olympics (and actually turned a deficit into a surplus), then turned a $2 billion deficit in Massachusetts into a balanced budget as governor and lowered unemployment to 4%.

All things considered, it isn’t even close for me. Nevertheless, I know there many good, patriotic folks such as yourself who feel differently; I just hope there are fewer voters who agree with you than agree with me. Not because of my ego, but because I really believe we are at a tipping point and can’t afford 4 more years of policies that have failed in Greece, California, Illinois, New York and other bastions of liberalism.”

Montana Public Radio Commentary: Philosophies on Philosophies

Philosophies on Philosophies

By: Carl Graham, CEO, Montana Policy Institute

With stimulus packages apparently designed to just stimulate government growth, “Quantitative Easing” that’s only inflating the next bubble, and institutionalized denigration of those holding differing opinions passing for political discourse, maybe it’s time to say a few words about central planning.

Huh? What the heck does central planning have to do with any of that stuff?

Well, it’s a good representation of those differing opinions that many of us have. It exemplifies the difference in philosophy between those who think government is the only thing we all belong to, and those of us who think government actually is the only thing that belongs to all of us.

Let’s face it.  Some people want to be planned for.  They like having membership in a club that can make the tough calls, do the intellectual heavy lifting, and take the heat for our collective misdeeds.  They’re willing to give up some latitude in their lives to not have to make those hard decisions, or maybe they think there are enough others out there who are incapable of making good decisions that somebody should help narrow their options.  And of course there’s no shortage of people who think they have all the answers and gee wouldn’t we all be better off if they could just impose their ideas on the rest of us in the form of central planning. It’d be so much more efficient and, even if a few eggs get broken it’ll still be a better omelet.

But history is littered with failed attempts by states (or more accurately elites) to centrally plan all or significant portions of economies.  From the French Revolution to socialism to communism, to even Plato’s philosopher king, elites have tried to tie all the pieces of society together in a way that provided for everyone by dictating the types and amounts of things (materials, ideas, labor, etc.) to keep the machine running.  All failed spectacularly.  Well, Plato’s wasn’t really tried but come on; can you really see your old philosophy professor with the pony tail and bong blisters in charge?

These attempts were all cloaked in good intentions but failed out of a combination of hubris and indifference: someone assumed they could know the unknowable about what people wanted and needed, and what it would take to provide all of those things in the right quantities and at the right places and times.  And because enough people didn’t demand the right to make their own decisions the ruling elites were able to use powerful and centralized governments to impose their “solutions.”

Let’s see: bank lending requirements, pay caps, government-run healthcare, mass subsidies, auto bailouts…the list is growing of things that someone somewhere thinks they know more about than millions of free people making free decisions about how best to allocate their resources to pursue their own happiness. As more and more decisions and resources are centralized in Washington, the gap between haves and have-nots is being replaced by a growing gulf between those who get to make decisions about we’ll live our lives, and those of us who have live with those decisions.

And that is why, I think, we’re seeing denigration passing for opinion and demonization passing for discourse. The stakes have never been higher, and there are two broad camps out there with fundamentally different visions of what this country should look like– both with strong historical philosophical roots and legitimacy. But both can’t be right, at least not at one time in one place.

I’m getting quite tired, for example, of hearing that those on the Left are stupid, uninformed, or evil.  Some certainly are some or all of those things, as are some on the Right. But just like ignorance, racism and extremism don’t define the vast majority of those on the Right; stupidity and malevolence don’t define the activating forces behind those on the Left.

Ignoring the vast malleable center for the moment – which we generally do anyway except at election time – most people fall into one of two camps, both of which have long philosophical pedigrees and solid ideological underpinnings.

Folks like me who believe that freedom and happiness flow from natural rights and having choices in our lives too often fall into the trap of casually dismissing as useful idiots or miscreants those who believe that rights are granted by governments which are in turn best led by intellectual elites attuned to the needs of the times.

It’s not necessarily gullible or malevolent to believe that some set of experts are better at adapting to the times than individuals and so they should be in charge for the betterment of us all.  It sounds nuttier than a Planters Peanut factory to me, but it’s not an illegitimate view and it should be argued against, not belittled.

Likewise, many on the Left generally dismisses the new grassroots conservative movement as not worthy of their derision and so fall back on manufactured stereotypes of racists and bumpkins to explain any popularity and successes these groups attain.

What many on the Left don’t understand is that there are sound ideological and philosophical underpinnings to conservative values as well. Founding principles and religious values are legitimate in the mainstream, and so the people who hold them must be tarred with illegitimate caricatures of bigotry or ignorance to marginalize them. That is, or should be, insulting to honest people on both sides of the argument.

The thing is, if we don’t understand our opponents’ philosophies and what goes into their assumptions how can we tailor our arguments to oppose them and expose their fallacies?  And if we take the intellectually lazy position of ascribing ill intent or ignorance rather than understanding their arguments then we miss an enormous opportunity to debate issues on the strengths of our own arguments.  We’re seeing too much of that now, where informed and interested people are calling each other playground names instead of trying to persuade each other and educate those around them.

We would do our political system a favor, and maybe we could get back to watching boring beer commercials for a while if we spent a little more time listening and a little less time calling each other names.


Great Falls Tribune: Judge hears testimony in Gallik case

HELENA – A Missoula judge heard more than two hours of testimony in a Helena courtroom Wednesday in a lawsuit alleging former Commissioner of Political Practices Dave Gallik abused his state office.

Click here to continue reading the article in the Great Falls Tribune…