Obamacare Architect Says "Liberals" are Stupid

You may have heard, or read, by now about the controversy surrounding Obamacare (and Romneycare) architect Jonathan Gruber.  If not, here's a pretty good summary in video form.

If you follow the video link to YouTube, you can watch much longer versions of his remarks in context, which makes them even worse.

Most of the controversy surrounds Gruber's insults directed at American voters.  He called American voters stupid and economically illiterate, and accuses Americans of not caring about the uninsured.  His solution, then (in his own words) was to "[exploit] the lack of economic understanding of the American voter", and to use the "tortured way" in which the bill was written, and the bill's "lack of transparency" to trick American voters into accepting a law they would have otherwise rejected.

Gruber's statements shouldn't be controversial.  Gruber is right.  Sort of.  If you actually believed that "if you like your doctor, you can keep your doctor", and "if you like your plan, you can keep your plan", and that Obamacare would cover the supposed 40 million uninsured Americans, and that Obamacare would cover preexisting illnesses, all while "bend[ing] the cost curve down" and not "add[ing] a dime to the national deficit", then you sir/ma'am really are naive, gullible, economically illiterate - and yes - stupid.

In other words, Gruber is saying that "Liberals" are stupid, because "Liberals" swallowed every lie that Gruber - and more importantly, every Democrat politician - sold them, hook, line and sinker.

Ladies and gentlemen: Gruber is referring to you.

Conservatives and Libertarians have been warning the country about all of Gruber's and the Democrats' lies since 2009.  Conservatives and Libertarians aren't Gruber's "stupid", economically illiterate, stingy voters.  "Liberals" are.

Possibly the most important part of this whole controversy is that Gruber unintentionally gave the whole world a glimpse into how Leftists think.

Leftists believe ordinary people are too stupid to make decisions for themselves, and too stingy to care for the needy through voluntary charity.  Leftists therefore believe that ordinary people need Leftist elites - like Gruber and all the Democrats who forced this monstrosity on the rest of us - to make decisions for ordinary folk and force them to care for the needy at gun point, through taxation.

The fact that charity provides politicians with no opportunity for graft, and taxation offers myriads of opportunities for graft, never enters the Leftist elites' minds, of course.  It's all for the children, you see.

So, thank you, Jonathan Gruber, for being honest.  Even if you never meant to be. 

Pres Obama: Government Makes Government Inefficient

Pres Obama explained why the Obamacare website is a lemon.

What is true is that, as I said before, our IT systems, how we purchase technology in

the federal government is cumbersome, complicated and outdated. And so this isn’t a situation where — on my campaign, I could simply say, who are the best folks out there, let’s get them around a table, let’s figure out what we’re doing and we’re just going to continue to improve it and refine it and work on our goals. 

If you’re doing it at the federal government level, you know, you’re going through, you know, 40 pages of specs and this and that and the other and there’s all kinds of law involved. And it makes it more difficult — it’s part of the reason why chronically federal IT programs are over budget, behind schedule. 

And one of the — you know, when I do some Monday morning quarterbacking on myself, one of the things that I do recognize is since I know that the federal government has not been good at this stuff in the past, two years ago as we were thinking about this, you know, we might have done more to make sure that we were breaking the mold on how we were going to be setting this up. But that doesn’t help us now. We got to move forward.

So, Pres Obama recognizes that excessive federal regulations make it far more difficult (in some cases impossible) and far more expensive (often prohibitively so) to accomplish anything.

But it never seems to occur to him that excessive federal regulations (like Obamacare, for example) do the same to businesses.  It never seems to occur to him that the cost (time, money, resources, man-hours) of complying with all those regulations makes businesses less efficient, less productive, and less able to hire employees and grow the economy.

And, unlike government, businesses can't just confiscate people's money.

Amazing, isn't it?

Interview: "The Frackers"

Prof Reynolds interviews WSJ reporter, Gregory Zuckerman, about his new book, "The Frackers".

Do watch the whole thing, but a couple things stood out to me.

First, the fracking revolution could have just as easily taken place in Russia, China, or a number of other places, but instead it happened in the US.  One reason for that is stronger property rights in the US than in other countries.  Most fracking in the US takes place om privately owned land.  In most states, the land owner also owns the mineral rights for his/her land.  That means they can make more money from allowing a fracking firm to drill on their land, which gives the land owner more incentive to do so.

It's a great example of how liberty leads to opportunity, which leads to prosperity.

Second, oil giants like ExxonMobil did not initiate the fracking boom.  Smaller firms, whose wells were drying up and didn't have the resources to explore abroad, were more willing to take risks because, essentially, they had nothing to lose.

Anti-fracking regulations "Liberals" demand wouldn't hurt ExxonMobil, but they would kill those smaller firms.

Unfortunately, no discussion on hydraulic fracturing is complete without addressing anti-fracking hysteria.  It's worth noting, then, that former DOE secretary Stephen Chu, no fan of fossil fuels, stated that fracking...

...is something you can do in a safe way,” former Secretary of Energy Steven Chu said while speaking in Columbus, Ohio, on Sept. 18. He also said that it was a “false choice” to say that the country can either preserve the environment or acquire cheap natural gas.

Former Secretary of the Interior, Ken Salazar, stated that...

“I would say to everybody that hydraulic fracking is safe,” Salazar said during a conference in Las Cruces, N.M. He said that fracking was “creating an energy revolution in the United States.”

Chu and Salazar joined current Secretary of Energy Ernest Moniz, who in early September praised fracking as “a big contributor to our carbon reduction” and “a huge economic benefit.” 

And now the British government has reached the same conclusion.

“There are risks but they can all be mitigated” through monitoring and regulation, Neil Dhot, a spokesman in London, said today by telephone. The report, compiled by an independent consultant, is funded by the water industry, he said.

Everything we do involves risk - even doing nothing.  An honest risk analysis of hydraulic fracturing, I believe, demonstrates that the financial benefits of fracking far outweigh the potential risks.

UPDATE: Speaking of fracking, the Bakken formation of North Dakota & Montana is projected to produce about one million barrels per day next year.

The growth of crude oil production in the Bakken region is part of a longer-term trend in drilling efficiency gains and has led North Dakota to rank second in crude oil production in the United States, behind only Texas.

UPDATE: Prof Reynolds has another outstanding column in USA Today in his series about "the America that works and the America that doesn't", which contrasts the successes of the frackers with the "train wreck" of Obamacare.

As I've written here before, there are two Americas: One that works, produces value, and overcomes problems, and one that for the most part doesn't work, consumes wealth, and produces more problems than it solves. 

The America that doesn't work was very much in evidence this past week, as the Obamacare roll out continued to be -- in Democratic Sen. Max Baucus' memorable phrase -- a "train wreck." Writing in The New Republic, John Judis observed that the Obamacare fiasco should make fans of activist government angry, because it will damage big government's brand for decades to come. Well, if you support big government because you think that politicians are more competent or honest than the rest of us, yes, it's a big bummer. Then again, if you really think so highly of politicians, you have more serious problems than that.

Read the whole thing.

Obamacare: Told You So (Continued)

Those of us who support economic liberty warned that Obamacare would result in an increase of part time employment, vs full time employment.  Obamacare supporters shrieked, "racist!" 

Told you so.

Employers around the country, from fast-food franchises to colleges, have told NBC News that they will be cutting workers’ hours below 30 a week because they can’t afford to offer the health insurance mandated by the Affordable Care Act, also known as Obamacare. 

“To tell somebody that you’ve got to decrease their hours because of a law passed in Washington is very frustrating to me,” said Loren Goodridge, who owns 21 Subway franchises, including a restaurant in Kennebunk. “I know the impact I’m having on some of my employees.”  

Goodridge said he’s cutting the hours of 50 workers to no more than 29 a week so he won’t trigger the provision in the new health care law that requires employers to offer coverage to employees who work 30 hours or more per week. The provision takes effect in 16 months.

Hey, now that they mention it, this couldn't possibly have anything to do with the report that 97% of jobs created in 2013 are part time, could it?

“Over the last six months, of the net job creation, 97 percent of that is part-time work,” said Keith Hall, a senior researcher at George Mason University’s Mercatus Center.

“That is really remarkable.” 

Hall is no ordinary academic. He ran the Bureau of Labor Statistics, the agency that puts out the monthly jobs report, from 2008 to 2012. Over the past six months, he said, the Household Survey shows 963,000 more people reporting that they were employed, and 936,000 of them reported they’re in part-time jobs. 

“That is a really high number for a six-month period,” Hall said. “I’m not sure that has ever happened over six months before.”

“There is something going on if such a large share of the hiring is part time,” Hall said. ... 

Hall speculated that the implementation of the Affordable Care Act, shorthanded as Obamacare, might be resulting in employers shifting workers to part-time status to avoid coming health care obligations. 

“There’s been so much talk about the effects of Obamacare on part-time work,” he said. “This is such an unusual thing to see.”

Read more here: http://www.mcclatchydc.com/2013/08/02/198432/most-2013-job-growth-is-in-part.html#.Uf-UcGRAS7g#storylink=cpy

 What?  You mean businesses respond to the economic incentives artificially created by government policies?  No way!  Of course, anyone with any understanding of economics - or common sense - would've seen this coming.  As Chris Conover wrote before the BLS report was published...

Denialism may be too strong a term.[1] But there seem to be a lot of people arguing that Obamacare has little or nothing to do with the rise in part-time employment. Some deny the rise is even happening, while others are content to deny that Obamacare is the culprit. Admittedly, it takes a little detective work, but if we systematically review the available empirical evidence in an even-handed fashion, the conclusion seems inescapable: Obamacare is accelerating a disturbing trend towards “a nation of part-timers.” This is not good news for America.

 So, is this consequence of Obamacare intended, or unintended?

Read more here: http://www.mcclatchydc.com/2013/08/02/198432/most-2013-job-growth-is-in-part.html#.Uf-UcGRAS7g#storylink=cpy

The Free Market Cure

You may have seen this graphic floating around Facebook.

Apparently, that quote comes from a speech he gave at Georgetown University. 

“Aid is just a stopgap,” he said. “Commerce [and] entrepreneurial capitalism take more people out of poverty than aid. We need Africa to become an economic powerhouse.”

Bono is right, of course.  But it's always nice to have data to support your beliefs.  So, here it is.

The US and UK, with economic policies that respected property rights and economic liberty far more than China's, grew steadily in GDP/capita, which is a pretty good indicator of increasing wealth.  When China loosened economic regulations, their GDP/capita skyrocketed.

So, economic liberty leads to economic prosperity.  Great!  Which way are we headed now?  According to the Heritage Foundation's Index of Economic Freedom, we're 10th in the world, and dropping.

US Economic Freedom score over time

According to the Heritage Foundation...

Registering a loss of economic freedom for the fifth consecutive year, the U.S. has recorded its lowest Index score since 2000. Dynamic entrepreneurial growth is stifled by ever-more-bloated government and a trend toward cronyism that erodes the rule of law. More than three years after the end of recession in June 2009, the U.S. continues to suffer from policy choices that have led to the slowest recovery in 70 years.

All in the name of helping the poor, of course.  Ironic, isn't it?

Capitalism is Good for the Environment

Remember the Kyoto Protocol?  It's alright if you don't.  Nobody else seems to.  Which is funny, because "Environmentalists" warned of war, famine, pestilence and death if the world didn't ratify it.  No, seriously.  

Then-VP Al Gore signed the treaty, but the US Senate never ratified it, making it invalid in the US.  Leftists, of course, blamed President Bush, because everything is Bush's fault.  Supposedly, Americans' "Commercialism and greed overcome all common sense and thought for the welfare of future generations. This failure causes hatred not only of the Bush administration, but of American commercialism in general".  Also, the refusal to ratify the Kyoto Protocol was a failure of American leadership in the world.

Sixteen years later, we "greedy" Americans must look more dastardly than ever, right?  Wrong.

In 2012, a surprising twist and without ever ratifying it, the United States became the first major industrialized nation in the world to meet the United Nation’s original Kyoto Protocol 2012 target for CO2 reductions.

 

How is this possible?  How did we "greedy" Americans succeed in meeting the objectives of the Kyoto Protocol - having never ratified it - while all those virtuous nations that enthusiastically signed the treaty failed?

One word.  Frack.

The largest drop in emissions in 2012 came from coal, which is used almost exclusively for electricity generation (see figure below). During 2012, particularly in the spring and early summer, low natural gas prices led to competition between natural gas- and coal-fired electric power generators. Lower natural gas prices resulted in reduced levels of coal generation, and increased natural gas generation—a less carbon-intensive fuel for power generation, which shifted power generation from the most carbon-intensive fossil fuel (coal) to the least carbon-intensive fossil fuel (natural gas).

We know that the increased supply of natural gas in the US economy resulted from advances in, and the increased use of, hydraulic fracturing techniques, which unlock reserves that were previously inaccessible.  We also know that hydraulic fracturing (fracking) techniques became economically viable because of the recent increase in energy prices.  Higher prices created an incentive to invest in fracking.  Fracking increased supply, which, along with innovations spurred by competition, resulted in lower natural gas prices, and that prompted energy producers to switch from coal to natural gas.

In other words, free markets succeeded where bloated, collectivist government mandates failed.  In other words, American "greed" turned out to be more virtuous than multinational "virtue". 

There is another, less rosy possible reason why the US's carbon emissions fell since 2007.  The recession began in 2007, and the American economy remains weak.  A weak economy results in reduced energy consumption and demand.  But I don't think that was a major factor here.  After all, Europe's economy is even weaker than that of the US, but all European nations failed to meet their Kyoto goals.

The lesson here is one sensible people learned when they saw the devastation the Soviet Union caused to its environment - free markets work, even in environmental matters.

But don't expect "Environmentalists" to embrace free market solutions to environmental problems.  "Environmentalists" are, for the most part, watermelons - green on the outside, red on the inside.  Environmental concerns are an excuse for them to give government even greater power over people's lives.  No matter how well free market solutions prove to work, most "Environmentalists" will always reject them, because their main concern is not the environment.  Their main concern is bloated, morbidly obese, inescapable government.

Obamacare: Told You So (Continued)

Just in case you thought it was only those evil businesses with their dirty profits cutting workers' hours to avoid Obamacare's penalties...

Community College of Allegheny County will cut the hours some instructors to avoid paying for their health insurance coverage under new Affordable Care Act rules.

CCAC President Alex Johnson announced in an email to employees last week that the school would cut course loads and hours for some 200 adjunct faculty members and 200 additional employees. The Affordable Care Act -- nicknamed Obamacare -- classifies employees who work 30 hours or more per week as full-time, and CCAC would be required under the new law to provide employer-assisted health insurance to those employees. Instead, temporary part-time employees, such as clerical, computer, seasonal and other positions, will be limited to working 25 hours per week, and adjunct instructors will only be able to teach 10 credits per semester. Permanent part-time employees, already eligible for health care coverage, will be unaffected. The Pittsburgh-based college estimates the move will save it from spending an additional $6 million. 

Expect to see much more of this in the near future.  Thanks, Obama voters!

Secession, No. Federalism, Yes

You may have heard that the White House website now has petitions from all 50 states requesting permission to peacefully secede from the Union.  The most famous of these - and the one with the most signatures - is from Texas, naturally.  The whole thing is silly, but it reflects a real problem.  A whole lot of Americans are unhappy with the federal government, which makes perfect sense.  It's impossible to please 350,000,000 people at the same time.  It's highly unlikely that any state will actually attempt to secede, but the existence of so many disgruntled voters is no laughing matter.

There is, however, a very simple solution to this problem.

 Let the central government do the things that only central governments can do -- national defense, regulation of trade to keep the provinces from engaging in economic warfare with one another, protection of basic civil rights -- and then let the provinces go their own way in most other issues. Don't like the way things are run where you are? Move to a province that's more to your taste. Meanwhile, approaches that work in individual provinces can, after some experimentation, be adopted by the central government, thus lowering the risk of adopting untested policies at the national level. You get the benefits of secession without seceding.

Pretty simple, right?  If you want to live in a state with enormous debt, high taxes, business-stifling regulations, high unemployment, lots of poverty, welfare and income inequality, and crappy schools, move to California, New York or Illinois.   If you want to live in a state with low debt, low taxes, little regulation, lots of jobs and low unemployment rates, move to North Dakota, Texas or Utah.

It's not even a new idea.

Sound good? It should. It's called federalism, and it's the approach chosen by the United States when it adopted the Constitution in 1789. As James Madison wrote in Federalist No. 45, "The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State."

It's a nice plan. Beats secession. Maybe we should give it another try.

For a bunch of racist old white dudes, those Founding Fathers sure were smart!

California Running Out of Other People's Money

In the past, when I've written about how, "the trouble with Socialism is that eventually you run out of other people's money", I've used Greece as an example.  Although I still think Greece is the best example, several states in the US are doing their best to catch up.  California is arguably in the lead.

The real cause for California's fiscal crisis is simple: They spend too much money. Between 1996 and 2012, the state's population grew by just 15 percent, but spending more than doubled, from $45.4 billion to $92.5 billion (in 2005 constant dollars).

What are Californians getting for all this government spending? According to a new census report released Friday, almost one-quarter, 23.5 percent, of all Californians are in poverty. One-third of all the nation's welfare recipients live in the state, despite the fact that California has only one-eighth of the country's population. That's four times as many as the next-highest welfare population, which is New York [another "Liberal" bastion ~ OS]. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.

Surely, California can solve all its problems by taxing the rich, right?  I mean, that's what Democrats always tell us.  Except, California has already tried that.

Despite Brown's historic tax hike, the California Legislative Analyst's Office announced this week that the state still faces a $2 billion budget deficit just for the next fiscal year. California's liberal electorate has already racked up an additional $370 billion in state and local debt over that last decade. That is more than 20 percent of the state's gross domestic product.

According to the California State Budget Crisis Task Force, that comes to more than $10,000 in debt for every Californian. And because the state's credit rating is so low, California taxpayers must fork over about $2 for every new dollar borrowed. In 2012 alone, the state budget included more than $7.5 billion in debt service -- more than most states' budgets.

Don't think for a second that California's chronic deficits are caused by low taxes. Even before last Tuesday's tax hikes, California had the most progressive income tax system in the nation, with seven brackets, and the second-highest top marginal rate. Now it has the nation's highest top marginal rate and the nation's highest sales tax. And the budget still isn't balanced.

What do Californians do when fed up with excessive taxation, regulation and debt?  Move to Texas.

Middle-class families that want actual jobs, not welfare, are fleeing California in droves. According to IRS data compiled by the Manhattan Institute, since 2000, almost 2 million Americans have left California for other states. Their most popular destination: Texas.

It isn't a tough move to make. Thanks to low taxes and simple regulations, Chief Executive magazine ranked Texas as the best state to do business in for 2012. Guess who ranked dead last? That's right, California. And not only does Texas (6.8 percent) have a far lower unemployment rate than California (10.2 percent), but, according to the Census Bureau, income inequality is worse in California than it is in Texas.

Again, this is a case of federalism at work.  States with low taxes, light regulation and a business friendly climate attract businesses (duh!), which create jobs, which attract people.  The opposite is also true.

From the Manhattan Institute's Civic Report of September 2012.

Note how the top "sender states" - the ones people are leaving in droves - are "Liberal" bastions, while the top destination states - the ones to which people and businesses are escaping - are largely Conservative.  This shouldn't surprise anyone.

What makes matters worse for California is that when they push people out of their state, those people take their money with them (duh!), which shrinks California's tax base.  California isn't just losing people to other states, it's losing money.

From the Manhattan Institute's Civic Report of September 2012.

So, California keeps raising tax rates on a smaller number of people, which causes more people to move out, which shrinks the state's tax base, so they raise tax rates...

California really should be the #1 place to live in the US.  The state's natural beauty, raw materials (petroleum and natural gas abound), fertile soil and weather should make it a great place to live and do business.  Instead, California's politicians, elected by California's people, keep making it increasingly difficult to make a living, so people move to Texas, where doing business is much easier.

So, which model do you think the US as a whole is currently following; California or Texas?  Which model should we follow?

Throwing Good Money After Bad

The federal government's insistence on wasting money on "green energy" companies has achieved self-parody.

Energy Secretary Steven Chu at A123 Systems

Electric car battery maker A123 Systems received a $946,830 check from the U.S. Energy Department on the day it filed for Chapter 11 bankruptcy last month -- providing more ammunition for critics who say the Obama administration is blindly funding failed clean energy companies.

The Waltham, Mass.-based company also told two U.S. senators in a letter this week that it may seek more money from the $249.1-million Energy Department stimulus award it won in 2009. A123's Oct. 16 check was the latest payment as part of the original grant, which is distributed incrementally as the company meets certain benchmarks. A123 has received $133.3 million of the grant so far based on its investments in new battery plants in Livonia and Romulus, Mich.

You know what we really need in this roaring economy?  We need the federal government to take our money and give it to politically connected loser companies in the administration's pet industries.

Who do you think makes more productive financial decisions with your money; you, or DC politicians and bureaucrats?

Remember, governments don't pick winners and losers.  They only picks losers, because winners don't need governments to prop them up with money confiscated from tax payers.

Saudi Dakota? (Updated)

The US economy may be stagnant, but North Dakotans haven't noticed.  Recession?  What recession?

The “Economic Miracle State” continues to lead the nation with the lowest state unemployment rate at 3% in September, at almost five percentage points below the national average of 7.8%.  There were 11 North Dakota counties with jobless rates below 2.0% in September, and Williams County, which is at the epicenter of the Bakken oil boom, continues to boast the lowest county jobless rate in the country at just 0.7%.  The exponential growth in North Dakota oil production has fueled exponential growth in the state’s oil and gas jobs, which have more than tripled over the last three years.  Overall employment throughout the entire state increased 5.6% over the twelve month period through September; four times the tepid 1.4% pace of job growth nationally during that period.

It ain't no miracle.  It's a deliberate decision to allow free market forces to work and create wealth by accessing the state's natural raw materials, namely petroleum.

What’s especially impressive is the incredible exponential increase in North Dakota’s oil production over such a short period of time.  The state’s oil production has doubled in just the last 16 months, from 364,160 bpd in May of last year to 728,494 in September of this year.  Oil coming out of the state’s Bakken Formation is behind the huge increase, as that oil field in western North Dakota now supplies 91% of the state’s oil, up from only 78% of the state’s oil two years ago.  Bakken oil output has doubled in just the last 15 months, from 320,435 bpd last June to 662,428 bpd in September (see bottom chart above).  At the current pace of production increases, North Dakota’s oil production will surpass one million bpd by the end of next year.  And it’s the exponential increases in shale oil production in the Bakken region of North Dakota and the Eagle Ford Shale region of Texas that have the United States on a trajectory to become the world’s largest oil producer in the next eight years.

Considering North Dakota's economic boom due to "frackin' the Bakken", and that the US has more petroleum in the Green River Formation than all the world's known oil reserves, the federal government must be eager to allow more drilling and exploration on federal lands, right?

Not so much.

The Interior Department on Friday issued a final plan to close 1.6 million acres of federal land in the West originally slated for oil shale development.

The proposed plan would fence off a majority of the initial blueprint laid out in the final days of the George W. Bush administration. It faces a 30-day protest period and a 60-day process to ensure it is consistent with local and state policies. After that, the department would render a decision for implementation.

As I wrote before, "it's not as though, in this roaring economy, we need all that inexpensive energy or high-paying jobs".

The US is over $16,000,000,000,000 in debt and counting.  The federal government added over $120,000,000,000 to that debt in October 2012 alone and is on track to add another $1,320,000,000,000 to the debt by the end of fiscal year 2013.  Raising taxes will likely cause the economy to slow even more.  Even if the federal government were to cut spending drastically (good luck with that), we would need enormous economic growth to begin paying down our monstrous debt.

In other words, we need the kind of growth North Dakotans have enjoyed for years.

UPDATE (19NOV2012): The following charts demonstrate how hydraulic fracturing (fracking) has increased total US reserves of petroleum and natural gas by making previously unavailable reserves available.  Further technological advances will make the Green River Formation available.

From the Energy Information Administration

Making Health Care More Affordable

Have you ever walked into a doctor's office and seen a list of prices for the services they offer?  No?  Have you ever asked why not?  Every establishment that sells a good or service provides an up-front list of prices, or at least an estimate.  The one exception is health care providers.  The reason is insurance.

When you buy something for yourself with your own money, you naturally look for the highest quality at the best price.  That desire, and competition between providers, drives costs down and quality up.

When you buy something for yourself with someone else's money, you naturally look for the best quality, but not necessarily the best price.

That's what happens with health insurance, and why health care prices keep increasing. 

The "solution" you'll typically hear for this problem is to make health care 100% government-run.  But that makes the problem worse, because it introduces another layer of separation between the customer and the price.  When you buy something for someone you don't know or care about with other people's money, you neither care about the price nor the quality. 

Furthermore, that solution fails to take into account the fact that government caused the problem in the first place by placing price controls on the amount companies could pay employees back in 1942.  Companies then began compensating workers with health insurance packages, and the modern health care behemoth was born.  Believing that greater government intervention will cure a problem government intervention caused is like believing that a poisoned patient should drink more poison to save himself.

So, what's the solution?  Some doctors in Oklahoma believe they've found it.

The Surgery Center demonstrates that it’s possible to offer high quality care at low prices. "It's always been interesting to me,” says Dr. Jason Sigmon, “that in any other industry, tons of attention is devoted to making systems more efficient, but in health care that's just completely lost."

The bill, which is strictly for the hospital itself and doesn't include Sigmon's or the anesthesiologist's fees, totaled $33,505. When Sigmon performs the same procedure at the Surgery Center, the all-inclusive price is $5,885.

How can the Surgery Center offer the same procedure at 1/6 the cost of the hospital?

Three years ago, Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma, took an initiative that would only be considered radical in the health care industry: He posted online a list of prices for 112 common surgical procedures. The 51-year-old Smith, a self-described libertarian, and his business partner, Dr. Steve Lantier, founded the Surgery Center 15 years ago, after they became disillusioned with the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists.

The following is from the Surgery Center's website.

Transparent, direct, package pricing means the patient knows exactly what the cost of the service will be upfront. Fees for the surgeon, anesthesiologist and facility are all included in one low price. There are no hidden costs, charges or surprises.

None of this should come as a surprise.  Corrective eye surgery prices keep dropping because it's not covered by insurance.

"In every other field of medicine, the price is going up faster than consumer prices in general," said Dr. John Goodman, president of the National Center for Policy Analysis.

"[But] the price of Lasik surgery, on average, has gone down by 30 percent." [this article is from 2006, whereas the chart to the right is from 2009 ~ OS] 

Prices dropped even though doctors pay for advertising. And while the procedure got cheaper, it also got better.

"When the lasers first came out, all they could treat was nearsightedness," Bonanni said. "[Today] the lasers are faster, more precise."

The same is true of most cosmetic surgery procedures.

So, the answer to ever-increasing health care costs is not more government intrusion, but less.  The answer, as usual, is the free market.

Euro Zone Back in Recession (Updated)

How's Socialism working for Europe?

The debt crisis dragged the euro zone into its second recession since 2009 in the third quarter despite  modest growth in Germany andFrance, data showed on Thursday.

The two leading economies both managed 0.2 percent growth in the July-to-September period.

Got that?  Their two leading economies grew at the roaring rate of 0.2%.

But the resilience could not save the austerity-hit 17-nation bloc from overall contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.

Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2-percent drop in the second quarter.

Those two quarters of contraction put the euro zone’s 9.4 trillion euro ($12 trillion) economy in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.

Incredibly, this is the direction some Americans actually want to follow them off the cliff by spending more, borrowing more and taxing more.  It's insane.  We should be taking the opposite approach, because as Ed Morrissey states...

At some point, the Germans and French citizens will tire of having their production dedicated to rescuing less disciplined neighbors on the Continent.  When that day comes, the Atlantic will not protect us from the shock waves — which is why it’s more urgent than ever for the US to get its own fiscal house in order.

Fortunately, our president promised to cut the deficit in half by the end of his first term.  Of course, it's his second term now, and he hasn't even tried, but it's the thought that counts, right?

UPDATE (18NOV2012): Half of UK voters want to leave the EU, and I can't say that I blame them.

The survey will fuel the growing political debate about Britain’s future place in the EU, which has seen even Cabinet ministers suggesting that the UK would prosper outside the union.

The YouGov poll showed that 49 per cent of voters would vote to leave the EU in a referendum. Twenty-eight per percent said they would opt to remain a member, while 17 per cent said they did not know how they would vote.

British voters are also gloomy about the future of the EU: 65 per cent said they are pessimistic about the union’s prospects, while only 22 per cent were optimistic.

Another poll published yesterday in The Guardian claims it's more like 56%, but the link wouldn't work for me (maybe it'll work now).

Remember when Americans thought the EU would overtake the US as the world's leading economic power?  No nation, or group of nations, can spend more than they take in, lavish their population with welfare programs that give them incentives to not work, punish those who do work with excessive taxes, make it excessively difficult to start or run a business with excessive regulation,  produce too few children to replace in the future the people who are working today, and expect to survive.

And we're making all the same mistakes.

October Deficit = $120 Billion

Technically, the federal government doesn't have a budget deficit, because in order to have a budget deficit, one first needs a budget.  And we haven't had one of those since 2009.  In more practical terms however, the federal government spent $120 Billion more than it took from tax payers in October 2012, the first month of fiscal year 2013.

The Treasury said on Tuesday the October deficit was $120 billion, larger than economist forecasts for a $114 billion gap and up from $98 billion in October of 2011.

And it's not as though they took less money from tax payers.

Growth in expenditures outpaced rising receipts, deepening the deficit. Outlays grew to $304 billion from around $262 billion in the same month last year while receipts rose to $184 billion from $163 billion.

Got that?  The more DC takes the more DC spends. 

Remember when Pres Obama promised...

...today I’m pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we’ve long neglected. But I refuse to leave our children with a debt that they cannot repay — and that means taking responsibility right now, in this administration, for getting our spending under control.

In case you haven't heard, that didn't happen.  Instead, our federal government ran without a budget for three years, spent over $1,100,000,000,000 more than it took each year for four years straight, and added $5,000,000,000,000 to the national debt in those four years.

And it's on track to do it again. 

And it'll be George Bush's fault.

Obamacare: Told You So (Updated)

What happens when you make it more expensive to hire people?  Businesses hire fewer people.  Weird, isn't it?

With 20 or so new or higher taxes set to be implemented, ranging from a $123 billion surtax on investment income, through the $20 billion medical device tax, all the way down to the $600 million executive compensation limit, Obamacare will be a nearly unbearable tax burden on the economy.

Because what this roaring economy really needs is more burdensome taxation and regulation to prevent it from growing too quickly.

As recently as a week ago, a global auto parts manufacturing company in Ohio known as Dana Holding Corp., warned their employees of potential layoffs, citing "$24 million over the next six years in additional U.S. health care expenses".  After laying off several white collar staffers, company insiders have hinted at more to come.  

When you tax something, you get less of it.  So, of course, Obamacare includes a tax on the manufacture and development of medical equipment, because the last thing we want is American companies developing and manufacturing medical equipment!

Welch Allyn, a company that manufactures medical diagnostic equipment in central New York, announced in September that they would be laying off 275 employees, or roughly 10% of their workforce over the next three years.  One of the major reasons discussed for the layoffs was a proactive response to the Medical Device Tax mandated by the new healthcare law.

Thanks, Obama voters!


UPDATE (11NOV12): John Schnatter, founder and CEO of Papa John's, says Obamacare will increase the cost of hiring employees and force his company to cut employees' hours.

A day after Barack Obama earned a second term in the White House, Papa John's founder and CEO John Schnatter said the president's signature health-care reform law would increase his business costs and possibly result in employees' hours being cut.

In August, he made national headlines after telling shareholders the Affordable Care Act — commonly known as Obamacare — would result in a 10- to 14-cent increase for customers buying a pizza.
"I got in a bunch of trouble for this," he told the students. "That's what you do, is you pass on costs. Unfortunately, I don't think people know what they're going to pay for this."

No kidding.  For some reason, a percentage of the population can't seem to understand that nothing is free.  They think whatever government gives them costs nothing.  That percentage of the population seems to be growing.

Schnatter, a Mitt Romney supporter and fundraiser, said he was not "pro or against" the reform law [he seems pretty clearly against ~ OS] but likened the government's involvement in health care to its operation of the U.S. Postal Service, saying "the worst entity in the world for running the thing is the government." [we agree there ~ OS]

"We're all going to pay for it," he said, estimating the new law would cost the business $5 million to $8 million annually.

Under the Affordable Care Act, full-time employees — those working 30 hours or more per week — would have to be provided with insurance at companies with more than 50 workers. Schnatter said it was likely that some franchise owners would reduce employees' hours in order to avoid having to cover them.

"That's probably what's going to happen," he said. "It's common sense. That's what I call lose-lose."

Yes, it's common sense, which is very rare in DC.

UPDATE (13NOV12): More businesses are cutting employees' hours.

Last month Darden Restaurants — which employs 185,000 people at nearly 2,000 Olive Garden, Longhorn Steakhouse and Red Lobster restaurants — revealed that it was scaling back many of its employees' workweeks to 28 hours.

This month Kroger — the grocer that employs 350,000 people — announced that existing part-time workers and new hires would be limited to working 28 hours per week.

"Kroger is doing this to avoid paying for full-time health care for employees who currently only receive part-time benefits," one employee explains. "And (so) they will not get hit with the $3,000 penalty."

How have "Liberals" reacted to this?  Why, those evil, greedy, Capitalist pigs are robbing the workers!  Boycott!

Many progressives are today organizing a boycott over Papa John’s threat to cut worker hours in response to President Obama’s re-election. John Schnatter, the CEO of Papa John’s, said that as a result of Obama’s re-election, and the subsequent implementation of Obamacare, he would consider cutting his employees hours. Scnatter's comments immediately created controversy, and many Twitter and Facebook users are now promising to boycott the pizza chain.

The writer is either ignorant, or lying to his readers.  Schnatter doesn't set anyones hours.  Franchise (i.e. small business) owners control employees' hours.  They're the ones who have to figure out how to make ends meet, and Obamacare makes that more difficult.  Schnatter merely predicted - based on obvious economic reality - what most franchise owners will do.

Who does this hurt most?

Millions across the country are likely to be affected by the mandate — and the vast majority of these will be lower middle class people who desperately need that extra income to make ends meet.

In other words ObamaCare's "employer mandate" will wind up hurting the very people Obama claims to be fighting for — reducing their take-home pay at a time when loose monetary policy is already whittling away at the value of every dollar they earn.

When will Americans learn that there is no free lunch?  When government offers you something for "free", you end up paying for it in other ways.

Running Out of Other People's Money

Margaret Thatcher famously said that "the problem with Socialism is that eventually you run out of other people's money".  She didn't say what happens then.  Greece gives us an idea.

Private businesses have closed down in the thousands. Unemployment stands at a record 25 percent, with more than half of Greece's young people out of work. Caught between plunging incomes and ever increasing taxes, families are finding it hard to make ends meet. Higher heating fuel prices have meant many apartment tenants have opted not to buy heating fuel this year. Instead, they'll make do with blankets, gas heaters and firewood to get through the winter. Lines at soup kitchens have grown longer.

But at least Greeks are pulling together in hard times, right?

Life in Athens is often punctuated by demonstrations big and small, sometimes on a daily basis. Rows of shuttered shops stand between the restaurants that have managed to stay open. Vigilantes roam inner city neighborhoods, vowing to "clean up" what they claim the demoralized police have failed to do. Right-wing extremists beat migrants, anarchists beat the right-wing thugs and desperate local residents quietly cheer one side or the other as society grows increasingly polarized.

.....

After battering his Egyptian assistant, the mob turned on Mr Abdulbasset, who had defied police to keep his shop open...  The riot police watched on but did not intervene

The authorities will take care of all this vigilante justice, right?

Greece's sclerotic justice system has been hit by a protracted strike that has left courts only functioning for an hour a day as judges and prosecutors protest salary cuts.

At least if they get beat up, Greeks still have "universal", government-provided medicine, right?

A sign taped to a wall in an Athens hospital appealed for civility from patients. "The doctors on duty have been unpaid since May," it read, "Please respect their work."
.....
"When the pharmacies are closed and I can't get my insulin, which is my life for me, what do I do? ... How can we survive?" asked Voula Hasiotou, a member of an association of diabetics who turned out for the rally.

Keep all this in mind when politicians tell you we need to keep borrowing over $1 Trillion per year, as we have during all four years of Pres Obama's first term. 

Think this can't happen in the US?  On the contrary, there's no reason why it can't.  And if we let it happen, it'll be far worse.  The US and EU bailed Greece out.  Our population is 31x bigger than that of Greece, and our economy is the biggest in history.  No one is big enough to bail us out.

Here's one last quote from the AP article on Greece.

"Our society is on a razor's edge," Public Order Minister Nikos Dendias said recently, after striking shipyard workers broke into the grounds of the Defense Ministry. "If we can't contain ourselves, if we can't maintain our social cohesion, if we can't continue to act within the rules ... I fear we will end up being a jungle."

Not even close, Mr Dendias.  Greece is following the eternal cycle.  From oppression to revolution, from revolution to freedom, from freedom to prosperity, from prosperity to entitlement and indolence, from entitlement and indolence to anarchy, and finally from anarchy to dictatorship and oppression.

And we're heading in the same direction.

Democrats' Plan for the Debt Crisis

I've asked this question of several "Liberals" and, so far, received exactly zero answers.  What is the Democrats' plan to avert America's approaching debt crisis?  Does anyone out there have an answer?  Anyone?  Bueller?

Here's a little background.

Treasury Secretary Timothy Geithner told the House Budget Committee Thursday that President Obama’s fiscal year 2013 budget — “the most expensive in United States history” — would “put the U.S. on an ‘unsustainable’ course” if enacted.

Geithner also told committee Chairman Paul Ryan that although the Obama administration doesn’t have a “definitive solution” to the debt crisis, it definitely knows it doesn’t like the Republican solution. ...

“We have millions of Americans retiring every day, and that will drive substantially the rate of growth of health care costs. You are right to say we’re not coming before you today to say we have a definitive solution to that long-term problem. What we do know is, we don’t like yours,” Geithner said.

Steal From the Poor, Give to the Rich

Big government often passes itself off as a kind of Robin Hood, stealing from the rich to give to the poor, but in practice, it often works the other way around.

As a part-owner of the New Jersey Nets basketball team, Jay Z profited at taxpayer expense when the state of New York abused its eminent domain powers to seize privately-owned homes and business and then handed that land over to fellow Nets owner and real estate tycoon Bruce Ratner, who built a new arena for the Nets to call home in Brooklyn.

Oh, and Jay Z endorsed Pres Obama.

But that shouldn't be surprising, since most wealthy people vote Democrat.

UPDATE (08NOV12): Pres Obama won eight of the ten wealthiest counties.

In an election that often focused on debates about class warfare, President Barack Obama was favored over multimillionaire businessman Mitt Romney in eight of the nation's 10 wealthiest counties.

And his margin of victory in all eight counties was greater than that of the national vote, in which Obama was leading by 50 percent to 48 percent with 97 percent of precincts reporting.

The findings are based on a CNBC.com analysis of Census Bureau numbers on average annual household income from 2006-2011 and results from Tuesday's elections.

Which is the "party of the rich"?

Picking Losers...

...And lying about it.

Abound Solar is a "green energy" company that, like Solyndra (backed by Obama bundler, Tulsa billionaire George Kaiser), received millions in tax payers' money, then promptly went bankrupt.  Unlike Solyndra, Abound Solar is is now under criminal investigation for misleading investors.  That's private investors, not tax payers.  But that's old news.  Onto the current story.

Recent remarks by President Obama to a Denver-based TV anchor stand in stark contrast to new emails obtained by CompleteColorado.com.

This past Friday, President Obama told KUSA's Kyle Clark, in response to a question on the federally-backed but failed Colorado company Abound Solar, "And these are decisions, by the way, that are made by the Department of Energy (DOE), they have nothing to do with politics."

Of course they have nothing to do with politics.  Specifically, they have nothing to do with the fact that...

Abound Solar... counts major Obama bundler Pat Stryker among its early backers

But never mind that.  Let's go to the emails.  Here's the key sentence.

You better let him know the WH wants to move Abound forward.

What?  I thought that "these... decisions... are made by the Department of Energy", not the White House!  Say it ain't so!

Next time a politician rails against those eeeeeevil venture capitalists, then touts the need for government to "invest" some corporation or industry, keep three things in mind.

1. Venture capitalists use their own money, or investors' money, to invest in companies they believe will turn a profit.  Either way, the investors provide the money voluntarily. 
2. Governments that "invest" in companies force tax payers to give their money to those companies, whether the tax payers think it's a good investment or not.
3. Politicians always make decisions based on political considerations.
4. Politicians don't pick winners and losers.  They pick losers.  Because the winners don't need government to force people to give them money.

Free Markets Make Life Better

From the American Enterprise Institute:

1. The percentage of low-income households with a computer rose to 47.7% in 2009 from 19.8% in 2001.

2. Appliances? The percentage of low-income homes with air-conditioning equipment rose to 83.5% from 65.8%, with dishwashers to 30.8% from 17.6%, with a washing machine to 62.4% from 57.2%, and with a clothes dryer to 56.5% from 44.9%.

3. The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.

Clearly, the average percentage of their income that people spend on necessities has decreased steadily over the last 50 years.  Why does this matter?  Because people who spend less on necessities have more left over to spend on things they actually want.

What makes this possible?  Free markets do.  Free markets force manufacturers to innovate or die, thereby making their products more affordable.

Does it matter that an increasing percentages of Americans can afford refrigerators, microwave ovens, dish washers, clothes washers and dryers?

Of course it does.  If you don't believe me, try living without them.