CBO report on “Trumpcare” and the 2018 midterm elections.

The talking heads are having a field day after release of the Congressional Budget Office (CBO) report on the repeal and replace efforts to end Obamacare. Some Republicans suggest that they should just let Obamacare implode. I agree that Obamacare will implode and that it will be a major black eye for the Democrat Party. However, it would be an abdication of Congress’ responsibility and mean-spirited.

There were many positive aspects of the CBO report. But, as is typical, the main takeaway from the CBO report by the “lame-stream media” is that 24 million Americans would be uninsured sometime in the future – a future too far distant for accurate prediction. OK. Let’s give the CBO the benefit of our doubts (they were off by 12 million when making their Obamacare prognostication) and analyze that prediction from the perspective of the 2018 election.

Who would be uninsured? Two groups would be the most likely to be uninsured. Group 1: those that do not want health insurance (young healthy adults who see it as a cost without benefit), but were forced to purchase it under Obamacare and will no longer do so once Obamacare is a footnote in history. Group 2: those that got it for free and refuse to spend even one cent of their own money to purchase health insurance.

How will these two groups vote in 2018. Group 1 will be pleased with the Republican changes to health care. Group 2 will be very unhappy. But let’s face it; Group 2 are “dyed-in-the-wool-give-it-to-me-free” Democrats. They would never vote for a Republican under any circumstance. Group 1 will vote Republican.

You can let me know what you think of my analysis. And, it’s OK to strongly disagree. I have a thick skin after writing a political blog these past 6 years.

Roy Filly


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If you can’t beat them… well, take your ball and go home.

Isn’t it interesting that all of a sudden and miraculously progressive/statist/altruists are now advocates of state’s rights. It is finally dawning on their “collective” (pun intended) consciousness that they won’t be beating the Republican Party any time soon. What to do? What to do?

[Source: Liberals are learning to love states’ rights, by Charles Lane]

We are seeing a liberal “independence movement.” California, the frustrated “statist” state that provided the entire popular-vote margin for Hillary, wants to secede from the Union. In a New Republic manifesto, Kevin Baker goes beyond “Calexit” to advocate a “Bluexit” secession of all 20 states that voted “Clinton.”

I love hearing such insane notions from the liberals. It is proof positive they are beaten and do not know which way to turn! A national breakup along state lines is not going to happen. However, as I am more of a Federalist (footnote), I applaud any move toward states as sovereign policymaking entities.

Federalism has had its bad moments to be sure (e.g., John C. Calhoun). But the “good” of federalism is that, whenever appropriate, laws be made close to the people who will actually live under them. As well, there is an enormous benefit in state-by-state experimentation and even a certain amount of competition.

We see this being played out even today under the heavy hand of the federal government. Federal law says “no marijuana.” State laws say make your own choice. There is a federal minimum wage. Now 29 states have a higher minimum wage. Twenty-eight states have right-to-work laws. Do I like all of these? Not at all! I am opposed to minimum wage laws of any kind and very much favor right-to-work laws. (I’m neutral on marijuana.) But my personal preferences are moot, as I am not Emperor of the USA.

This is the benefit is federalism. For example, if 47 states legalize marijuana in the next decade, you will know that the federalism “experiment” of a few states convinced the vast majority of other states.

[Directly from the Lane article] America’s federalist constitution, by contrast, offers ways of channeling debates away from Washington — where the stakes are winner-take-all but the processes are deadlocked — into potentially more fluid and productive state channels.

Neither Blue America nor Red America really wants to break up. We just need to give each other some space.

Roy Filly


Legal Definition of federalism:  distribution of power in a federation between the central authority and the constituent units (as states) involving especially the allocation of significant lawmaking powers to those constituent units.

Posted in Uncategorized | 8 Comments

Just for fun.

No words required.

Roy Filly

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Three completely unrelated subjects.

The graph below does not include the USA (Source: Eurostat), only European nations. However, I am confident that our statistic would be similar. As a physician, I use google frequently. It is a remarkable source of information. In fact, the first time I ever heard the name “Google” (circa 2000) or saw a Google search result was when one my resident students found that answer to a question I did not know (and was considered a world authority in the particular subject)! Being an informed patient is one of your best health protections.

The Devil made me do it, but I just had to post this!

Over the next week or two we will get an earful about President Trump’s budget. As a small government, strong defense conservative… well, I love it! He could have eliminated some of those Departments and I would not have shed a tear. And, by the by, when the Democrats start to demean the Trump Budget, recall these facts:

  • 2015 Senate vote on Obama budget defeated 98 – 1
  • 2012 Senate vote on Obama budget defeated 99 – 0
  • 2011 Senate vote on Obama budget defeated 97 – 0
  • the Obama administration missed every deadline to submit a budget since he first took office in 2009.

I think Milton Friedman had it exactly right!

Roy Filly

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Food for thought.

I believe my skepticism of “climate change” and “global warming” is more than evident in the numerous posts I have written on this issue. Here are a few. There are dozens more.





However, the graph below demonstrates that if the government and the media say something often enough, Americans start to believe it. Sad.

As a fiscal conservative I am always skeptical of any large government program. Among the programs about which I have been skeptical is “massive infrastructure spending” – although, like all Americans, I want our infrastructure maintained. President Trump has proposed just such a new federal project (skeptical). But I must admit that if the graph below is accurate, the old truism, “a stitch in time save nine” comes to mind. His trillion dollar investment could be repaid many times over.

Roy Filly

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Jokes of the day.

Whenever you get frustrated by President Trump’s lack of verbal political skill, close your eyes and whisper repeatedly: “President Hillary Clinton, President Hillary Clinton…” You’ll feel ever so much better.

I’m not sure the Democrat Party sees their fate as they belligerently try to block the efforts of our new President.

Finally, someone has discerned the key factor in spotting a good healthcare reform bill.

Roy Filly

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When the government sticks in their nose.

I am not against alternative forms of energy. I am against the government picking winners and losers. If one listens to the climate change alarmists and the lame-stream media one gets the distinct impression that “the world has moved smartly and seamlessly toward 21st century green energy while the U.S. is the high-polluting laggard that just won’t get with the program to save the planet (see Moore article below).”

Not so. The Green energy movement has been anything but “seamless” and “successful.” To paraphrase Flip Wilson (if any of you are old enough to remember), “Do duh name ‘Solyndra’ ring a familiar note?”

[Sources: Germany’s “Silent Catastrophe” …330,000 Households See Power Turned Off In One Year! By P. Gosselin and Europe’s Lesson Teaches Us: Don’t Go Green, by Stephen Moore]   

For example, the German government has legally mandated that significant amounts of wind and solar power must be part of their energy economy. And what has been the result of this “brilliant plan?” The German press reports that “energy poverty” is now engulfing their nation.

What is causing this massive problem, ask you? Simple, answer I. The government thinks they know more than the free enterprise system… but THEY DON’T!

The problem is Germany’s skyrocketing electricity prices. Currently regular household consumers are paying nearly 30 cents a kilowatt-hour – almost three times the rate paid in the USA. Many households are no longer able to afford electricity. More than 330,000 households in Germany have seen their electricity cut off over the past year alone.

And who is suffering the most? The hardest are households on welfare.  Not only have the poor been broadsided by the high electricity prices, but so have energy intensive industries. Over the past years a number of German plants have been moving their operations to less expensive locations abroad. Traditional power companies have also been getting creamed, seeing billions in losses and thousands of layoffs. Perhaps, as President Trump’s energy policy results in the US having the world’s lowest unsubsidized energy prices, manufacturing enterprises will flood back to the USA.

The 330,000 German households that lost their electricity, while serious, is only a drop in the proverbial bucket. Power companies threatened 6.2 million with loss of service! Toss in 44,000 households that saw their natural gas turned off and one can easily see that my original premise is correct.

Other nations are also faring poorly with their “green energy” schemes. [From the Moore article] In Britain, to comply with renewable energy requirements, power stations are burning hundreds of millions of pounds of wood pellets (pellets imported from the U.S.). Environmental experts confirm that burning wood is much worse for the environment than burning natural gas or even coal.      

Australia, another “green energy” leader, saw its electricity prices skyrocket this past winter. According to an analysis by the Institute for Energy Research, power costs surged unbelievably — from $100 per megawatt-hour to $10,000 per megawatt-hour. This was because of heavy dependence on an unreliable renewable energy program. The government had to reopen one of its shuttered natural-gas plants to keep prices from further exploding.

Sweden announced a decade ago that it was all-in on green energy, and the government launched a wind-power program. Embarrassingly, Swedish politicians now have had to acknowledge the program has become so expensive and inefficient that the government will phase out the subsidies lavished on the industry.

As I said above, governments think they know more than the free enterprise system… but THEY DON’T!

And thanks to HP for sending the Gosselin to me.

Roy Filly


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I love quotes.


  1. In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress. —   John Adams
  1. If you don’t read the newspaper you are uninformed, if you do read the newspaper you are misinformed. —   Mark Twain
  1. Suppose you were an idiot. And suppose you were a member of Congress. But then I repeat myself. —   Mark Twain
  1. I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. —   Winston Churchill
  1. A government which robs Peter to pay Paul can always depend on the support of Paul. —   George Bernard Shaw 
  1. A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money. —   G. Gordon Liddy
  1. Democracy must be something more than two wolves and a sheep voting on what to have for dinner. —   James Bovard , Civil Libertarian (1994)
  1. Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries. —   Douglas Casey , Classmate of Bill Clinton at Georgetown University
  1. Giving money and power to government is like giving whiskey and car keys to teenage boys. —   P.J. O’Rourke , Civil Libertarian 
  1. Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. —   Frederic Bastiat , French economist(1801-1850)
  1. Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it —   Ronald Reagan   (1986)
  1. I don’t make jokes. I just watch the government and report the facts. —   Will Rogers
  1. If you think health care is expensive now, wait until you see what it costs when it’s free! —   P.J. O’Rourke
  1. In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other. —   Voltaire   (1764)
  1. Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you! —   Pericles   (430 B.C.)
  1. No man’s life, liberty, or property is safe while the legislature is in session. —   Mark Twain   (1866) 
  1. Talk is cheap…except when Congress does it. —   Anonymous 
  1. The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other. —   Ronald Reagan
  1. The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery. —   Winston Churchill 
  1. The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. — Mark Twain
  1. The ultimate result of shielding men from the effects of folly is to fill the world with fools. —   Herbert Spencer , English Philosopher (1820-1903)
  1. There is no distinctly Native American criminal class…save Congress. —   Mark Twain 
  1. What this country needs are more unemployed politicians. —   Edward Langley , Artist (1928-1995)
  1. A government big enough to give you everything you want, is strong enough to take everything you have. —   Thomas Jefferson 
  1. We hang the petty thieves and appoint the great ones to public office. —   Aesop


  1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
  1. What one person receives without working for… another person must work for without receiving.
  1. The government cannot give to anybody anything that the government does not first take from somebody else.
  1. You cannot multiply wealth by dividing it. 
  1. When half of the people get the idea that they do not have to work, because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation!

And thanks to PCoop for sending these to me.

Roy Filly

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The “Statist” State: California.

As my readers know, I live in California. The State has great weather, great natural beauty, and the worst government. You don’t even need to know what these “agencies” do (see list below). Probably, no one in the state structure of California can tell you what each of these “agencies” does. But they cost a lot.

Some agencies have a short name like CalPERS. But this is a massive agency. CalPERS pays over $12.7 billion in retirement benefits, and they will pay over $7.5 billion in health benefits. CalPERS manages the largest public pension fund in the United States, with $300.3 billion in assets. Despite the large amount of assests, California pension funds are in serious trouble. The Kersten Institute for Governance and Public Policy revealed some fairly startling realities about California’s public pension underfunding levels.  The amount of California public pension underfunding is a staggering $92,748 per household. Worse yet is the estimated 0.6% annual return in 2016 that missed the 7% target by a country mile.

California State Agencies

  • Administrative Law, Office of (OAL)
  • African American Museum, California (CAAM)
  • Aging, California Commission on (CCoA)
  • Aging, California Department of (CDA)
  • Agricultural Labor Relations Board (ALRB)
  • Air Resources Board (ARB, CARB)
  • Alcoholic Beverage Control Appeals Board (ABCAB)
  • Alcoholic Beverage Control, Department of (ABC)
  • Arts Council, California (CAC)
  • Asian Pacific Islander Legislative Caucus (API)
  • Assembly Democratic Caucus (ASMDC)
  • Assembly, California State
  • Association of Bay Area Governments, Earthquake & Hazards Program, (ABAG)
  • Athletic Commission, California State (CSAC)
  • Attorney General (Department of Justice) (AG)
  • Audits, Bureau of State (State Auditor) (BSA)
  • Automotive Repair, Bureau of (BAR)
  • Baldwin Hills Conservancy (BHC)
  • Bar of California, State (CALBAR)
  • Barbering and Cosmetology, Board of (BBC)
  • Behavioral Sciences, Board of (BBS)
  • Binational Border Health, California Office of (COBBH)
  • Biodiversity Council, California (CBC)
  • Blind, Office of Services to the (OSB)
  • Boating & Waterways, California Department of (DBW)
  • Boating and Waterways Commission, California
  • Building Standards Commission (BSC)
  • Business and Economic Development (Go-Biz)
  • Business Oversight, California Department of (DBO)
  • Business, Transportation, & Housing Agency (BTH)
  • Business.ca.gov (Go-Biz)
  • Cal EMA (CAL EMA)
  • Cal-Atlas (Cal-Atlas)
  • Cal/EPA (CALEPA)
  • CalCareNet
  • CALFED Bay-Delta Program (CALFED)
  • CalFresh (CalFresh)
  • California Channel (CalChannel)
  • CalRecycle
  • CalSTRS
  • Caltrans (Headquarters) (DOT,CALTRANS)
  • Caltrans, District 1 (DOT, CALTRANS)
  • Caltrans, District 10 (DOT,CALTRANS)
  • Caltrans, District 11 (DOT,CALTRANS)
  • Caltrans, District 12 (DOT, CALTRANS)
  • Caltrans, District 2 (DOT,CALTRANS)
  • Caltrans, District 3 (DOT,CALTRANS)
  • Caltrans, District 4 (DOT, CALTRANS)
  • Caltrans, District 5 (DOT, CALTRANS)
  • Caltrans, District 6 (DOT, CALTRANS)
  • Caltrans, District 7 (DOT,CALTRANS)
  • Caltrans, District 8 (DOT,CALTRANS)
  • Caltrans, District 9 (DOT, CALTRANS)
  • Career Resource Network (CALCRN)
  • Cemetery & Funeral Bureau (CFB)
  • Central Valley Flood Protection Board (CVFPB)
  • Child Abuse Prevention, Office of
  • Child Support Services, Department of (CDCSS)
  • Chiropractic Examiners, Board of (BCE)
  • Citizens Compensation Commission, California
  • Citizens Redistricting Commission (CRC)
  • Climate Change Portal, California
  • Coachella Valley Mountains Conservancy (CVMC)
  • Coastal Commission, California
  • Coastal Conservancy, California
  • Colorado River Board of California (CRB)
  • Community Colleges System, California (CCCS)
  • Community Services & Development, Department of (CSD)
  • Compensation Insurance Fund, State (SCIF)
  • Conservation Corps, California (CCC)
  • Conservation, Department of (DOC)
  • Consumer Affairs, Department of (DCA)
  • Consumer Services Agency, State and (SCSA)
  • Contractors State License Board (CSLB)
  • Controller’s Office, California State (SCO)
  • Correctional Health Care Services, California (CCHCS)
  • Corrections & Rehabilitation, Department of (CDCR)
  • Corrections Standards Authority (CSA)
  • Counties, California State Association of (CSAC)
  • Court Reporters Board of California
  • Courts, California
  • Courts of Appeal
  • Cyber Safety for Children
  • Deaf Access, Office of
  • Delta Conservancy
  • Delta Protection Commission
  • Delta Stewardship Council
  • Dental Board of California (DBC)
  • Dental Hygiene Committee of California (DHCC)
  • Denti-Cal (DENTI-CAL)
  • Department of Motor Vehicles (DMV)
  • Developmental Disabilities, State Council on (SCDD)
  • Developmental Services, Department of (DDS)
  • Disability Insurance, State (EDD)
  • Disabled Veterans Business Enterprise Advisory Council (DVBE)
  • Earthquake Authority, California
  • Education, California State Board of
  • Education, Department of (CDE)
  • eHealth Initiative, California
  • Elections (Secretary of State) (SOS)
  • Electronic & Appliance Repair, Bureau of (BEAR)
  • Emergency Communications Office (911), California
  • Emergency Food Assistance Program (EFAP)
  • Emergency Management Agency, California (Cal EMA)
  • Emergency Medical Services Authority (EMSA)
  • Employment Development Department (EDD)
  • Employment of People with Disabilities, California Committee on (CCEPD)
  • Employment Training Panel (ETP)
  • Energy Commission, California (ENERGY)
  • Environment Resources Evaluation System, California (CERES)
  • Environmental Health Hazard Assessment, Office of (OEHHA)
  • Environmental Protection Agency (CALEPA)
  • Equalization, Board of (BOE)
  • eServices Office (ESERVICES)
  • Experience Unlimited (EDD)
  • Exposition & State Fair, California (CAL EXPO)
  • Fair Employment & Housing Commission (FEHC)
  • Fair Employment & Housing, Department of (DFEH)
  • Fair Political Practices Commission (FPPC)
  • Fair, California State (BIG FUN)
  • Film Commission, California (CFC)
  • Finance, Department of (DOF)
  • Financial Institutions, Department of (DFI)
  • Fire Marshal, Office of the State (OSFM)
  • Firearms, Bureau of (DOJ)
  • First 5 California (First 5)
  • Fish & Game Commission (FGC)
  • Fish & Game, Department of (DFG)
  • Fleet & Asset Management, Office of (OFAM)
  • Flex Alerts
  • Food & Agriculture, Department of (CDFA)
  • Forestry & Fire Protection, Board of (BOF)
  • Forestry & Fire Protection, California Department of (CAL FIRE)
  • Franchise Tax Board (FTB)
  • Gambling Control Commission (CGCC)
  • Gang & Youth Violence Policy, Governor’s Office of (OGYVP)
  • General Services, Department of (DGS)
  • Geospatial Clearinghouse (CALATLAS)
  • GIS (Geographic Information Systems) Council, California (CGC)
  • Government Operations Agency
  • Governor’s Mentoring Partnership (GMP)
  • Governor’s Office of Business and Economic Development (GoED)
  • Governor’s Office of Planning & Research (OPR)
  • Governor, Office of the (GO)
  • Guide Dogs for the Blind, Board of (BGDB)
  • Habeas Corpus Resource Center (HCRC)
  • Health and Human Services Agency (CHHS)
  • Health and Safety & Workers’ Compensation, Commission on (CHSWC)
  • Health Benefit Exchange, California (HBEX)
  • Health Care Reform, California
  • Health Care Services, Department of (DHCS)
  • Health Information Integrity, California Office of (CALOHI)
  • Health Planning and Development, Office of Statewide (OSHPD)
  • Healthy Families Program
  • Hearing Aid Dispensers Bureau
  • High-Speed Rail Authority (CAHSRA)
  • Highway Patrol, California (CHP)
  • Historic Preservation, Office of (OHP)
  • Historical and Cultural Endowment, California
  • Historical Resources Commission, State (SHRC)
  • Home Furnishings and Thermal Insulation, Bureau of (BEARHFTI)
  • Homeless Youth Authority, California (HYP)
  • Horse Racing Board, California (CHRB)
  • Housing & Community Development, Department of (HCD)
  • Housing Finance Agency (CALHFA)
  • Human Resources, Department of (CalHR)
  • I Can Afford College
  • Independent Living Council, California State (CALSILC)
  • Industrial Relations, Department of (DIR)
  • Industrial Welfare Commission (IWC)
  • Information Security, Office of (OIS)
  • Infrastructure and Economic Development Bank (I-Bank) (IBANK)
  • Inspector General, Office of the (OIG)
  • Insurance Commissioner
  • Insurance, Department of (CDI)
  • Judicial Council of California
  • Judicial Performance, Commission on (CJP)
  • Justice, Department of (Attorney General) (DOJ)
  • Juvenile Justice, Division of
  • Juvenile Parole Board (JPB)
  • Labor and Workforce Development Agency (LWDA)
  • Labor Enforcement Task Force (LETF)
  • Labor Market Information Division (LMID)
  • Labor Standards Enforcement, Division of (DLSE)
  • Labor Statistics and Research, Division of (DLSR)
  • Lands Commission, California State (SLC)
  • Landscape Architects Technical Committee (LATC)
  • Latino Legislative Caucus (LLC)
  • Law Enforcement Agencies
  • Law Revision Committee (CLRC)
  • Learn California
  • Legislative Analyst’s Office (LAO)
  • Legislative Black Caucus (ASM)
  • Legislative Environmental Caucus
  • Legislative Information (LEGINFO)
  • Legislative Lesbian, Gay, Bisexual, & Transgender Caucus (LGBT)
  • Legislative Outdoor Sporting Caucus
  • Legislative Rural Caucus
  • Legislative Women’s Caucus
  • Legislature, California State (LEGISLATURE)
  • Library, California State (CSL)
  • Lieutenant Governor, Office of (LTG)
  • Little Hoover Commission (LHC)
  • Lottery Commission (Lotto)
  • Lottery, State (LOTTERY)
  • Managed Health Care, Department of (DMHC)
  • Managed Risk Medical Insurance Board (MRMIB)
  • Medi-Cal (MEDI-CAL)
  • Mediation & Conciliation Service, State (CMCS)
  • Medi-Cal Access Program (MCAP)
  • Medical Assistance Commission (CMAC)
  • Medical Board of California (MBC)
  • Mental Health Services Oversight and Accountability Commission (MHSOAC)
  • Mental Health, Department of (DMH)
  • Mentally Ill Offenders, Council on (COMIO)
  • Military Museum, California State (CSMM)
  • Mine Reclamation, Office of
  • Mining & Geology Board (SMGB)
  • Missing & Unidentified Persons Unit (DOJ)
  • Motor Vehicles, Department of (DMV)
  • Museum for History, Women and the Arts, California
  • Museum, the California (Museum)
  • MyCali Youth Portal (MYCALI)
  • Native American Heritage Commission (NAHC)
  • Natural Resources Agency, California
  • Naturopathic Medicine Committee
  • New Motor Vehicle Board (NMVB)
  • Occupational Safety & Health, California Office of (DOSH)
  • Occupational Safety and Health Appeals Board (DIR, OSHAB)
  • Occupational Safety and Health Standards Board (OSHSB)
  • Occupational Therapy, California Board of (BOT)
  • Ocean & Coastal Environmental Access Network, California (Cal OCEAN)
  • Ocean Protection Council (OPC)
  • Off-Highway Motor Vehicle Recreation (OHMVR)
  • Office of Statewide Health Planning & Development (OSHPD)
  • Oil, Gas & Geothermal Resources
  • Optometry, Board of
  • Osteopathic Medical Board of California (OMBC)
  • Paid Family Leave Insurance Program (PFL)
  • Parks and Recreation, California Department of
  • Park and Recreation Commission, California State (PARKS)
  • Parole Hearings, Board of (CDCR, BOPH)
  • Patient Advocate, Office of the (OPA)
  • Peace Officer Standards & Training, Commission on (POST)
  • Personnel Board, State (SPB)
  • Pesticide Regulation, Department of (CDPR)
  • Pharmacy, Board of
  • Physical Fitness and Sports, California Governor’s Council on
  • Physical Therapy Board of California (PTBC)
  • Physician Assistant Committee (PAC)
  • Pilot Commissioners, Board of (BOPC)
  • Podiatric Medicine, Board of (BPM)
  • Pre-Existing Condition Insurance Plan (PCIP)
  • Prison Industry Authority (CALPIA)
  • Privacy Protection, Office of (OPP)
  • Private Postsecondary Education, Bureau for (BPPE)
  • Procurement Division (PD)
  • Professional Engineers, Land Surveyors, & Geologists, Board for
  • Professional Fiduciaries Bureau
  • Psychology, Board of
  • Public Employees Retirement System, California (CalPERS)
  • Public Employment Relations Board, California (PERB)
  • Public Health, California Department of (CDPH)
  • Public Infrastructure Advisory Commission (PIAC)
  • Public Safety Communications, Office of (PSCO)
  • Public School Construction, Office of (OPSC)
  • Public Utilities Commission, California (CPUC)
  • Publishing, Office of State (OSP)
  • Railroad Museum, California State (CSRMF)
  • Real Estate Appraisers, Office of (OREA)
  • Real Estate, Department of (DRE)
  • Regenerative Medicine, California Institute for (CIRM)
  • Registered Nursing, Board of (RN)
  • Registrar of Charitable Trusts (AG)
  • Rehabilitation, California Department of (DOR)
  • Research Bureau, California (CRB)
  • Respiratory Care Board of California (RCB)
  • Risk and Insurance Management, Office of (ORIM)
  • Sacramento-San Joaquin Delta Conservancy
  • Safe at Home Program (Secretary of State)
  • San Diego River Conservancy (SDRC)
  • San Francisco Bay Conservation & Development Commission (BCDC)
  • San Gabriel & Lower Los Angeles Rivers & Mountains Conservancy (RMC)
  • San Joaquin River Conservancy (SJRC)
  • Santa Monica Mountains Conservancy (SMMC)
  • Science Center, California
  • Secretary of State, California (SOS)
  • Security and Investigative Services, Bureau of (BSIS)
  • Seismic Safety Commission, California (SSC)
  • Self Insurance Plans (DIR, SIP)
  • Senate Democratic Caucus
  • Senate Office of Research (SOR)
  • Senate Republican Caucus
  • Senate, California State
  • Sierra Nevada Conservancy
  • Small Business & Disabled Veteran Business Enterprise Certification Program
  • Small Business Development Centers (SBDC)
  • Social Services, Department of (CDSS)
  • Speech-Language Pathology and Audiology Board
  • State Mandates, Commission on (CSM)
  • Status of Women and Girls, California Commission on the
  • Structural Pest Control Board
  • Student Aid Commission, California (CSAC)
  • Summer School for the Arts, California State (CSSSA)
  • Superintendent of Public Instruction, State (SPI)
  • Superior Courts, California (COURTS)
  • Supreme Court of California (COURTS)
  • Systems Integration, Office of (OSI)
  • Tahoe Conservancy, California
  • Tax Service Center, California (TAXES)
  • Teacher Credentialing, Commission on (CTC)
  • Teachers’ Retirement System, California (CalSTRS)
  • Technology, Department of
  • Technology Services, Office of (OTech)
  • Telephone Medical Advice Services Bureau (DCA, TMAS)
  • Tourism, California Office of
  • Toxic Substances Control, California Department of (DTSC)
  • Traffic Safety, California Office of (OTS)
  • Transportation Commission, California (CTC)
  • Transportation, Department of (DOT,CALTRANS)
  • Treasurer’s Office, State (STO)
  • Trustees, Board of (California State University)
  • Unclaimed Property (SCO)
  • Unemployment Insurance Appeals Board (CUIAB)
  • Unemployment Insurance Program (EDD, UI)
  • Uniform Custom Cost Accounting Commission (SCO)
  • University of California (UC)
  • University, California State (CALSTATE, CSU)
  • Veterans Affairs, Department of (CalVet)
  • Veterinary Medical Board, California (VMB)
  • Victim Compensation and Government Claims Board (VCGCB)
  • Vocational Nursing and Psychiatric Technicians, Board of (BVNPT)
  • Volunteers, California
  • Voter Registration – Secretary of State (SOS)
  • Water Resources Control Board, State (WRCB)
  • Water Resources, Department of (DWR)
  • Wildlife Conservation Board (WCB)
  • Workforce Development Board, California (CWDB)

In case you were wondering, there are 343 agencies in the list.

And thanks to BL for sending this to me.

Roy Filly

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For those of you who do not know what the Dodd-Frank Bill is (I suspect the number is small), I will spend a moment enlightening you. The formal name of the legislation is the Dodd–Frank Wall Street Reform and Consumer Protection Act. It was signed into federal law by President Barack Obama on July 21, 2010. Passed as a response to the Great Recession, it brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression. It made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation’s financial services industry. Yippee! The bill passed along party lines. Guess which party was “for it?”

Dodd-Frank has been the law of the land for more than 6 years now. So are we now safe from the next financial crisis? Financial crises like the Great Recession are very uncommon. The last meltdown that was of similar magnitude was in the early 1980s. Some would say we would need to go all the way back to the Great Depression of the 1930s for something of this magnitude. Thus, we would need to wait some 25 – 80 years to find the answer to the question of whether or not Dodd-Frank will protect us from the next major financial crisis.

The more appropriate question is whether or not Dodd-Frank better prepares us to handle the next financial debacle. Sadly, I must inform you that the answer to that question is “no.” Indeed, the opposite may be the case. President Trump is itching for a fight with Democrats over reining in the Consumer Financial Protection Bureau, one of the most contentious reforms in response to the 2008 financial meltdown. Just two weeks into his presidency, he took aim at the bureau with an executive order to begin unraveling the rules and regulations. Hopefully the Dodd-Frank Act “id toast,” as the saying goes.

[Source: Dodd-Frank’s Achilles heel, by Robert J. Samuelson]

To see why, you need to understand Section 13(3) of the Federal Reserve Act and its role in the last crisis. It’s the sleeper issue in judging Dodd-Frank.

By their nature, financial crises are unexpected, fast-moving and chaotic. Government’s goal is to defeat panic: the terror-driven rush to sell stocks and bonds or withdraw funds from financial institutions and markets. Panic becomes self-fulfilling. Less wealth and more fear depress spending and raise unemployment. In 2008-2009, the Fed — aided by the Treasury and the Federal Deposit Insurance Corp. — arrested panic by lending huge amounts to besieged markets and institutions. At its peak, the Fed’s loans totaled about $1.5 trillion.

Much of this lending couldn’t have occurred without Section 13(3). Normally, the Fed lends only to deposit-taking commercial banks. In the crisis, it also lent to or supported money-market funds, commercial paper markets, investment banks and a major insurance company (AIG). It could do so because Section 13(3), enacted in 1932, said that “in unusual and exigent circumstances” the Fed could lend to almost anyone — individuals, industrial companies, non-bank financial institutions.

Section 13(3) enabled the Fed to serve as a true “lender of last resort.” Many economists believe that this may have prevented a second Great Depression. And how did Congress, via Dodd-Frank, reward the Fed’s good deeds? It handcuffed (maybe gutted) 13(3).

Dodd-Frank’s restrictions on 13(3) loans include: (1) the treasury secretary must approve any lending; (2) loans can’t be focused on an individual firm (example: a wobbly money-market fund) but must be open to a broad class of borrowers; (3) the names of borrowers must be disclosed to Congress within a week; and (4) there are stricter standards for loan collateral. “I’m concerned that the restrictions . . . limit more than is wise,” Donald Kohn the Fed’s vice-chairman during the crisis, said at a recent Brookings Institution conference. Other commentators agreed.

While I am not a big fan of the Federal Reserve, one must admit that they stepped up to the plate during the financial collapse. Indeed, the Fed loans to banks have been repaid with interest ($19 billion profit). However, the loans to Fannie ($91 billion), Freddie ($51 billion), AIG ($23 billion), and GM ($27 billion) are much muddier to sort out repayment. The charge that the Federal Reserve fostered “too big too fail” is only partially accurate. Indeed, they did prop up Citigroup and AIG, but many failed or were forced to sell out at low share prices: Lehman Brothers, Bear Stearns, Merrill Lynch, Wachovia, Washington Mutual.

One thing is for sure, bankers do not like Dodd-Frank (see quotes in footnote). Overall, I’ll take the Federal Reserve over Dodd-Frank (and, my friends, that ain’t sayin’ much).

Roy Filly


Quotes From Traditional Banks About Dodd Frank

“The regulatory costs are overwhelming in our industry right now…Virtually everyone in our bank now is involved to some extent or another in complying with regulations, and so it has taken away from their ability and their resources to work with both existing customers and also to go out and solicit new customers, helping other people get businesses off the ground.”
— John A. Klebba, President and Chief Executive Officer, Legends Bank

“And I charge you with this, 40 years ago I did not see problems in banks and banks falling like flies, and yet the level of regulation and the cost of regulation was far, far less than it is today. As I see it from my standpoint, we will see community banks continue to decline. We simply cannot afford the high costs of federal regulation. And as one banker I will tell you this, my major risks are not credit risks, risks of theft, risks of some robber coming in with a gun in my office; my number one risk is federal regulatory risk. And I have a greater risk of harm to my bank, my stockholders from the federal government than I have anything else in this whole world. That is obscene.”
— Les Parker, Chairman, President and Chief Executive Officer, United Bank of El Paso de Norte

“Over the last several years, banks have faced increased regulatory costs and will face hundreds of new regulations with the Dodd-Frank Act. These pressures are slowly but surely strangling the traditional community banks, and handicapping their ability to meet the credit needs of their communities.”
— Matthew H. Williams, Chairman and President, Gothenburg State Bank

“There’s no question that the current regulatory and examination environment is an impediment to the flow of credit that will create jobs and advance the economic recovery.”
— Mr. Marty Reinhart, President, Heritage Bank

“As one who has worked in community banks for over four decades, I maintain that despite policymakers’ good intentions in implementing regulations, they are ultimately detrimental to banks’ ability to grow and create capital in other communities and to build communities through job creation. Without community banking, we will no longer be the America that created the largest economy in the world. We have already lost over 11,000 community banks since 1985; we cannot afford to lose anymore.”
— Ignacio Urrabazo, Jr., President, Commerce Bank

“And I totally support the idea that there should be smart–you have to have regulation. But we are regulating community banks particularly down to the point where there is barely room to breathe. That is not how you get the economy going. And that is not how you lend money out.”
— Tim Zimmerman, President and Chief Executive Officer, Standard Bank

“The amount, intensity and uncertainty of new Federal regulations, chiefly the Dodd-Frank Act, have forced banks to allocate an enormous amount of time and resources to compliance, and away from our primary mission of serving our customers.”
— Todd Nagel, President, River Valley Bank

“To community banks like mine, regulation is a disproportionate expense, burden, and a real opportunity cost. My compliance staff is half as large as my lending staff. This is out of proportion to our primary business: lending in our communities to support the local economy.”
— Salvatore Marranca, President and Chief Executive Officer, Cattaraugus County Bank

“The bigger banks can absorb it, the smaller banks can’t. I would not be surprised to see half of the community banks in this country go out of business if we don’t give some relief from Dodd-Frank for them. I think that Dodd-Frank is a terrible piece of financial legislation. It didn’t address any of the causes of the crisis that we just went through. It won’t prevent the next crisis. It’s heaped volumes and volumes of regulations. What they’re missing here is that when you require banks to capitalize for a depression, it’s going to be awfully hard to get this economy moving. Loan growth has almost been non-existent for the past three years. It’s hurting the people who need the money the most. It’s hurting small business. I think it is impeding economic growth.” 
— Bill Isaac, Former FDIC Chairman and Chairman of Fifth Third Bancorp

“Community banks have been the life blood of this country, and they’re responsible for more small business successes than any other resources including government programs. What’s troubling to me and to my bank is the impact of government regulation that has been based not upon common sense but on politics.”
— George Hansard, President, Pecos County State Bank

“If Dodd-Frank is allowed to stand and proliferate as a monster regulatory overhaul, only the largest institutions will be able to navigate its requirements, and the community institution model will continue to diminish. The cost of regulatory compliance is simply staggering. I’m not talking about efforts to keep an institution out of trouble; I’m talking about a well-meaning community institution that has no intention of being unfair to members of their own town. These smaller institutions spend a disproportionate amount of money and time to just meet the reporting and manpower requirements of this new regulatory overkill.”
— Cliff McCauley, Executive Vice President, Correspondent Banking, Frost Bank

“Most banks in the Midwest did not participate in the underwriting practices that contributed to the recent recession. Sadly, however, we are paying for the past through costly new regulatory burdens, anxious examiners, and customers that are unwilling to borrow. These remedies are hitting all hearts of our financial statements, as costs are going up, opportunities to earn revenue have been curtailed, and the amount and cost of capital we need is increasing.”
— G. Courtney Haning, Chairman, President and Chief Executive Officer, Peoples National Bank

“We know that there will always be regulations that control our business–but the reaction to the financial crisis has layered on regulation after regulation that does nothing to improve safety or soundness and only raises the cost of providing credit to our customers. As a banker, I feel like Mickey Mouse as the Sorcerer’s Apprentice in Disney’s famous cartoon Fantasia. Just like Mickey with bucket after bucket of water drowning him, new rules, regulations, guidances, and requirements flood in to my bank page after page, ream after ream. With Dodd-Frank alone, there are 3,894 pages of proposed regulations and 3,633 pages of final regulations (as of April 13) and we’re only a quarter of the way through the 400-plus rules that must be promulgated. While community banks pride themselves on being flexible and meeting any challenge, there is a tipping point beyond which community banks will find it impossible to compete.”
— William Grant, Chairman, President and Chief Executive Officer, First United Bank & Trust

“But the role of community banks in advancing and sustaining the recovery is jeopardized by the increasing expense and distraction of regulation drastically out of proportion to any risk posed by community banks. We didn’t cause the recent financial crisis, and we should not bear the weight of new, overreaching regulation intended to address it.”
— Samuel Vallandingham, Vice President and Chief Information Officer, First State Bank

“Once again, community banks will suffer for the problems created by big banks and investment houses. Dodd-Frank, while attempting to “fix” the financial services industry, has come up short in correcting the problems that created today’s economic uncertainty. Thousands of pages of new compliance requirements stemming from this legislation and from the Consumer Protection Act will continue to burden many financial institutions dedicated to serving local communities and supporting Main Street businesses.” “Some community banks will find it financially impossible to operate independently and competitively while complying with the host of expected regulations, and that will lead to consolidation among smaller banks. And that will mean hardships for many small businesses that depend on their neighborhood bank. Many of our small business customers tell us that they left large banking institutions because of their inability to obtain credit and the high service fees charged by these banks. Few deals were sealed with a handshake — one of the hallmarks of community banking.”
— Douglas C. Manditch, Chairman and CEO, Empire National Bank

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