Archive for July, 2009
Charting ObamaCare
Posted by Tom in Nationalized Health Care on July 31, 2009
A few illustrative charts of the House ObamaCare plan:
Dennis Prager’s Irrefutable Socratic Stand Against ObamaCare
Posted by Tom in Nationalized Health Care on July 28, 2009
Dennis Prager hits the nail on the head in his July 28th Real Clear Politics article, 10 Questions for Supporters of ‘ObamaCare.’ The full article follows without dicta from moi, none is necessary!
1. President Barack Obama repeatedly tells us that one reason national health care is needed is that we can no longer afford to pay for Medicare and Medicaid. But if Medicare and Medicaid are fiscally insolvent and gradually bankrupting our society, why is a government takeover of medical care for the rest of society a good idea? What large-scale government program has not eventually spiraled out of control, let alone stayed within its projected budget? Why should anyone believe that nationalizing health care would create the first major government program to “pay for itself,” let alone get smaller rather than larger over time? Why not simply see how the Democrats can reform Medicare and Medicaid before nationalizing much of the rest of health care?
2. President Obama reiterated this past week that “no insurance company will be allowed to deny you coverage because of a pre-existing medical condition.” This is an oft-repeated goal of the president’s and the Democrats’ health care plan. But if any individual can buy health insurance at any time, why would anyone buy health insurance while healthy? Why would I not simply wait until I got sick or injured to buy the insurance? If auto insurance were purchasable once one got into an accident, why would anyone purchase auto insurance before an accident? Will the Democrats next demand that life insurance companies sell life insurance to the terminally ill? The whole point of insurance is that the healthy buy it and thereby provide the funds to pay for the sick. Demanding that insurance companies provide insurance to everyone at any time spells the end of the concept of insurance. And if the answer is that the government will now make it illegal not to buy insurance, how will that be enforced? How will the government check on 300 million people?
3. Why do supporters of nationalized medicine so often substitute the word “care” for the word “insurance?” it is patently untrue that millions of Americans do not receive health care. Millions of Americans do not have health insurance but virtually every American (and non-American on American soil) receives health care.
4. No one denies that in order to come close to staying within its budget health care will be rationed. But what is the moral justification of having the state decide what medical care to ration?
5. According to Dr. David Gratzer, health care specialist at the Manhattan Institute, “While 20 years ago pharmaceuticals were largely developed in Europe, European price controls made drug development an American enterprise. Fifteen of the 20 top-selling drugs worldwide this year were birthed in the United States.” Given how many lives — in America and throughout the world – American pharmaceutical companies save, and given how expensive it is to develop any new drug, will the price controls on drugs envisaged in the Democrats’ bill improve or impair Americans’ health?
6. Do you really believe that private insurance could survive a “public option”? Or is this really a cover for the ideal of single-payer medical care? How could a private insurance company survive a “public option” given that private companies have to show a profit and government agencies do not have to – and given that a private enterprise must raise its own money to be solvent and a government option has access to others’money — i.e., taxes?
7. Why will hospitals, doctors, and pharmaceutical companies do nearly as superb a job as they now do if their reimbursement from the government will be severely cut? Haven’t the laws of human behavior and common sense been repealed here in arguing that while doctors, hospitals and drug companies will make significantly less money they will continue to provide the same level of uniquely excellent care?
8. Given how many needless procedures are ordered to avoid medical lawsuits and how much money doctors spend on medical malpractice insurance, shouldn’t any meaningful “reform” of health care provide some remedy for frivolous malpractice lawsuits?
9. Given how weak the U.S. economy is, given how weak the U.S. dollar is, and given how much in debt the U.S. is in, why would anyone seek to have the U.S. spend another trillion dollars? Even if all the other questions here had legitimate answers, wouldn’t the state of the U.S. economy alone argue against national health care at this time?
10. Contrary to the assertion of President Obama — “we spend much more on health care than any other nation but aren’t any healthier for it” — we are healthier. We wait far less time for procedures and surgeries.
Our life expectancy with virtually any major disease is longer. And if you do not count deaths from violent crime and automobile accidents, we also have the longest life expectancy. Do you think a government takeover of American medicine will enable this medical excellence to continue?
Follow-up on Obama’s Racism Politics
He’s never wrong, he’ll never apologize. His community organizing skills really don’t wash as the nation he attempts to govern is e pluribus unnum!
Tom Motherway, tom@renohayek.com
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Risk Promoter Frank Targets Excessive Risk
Posted by Tom in Centrally Managed Economy on July 28, 2009
Ironic isn’t it that Barney Frank who almost single-handedly promoted the dramatic expansion of the sub prime market in Fannie and Freddie now wants to legislate compensation to avoid excessive risk. These Democrats will expand government until the economy fails!
July 28 (Bloomberg) — House Financial Services Committee Chairman Barney Frank said his legislation aimed at reining in pay incentives that lead executives to take excessive risks will probably reduce compensation “in bad times.”
“What it will mean is that the compensation is more likely to track the broad outlines in the economy,” Frank, a Massachusetts Democrat, said today in an interview with Bloomberg Television in Washington.
Frank’s panel is considering the legislation today and may vote on changes that would let shareowners hold non-binding votes on executive pay and direct regulators to write rules that will limit incentives that encourage excessive risk-taking.
Shareholders will help determine the compensation at their company, Frank said. “What we’re saying is however you pay the overall amount, don’t have a system that makes you take excessive risk,” Frank said.
The pay measure is part of an effort in Congress to overhaul rules that regulate Wall Street. Broad support has emerged for a regulator to monitor companies that pose a systemic risk to the economy, Frank said. Lawmakers are backing away from the Obama administration’s proposal to give such authority to the Federal Reserve, Frank said.
“There’s going to be some combination of existing regulators working together,” he said.
To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net; Peter Cook in Washington at pcook6@bloomberg.net.
via Frank Says Bill May Lower Compensation ‘In Bad Times’ (Update1) – Bloomberg.com.
Beneficiaries of Racism
Thomas Sowell in his July 28th Real Clear Politics article points up a little realized fact: racism benefits people who use it effectively. Some trade on racism. Unfortunately our president seems to be one such person.
With race– as with campaign finance, transparency and therest– Barack Obama knows what the public wants to hear and that is what he has said. But his policies as president have been the opposite of his rhetoric, with race as with other issues.
As a state senator in Illinois, Obama pushed the “racial profiling” issue, so it is hardly surprising that he jumped to the conclusion that a policeman was racial profiling when in fact the cop was investigating a report received from a neighbor that someone seemed to be breaking into the house that Professor Gates was renting in Cambridge.
For those who are interested in facts– and these obviously do not include President Obama– there has been a serious study of racial profiling in a book titled “Are Cops Racist?” by Heather Mac Donald. Her analysis of the data shows how this issue has long been distorted beyond recognition by politics.
The racial profiling issue is a great vote-getter. And if it polarizes the society, that is a price that politicians are willing to pay in order to get votes. Academics who run black studies departments, as Professor Henry Louis Gates does, likewise have a vested interest in racial paranoia.
For “community organizers” as well, racial resentments are a stock in trade. President Obama’s background as a community organizer has received far too little attention, though it should have been a high-alert warning that this was no post-racial figure.
What does a community organizer do? What he does not do is organize a community. What he organizes are the resentments and paranoia within a community, directing those feelings against other communities, from whom either benefits or revenge are to be gotten, using whatever rhetoric or tactics will accomplish that purpose.
To think that someone who has spent years promoting grievance and polarization was going to bring us all together as president is a triumph of wishful thinking over reality.
Not only Barack Obama’s past, but his present, tell the same story. His appointment of an attorney general who called America “a nation of cowards” for not dialoguing about race was a foretaste of what to expect from Eric Holder.
The way Attorney General Holder has refused to prosecute young black thugs who gathered at a voting site with menacing clubs, in blatant violation of federal laws against intimidating voters, speaks louder than any words from him or his president.
President Obama’s first nominee to the Supreme Court is, like Obama himself, someone with a background of years of affiliation with an organization dedicated to promoting racial resentments and a sense of racial entitlement.
An 18th century philosopher said, “When I speak I put on a mask. When I act I am forced to take it off.” Barack Obama’s mask slipped for a moment last week but he quickly recovered, with the help of the media. But we should never forget what we saw.
Who Will Cure?, Who Will Defend? Who Will Innovate?
Posted by Tom in Defense, Nationalized Health Care, Technology on July 27, 2009
Mi Amigo
An oncologist friend visited this weekend and discussed the state of technological improvement in his speciality. In sum, his 40 years in the practice saw dramatic improvements and cures in various cancers that were nonexistence when he started. Whence this improvement? American research! Yes, those dedicated researchers with or without government or drug company funding discovered, found, or invented the cures that have people living today. Did the Canadian health system do it? The European? The whatever system? No, it was accomplished in the good old USA. Who benefited from it? Was it confined to our boarders? No, the world benefited. Perhaps, that’s one reason why government officials and wealthy individuals come to our hospitals to receive the premium treatment to cure their serious health problems.
So why does Obama want to go to the European model in healthcare? Americans have accomplished it and paid for it. Who will pay for it with Obamacare?
Come to think of it, who has defended the free world since WWI? Here we have paid in blood, life and dollars. Two world wars, the formation of world organizations and regional defenses paid for in our fathers and brothers blood and with our labors. Yet our current president wants to follow the “European model!” If he follows the French model, he will deny territorial overflight rights and start manufacturing white surrender flags. We have already seen him bowing to the Arabs and currying favor to his “mi amigo” Chavez, at the expense of Honduran democracy. He proposes further nuclear disarmament and reduction of warheads and delivery systems and wants to abandon missile defense.
Who will defend us? The French, with white flags?
Further reflection requires the reasonable person to question his antitrust policies, again gravitating toward the European model. Should Microsoft be penalized for not offering a competitive browser? Should Apple or ATT be penalized for offering the improved iPhone? Or, for that matter, should Boeing be penalized for an new jet airliner?
Who will innovate? Will our sons and daughters move to China or India to develop the next innovation? Ayn Rand’s Atlas Shrugged may be prophetic!
So we now have the Obama, Pelosi, Reid triumvirate directing our lives with their various tzars. The latest “don’t tax you , don’t tax me, tax that fellow behind the tree” scam focuses on the medical insurance companies offering high value medical insurance plans. Are these people stupid or are they socialists who are historically challenged? Have any of them cured anyone, served in the military in combat, invented anything of benefit to society? Do they resent those who have? Perhaps!
What they are doing to our grandchildren, born and unborn, with all their spending of their yet unearned income is simply immoral! Obama’s intergenerational immorality at its best!
Tom Motherway, tom@renohayek.com
Earmarks–A Way of Life in DC
Murtha correctly argues (i) that he is only representing his district and (ii) if he didn’t get the money, some other congressman would! Hard to fault the logic. Honesty within a corrupt system. Evidently, there’s no such thing as the “common good,” or at a minimum, it takes a back seat to getting re-elected!
This ABC News report is enlightening: Very Private Airport
Tom Motherway, tom@renohayek.com
The 0% Tax Rate Solution – Brilliant Idea!
Posted by Tom in Uncategorized on July 14, 2009
Peter Ferrara’s op-ed in today’s WSJ posits the forward thinking Republicans-Conservatives-need. The article points out that the Republicans are responsible for most of the tax credits and give backs that benefit the lower wage earners today. Obama takes office with 40% of income earners paying no tax and the next 20% paying only 4.4% of federal income tax revenue. In essence the bottom 60% pay less than 1% of income tax revenue. Obama’s new $400 per worker refund, effectively reduces the bottom 60% tax to 0% of income tax revenue. So why not make this explicit as a Republican program and eliminate the complex credits and give backs.
But what if Republicans proposed a federal tax reform with a 0% income tax rate for the bottom 60% of income earners? With that explicit 0% tax rate framing the issue, abolishing the refundable tax credits that actually ship money to lower income earners through the tax code would become politically viable. Trading an explicit 0% tax rate for the bottom 60% in return for eliminating the refundable tax credits would likely be at least revenue neutral, and probably result in a net increase in revenue.
Such tax reform can and should be combined with overall welfare reform based on work that would ensure an adequate safety net for the poor. Considering the success of the 1996 reform to the Aid to Families with Dependent Children (AFDC) program, further reform could result in huge overall savings. Besides AFDC, there are 85 more federally administered welfare programs that could benefit from reform.
Moreover, we should then be free to adopt sound tax policy for the top 40% of earners who make 75% of total income. Suppose we tax all of the income of those top 40% once with a 15% flat tax? That would be close to revenue neutral on a dynamic basis (i.e. counting work incentive effects).
The usual distribution arguments against such a flat rate would not apply because the bottom 60% would bear a 0% rate. All flat tax proposals effectively try to do the same through generous personal exemptions that are tax neutral for low- and moderate-income workers. But the explicit 0% rate would make the reform more easily understood.
This — rather than adopting still more refundable tax credits as some conservatives are advocating — is also the way to eliminate the distorting tax preference for employer-provided health insurance. For the bottom 60%, there would no longer be any health insurance tax preference, and for the rest the favoritism would be reduced to a minimal 15%. Or the tax exclusion for employer provided health benefits could be eliminated altogether, affecting only the top 40%. The economic distortions caused by every other tax preference in the code would be minimized or eliminated entirely in this same way.
Contrary to the fears of conservatives, this tax system would sharply limit the size of government. No politician would dare suggest imposing income taxes anew on the bottom 60%. While the last two Democratic presidents won by running on a tax cut for the middle class, that game would be over. Instead conservatives can argue for middle-income and working-class votes to protect the 0% tax rate from big government liberals. As the Obama administration will soon learn, higher income earners have flexibility in their taxable income and increasing revenues by raising taxes on them is not easy.
Mr. Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation. He served in the White House Office of Policy Development under President Reagan.
The benefits of a flat tax are even being recognized by the CA Democrats. Yes, the fact that high bracket tax payers have options (like Nevada) is beginning to sink in. Kudos to whoever furnished the 2 X 4 to crack heads! Joe Mathews article Democrats For a Flat Tax? in the July 11th Journal details the enlightenment starting to take hold in CA. Hopefully, Obama will take heed and learn, but I’m not holding my breath!
Tom Motherway, tom@renohayek.com
The Noblesse Oblige of Capitalism
Posted by Tom in Law, Morality & Religion in the Public Square on July 13, 2009
The Pope’s encyclical Caritas in Veritate in not the leftist manifesto for which some liberals hoped. As Tyler Cowen in his Vaticanomics Wall Street Journal article points out, “the underlying assumption of the document is the continued reign of the status quo–a globalized , wealth-creating economy–with some ethical adjustments.” It’s a fundamentally a conservative piece of work. After the Madoff scandal, it’s hard to argue that the system doesn’t need ethical adjustments.
Robert Sirico fills in a few more details on those ethical adjustments in his WSJ op-ed, The Pope on ‘Love in Truth’. “He constantly returns to two practical applications of the principle of truth in charity. First, this principle takes us beyond earthly demands of justice, defined by rights and duties, and introduces essential moral priorities of generosity, mercy and communion — priorities which provide salvific and theological value. Second, truth in charity is always focused on the common good, defined as an extension of the good of individuals who live in society and have broad social responsibilities.”
The Pope is not an economist; nor is he a international political scientist. He is though a European and his suggestions for a world financial regulatory framework should only reflect other such calls from European heads of state. Like the Basal II Accord, these suggestions will not work. His worries on wealth aggregation reflect concerns of economists like Alan Greenspan, our former Fed Chairman. A broader treatment of the encyclical can be found in George Weigel’s Charity in Truth in National Review Online.
So where are we with the morality of capitalism as a system? This is an economic system that has raised the living standards of the masses from its beginnings. Adam Smith’s Wealth of Nations took steroids as it grew and, pejoratively speaking, “trickle down” economics benefited all. But something is indeed missing if the greed of the “invisible hand” is the only obligation of the head which governs that hand.
The medieval concept of noblesse oblige, I believe, gives secular society an answer. This is the moral obligation of those of high birth, powerful social position, etc. to act with honor, kindness, and generosity. In other words, take care of those less fortunate. And a scale is implied in the concept, the more you have, the greater your obligation. In Judaism, Christianity and Islam the religious context further requires almsgiving of all, regardless of status. The story of the widow’s might is all too familiar. In short, there is an obligation of charity.
So if we add a specific concept of charity to an economic system which benefits all, we have what the Pope is promoting. This indeed all religious leaders should promote.
I personally go further and believe that governments should provide the freedom to allow individuals, social institutions, and business enterprises to give alms and perform charitable works. Unfortunately the statist governments in Europe and the Obama government in the US are not so inclined. In Europe individual charity is lacking and people rely on the state to take up the individual obligation; witness the tsunami relief of recent years. And Obama has proposed to limit charitable deductions in favor of government controlled largess.
When we depend on the state for more and more of our needs, we are enticed to cede our moral obligations as well, in the end we lose our individuality and we are nothing but slaves of the state. The Road to Serfdom is an easy path indeed!
Tom Motherway, tom@renohayek.com
Is California Our Future?
Posted by Tom in Politics, Press, State Finances on July 8, 2009
Matt Welch’s article, California Screaming, details the recent voter revolt in California rejecting the five propositions calling for more borrowing, taxing and spending to extricate CA from its bloated budgetary mess. The beautiful part is the Sacramento Bee’s chastisement of the voters the next day. Imagine the voters not doing what they were told by the press and the democratic party! The article accurately portrays the public employee unions control of the state aided and abetted by the fourth estate. Rue the ruling classes!
As frightening in the July 8th Wall Street Journal, Henry Rowen posits a New York solution for California in which Obama will spend more of our hard earned money to salve California’s profligacy. It’s not often that the term “moral hazard” is used with reference to governments but it appears to becoming in vogue!
Tom Motherway, tom@renohayek.com