Monday, November 23, 2015

What the French Economy Needs? Free Markets

As reported in today's WSJ, the French economy is, at minimum, 57 percent government.  But that is a gross, gross understatement.  In reality, the true number is more likely 75 percent, because there are so many "private" businesses that exist only to satisfy the needs and demands of the government.  The private sector is, then, likely a meagre one-fourth of the economy.  How much economic growth can anyone anticipate from that?  None

The plight of the French Muslim minority is that their youth have an unemployment rate exceeding 40 percent. Not finding work, they find other things to do.

Absence of free markets breeds problems.  France's future is bleak under socialism.  Only the return of free markets offers hope for the future.

Sunday, November 22, 2015

Its Time to Eliminate the Charitable Deduction

Permitting taxpayers to take a tax deduction for charitable contributions is another reverse Robin Hood exercise.  Almost all of the benefits of this deduction go to extremely wealthy Americans, none at all to poor people.

Worse, average Americans are required to poney up the missing tax dollars that would otherwise be paid by the wealthy.  These deductions have been used to finance phoney charities like the Clinton Foundation, which is mainly a source of funding for Clinton political operatives.

If people want to support a worthy cause, let them do it with their own dollars, not the dollars that other unsuspecting taxpayers will have to put up to make up for the tax breaks for a handful of absurdly rich people.

This should apply to both right wing and left wing not-for-profits.  The phrase "not-for-profits" usually means that average Americans are getting hosed by being unwittingly forced to underwrite things they know nothing about, while the wealthy get massive tax breaks and are able to set the political agenda for the country through their foundations, endowments and not-for-profits.

Let these foundation, endowments and not-for-profits survive without gouging the average American.  Make wealthy folks pay their taxes, then make their contributions.  Why should average Americans be on the hook for this?

Saturday, November 21, 2015

Britain Bails on Green Energy

It is a truism that only free markets can provide for environmental improvement.  If there are any doubts, check out the environmental record of the US and Canada and compare those results to the environmental record of China or the old USSR (or modern Russia).

So, when Britain and Europe began subsidizing green energy businesses and announced its commitment to fight climate change, you knew what the outcome would be.   All of these efforts had the effect or increasing the cost of energy to the average citizen, who might put up with that for a while, but not for long.

In a detailed article in today's Washington Post, Griff Witte discusses Britain's retreat from it's clean energy initiatives.  Having literally wasted billions of pounds subsidizing failing clean energy businesses, the Brits have now thrown in the towel, eliminating 90 percent of the subsidies to clean energy initiatives and walking away from numerous failed clean energy projects.  They didn't work, they cost a lot of money, and the public grew tired of paying for nothing.

Read the article.

The climate change advocates might win an occasional battle, but, in the end, taking the world back to stone age economics will not prove a winning strategy for the environmental crowd.

True environmental progress can only be funded by the economic growth that free markets provide, as history shows.  The idea that stagnant, over-bloated, government-run economies can fight climate change is absurd on the face of it.  So, Britain retreats, as they all will, in time.

Europe is Toothless

The idea that Europe can confront ISIS is a joke.  Europe cannot afford the resources to mount an effort to defeat ISIS and is bound to sit back and endure future terror attacks with little but body bags to show for it.


European economies no longer grow.  Worse, their Muslim minorities have never been assimilated and never will be.  France and Germany face internal and external threats of violence that they do not have the resources to defend against.  Where will Europe get the troops and resources necessary to take the fight to ISIS?  The answer:  nowhere.

Europe long ago adopted socialism as the economy of choice.  Socialist economies don't grow.  They simply divide a constant pie among an ever bickering population of special interests.  Worse, they accumulate unpayable debts that loom over their economies and darken their economic future.  Economies like this can't fight anything.  All they can do is provide a limited defense at great personal costs to their population.  France will get used to constant domestic violence in time.  There is nothing they can do about it.

Only free markets can provide the resources for the economic growth necessary to defend the developed world.  Unfortunately, the developed world is heading in the opposite direction by increasing the role of government and reducing the role of the free market.

Thursday, November 19, 2015

2016 Sticker Shock - Unaffordable Care is Here

A detailed article in the Wall Street Journal today by Louise Radnofsky, Paul Overberg, and Stephanie Armour describes the disaster that awaits average Americans in 2016: double digit health insurance premium increases and huge increases in deductibles.  The idea, all along, was that average Americans with good health would pay through the nose to provide the money for poor people to gain insurance.  That's what's happening.

Here's just one example of many:

"Eric Elmquist, 37, of Franklin, Tenn., felt he was paying too much in 2014 for his Blue Cross Blue Shield plan at $878 a month for two adults and three children, with an annual deductible of $5,000. A year later, he had a plan with a premium of $1,089 and deductible of $7,000. Now, he is eyeing a premium of more than $1,416 to keep that plan."

The broad conclusion:
"Many people signing up for 2016 health policies under the Affordable Care Act face higher premiums, fewer doctors and skimpier coverage, which threatens the appeal of the program for the healthy customers it needs.
Insurers have raised premiums steeply for the most popular plans at the same time they have boosted out-of-pocket costs such as deductibles, copays and coinsurance in many of their offerings. The companies attribute the moves in part to the high cost of some customers they are gaining under the law, which doesn’t allow them to bar clients with existing health conditions."

The reality has arrived.  Under the guise of the "Affordable Care Act," health care in America is becoming increasing unaffordable and unavailable.  This trend is not going to be reversed and things will continue to deteriorate until America's health care system begins to resemble the worst public schools in Chicago with a similar funding status.

Not to be outdone, the NY Times today has two articles of its own detailing the disastrous results of Obamacare.  Stacy Cowley's article discusses the problems that small business faces having to choose between compliance with Obamacare and their own growth or even their own survival.  Abby Goodnough describes one of life's new stresses, the annual search to find some health insurance that meets their needs.  This, of course, is something new that has been added to life by Obamacare -- fear, panic and anxiety as average Americans desperately try to find new coverage in the Obama world, most of whom were satisfied by the coverage they already had before the brave new world of Obama began.

Here's an apt quote from Goodnough's article: "I don't have a regular doctor anymore, so I avoid going."  Ah, health insurance without health care -- the Obama dream come true.

It is hard to imagine a worse health care regime than Obamacare.  Almost anything would be better than this.  For a country that grew up with free markets delivering the best quality of health care in the world, it is remarkable that this could all be destroyed in less than a decade by overzealous, inexperienced, dogmatic politicians, who, themselves, will never be subject to this terrible law.

Sunday, November 15, 2015

The Pernicious Role of Government in Higher Ed

Higher Education is less and less about education these days and more and more about social protest.  This, in the wealthiest society in the world.  Poor people in America live by a standard that the vast majority of the people of the world have no hope to ever achieve.  But, it isn't the poor that are protesting.

The protests are coming from the wealthiest strata of society.   The wealthy and privileged, apparently, are the new victims of oppression, or, at the very least, the newly self-appointed spokesmen for the oppressed.  Colleges and universities all over America have turned into hotbeds of unhappiness.  Many college students seem unable to weather the slings and arrows of events both near and far away.  They are suffering, they say, leaving little time to pursue an education.

Instead, the demand is to convert the university itself, more and more, into an institution devoted to political agitation.  Those who might question such a move are no longer considered worthy of the right of free speech.  They need to move on or be run over.

This is the natural result of deep federal government involvement in education, mostly driven by using taxpayer money to fund political activities and politically-motivated research at America's universities.  The usual response when one questions why university administrators tolerate illegal, sometimes violent, activities by 19 and 20 year olds, is that government funding might be threatened if they took any action other than surrender.

Thus, universities are more and more devoted to "centers" that separate students into various categories, categories which are multiplying every year.  Integration has given way to enforced and institutionally encouraged separation, one race from another, one gender from another, one ethnic group from another, one nationality from another -- unending and confusing multiplicities of identities, most of whom feel victimized, they say,  by the universities and colleges they attend.

How to divide the university financial pie among all of these competing victim groups?  That is the modern question facing the modern university.  Education has become an after thought, no longer relevant to the modern higher ed establishment.  It's all about identity, not about building strength or character through education.

The folks that lead these institutions now make whopping salaries (seven figure salaries are rampant at the elite schools), typically with accompanying entourages that would make the ghost of Louis the XIV blush.  Faculty parking lots are full of mercedes, bmws and the occasional ferrari.  Times have changed.

The real victim is the education process itself, no longer of much concern to folks out raising money to perpetuate these institutions.  Taxpayers, either through direct government grants or tax deductions provided to wealthy donors, provide the funding for institutions that have long since lost their moorings and are constantly casting about for a new champion or cause that might stir up students, many of whom no longer see education of much value anyway.

Ultimately, there will be no financing to support all of this, since no real product is created or even envisioned by the increasingly politicized modern education model.  Tuitions are continuing to escalate skyward and that process will not abate.  Eventually, however, the tide will turn and many, if not most of these no-longer-functional monstrosities will collapse of their own weight.

Education, as such, is, after all, pretty cheap and not in any way political.  That simple and obvious fact will spell doom for the higher education system that big government has spawned.

Insurance Without Health Care

As Obama trumpets the meagre spread of health insurance occasioned by the fourth year anniversary of the passage of the bizarrely-named Affordable Care Act, it is becoming increasing clear to many Americans that having Obamacare insurance is not the same as having access to health care.

"We have insurance, but can't afford to use it." So says, David R. Reines of New Jersey, quoted in today's NYTimes article, penned by Robert Pear.

In order to make Obamacare work, the deductibles -- that means what you pay before the insurance kicks in-- were raised to "sky-high" (that's the description in the article) levels.

Kevin Fanning of North Texas was quoted in the article saying:  "We could not afford the deductible.  Basically I was paying for insurance I could not afford to use."  He dropped his policy, according to the article.

Wendy Kaplan pays $ 1,200 per month for her Obamacare health insurance, according to  the article, for coverage with an annual deductible of $ 12,700.  Only Obama and his allies would call this "affordable."

An on and on.

The best quote of all in Pear's article is from Anne Cornwell of Chattanooga (whose annual deductible is $ 10,000): "When they said affordable, I thought they really meant affordable."

The insurance is affordable so long as you don't plan to use it.  Insurance without access to health care -- the Obama dream.   Form without substance.