Monthly Archive for August, 2009

Question: Why Are We Still In Afghanistan?

Aside from Obama trying to show the world he is “tough” on foreign policy, what other reason could there be for us sending even more troops there?

Whenever you are ready President Obama: You have my support in a speedy exit out of Afghanistan.

Quote Of The Day

“Today, generally, Adam Smith is claimed by the Right, Darwin by the Left. In the American South and Midwest, where Smith’s individualist, libertarian, small-government philosophy is all the rage, Darwin is reviled for his contradiction of creation. Yet if the market needs no central planner, why should life need an intelligent designer? Conversely, in the average European biology laboratory you will find fervent believers in the individualist, emergent, decentralised properties of genomes who prefer dirigiste determinism to bring order to the economy.” — Matt Ridley, writing in Spectator

Whose Behind The Obama = Hitler Protests?

Its definitely not Republicans and if you had to pigeon hole them into a party, it would be Democrats.

Jason Richwine of AEI explains:

Sensible and principled supporters of the free market do not want to be linked to “wingnuts” and paranoid far-right types who always see totalitarianism around the corner. But the major purveyor of the Nazi imagery is actually not a conservative Republican by any stretch of the imagination, and he should never be lumped with advocates for smaller government.

To see who I’m talking about, look closely at the pictures attached to this CNN story about a combative town hall meeting with Barney Frank. A protester has brought a large sign depicting President Obama with a Hitler mustache. Below the picture reads: “www.LaRouchePAC.com.” I’m pleased to see that Brent Baker at the invaluable Media Research Center has called attention to this same fact, because it seems to be lost on the general news media.

Most long-time followers of politics know that Lyndon LaRouche is a world-class crank who defies political labels. He’s associated himself with many weird and disparate causes over the past half century, but he’s made seven super-long-shot presidential bids as a Democrat. As someone who has spent a lot of time on university campuses in the past decade, I’ve become somewhat familiar with the LaRouche people.

The full post can be found here.

Impromptu Obama vs Teleprompter Obama

Teleprompter Obama seems to understand economics well, impromptu Obama not so much.

Caroline Baum, writing in Bloomberg explains:

Aug. 18 (Bloomberg) — “UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.” — Barack Obama, Aug. 11, 2009

No institution has been the butt of more government- inefficiency jokes than the U.S. Postal Service. Maybe the Department of Motor Vehicles.

The only way the post office can stay in business is its government subsidy. The USPS lost $2.4 billion in the quarter ended in June and projects a net loss of $7 billion in fiscal 2009, outstanding debt of more than $10 billion and a cash shortfall of $1 billion. It was moved to intensive care — the Government Accountability Office’s list of “high risk” cases – – last month and told to shape up. (It must be the only entity that hasn’t cashed in on TARP!)

That didn’t stop President Barack Obama from holding up the post office as an example at a town hall meeting in Portsmouth, New Hampshire, last week.

When Obama compared the post office to UPS and FedEx, he was clearly hoping to assuage voter concerns about a public health-care option undercutting and eliminating private insurance.

What he did instead was conjure up visions of long lines and interminable waits. Why do we need or want a health-care system that works like the post office?

What’s more, if the USPS is struggling to compete with private companies, as Obama implied, why introduce a government health-care option that would operate at the same disadvantage?

Obama Unscripted

These are just two of the questions someone listening to the president’s health-insurance reform roadshow might want to ask.

Impromptu Obamanomics is getting scarier by the day. For all the president’s touted intelligence, his un-teleprompted comments reveal a basic misunderstanding of capitalist principles.

For example, asked at the Portsmouth town hall how private insurance companies can compete with the government, the president said the following:

“If the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining — meaning taxpayers aren’t subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do — then I think private insurers should be able to compete.”

Self-sustaining? The public option? What has Obama been doing during those daily 40-minute economic briefings coordinated by uber-economic-adviser, Larry Summers?

Capitalism Explained

Government programs aren’t self-sustaining by definition. They’re subsidized by the taxpayer. If they were self-financed, we’d be off the hook.

Llewellyn Rockwell Jr., chairman of the Ludwig von Mises Institute in Auburn, Alabama, and editor of LewRockwell.com, put it this way in an Aug. 13 commentary on Mises.org:

“The only reason for a government service is precisely to provide financial support for an operation that is otherwise unsustainable, or else there would be no point in the government’s involvement at all.”

Rockwell sees no “economic reason for a government postal system” and would abolish it.

Of course, there’s the small matter of the U.S. Constitution. Article 1, Section 8, grants Congress the power “to establish Post Offices and Post Roads.” A series of subsequent statutes gave the USPS a monopoly in the delivery of first-class mail. Congress thought that without such protection, private carriers would cherry-pick the high-profit routes and leave money-losing deliveries in remote areas to the post office. (In those days, the USPS covered most of its expenses with revenue.)

Less Bad Option

It was only through exemptions in the law that private carriers, such as UPS and FedEx, were allowed to compete in the delivery of overnight mail.

Short of a constitutional amendment or a waiver from Congress, we are stuck with the USPS.

But back to our storyline. Everyone makes a mistake or flubs a line when asked questions on the spot, including the president of the United States. We can overlook run-on sentences, subject and verb tense disagreement, even a memory lapse when it comes to facts and figures.

The proliferation of Obama’s gaffes and non sequiturs on health care has exceeded the allowable limit. He has failed repeatedly to explain how the government will provide more (health care) for less (money). He has failed to explain why increased demand for medical services without a concomitant increase in supply won’t lead to rationing by government bureaucrats as opposed to the market. And he has failed to explain why a Medicare-like model is desirable when Medicare itself is going broke.

The public is left with one of two unsettling conclusions: Either the president doesn’t understand the health-insurance reform plans working their way through Congress, or he understands both the plans and the implications and is being untruthful about the impact.

Neither option is good; ignorance is clearly preferable to the alternative.

The full article can be found here.

In Support Of Barney Frank

For repudiating stupid people like this:

[youtube:http://www.youtube.com/watch?v=nYlZiWK2Iy8]

People like this make me sick.

Why Oppose The Public Option?

Many people on the left seem to assume that the public option is a win-win situation: those who don’t need it can keep their healthcare whereas those who do need it get healthcare. Everybody’s happy. What could be wrong with that?

Here are the arguments I find most persuasive against the public option.

First, is the argument that it is a trojan horse for single payer.  Single payer results in less competition, less innovation and longer wait times.

But…but…the Democrats promise, PROMISE, that it won’t lead to single payer. It will just force private insurance companies to compete, to provide better service. Okay, say that is true. Harvard economist Greg Mankiw answers that claim directly:

Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”

More here and here.

Then there is the issue of cost: how are we going to pay for the plan? The CBO has already stated that the current proposals, rather than decrease costs, increase them dramatically:

In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

This is on top of already record spending and real record deficits (see chart here).

Then comes the question of need: who does this public option benefit? Who needs it? It can’t be the most needy, after all, there is already medicaid for the poor and medicare for the elderly. In fact, there is even SCHIP for the lower middle class. So who is left? A very, very small percentage of people who are in no way poor.

Bala Ambati, the Director of Cornea Research at University of Utah, explains:

On the 47 million people without health insurance point, that too is a statistic where there is less than meets the eye. First, health insurance does not equal health care (there are not just emergency rooms but cash-based clinics, and conversely, a lot of people with insurance don’t get good health care). Second, of that 47 million, 14 million are already eligible for existing programs (Medicare, Medicaid, veterans’ benefits, SCHIP) yet have not enrolled, 9.7 million are not citizens, 9.1 million have household incomes over $75,000 and could but choose not to purchase insurance, and somewhere between 3 and 5 million are uninsured briefly(<2 months) between jobs. That leaves about 10 million Americans who are chronically without insurance. Needless to say, extending the blanket of coverage to this group should not cost $1.5 trillion and require a wholesale overhaul of all of medicine.

Lastly, how this whole healthcare reform will be paid for has especially bad timing. Economist Bryan Caplan explains:

… when the unemployment rate is 9.7%, it’s a bad idea to legislate an 8% payroll increase on businesses that fail to offer health insurance.   Employers are reluctant to hire workers at today’s wages; how are they going to feel once the marginal worker gets 8% pricier?

In short, I oppose the public option because it’s likely to result in lower quality healthcare for all, it’s too expensive, it doesn’t curtail the growing cost of healthcare, and its payroll tax implementation is especially harmful in our current labor market. Hardly win-win, like some leftists make it seem.

For more on this topic see here, here, here, here, here and here.

The Censorship Of The Left On Healthcare

Radley Balko explains:

Let me see if I have the logic correct here: Whole Foods is consistently ranked among the most employee-friendly places to work in the service industry. In fact, Whole Foods treats employees a hell of a lot better than most liberal activist groups do. The company has strict environmental and humane animal treatment standards about how its food is grown and raised. The company buys local. The store near me is hosting a local tasting event for its regional vendors. Last I saw, the company’s lowest wage earners make $13.15 per hour. They also get to vote on what type of health insurance they want. And they all get health insurance. The company is also constantly raising money for various philanthropic causes. When I was there today, they were taking donations for a school lunch program. In short, Whole Foods is everything leftists talk about when they talk about “corporate responsibility.”

And yet lefties want to boycott the company because CEO John Mackey wrote an op-ed that suggests alternatives to single payer health care? It wasn’t even a nasty or mean-spirited op-ed. Mackey didn’t spread misinformation about death panels, call anyone names, or use ad hominem attacks. He put forth actual ideas and policy proposals, many of them tested and proven during his own experience running a large company. Is this really the state of debate on the left, now? “Agree with us, or we’ll crush you?”

These people don’t want a dicussion. They don’t want to hear ideas. They want you to shut up and do what they say, or they’re going to punish you.

The full post can be found here.

The Democrats Secret Plan To Get To Single Payer

[youtube:http://www.youtube.com/watch?v=p-bY92mcOdk]

Exposed.

Quote Of The Day

“And yet, most of us realize that there are huge differences between price rationing and government rationing, and that the latter is usually much worse for everyone….The rationing is, first of all, simply worse on a practical level:  goods rationed by fiat rather than price have a tendency to disappear, decline in quality, etc.  Government tends to prefer queues to prices.  This makes most people worse off, since their time is worth much more than the price they would pay for the good.  Providers of fiat-rationed goods have little incentive to innovate, or even produce adequate supplies.  If other sectors are not controlled, the highest quality providers have a tendency to exit.” —Megan McArdle, on why price rationing is far superior to government rationing

ABC 20/20 Takes On Healthcare Reform

[youtube:http://www.youtube.com/watch?v=gdx_2cuPgQQ]

Real Healthcare Reform

The late Milton Friedman made the argument 8 years ago:

A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.

This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns—the possibility of being impoverished by a major medical catastrophe—and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” not “What’s your insurance?”

Now this is healthcare reform I could support. The full article can be found here.

Quote Of The Day

“IRS data shows that in 2007—the most recent data available—the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act. Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined.” — Tax Foundation, link via Greg Mankiw

Quote Of The Day

“Nearly 75 percent of Washington, D.C. residents supported school vouchers in a new poll; 68 percent of residents oppose Congress’ effort to end the federally funded program. Under the Opportunity Scholarship Program, low-income children who win a lottery have been eligible for scholarships up to $7,500, which can be used at private schools of their parents’ choice.” — Joanne Jacobs