Thursday, December 26, 2013

John Cochrane Gets It Right

Today's Wall Street Journal has an excellent opinion piece written by economist John Cochrane on the topic of health care.

Cochrane argues that government obstruction is what caused health care costs to get out of control in the first place and that Obamacare has taken a problem and turned it into a nightmare.

He argues that only the free market can deliver quality affordable care.  Citing all of the government's disruptive efforts in the health car market, Cochrane delivers a simple prescription for what ails us -- get the government out of the way.

His analysis deals with "pre-existing conditions" and policy cancellations.  Changing tax laws that have forced employer-based health insurance on the country is part of the solution.  But, many other reforms are cited in his excellent article.

A must read.

Sunday, December 22, 2013

The Activist President

Looking toward 2014, President Obama spoke of the things that government must do in 2014 -- just as he boarded a plane with his family for a couple of weeks in Hawaii.

If only he would just stay in Hawaii for the entirety of 2014!

The government, under Obama, has now euthanized the financial sector and the health care sector -- nearly thirty percent of the US economy.  But, I guess, in his view, there is more yet to be euthanized.

Obama's war on coal is certainly succeeding, but free market oil and gas discoveries are overcoming destructive government energy policies. Obama has tried, without success, to destroy the oil and gas sector.  Thank goodness he has failed -- so far.

Even the NY Times features daily hardship stories about middle class Americans who find themselves the victims of Obama government overreach.  The most recent stories are about Obamacare, but others have featured other middle class victims of this President and his policies.

The biggest losers under the Obama gameplan are, of course, the poor and the lowest skilled part of the American population.  Obama seems to want to condemn these folks to servitude with little or no hope of escape.  Enact higher minimum wages so that these folks cannot acquire the skill set to participate in the market economy.  Expand welfare programs, so that the alternatives to acquiring a skill are more attractive.  Turn everyone's attention to "the rich," so that there is a convenient villain.  Focus on "inequality," while supporting policies that virtually guarantee that folks at the bottom of the economic pile have no shot of escape.

Even on the education front, Obama chooses the teacher's union over students.  Obama has consistently worked to damage the education prospects of the poor.  Eliminating charter school funding in the District of Columbia was a direct assault by the President on the hopes and dreams of poor black Americans stuck at the bottom of the economic pile in prosperous Washington DC.

Folks like Obama think that the reason that we have poor people is that we have rich people.  If only, in Obama's view, we could rid ourselves of rich people (except for his friends like Warren Buffet and movie stars), then the poor would no longer be poor.

The old Soviet Union followed this gameplan.  Unless you were a significant player in the communist party, Soviet citizens were condemned to a modern form of slavery.  But, at least among the slaves, there was little inequality.  The slavemasters lived high while the slaves struggled in an economic situation that America's poor would find frightening.  Bureaucrats (slavemasters) always win in this gameplan.  They known best, they say.  Sound familiar.

So, if you want our health care plan you can get it.  If you want a health care plan you would like, forget it.  We know best, say the Obama folks as the free market seems more and more a distant memory.

Saturday, December 21, 2013

Is The Economy Booming?

The 4.1 percent GDP growth in 3rd quarter 2013 is being touted as a sign that the economy is set to surge forward.  Really?

Obama celebrates an economy with 2 million jobs created in 2013.  Really?

The US economy will, for the entire year of 2013, still remain under 3 percent growth.  Historically, 3 percent is the average growth of the US economy.  In other words, 3 percent is mediocre. 

The real race is between the number of folks leaving the labor force and those who are finding jobs.

Anyone actually participating in this economy knows that it is still on life support.

Government policy under Obama is mainly aimed at propping up rich folks and undermining the life chances of the poor and the middle class.  In this, he is succeeding.

Passing more laws that make it illegal to offer poor people jobs is just one more example of Obama's plan to make life more difficult for the poorest among us.  Obama and Buffett and Mark Warner can applaud this since they will continue to ride at the top of the stagecoach.  Why not simply raise the minimum wage to $ 1,000 per hour.  At least that will treat almost all Americans equally instead of singling out poor people by moving the minimum wage to $ 9 or $ 10 per hour.  Why not let these rules apply to everyone -- make everyone rich (by their logic) -- raise the minimum wage to $ 1,000 per hour. (Buffet and Obama and Warner could support that, since they would not be effected).

This economy is stagnant.  Europe is in even worse shape.  The western world is plagued by the overreach of government.  There will be no real economic growth until these policies are halted.

Friday, December 20, 2013

Mark Warner -- the $ 95 Man

Senator Mark Warner of Virginia is a master at saying one thing and doing another.  Describing himself as a moderate, Warner has supported the most extreme partisan left-wing programs that have been advanced by the Obama Administration -- chief among them: Obamacare.

Now Warner is trying to pretend that: a) he did not understand what he voted for, campaigned for, and championed; b) he wants to spare the nearly 6 million folks that lost their health insurance this year, thanks to Warner, the $ 95 penalty that they face for being unable to purchase replacement insurance.

This is a consistent Warner theme -- pass legislation that destroys the hopes and dreams (and health care) of the average American -- and then come up with some lame and paltry palliative.

$ 95.

I guess that is a substitute for health insurance coverage in the opinion of Senator Warner.

Obama, today, endorsed the Warner $ 95 plan and, illegally, eliminated the $ 95 penalty next year for those who, because of Warner and Obama, have lost their insurance and have no replacement insurance.

Too bad if you have a health problem.  You're still out of luck thanks to Senator Warner.  But, at least you don't pay the government the $ 95.  Thanks, Senator -- for nothing,

Tuesday, December 17, 2013

Another Republican Collapse

The Republicans have now embraced higher spending, higher taxes and expanded government by voting for the Ryan-Murray budget deal.  Within the week, expect enough Senate Republicans to join Democrats to make this government expansion a reality.

Had there been no Ryan-Murray compromise, the sequester would have remained in effect and government "discretionary" spending would have continued its downward trajectory, set in motion by the 2011 agreement known as "the sequester."

As usual, defenders of higher taxes and more government spending, say that this better positions the Republicans to retake the Senate in 2014 and the White  House in 2016.

But, Republicans routinely cave when they are the majority in both houses and occupy the White House.  That was the situation when the Prescription Drug Bill made its way into law.  When have the Republicans ever been for fiscal restraint?  The Eisenhower Era.  And don't forget Calvin Coolidge.

Even Ronald Reagan was unable to restrain the Republican desire to spend more money.

Does anyone really believe that electing John McCain or Mitt Romney would have materially altered the path of government spending in the US?

The Republican Party is cowardly and hypocritical.  They will avoid taking stands on principal at all costs.  Even Paul Ryan, who many once thought a spokesman for fiscal prudence, has joined the accomodation crowd.

So, if the Senate remains Democratic in 2014, is that the end?  When will Republicans ever stand up for fiscal discipline?  I think we all know the answer to that question.

Thursday, December 12, 2013

Healthcare: Big Issues; Little Issues

Obamacare has two features that will make it wildly unpopular once implemented (if that day ever comes):  (i) sky-high deductibles; (ii) tight, low-cost doctor and hospital networks.  The media focus on the website and the premiums (and subsidies) misses the bigger issues.

The sky-high deductibles will mean that most lower and middle income Americans still won't be able to afford health care.  If your plan has a $ 10,000 deductible, that means you pay $ 10,000 before the plan really kicks in -- every year.  Once the plan kicks in, there are very few doctors and hospitals that are covered under the plan.  (In New Hampshire, for example, only ten of the state's 19 hospitals are covered by Obamacare providers).  And, who are these doctors and where are these hospitals?

The doctors covered in the networks will be those who work cheap, maybe because they must.  Ditto for the hospitals.  The only real guarantee is that the best doctors and hospitals will not be covered in these Obamacare networks. 

The net result: if you are insured under Obamacare, you will pay large deductibles and then once the deductible is exhausted, you will be confined to the cheapest (and probably least talented) doctors and the worst (and likely most crowded) hospitals in America.  Unless, of course, your name is Obama or Buffett or Mark Warner or Nancy Pelosi or Harry Reid, in which case you will get the best doctors and the best hospitals.  "Let them eat cake."

Wednesday, December 11, 2013

The Sequester is Better

The budget deal forged by Paul Ryan and Patty Murray is a big mistake.  Doing nothing would leave the sequester in place.  The sequester is the right way to go -- Pentagon or no Pentagon.  There is no reason that the bloated military should be exempt from budget cuts.  Ryan is desperately trying to appease the House Republicans that are military spending hawks.  But this is a mistake.

The Ryan-Murray budget deal increases spending, increases taxes and provides for ephemeral spending cuts in the (unknown) future.  This is a typical outcome from a frightened and cowed Republican Party leadership.  No wonder Harry Reid praised this deal. 

There was no  reason to go this route and further exacerbate the differences within the Republican Party.

This deal will pass both Houses of Congress, but it shouldn't.  Maybe the Republicans should take a fresh look at their leadership in the House.