DIY Stimulus Policy

Fred:  What is your analysis of stimulus spending?
Economist:  "4=2+2" so stimulus will increase GDP and jobs.
Fred:  Are you nuts?

Economist:  Oh, I meant to say "GDP = All production in the U.S.", so stimulus will increase GDP and jobs.
Fred:  I don't get it. That's just a definition.

Economist:  Oh, I meant to say "GDP = C + I + G + (X - M)", so stimulus G will increase GDP and jobs.
Fred:  That's better.

This is one of our most impressive installments of DIY. Government economists support giant "stimulus" spending to end our recession. We explain the tricks of the professionals, so that you can create fiscal (spending) policy at home.

Don't panic. This is a "high concept" idea that would be less impressive if it were complicated by details. Just appreciate the grandeur of analyzing the entire production of 300 million people, simply by giving it a name.

Don't be afraid of the few formulas you will see. They are only a fancy way to add things up, and they look great on a cocktail napkin. Any formula will amaze your friends and show your deep insights into finance. This is exactly the same effect enjoyed by graduates of Harvard Business School.

Read more ...

The GDP Formula For the Economy

The detailed interactions that describe the U.S. economy are many, complicated, and mostly not understood.

In the meantime, many macro-economists use a short formula which is easy to remember. They use it to promote deficits, spend $789 billion on stimulus, impress the non-PHD's, and win arguments on blogs. You can use this formula as an amateur. It is merely addition, but it does require memorizing the letters (the variables or quantity names) to show that you are unusually intelligent.

 Y (same as GDP) = C + I + G + (X - M)

You can casually say at a party "Stimulus increases G, which increases Y and creates more jobs throughout the economy".  The effect is electric. Politicians will applaud.

The quantity "Y" or "GDP" is Gross Domestic Product. That is all of the goods and services produced in the country.

Just like "DIY - Garden Shed", we will build from the bottom, giving you hints along the way. Here is the foundation:

GDP  =  Total U.S. production. All goods and
        services produced during the year

That is merely a definition. We can make it less boring by slicing GDP into philosophical pieces. Really, schools award degrees in this stuff. Here is our first slice:

GDP  =  Consumption C  +  Investment I

This says that everything we produce can be assigned to two categories. "Consumption" is what we use personally, like food, clothing, and automobiles. "Investment" supports businesses to produce those goods and services, like supermarkets and automobile factories. There are some gray areas, but why worry? The macro-economists don't.

How does government fit in? We slice again:

GDP = Consumption C + Investment I + Govt Spending G

Consumption is spending for individual use, also called consumer spending. Investment is spending to support businesses, like buying machinery. Government Spending is everything purchased by government.

Notice that there is no "Government Investment". We know that government builds a few useful things like bridges, but government doesn't try to make a profit (more is the pity) so it is all called Government Spending.

We have left out "Exports X - Imports M" for now. You can look below for that explanation, so that people don't accuse you of reading "only that stupid DIY post".  "X - M"  is "Exports minus Imports". It is there mostly to show that you understand the complexities of the economy, after completely ignoring all of those complexities by relying on this stupid formula.

That is the GDP Formula. I know you were looking forward to more complexity and hours of study. You may even be angry, thinking now that this whole post is a big joke. You think it can't be this simple. Our leading government economists and Keynesian pundits just can't be using this simple formula as justification for their economic policy. I share your anger. Don't blame me. That is just how it is.

About GDP

Here is the GDP Formula again. You will find out how our government uses this formula. Sadly, this is not a joke.

GDP = Consumption + Investment + Government Spending

This formula is simple and absolutely true. People are dazzled by its truth, but are not aware of how useless it is. It is only a broad mental exercise for thinking about the money spent in our economy.

GDP is everything produced in our country. An economist notices that your income results from selling what you produce. You sell your effort each day to earn your salary in money. You spend your salary to buy the food, clothing, and services which support your life. Your income in cash comes from your share of the goods and services you help to produce. So, production and income are two sides of the same coin. All production represents someone's income.

In general, more GDP is good because more production means more income to the people of the country. Government economists look for ways to increase GDP, especially during recessions. They most often find their answer in the GDP Formula above. They see that GDP would be larger if one or more of its parts were larger.

Consumer Spending

Economists note that consumer spending is 70% of the economy. This means that about 70% of all purchases are by people for their personal benefit. Looked at another way, 70% of what is produced (GDP) is made for people to use personally.

During recessions, people spend less on consumption because some are out of work and others want to save more, in fear of losing their jobs.  GDP is produced by people, so higher GDP is associated with more people working. Government economists look at the GDP Formula and conclude that if people would spend more on consumption, there would be higher GDP and more jobs, ending the recession. This extra consumption would be economic "stimulus".

It is difficult to encourage people to consume more. A few tries have been made with Cash for Clunkers for buying autos, and cash subsidies for buying homes. But, people can't consume much more if they are out of work.

Both presidents Bush and Obama gave one-time tax refunds or payments to people. These didn't do much for the economy. Government economists complained that people saved most of it instead of spending it all, reducing the "stimulating" effect.

I don't understand why saving (investment) is supposed to be worse than spending. According to the GDP Formula, they add equally to GDP. I suppose that is just inconvenient to what politicians want to do. They want to spend.

Investment

Nope. The government doesn't know how to invest, and it hates making a profit. Investment is done by the prosperous business people that the government takes taxes from. Government isn't about to give back that money for investment, followed by "trickle down" prosperity.

Government Spending

Now we are on to something. Government economists interpret the GDP Formula as showing that government spending increases GDP. That is something that government can do with a few votes, and spending is something that all politicians like to do. Any recession creates calls for much more government spending, and they do it.

The Personal Spending Formula

I said above that the GDP Formula is true but useless. Let's get a feel for that by looking at a smaller, friendlier, more understandable relative  The Personal Spending Formula:

My Spending
   =  Restaurant Meals + Savings + Other Spending

In general, more of My Spending is good because I enjoy most of the things I buy. I often daydream about buying more things to be happier. The Personal Formula seems to give me guidance: I should buy more restaurant meals to increase My Spending. In fact, I might think it tells me that I should eat out all the time, and take friends and family with me. More spending on restaurant meals is good, and the more the better.

I hear some shouting in the audience, that I can't just increase what I spend on restaurants. I would have to decrease what I save or decrease what I spend on other things. I might enjoy more restaurant meals, but I would have to cut elsewhere. In fact, I can't really change My Spending at all (!) because I have properly included Savings in the formula.

By definition, my entire income is equal to My Spending, and I can only allocate my income to different purposes. I can't raise or lower My Spending by spending more or less in one category, because I must adjust the other categories. The formula is correct, but it can mislead me about how the quantities affect each other.

To increase My Spending, I would have to work more hours, or find a better-paying job, or save/invest in a growing company. None of that is represented in the Personal Spending Formula.

I could buy more restaurant meals if I cut Other Spending. I might spend less on maintaining my car and use the difference for more restaurant meals. But, my car might break down, and that strategy could work out as a bad choice. Whatever happens, the Personal Spending Formula will reliably add up the results, but it does not say what I should do or what will happen.

An increase in my income would allow me to spend more in one or more categories. The Personal Spending Formula doesn't tell me that I can increase my income by purchasing more restaurant meals or anything else. That would be a crazy interpretation of a formula that merely adds up my spending choices.

The Personal Spending Formula is absolutely true, which impresses people at first glance. But, it is worthless for guiding me to earn more income. It only says that I must spend less in one category if I spend more in another category.

Borrowing Savings For a Price

If I want to buy a new television for $1,000, and I don't have enough in savings, possibly I can borrow the money. This works if I can reliably save enough to pay for the TV plus interest, and I don't want to delay the purchase until I have saved the money.

I could buy the TV for $1,000, and pay $80 per month for the next 15 months to pay off a $1,000 loan. My total cost to buy the TV this way would be $1,200. So, I could pay an extra $200 to the lender to buy the TV now, rather than save $80/month for 12.5 months to buy the TV later.

It seems that I have increased My Spending by $1,000 by getting that loan. Actually, I increase Other Spending by $1,000 when I buy the TV, and I decrease Savings $1,000 by getting the loan. Savings has become negative.

Negative savings means that I owe money. I put less into savings over time than I have now taken out. I will pay about $67/month into savings as I pay off the loan, and I will pay the loan company about $13/month interest for the use of the money. Savings will become $0 after 15 months (assuming it was $0 to start), the loan will be paid off, I will own the TV, and I will have paid about $200 to borrow enough savings to buy the TV sooner rather than later.

This is interesting. "My Spending" did not change because of the loan. Other Spending went up by $1,000, and Savings went down by $1,000, offsetting each other. This contrasts with the usual assumption that taking out a loan increases "spending". In fact, loans are a transfer of savings for a price.

This personal accounting agrees with what the society sees. I bought $1,000 more of something, but the lender bought $1,000 less of something. These cancel out for the society, and they cancel out in a proper personal accounting.

Confusion

I confess that I introduced some confusion, but only the same confusion that government economists use. The Personal Spending Formula should have looked like this:

My Production or Income
   =  Restaurant Meals + Savings + Other Spending

It is entirely true that Production = Income = Spending. We can account for Production by either valuing everything that is produced as GDP, or adding up all Income, or adding up all Spending (when Savings are properly accounted as a category of spending).

Here is the confusion. When I say   "My Spending = . . .",   that choice of word gives the impression that I can change what I spend in total. "Spending" seems to be something that I can do more or less of. In fact, when we properly account for transfering money into Savings/Investment, I can't change the total of My Spending, I can only allocate it between Restaurants, Savings/Investment, and Other Spending.

If I had said   "My Income = . . .",   then it would have suggested the correct conclusion from the start. "My Income" depends on what I earn, and I can only allocate it between different types of purchases, including Savings/Investment. It becomes much clearer that what I earn doesn't change because I spend more or less on consumer goods rather than on Savings/Investment.

Stimulus

Here is the GDP Formula again:

GDP = Consumption + Investment + Government Spending

It should look different to you now, after reading the section above.

There, we saw that the Personal Spending Formula is a true representation of how I might allocate my income among different categories of goods. It is useless for deciding what I should do to increase my income. It doesn't express or relate any of the complexity in my life that determines what my income is or what it could be.

The GDP Formula has the same qualities. It is definitely true. But, it is merely a true statement about how all GDP (production) can be allocated to various categories, in principle, philosophically.

It is crazy to use the GDP Formula to claim that increasing Government Spending will increase GDP. The GDP Formula only says Government Spending buys some part of what is produced. It says nothing about how we could produce more or increase employment. The GDP Formula says nothing about the immense complexity within our society. If anything, the GDP Formula tells us that there is a tradeoff, that more government spending requires less personal consumption and/or less investment.

Government economists say that the government is in a special position to create "stimulus", to borrow money and increase spending now to create jobs now. Although spending will go down in the future when the loans are repaid, they say the economy will have time to recover.

There is a problem in this reasoning. Borrowing does not increase "spending" overall. The government spends more, but the lender spends (invests) less to support business. It is mostly a wash. If anything, resources lent to the government are applied with a lower productivity than they would be by individual investors in our society, reducing employment.

Your car has a speedometer that reports how fast you are going. You would be crazy to think that you could increase your speed by grabbing the needle and pulling it toward 50 mph.

The GDP Formula reports (only in principle) how production is allocated among uses. You would be crazy to think that you could increase production merely by allocating more of it to the use of government. That is what increased government spending does.

The GDP Formula is a magic trick. Observers see that the formula is true by definition. Then the magician economist interprets the formula in a crazy way to support the taxing and spending desires of the politicians who employ him. Assuming that government economists are smart and college educated, I think that they are lying, not merely mistaken about this crazy interpretation of the GDP Formula.

The Complete Keynes Formula

Total Production Y = 
  Consumption C + Investment I + Govt Spending G 
  + Exports X - Imports M

The Keynes Formula divides all production within a country into categories. Consumption + Investment + Government Spending seems to include everything, so what is (Exports - Imports) doing there?

The Keynes Formula accounts in principle for every spending transaction within a country and assigns each transaction to Consumption, Investment, or Government Spending. But, usually that is not quite equal to the goods and services produced within the country.

If a French company buys from the U.S., the spending is done in France for goods manaufactured in the U.S. This foreign spending on U.S. exports should be added to U.S. GDP.

If a U.S. company buys from France, the spending is done in the U.S. for goods manufactured in France. This local spending on French imports does not represent U.S. GDP, so it should be subtracted from the spending figures.

So, if we start with "All spending transactions within the U.S.", we can add exports and subtract imports to get the true dollar value of U.S. GDP (Total Production Y above).

Showy Complexity

The Keynes Formula is contrived.

First.  The division of GDP into Consumption, Investment, and Government Spending is arbitrary. It seems to me that Government Spending is in the formula merely to refer to it as a component of political strategy.

I could as easily write this formula:

GDP = Consumption + Investment 
      + Video Games + Cat Food

Then I could argue for increasing GDP by subsidizing the purchase of video games and cat food.

The categories of spending seem analytical, but they aren't used for any further analysis. There is no discussion about which is better, and there couldn't be; these terms are too vague to provide an analytical insight.

Keynes did not make a distinction. He famously recommended distributing cash to the public, or paying them to dig holes and fill them up. Any means of increasing consumption, investment, or government spending was supposed to increase overall production. Of course, politicians have always preferred government spending.

Second.  The inclusion of "Exports - Imports" adds unneeded complexity. Our government certainly buys some foreign goods, and sells government services to foreign countries. So, part of "Exports - Imports" is Government Spending. Who cares? The Keynes Formula is only used to incorrectly claim that increased Government Spending must increase GDP. That fallacy is the central point of this post.

The value of including "Exports - Imports" is to present another absolutely true and complex fact about GDP accounting which is irrelevent to the discussion. It puts another gloss of legitimacy on the incorrect interpretation of the Keynes Formula.

Third.  Keynesian economists have analyzed the failure of one-time tax rebates or subsidies to "stimulate". They conclude that the public didn't spend enough of their new money. They saved much of it or paid down debt, which is another way of saving.

But, the interpretation of the Keynes Formula by Keynesian economists would make consumer spending, saving, and investment equally "stimulative" and equally powerful in raising GDP. This bias toward spending and against saving is not part of the Keynes Formula, but they illogically use the Keynes Formula as a quick justification for their political preferences.
 

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Keynes, Digger of Holes
12/2008 - EasyOpinions

No one should trust a theory that predicts greater prosperity from digging holes. Yet, this is the theory by Keynes that Obama is following, and that many past presidents have followed to forcibly change our society. We will supposedly create even more wealth in the future by wasting our current wealth today.

I know. I must be wrong. No one could believe such a thing. Certainly no president of a great country would listen to a dead crank who spouted such nonsense. But, there it is.

There is a story at the link about Keynes dirtying some towels in a washroom and claiming that he had just helped the economy by creating work.

How many obviously false statements must a person make before the quality of his entire thought is in question? The limit has not yet been set for Keynesian economists and politicians.

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The Keynesian Accounting Trap
06/17/10 - 12/21/09 - Mises.org by Robert P. Murphy

[edited]  I think Krugman [a Keynesian economist and pundit] is committing a very basic error. He is confusing the Keynesian accounting identity [the GDP Formula above] with a causal theory of how changes in one of the variables lead to changes in the other variables.

This formula very often misleads people that the way to increase output [GDP] is to try to increase one of the variables on the right side. But this is a fallacy. The accounting identity must always be true, but it can remain in balance if other variables on the right side fall.

Krugman is wrong even within the Keynesian framework. For example, Keynesians often use this formula to argue that increases in government spending are necessary to "fill the gap" when private consumption and investment are below "potential GDP." They naively assume that boosting Government Spending on the right side of the formula will lead to an increase in GDP on the left side. But, that relies on the Keynesian theory of how the macroeconomy works; it doesn't follow from the formula itself.

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Bigger Government Is Not Stimulus
12/15/08 - Cato Institute by Dan Mitchel   (YouTube video 7:29)
A video by the Center for Freedom and Prosperity Foundation.

Both theory and evidence show that allowing politicians to spend more money does not produce better economic performance. Keynesian theory doesn't make sense. Government can only put money into the economy by first taking it out as borrowing. Transferring the economy’s money from its left pocket to its right pocket is not a recipe for growth.

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Macroeconomics is Astrology, Not Science
01/30/09 - EO -> RealClearMarkets

Frank J. Tipler is Professor of Mathematical Physics at Tulane University:

[edited]  The inability of macroeconomic theories to make accurate predictions about an entire economy means that those economists do not know what they are talking about. Our leaders are being advised by macroeconomists who haven’t got a clue where they are leading us. Their actions may lead us out of the current recession, or they may lead us into a depression as bad as the Great Depression.

Update

A Doctor Describes Government Management of Medical Care
07/03/10 - Big Government by Bret Jacobson  (YouTube video 3:37)

This doctor treated Medicare Patients, and was routinely denied payment. Medicare said: "We can't pay you right now, the computer is down". The computer was down for 18 months when she gave up.

This is an update to Government Management of Doctors.

= = = = = =

Fred:  We'll build wind turbines everywhere and store the excess energy in hydro facilities.
Mike:  That will work for places that are flat and windy, next to mountains that will support a hydro dam. What about the other places?

The Myth of Alternative Power and Hydro- Electric Storage
06/17/10 - ChicagoBoyz by Shannon Love

[edited]  "Alternative energy" can’t be used for baseline power because it is not reliable, and we can’t make it reliable by storing the electricity that it episodically generates.

What about energy storage in a hydro-electric dam? Pumps would use alternative power to lift water behind the dam. When wind or solar power is not available, we could drain the water through turbines to create electricity.

Suppose alternative power should produce 30% of our current baseline power needs. If alternative power (optimistically) operates 75% of the time, we would need a 25% stored reserve. 25% x 30% is 7.5% of our total electric power needs.

Coincidentally, hydro-electric power today produces 8% of U.S electricity. If we want to use hydro-electric storage to make alternative power reliable, we will have to recreate 93% of the generating capacity of every current hydro-electric facility. That includes Hoover Dam, the entire TVA, and all of the dams in the Rocky Mountains.

All the places with the geography and water to produce hydro-electric power are already in use. Worse, the places that produce significant amounts of solar and wind power, the desert and the plains, are very far from that geography, requiring expensive power-line connections.

The full post has more information and many interesting comments.

This is an update to Problems With Green Energy

= = = = = =
Increases in the Minimum Wage Kill Job Creation
06/15/10 - HotAir by Ed Morrissey

[edited]  The Center for Freedom and Prosperity offers this 4:25 video about the destructive results of the minimum wage.

Democrats increased the minimum wage in steps from $5.15 to $7.25 per hour. They claimed to be helping the young and poor.

The minimum wage did no direct harm when it was less than the usual wage for entry-level jobs. When the minimum wage rose above that wage, employers stopped offering those entry-level jobs.

This is an update to Minimum Wage Prosperity

= = = = = =
ObamaCare Will Increase Premiums, Change Coverage, and Reduce Wages
06/14/10 - Cato @ Liberty by Michael F. Cannon

Fred:  I took this job because of the great healthcare plan, even though it paid less.
Mike:  So, be happy. Now you will get Obamacare, and you will be paid even less.

ObamaCare increases health insurance premiums and requires the employer to pay that increase. But, the employer pays this cost out of the production of the employee. So, the employer must offer a lower wage or fire the employee. The employee will likely blame the employer, not ObamaCare.

[edited]  ObamaCare will raise health insurance premiums even higher than they would have risen. If employers or consumers try to reduce their coverage and costs, they will lose their “grandfather” protections, and be forced to purchase even more coverage under ObamaCare mandates.

Employers are required to sustain "their" contribution to the cost of health benefits. This hides ObamaCare’s effect on health insurance premiums.

Health economists almost all agree that the “employer contribution” is a fiction. Employers merely deduct what they pay for health benefits from the overall compensation offered to employees. In other words, the employee pays for his own health benefits. [The employer only writes the check for him.]

ObamaCare’s increasing costs will appear as lower wages offered. Workers would likely blame ObamaCare for rising insurance premiums, but are less likely to blame ObamaCare for stagnant take-home pay.

This is an update to Company Paid Health Insurance is Part of Your Salary

EPA Purity of Essence

Fred:  (crawling in from the desert) Water, water.
EPA:  My poor man. Yes, we have water. Do you have a Desert Waste Disposal Permit?
Fred:  (more weakly) Water.
EPA:  It seems not. If I give you water, you are likely to create more waste. The regulations require a permit.
Fred:  (raises questioning eyes) You ... your waste?
EPA:  Oh, right. I use the trailer behind me. Sorry, EPA personnel only.

Our government is supposed to be a giant organization for The Good. Government collects information and regulations that are supposedly vital to a safe, productive economy. Government supposedly collects resources and action plans to react quickly to mistakes and disasters.

But, when put to the test, we find that government employees and agencies do not want to act, for fear of making a mistake. And they won't bend any rule, regardless of reason or consequence. They know that government runs on rules. You can't break a rule just because it is reasonable or required. Sorry people. Better luck next time.

Tell me again, why should we empower and trust the type of organization called "government"?

EPA and Dutch Skimmers
06/20/10 - ClimateAudit by Steve McIntyre
Article:  Dutch response team on standby

[edited]  Dutch skimmer ships process an oil spill to extract the maximum oil in the minimum time. They use huge booms to sweep and suck the oil from the surface of the sea. They extract and store most of the oil, and discharge slightly oily water that is not at drinking water standard.

The U.S. Environmental Protecion Agency (EPA) refused the Dutch skimmers because regulations prohibit discharging oily water, even if processing extracts almost all of the oil. Americans don’t have any spill response vessels with skimmers because their environmental regulations do not allow it.

Wierd Koops is chairman of the Dutch Spill Response Group. He thinks the US approach is nonsense, because you would have to store the skimmed seawater in the tanks as well. We have to get as much oil as possible into the storage tanks, along with as little water as possible. So we pump the separated water overboard, containing drops of oil.

US regulations are contradictory. Releasing oily water is not allowed, but spreading chemicals to dissolve the oil in the seawater is allowed. The oil is naturally broken down quite quickly in both cases. But, experiments showed that dissolving the oil with chemicals caused more damage than the oil itself.

You have to clear up the oil at sea, before the oil reaches the mud flats and salt marshes. All you can do then is dig the oil up [with the sand]. That response is worse than the problem.

The EPA restriction on operating the Dutch skimmer ships has been known for years. Why is there still a prohibition on taking dirty water from the sea and returning much cleaner water? It seems that our government is incapable of making a practical rule. The requirement to "never discharge dirty water" seems like a religious requirement, rather than a general goal which has practical exceptions.

Read more ...

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Watchdog says EPA is covering up the toxicity of Gulf oil dispersants
07/20/10 - Digital Journal by Stephanie Dearing

[edited]  Hugh Kaufman is senior policy analyst at the Office of Solid Waste and Emergency Response at the US Environmental Protection Agency. He says the EPA is covering up the toxic effects of the dispersant Corexit used on the oil spill.

Kaufman [edited]:  "People and wildlife having contact with Corexit are hemorrhaging internally. That’s what dispersants are supposed to do. EPA now says that they really don’t know how dangerous it is, even though the label tells you. It is being used to protect BP's economics, not the environment."

Both types of Corexit products being used in the gulf were banned in the United Kingdom for such use years ago. This information had been in a New York Times article, Wang said, but had been pulled later. Nearly two million gallons have been sprayed on the oil spill to date. Kaufman said the dispersant was only causing the oil to sink below the surface.

Dispersants Are Breaking Up in the Gulf
06/30/10 - CNN U.S. by Wire Staff

[edited]  The EPA in May ordered BP to cut back its use of Corexit due to concerns about its safety. It wanted BP to use a different dispersant, but BP said no safer products were available in large enough quantities.

The EPA considers two million gallons of dispersant to be safe enough, although dispersants are not completely safe. Up close, dispersants are dangerous. It seems that dispersants make the oil less visible, dispersing it throughout the seawater below. So, why the rule against using Dutch technology skimmer ships, which add nothing dangerous to the seawater and collect useful oil in addition?

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Coast Guard Shuts Down Oil-Skimming Barges
06/17/10 - HotAir   Via ABC News

[edited]  Eight days ago, Louisiana Gov. Bobby Jindal ordered barges to begin vacuuming crude oil out of his state’s oil-soaked waters. Today those barges sat idle, even as more oil flowed toward the Louisiana shore.

Jindal: “It’s the most frustrating thing. Yesterday morning we found out that the Coast Guard halted all of these barges."

The Coast Guard needed to confirm that there were fire extinguishers and life vests on board. It had trouble contacting the people who built the barges.

The Coast Guard spends much effort checking pleasure boats to verify that people have the proper safety equipment. This valuable mission must be high on their list of things to do when they see a boat, even a 100 foot barge engaged in a vital mission to protect the LA coast. Well, the rules are the rules.

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Obama Orders Louisiana To Stop Building Berms
06/23/10 - Quando.net by MichaelW

[edited]  Louisiana has been building berms [rows of sand] about a mile out from the coast to halt infiltration of oil into its wetlands and fishing areas. This process was first delayed by federal red tape. The state has permits in hand, but the US Dept. of Fish and Wildlife is now ordering this to stop at midnight Wednesday.

The Feds Latest Attempt to Kill Louisiana
06/23/10 - SoItGoesInShreveport by Pat Austin

[edited]  I’m trying to understand the “coastal scientists” who say that the berms will “change tidal patterns” and lead to more long term erosion. If the islands are killed off by the oil, what difference does it make?

It seems that the feds want to cripple Louisiana’s response to this crisis. Gov. Bobby Jindal said long ago (paraphrase): If you’re not going to fix it, get out of the way and let us do it ourselves!

We could get the idea that Team Obama is trying to neutralize Jindal’s response, as if Obama were threatened by Bobby Jindal.

Porter Clark presents another possibility: "Any sufficiently advanced incompetence is indistinguishable from malice".

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The Government's Catastrophic Response to the Oil Disaster
07/09/10 - Reason by Jon Basil Utley

[edited]  Washington is almost criminally inept, compounded by the negligence of BP. Washington’s reactions are causing greater damage than the spill itself.

Extreme environmentalists in the Obama Administration have the declared agenda to shut down all offshore oil drilling, in Alaska as well as the Gulf. The Sierra Club has bragged that it helped to shut down all new coal power plants. Other environmentalists remain pleased that the Three Mile Island crisis ended building new nuclear power plants.

CNN reports that almost all new drilling has been suspended for at least two months. This includes shallow-water wells in less than 500 feet of water, despite Obama's prior statement that drilling such wells would continue.

Interior Secretary Ken Salazar has delayed permits for current drilling operations, despite that thousands of deep-water wells have been drilled successfully. Obama and Salazar falsely claimed that their desired six month shutdown had been supported by a panel of experts.

Salazar and his gang may be ignorant of business. They may shut down the sophisticated flow of supplies and men, believing they can later restart that flow like flipping a switch. This may bring financial ruin to smaller companies.

My sources estimate needing at least two years to restore Gulf production to its pre-suspension levels. Deep-water drilling rigs cost at least $500,000 per day. They are immediately being sent to work in Africa and Asia where they are wanted. It will take months or years to bring them back. Some 100,000 high-paying jobs are at risk. Already, the number of deep-water rigs has dropped by 23 from 42 to 19, a 55% decline.

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BP Relied on Faulty U.S. Regulatory Data
06/24/10 - Wall Street Journal

[edited]  BP PLC and other big oil companies have plans for responding to oil spills in the Gulf of Mexico. They are required by federal regulators to base these plans on models prepared by the Mineral Management Service within the Interior Department. These models were last updated in 2004, and never tested for deep water spills.

Regulatory models gave very low odds of oil hitting shore. These models projected that most of the oil would rapidly evaporate or be broken up by waves or weather. Oil would not reach shore even for a catastrophic offshore spill much larger than the current one.

Congressmen last week accused BP and other companies of using "cookie cutter" contingency plans that contained many errors and omissions. Exxon CEO Rex Tillerson noted that much of the company's response plan "is prescribed by regulation, including the models that are used to project different scenarios for oil spills."

Congress constructs laws that apply after crimes and errors have occurred. Then, Congress imagines that government "regulation" is even better, because it will require safe practices ahead of time and prevent cutting corners and bad mistakes.

In reality, government regulation is heavy handed, slow to change, and applied in suffocating detail. Regulation can crowd out good practices. I can imagine that oil companies are hassled enough by regulations that offer little benefit. Then, they are reluctant to go beyond requlations in areas that are speculative, such as where oil will float after a spill.

The government plan was to have "fire boom" available to soak up oil and burn it off while it was far at sea. In reality, the government did not have this boom available, and the EPA also said they couldn't burn off the oil this way.

I don't see intelligent regulation based on logical planning and trade-offs. I see a regulatory mess, with many agencies having conflicting requirements.

- -
EPA Prevents Dairy Spills
06/25/10 - Cato@Liberty by Walter Olson
Referring to   HollandSentinel

In this emergency of spilled oil, the EPA tightens handling of all oils. Will olive oil be next? This will put some small dairies out of business.

[edited]  New EPA regulations treat spilled milk like oil, requiring farmers to build extra storage tanks and form emergency spill plans.

EPA regulations say “milk typically contains a percentage of animal fat, which is a non-petroleum oil. Containers storing milk are subject to the Oil Spill Prevention, Control and Countermeasure Program rule when they meet the applicability criteria.”

EPA regulations, along with all government enforced regulations, resemble a computer program that has not been tested. When unintended situations come up, the regulations eliminate jobs, and are difficult to correct using reason.

This illustrates a typical regulatory response. Government regulation and preparation failed in the very important case of the Gulf oil spill. This has produced a strong reaction in other, simpler, unnecessary cases as a demonstration that the regulators are really vigilant and powerful. Take that, you dairy farmers!

- -
Dr. Strangelove - Precious Bodily Fluids
The 1964 movie "Dr. Strangelove" is a must see. It made the phrases "Purity of Essence" and "Precious bodily fluids" immortal. This video clip (2:52) is the scene where Col. Ripper describes the necessity of keeping the Communists from polluting our nation's precious bodily fluids. Satire becomes reality as enforced by our EPA.

More at The Internet Movie Database

Social Security Grandchildren

Retirement Policy
05/26/10 - EconLog by David Henderson

[edited]  A friend of mine retired at 65 and went to register at the Social Security office.

Clerk:  Do you have any children under age 18?
Friend:  One. Why do you ask?

Clerk:  You will get an extra monthly payment until the child turns 18.
Friend:  This must be pretty rare. In my case, I couldn't get pregnant, and so we adopted when I was in my late forties.

Clerk:  It's not at all rare. Many grandparents in this area adopt their grandchildren.

Are you 20 to 45 years old? Then, you are paying 12.4% of your real salary into Social Security to support current benefits being paid out. I hope you don't mind losing that money, because the above Social Security policy puts little value on it. Your politicians will not adjust the rules to eliminate the above gaming of the system.

You probably will never see a return on these taxes you have paid or will pay. The "Social Security surplus" is a piece of paper at the Treasury that totals up the amount of Social Security taxes collected but not yet spent on Social Security. But, that money has already been spent on other things.

That money has been spent each year out of the general Treasury fund. It isn't there. There is no gold, stocks, or anything of value there. There is only an IOU, a promise from the government to repay to itself the money owed to future retirees. Only higher deficits or much higher taxes on your children can supply that value.

Amazingly, this is like an insane person saving up for his children's college education. He puts $100 each Friday into his savings account. Each Monday he takes out that $100 and spends it on food and entertainment, but he carefully records what he has borrowed from the "college fund".

When his kids are 18, he tells them that he saved $50,000 over the years. He only has to pay back what he took out, or borrow the money in the name of the children. Are they happy at that result?

This has been justified over the years with the slogan "we owe the money to ourselves, so why not spend it now?" OK. Now, in your retirement, pay yourselves back.

Ponzy Schemes Like Social Security
01/01/09 - Easy Opinions

There is nothing real in the "trust fund". There is only a political promise to find the money somewhere that has already been spent. This is 300 times bigger than the Bernie Madoff fraud of $50 billion. It is a gigantic Ponzi scheme pretending to be a sensible government program.

Cass Sunstein Nudges the Discussion

Does Cass Sunstein Link to Richard Epstein?
05/20/10 - Cafe Hayek by Don Boudreaux

[edited]  [Czar] Cass Sunstein is head of the White House Office of Information and Regulatory Affairs.

This radio interview reveals he would discard the letter and the spirit of our First Amendment rights, our rights to freedom of speech and freedom of the press.

Sunstein wants political websites to ‘voluntarily’ supply access to sites offering views from ‘the other side’. If they didn't, then Congress could force them to do it.

+ + +
Future news:

The "Fair Access to Opposing Views on the Internet and Elsewhere" law has produced some interesting references on the Web, often called "Sunstein Links". For example:

- See also   The idiotic, unconfirmed fantasies of delusional idiots.
- See also   Another Opinion (Warning: May contain pornography).
- For the opposing view see   Cass Sunstein is an effing %!@&#.

One development is the creation of "Interview Links". The offered link goes to an intermediate page asking three questions. A correct response transfers to the end link. One of the questions is often "Social Security Number".

Other services provide a "Variety Link" for a long list of topics. These links are completed by transfering to one of thousands of web pages classified by topic and political view, such as Republican, Democrat, Independent, Undecided, Che Guevara, ChiCom, Born Again, Pet Lover, Vegetarian, and Eastern Anarchist.

Congress is now debating whether this is fair, what the definition of a "link" is, and what "opposing view" means in law.

Wall Street Reform Bill

Financial "Reform" - Pablum, Confusion, Dishonesty
05/21/10 - Clean Government Now
Via Power Line

[edited] 

• The bill is only tangentially related to the financial crisis.
• This large, confusing, and ill-considered bill favors only one constituency: those rich enough to afford the legal team needed to craft a compliance regime.
• The bill does nothing to address bi-partisan criticisms of the last "reform" attempted by Sarbanes, Oxley, and Spitzer. Prior "reforms" all but ruined the market for small company stock and the venture investment business that depended upon it.

This bill takes another step toward a European regime of political cronies in control of national investments (think Greece).

This bill regurgitates the nausea-inducing political spin, that the financial crisis was the result of "wild speculation" and "exotic instruments" on Wall Street. In fact, the crisis resulted from losing $2 trillion worth of fake AAA mortgage securities. $2 trillion is 14% of total US production for one year, or about 2 months income for everyone in the US. The crisis was supported by

• Shaky insurance from a politically connected AIG,
• Financial ratings granted by a few government-favored companies filled with "experts" of the kind this new bill relies on, and
• Government-sponsored Fannie Mae and Freddie Mac buying up shaky mortgages [convincing most participants that they were safe].

This bill responds to every ill (perceived or real) by creating another sclerotic, disconnected, and flat-footed federal agency, filled with turf-meisters having too much authority and too little experience.

We could recognize the power of free markets, empower the native interests and intelligence that drive the vast majority of American business leaders, and enable true enforcement of the rules of the road.

Instead, this bill brings the vain courtiers and vapid egoists of the political court onto the center of the economic and financial stage. Read Alice in Wonderland as your guide.

The effect of losses in housing wealth is painful, but does not explain the full depth of our current crisis. The loss from bad housing loans is $2 trillion. The effect on housing prices is worse, reducing the market value of US housing by $3.8 trillion. Together, that $5.8 trillion is about 5 months of total national income at $14 trillion per year.

That would be bad enough, requiring many people to change what they are doing (change jobs) to meet the national need to save more, to replace what was lost. Worse, our government has reacted by increasing spending, making it harder to save and produce what people need now. This has deepened and lengthened the pain.

Obama and Democrats are spending money on larger government bureaucracies, higher government salaries, and building roads and bicycle paths. That cannot possibly be the way to create greater wealth for the average person.

Stimulus Does Not Cure a Recession
Jobs change when people change what they want to buy or can afford. It is possible to keep people at their low-value or unneeded jobs for a bit longer, only by wasting the savings that should be financing a real recovery.

Government Management of Doctors

Doctor:  I dreamed of being a doctor, and earned my M.D.
Mike:  I'm puzzled. Why are you managing a government department?
Doctor:  As a doctor, I realized I was mostly managing a government department. This way, I get paid to do it, and I go home at 4:00.

The Trend to Cash Medical Practice
05/21/10 - Chicago Boyz by Michael Kennedy

Medicare has degraded to the point where reimbursements minus imposed costs are not enough to support doctors. The true, awful promise of Obamacare is to make this worse. Medical prices have been grossly distorted along the way, with more distortions to come.

[edited]  I have written about doctors dropping out of Medicare, many quitting all insurance. I met a woman geriatrician who is the only fellowship trained geriatric specialist in central Iowa. Geriatrics as a specialty is a university subsidized field. There is no private geriatric practice because the doctor can’t survive on what Medicare pays. She tried and had to quit.

Quitting Medicare is remarkable when all your patients are of Medicare age. Medicare was harrassing her because she was seeing patients too often. Many were frail elderly living at home. She dropped out and began charging cash. She made a decent living after a year and was happy with her decision.

Another doctor discovered he was able to do very well financially, have high patient satisfaction, and deliver good quality of care, by avoiding the administrative and bureaucratic hassles of Medicare. Surprisingly, most of his patients are not wealthy. Half have no insurance, and another 15% use Medicare for other doctors.

If a doctor accepts any Medicare payments, Medicare requires that he charge their grossly inflated price. Then they pay 10-20% of that price. If Medicare discovers that a doctor has charged less to a cash patient, Medicare reduces his “profile” price to that cash price and pays 20% of that. A doctor simply cannot go to cash medicine and stay enrolled as a Medicare provider.

Newport Beach is one of the wealthiest communities in California. Their busiest hip surgeon has dropped Medicare and charges $1200 cash for a total hip. Patients are surprised, because total hips cost $5000. No, that is the Medicare price. He is charging cash at the same rate he would be paid by Medicare. People don't realize the discounting that goes on because insurance companies have been able to sign doctors to contracts.

Read more ...

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Extortion
05/21/10 - MDOD by 911Doc

I am dismayed at what our thoughtless political leaders are doing to a vital profession. Literally vital, maintaining life. Citizens, wake up, and don't allow our politicians to continue to screw this up. To borrow a phrase, if you think medical care is expensive now, just wait until it is "free".

[edited]  Over the last fifteen years a quiet coup has taken place in medicine. Decisions about reimbursement, schedule, responsibilities, and the shape of a physician’s practice have been co-opted by all manner of clipboard carrying administrative drones and academicians.

I don’t believe the drones to be evil per se; they are simply doing what we cannot now do. They work to support themselves and their families to the BEST possible extent within their comfort zone. But their ‘normal’ existence and the laws, rules, and regulations which have allowed their rise, has come at the direct expense of physicians and patients.

The expense to physicians is in money lost, and more importantly in confidence. The monetary loss is easy to understand: EMTALA and other government redistribution programs are unfunded, medical care comes at a cost, and someone must pay. Physicians, nurses, and taxpayers pay the most as providers of the services.

This redistribution has given to the poor, both deserving and underserving. It has supported illegal aliens by the hundreds of thousands. It has also paid cash from our pockets to the new drone class in medicine. After all, there has to be a drone class to file the papers and hold meetings about how other people’s resources and money should be distributed. It has to be done with a semblance of “fairness” even though the act is unfair on its face.

Physicians have been quiet as their stuff has been taken, their time at the hospital increased, their power quashed, and their ability severely limited to practice medicine as they had trained. Uncertainty has replaced confidence. A generation of academicians and older physicians have submitted to bullying, or worse, encouraged it.

In the comments, 911Doc advises a doctor in training:

[edited]  Do not look to medicine to provide some deeper meaning, or prestige, or mojo, or whatever. For better or worse, today, it's a job. That's all it is.

Now, you and I probably know differently, because we feel that there is something special about what we do, that we practice a noble and giving profession, and hopefully that counts for something somewhere. But perceptions, while often wrong, carry weight, and the perception now is that what we do is just a job, and that health care is a commodity and not an art. This perception may change, but if it does, it will be decades hence.

- - -
A Doctor Describes Government Management of Medical Care
07/03/10 - Big Government by Bret Jacobson  (YouTube video 3:37)

This doctor treated Medicare Patients, and was routinely denied payment. Medicare said: "We can't pay you right now, the computer is down". The computer was down for 18 months when she gave up.

- - -
The Political Distribution of Wheat
01/17/10 - EasyOpinions

A short analogy to what is happening in the market for medical services. What does a market for wheat have to do with healthcare? It is easier to understand.

[excerpt]  A politician sees a warehouse full of wheat. He takes some of it to distribute to poor voters and prospective voters in his district. The warehouse will have to bear the burden. He is applauded for his sensitivity and charity.

The politician is dismayed at the consequence. Maybe the warehouse goes out of business, as people switch to using a warehouse that the politician doesn't see or can't tax. Or, the price of wheat goes up as the warehouse is not completely refilled. The politician ignores the people who paid for the wheat or were expected to buy it.

Obamacare At Ground Level

Government:  Whoa! Why are you reacting like this? We are the ones qualified to plan for the future, and it is going to work out fine. We are changing everything, but you should keep on as if nothing has changed.
Business:  We must be unqualified. We see a different future than you do.

 

Fannie Mae Health Insurance
05/16/10 - Throckmorton's Other Signs

[edited]  The effects of ObamaCare are beginning to hit. New quotes for health insurance are scary for small businesses in our area and in surrounding states. Health insurance rates are going up 27-37% because of increased demands on private insurance companies and the costs imposed on businesses.

Companies are dropping health insurance. Patients can't get Medicaid because it is out of money. So, there are now more people without insurance, and those who have it have giant deductables and are waiting too long to get care.

Medical centers like ours that have an open door to the indigent are getting creamed. Demand from indigent patients is increasing, and demand from the under-insured is skyrocketing. The costs of practicing medicine are increasing exponentially.

This medical model is like Fannie Mae. Give everyone "healthcare" that they can't afford, hide the cost, and stick it to future generations. Then forclose and destroy the whole thing.

- - -
Throckmorton's sign
In case you were wondering. "Throckmorton's sign" is irreverent medical slang. The Throckmorton sign is positive when the patient's penis points to the side of the body showing a problem on a plain X-ray of the Pelvis. Throckmorton's sign is negative if there is no abnormality, or reversed if the problem is on the other side.

It is also called the John Thomas sign, after the common British euphemism for the penis.

- - -
If Obama were a Marxist, what would he believe?
10/17/09 - American Thinker by Kelly O'Connell

[edited]  These are the basic teachings of Karl Marx. Readers may judge for themselves whether these might be at work influencing current administration decisions. In the present chaotic political atmosphere, the phrase "Marxist" is tossed around without explanation. But what exactly does Marxism represent?
. . .
Critics claim Obama's budget is an example of the Cloward-Pivin model of planned economic destruction of a functioning capitalist economy via sabotage. Outlays are so gigantic, and so dreadfully misspent, that our financial infrastructure will soon collapse. A trillion dollar tax increase and spending rising by $10 trillion dollars over the next decade is probable.

If so, government default will occur, only offset by printing money, which will then bankrupt the general populace. The middle class will fall. Chronic inflation will result, causing America to lose its sterling credit rating. Global financial players will dump the dollar as it falls in value. Then, hyperinflation will accelerate, and the era of superpower America will end.

John Maynard Keynes' wrote "The Economic Consequences of the Peace". He commented on Russian dictator Vladimir Lenin's economic insights.

[edited]  Lenin is said to have declared that the best way to destroy the Capitalist System is to devalue the currency. Governments can secretly confiscate an important part of the wealth of their citizens by a continuing process of money inflation. There is no subtler, no surer means of overturning the existing basis of society than to devalue the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

- - -
Rahm Emanuel is Obama's Chief of Staff:

You never let a serious crisis go to waste. And what I mean by that, it's an opportunity to do things you think you could not do before.

If it is moral to politicize a crisis for a good cause, is it moral to create a crisis to bring about a thorough transformation of an imperfect and supposedly unjust society?

Stimulus Give and Take

Useless Stimulus and Phoney Green Jobs
05/05/10 - Aguanomics by David Zetland
Via Knowledge Problem

[edited]  A friend mentioned that he had hired an extra guy under the stimulus program.

"Yeah, they are paying 80% of his wages and overhead. It's a win-win for him and me ... but then I fired another guy; he just cost too much compared to the new guy."

So we get +1 job and -1 job = 0 new jobs, more profits for my friend, and more taxes for us.

This happened because my friend was encouraged to use this new program to "get America back to work." I'm guessing that this is happening across the country.

Bottom Line: You can't make jobs where there's no demand, but you can sure waste money pretending that you know what you're doing!

To paraphrase Thomas Jefferson: A government big and intrusive enough to manipulate incentives for your business, is big enough to screw up your business in other ways. Manipulation does not create jobs.

Unconstitutional Health Law

An Unconstitutional Solution
03/17/10 - PowerLine Blog by John Hinderaker

Democrats are attempting to pass ObamaCare healthcare "reform" with unconstitutional procedures. John Hinderaker explains and quotes clearly about the conflicts.

Michael McConnell is a law professor at Stanford and a former judge on the U.S. Court of Appeals:

[edited]:  Senate rules protect a 41 vote minority by allowing it to block most types of legislation (a fillibuster). "Reconciliation bills" only make adjustments to spending or revenues, to reconcile current law to a new budget resolution, and they require only a majority vote.

Say the President signs the ObamaCare Senate bill into law. "Reconciliation" would permit Senate Democrats to change budget issues in that law with 51 votes. They could correct most offensive features, but maybe not the abortion provisions.

The Senate parliamentarian says reconciliation may only amend existing law. House Democrats must first pass the identical bill that passed the Senate, including the special deals, abortion coverage, and high taxes on expensive health-insurance plans.

The clever, but unconstitutional, Slaughter solution ignores basic fact. To become law, and eligible for amendment via reconciliation, the Senate bill must actually be signed into law.

The Constitution speaks directly to how a bill becomes a law. According to Article I, Section 7, a bill shall have passed the House of Representatives and the Senate, and be presented to the President of the United States for signature or veto. Unless a bill actually has passed both Houses, it cannot be presented to the President and cannot become a law.

Here is my summary. The Senate has passed ObamaCare. The House dislikes ObamaCare, but likes ObamaCare + Amend. What can the House do?

• Pass ObamaCare + Amend directly. But, it will not pass the Senate, because Republicans now have 41 votes (via Scott Brown) to block passage.
• Pass ObamaCare to become law. Also pass Amend and expect the Senate to approve. The Senate might pass Amend with 51 votes, or it might easily accept ObamaCare as-is, leaving the House Democrats hanging.
• The Slaughter trick. Pass Amend + Rule. The Rule says: When the Senate passes Amend, then the House automatically approves of ObamaCare.

Opponents object:

• The Senate can't pass a reconciliation amendment to an ObamaCare law that doesn't yet exist.
• Congress can vote on laws. It can't vote on laws that automatically vote on other laws.

I want the actions of Congress to be deliberate, open, and understandable. Congress is not a computer program that writes rules to create other rules. That complexity would end any accountability.

- -
The Health Care Debate: What is “Deeming”?
03/17/10 - Washington Watch by Jim Harper

A clear 900 word description of the procedures affecting passage of the massive healthcare overhaul called ObamaCare.

Cloture, The 60 vote rule, House passage of the Senate version, Reconcilliation, Senate promises to amend, Hiding a Yes vote, a Rule, a Self-Executing Rule, and Deeming it Passed.

- -
Questions for Thoughtful ObamaCare Supporters - Part 3
03/16/10 - Cato@Liberty by Michael F. Cannon

What do the following facts mean to you? [edited]

• Pharmaceutical-industry lobbyists are meeting with House Democrats behind closed doors to write this legislation. They are preparing to spend millions of dollars on advertisements to support the legislation.
• A former federal judge: Under Article I, Section 7, passage of one bill cannot be deemed to be enactment of another.
• Speaker Pelosi says of her proposed “deeming” strategy: I like it because people don’t have to vote on the Senate bill. Pelosi once opposed this same strategy in a court of law.
• The Washington Post editorializes: The Democrats’ endgame seems “dodgy” and “threatens to turn into something unseemly and contrary to Democrats’ promises of transparency and deliberation”.

Questions for ObamaCare Supporters
Part 1   Part 2   Part 3

Only 40% of Healthcare Costs

Mike:  I have a $4 coupon here for a hamburger.
Server:  (loudly to kitchen) Burger, well done, no salt, no cheese, no fries, half a bun. (to Mike) We'll have it for you in an hour.

Mike:  Wait, I don't want it like that!
Server:  It's free. Stop complaining.

Mike:  (looks at next table) Their meals look good.
Server:  Politicians and union guys. Where do you work?

Mike:  Acme Manufacturing, why?
Server:  We'll bill them for the other $6. Hah, they'll be happy.

Mike:  Say, what sort of restaurant is this?
Server:  Obama's Health Restaurant.

- -
Obamacare Cost Estimate Watch
03/11/10 - Cato@Liberty

[edited] The CBO (Congressional Budget Office) released today another cost estimate for ObamaCare. It still omits the cost of new private-sector mandates, nine months after the first version was released. President Obama has implicitly acknowledged this omission.

From history, the CBO estimated that mandates in President Clinton's health plan accounted for 60% of the costs. The Obama plan is remarkably similar, which is probably why Democrats have suppressed such estimates this time around.

So, when the CBO says the plan will cost $1 trillion ($1 million million), the true cost is likely $1 trillion collected in tax and spent by the government, PLUS $1.5 trillion in health care spending required of businesses and individuals, totalling $2.5 trillion.

The government is likely reporting just 40% of the true cost.

--------
Obamacare Would Increase Deficits by $59 Billion
(Via Legal Insurrection)
03/20/10 - Fox News

[edited] After correcting for the Doctor Fix gimmick the CBO estimates imply that the Obama plan increases Federal deficits by $59 billion over the next 10 years.

Democrats hid another $1.5 trillion by preventing the CBO from scoring hidden taxes. "Individual mandates” force workers to pay money to insurers, which is a hidden tax. History says those taxes would cost roughly $1.5 trillion, omitted from the CBO analysis.

The actual cost of the bill is nearly $3 trillion. Worse, existing and new constituencies will demand even more government spending, and proposed cuts in spending will be stopped by highly organized and vocal opposition.

Terrorism is Thug Advertising

Wars, Crimes, and Underpants Bombers
03/02/10 - Cato at Liberty by Julian Sanchez

The common question: Why do Islamic extremists spend their time and resources attacking the US and our people? What is in it for them?

One explanation is hate. They don't mind sacrificing their men to suicide bombings, or enduring our counter-terrorist operations that kill their leaders, as long as it shakes up The West and the US. But, there is much hate in the world, and most organizations and countries are not attacking in that way. So, hate is a plausible explanation, but doesn't leave me satisfied.

The following insight seems right to me. They attack us as a form of thug advertising, to build their organizations.

Sanchez [edited]: The claim that "we are at war" seems to be a statement that "we are very, very serious about national security". This self-esteem boosting ritual has a cost.

Jihadis primarily want to impose their rigid vision in the Muslim world, and to depose rulers perceived as corrupt or too secular. (See "The Far Enemy" by Fawaz Gerges.)   Their decision to strike “the Far Enemy” in the United States is not motivated by blind bloodlust or a desire to kill Americans as an end in itself. Their decision is generally unpopular, even among radical Islamists.

Al Qaeda had been perceived within jihadi circles as a marginal organization. Osama bin Laden and Ayman al-Zawahiri hoped that a titanic conflict between Islam and the West would revive the jihadi movement and enhance the prestige of Al Qaeda. This has largely backfired

Terrorism is primarily a symbolic act. Terror groups execute sensational attacks as PR stunts. They don’t love blowing up airplanes; they do it to establish their own credibility versus more locally-focused Islamist groups. They compete with both violent and peaceful groups for recruits.

Our response to these attacks will often have a military component. But, we should not treat Al Qaeda as if it were a belligerent foreign state. A big show supports their advertising and outreach efforts. We should treat Abdulmutallab and his cohorts as just one more band of thugs, when this is compatible with our intelligence gathering and security goals.

Do Smart People Run The Market?

Merit and the Market
02/16/10 - Econlog by Shikha Dalmia

[edited] Does merit drive the market? I say the opposite, that markets reward merit and many other qualities. The former Soviet Union lacked technical and financial successes because it suppressed markets. Free Markets enable people to turn their smarts and other knowledge into benefits.

Rewards can go to the stupid as well as the brainy. The recent MTV reality show "Jersey Shore" has made a group of young, non-descript Italian-American kids from New Jersey into millionaires for displaying a lifestyle that is self-indulgent and devoid of accomplishment. It is these kids' vices that are making them rich, not their virtues!

Markets create a mechanism to use knowledge about the everyday stuff of life, along with the abstract and complex. There will always be brain-powered industries in any economy, and smart people will do well. In addition, for every Bill Gates, there are thousands of little guys making money through small innovations: improved plastic caps, a tastier salad dressing, a better vegetable peeler, [and restaurants, dry-cleaners, and hardware stores].

The market rewards brilliant ideas, not brilliant people. Markets care only about the idea and its value to others, not its source. Markets are inherently anti-elitist. Smart, educated, credentialed people may lose in market competition, even to someone or some product they consider inferior. They regard this as a symptom of market failure and demand corrective government regulations, such as standards for minimum quality, manufacture outside "sweat shops", [and professional licensing].

Smart people have an undeserved sense of entitlement, that their brains power the market, and that some portion of the world is rightfully theirs. This sense of superiority blinds them to the broader "ecological rationality" of the environment in which they operate. They think that they are the ones who make markets work, instead of the other way around. This offends the vast portion of humanity.

Rational Management vs Random Markets

Academics and politicians routinely pose a question: Do you want us to provide rational, insightful, far-seeing management of your life and resources, or do you want to leave this to the unregulated, unplanned, hit-or-miss results of the market? They are smug in their belief that there is only one smart answer, that rational planning has to beat random action every time.

Of course, they spin the question to get their desired answer. The better question is: which do you choose as the primary way of solving the problems of life and offering you methods and choices?

• Government

  Empower 100,000 academics, lawyers, and politicians with half of what you produce, and entrust them to find great solutions. They deserve this power because
  - Academics are the best at deriving statistical results from historical studies,
  - Lawyers are adept at interpreting and writing complex rules of procedure, and
  - Politicians are the most likeable and talkative members of their group.

  If they make mistakes, they will shrug their shoulders, will explain why it was the best anyone could do under the circumstances, and will promise to do better in the future with even more of your resources.

  They will coordinate their actions through interpersonal agreements, meetings, organized political support, and lobbying. They will parcel out the work into divided areas of responsibility, to prevent wasteful competition and duplication. Except, if there are indeed multiple committees or agencies working on the same problems, then all will be funded to preserve the widest range of ideas and solutions.

  The most successful gatherers of resources will go on to higher responsibility.

• Market

  Trust three million people to solve the problems that they understand, using their own resources or those of willing partners. Anyone can participate, at their own risk and for whatever reward they can negotiate.

  If they make mistakes, they lose their investments. This is a direct and unavoidable reason to plan well and be careful in the use of their resources.

  They will coordinate their actions through prices and contracts. Their success depends on delivering value to others, a greater value than the resources they use to produce their product. This creation of value is called Profitability.

  A wide variety of products will be produced to satisfy the same problem area, limited only by profitability for each product. If more than one product competes, and some are not favored, those products will go out of business, ending the wasteful allocation of resources to those products.

  The most successful producers of valuable products will gain funding and trust, enabling them to attempt the production of further products.

The choice is not between government planning or market non-planning. The choice is between  (1) government planning by the few through politics, or  (2) market planning by millions with the knowledge and resources to create more value than they use up.

Myth of the Clinton Surplus

The Myth of the Clinton Surplus
10/31/07 - Craig Steiner US

This is one of multiple links that reveal these facts (Google: Clinton's Surplus). This shows how deceptive are the Democrats and big media. The Clinton Surplus is repeated endlessly as a biased and untrue talking point, in an attempt to prove the effectiveness and thriftyness of Democratic administrations.

This is a clear and interesting analysis. Here are edited excerpts:

You will often read the claim that President Clinton balanced the budget and even ran a surplus. This is then used to underline the irresponsibility of the Bush administration. [Bush ran deficits also, but he wasn't a sinner following a saint. -ag]

Clinton claimed surpluses of $69, $123, and $230 billion for FY1998-2000. Clinton claimed that the national debt had been reduced by $360 billion (interestingly, not the $422B sum of the yearly claims).

There was never a surplus. In fact, the total national debt increased by $281 billion during those years. How can this be? The Public Debt and yearly deficits were paid down by borrowing money from the Social Security fund, rather than borrowing directly from the public. Clinton did not achieve a surplus and he did not leave President Bush with a surplus. Actually, growing deficits began with a $133 billion deficit in the last Clinton budget, not in the first budget of the Bush administration.

Analogy: Dad has a college fund for the kids (accumulated money from Social Security taxes) and a credit card (Public Debt). Dad spends more than he earns, and borrows from the college fund to cover the excess. Then he goes further, and borrows $281 more from the college fund to pay off some of the credit card. Dad talks to Mom: "We're doing great dear. Look, I have paid down some of the credit card." Dad doesn't tell her that the kids aren't going to college.

Craig Steiner is evenhanded. He explains the myth as being a biased report of statistics, but not an intentional scam by Clinton.

This result most likely was not a conscious decision by Clinton. The Social Security Administration is required to buy U.S. Government securities with its surplus. This automatically borrows from Social Security, labeled "intergovernmental holdings" in the national accounts.

People were earning a lot during the dot-com bubble and paying a lot into Social Security. The government was running deficits, but the money from Social Security taxes was larger than those deficits. The amount borrowed from the public went down, while the money borrowed from Social Security went up by much more.

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The Real Tax Burden
Jan 2009 - EasyOpinions by Andrew Garland

The real tax burden is what government spends, not just the deficit.

Political Distribution of Wheat

A politician sees a warehouse full of wheat. He takes some of it to distribute to poor voters and prospective voters in his district. The warehouse will have to bear the burden. He is applauded for his sensitivity and charity.

The politician is dismayed at the consequence. Maybe the warehouse goes out of business, as people switch to using a warehouse that the politician doesn't see or can't tax. Or, the price of wheat goes up as the warehouse is not completely refilled. The politician ignores the people who paid for the wheat or were expected to buy it.

People complain that wheat is more expensive. The politician takes more of the wheat to subsidize the not-so-poor, to keep up his political support. Even less wheat appears in the warehouse, the price goes up again, and another group of people complain about the rising price.

The politician decides that the rich are making the price go up by buying too much wheat. He proposes a Wheat Allocation Board to decide how much wheat a person should get at the official, lower price. That board decides that politicians, state and federal workers, union members, and anyone granted a Wheat Buyer Card ("The Exempt Ones") can buy what they want. If others want more wheat, they can buy more by paying the 40% Wheat Tax on their extra wheat. Or, there are always oats available, which make a crumbly and dry bread, and cause some people digestive problems.

The amount of wheat falls further. The politician explains that the wheat farmers are at fault for not growing enough and charging too much, that the warehouse operators are causing shortages by not stocking enough wheat, and the rich must be cheating by continuing to buy too much wheat.

The answer is the Comprehensive Wheat Reform Act of 2010. It appoints 120 committees and boards to understand, control, and allocate all aspects of wheat production and consumption. Preliminary reports claim that the price of wheat will fall dramatically, now that the chaotic and inefficient market in wheat will be brought under comprehensive, organized, scientific, and rational management. The wheat farmers are called on to do their patriotic and humanitarian duty by cooperating with the government to finally provide wheat to everyone at a fair price. The selfish rich are told that they will be limited to a fair amount of wheat, regardless of their hard-to-justify wealth.

The Exempt Ones arrange for special deliveries of wheat to themselves subsidized at public expense, given their necessary and special contributions to the national welfare. They will need to remain impartial in deciding how much wheat the common man will receive, given that there may be a continuing and worsening wheat shortage, on a temporary basis.

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The Medicare Tomato Market
06/24/09 - The Happy Hospitalist

Say that tomatoes were declared vital to life and made available free through the Medicare National Tomato Bank. This translates the story of the healthcare market to the tomato market. A long, readable, and informative post directly about the horrible effects of politically allocated healthcare.

This inspired my shorter analogy about wheat.

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Capgras' Syndrome
01/15/10 - Throckmortons Other Signs

Capgras' Syndrome is the primary delusion that a close relative or friend has been replaced by an impostor, an exact double, despite familiar appearance and behavior.

Throckmorton [edited excerpt]: One pulmonologist on staff had pontificated on how we spend so much resources keeping people alive in their last six months. He didn't think the proposed panels to limit care were a bad thing.

His father has suffered a massive stroke. Now he wants everything done, a trache, peg, longterm rehab vent unit, the works. I thought I was having an attack of Capgras' syndome, but then remembered liberals want to decide how to spend everyone's money except their own [and limit everyone's choices except their own -amg].

Europeans Are Less Wealthy

Are Europeans as Wealthy as Americans?
01/15/10 - Links from Cafe Hayek by Don Boudreaux.

Consumption in America vs. Europe
01/15/10 - Cato At Liberty by Daniel J. Mitchell

[edited] People claim Europe is as rich as the United States. I’m shocked, because abundant data shows otherwise. The following charts should be more than enough to end the argument, both from presumably impeccable sources.

The OECD is the Organisation for Economic Co-operation and Development. OECD data (page 6) shows average consumption per capita. I compare America to the EU-15 (Western Europe) adding Norway and Switzerland to boost the European score.

The chart shows US consumption at 152, Western Europe at 105, compared to a benchmark of 100 for the average of all members of the OECD. That is 44% more goods and services enjoyed in the US as compared to Western Europe.

The biggest policy difference between the U.S. and Western Europe is the burden of government.

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We're Rich, You're Not. End of Story.
04/17/05 - NYTimes.com by Bruce Bawer

[edited] I am an American living in Oslo, Norway. People here believe the common wisdom about economic life in the Nordic countries. They believe that they are incomparably affluent, with all of their needs met by an efficient welfare state. Some recent studies support my view that the reality is not quite what it seems.

I moved here six years ago. I quickly noticed that Norwegians live more frugally than Americans do. They hang on to old appliances and furniture that we would throw out. They drive around in wrecks. My partner and I took his teenage brother to New York in 2003 on his first trip outside of Europe. He stared boggle-eyed at the cars in the Newark Airport parking lot, as mesmerized as Robin Williams in a New York grocery store in the movie "Moscow on the Hudson".

An office worker in New York might go to a deli for lunch. In Paris, she might enjoy quiche and a glass of wine. In Norway, she will sit at her desk with a sandwich from home. The home sandwich is ubiquitous here, from classroom to boardroom.

It is not simply a matter of tradition, or a preference for a non-materialistic life. Dining out is just too pricey in a country where teachers make about $50,000 a year before taxes. A large pizza delivered from Oslo's most popular pizza joint costs $34 to $48, including delivery and a 25 percent value added tax.

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Of Sunroofs and Motor Scooters
06/27/07 - Pittsburgh Live by Donald J. Boudreaux

[edited] I suspect that Parisians have fewer sunroofs on their cars because they are less wealthy than Americans. A sunroof is a luxury unrelated to reliability or safety. It only makes a car ride more enjoyable, like an in-dash CD player.

A very poor person buying a car cares mostly about how reliably the car will transport him. He is unlikely to pay for leather seats and a tilt steering wheel. He prefers to conserve his income for more vital purposes such as fuel, food, and decent housing.

But, give this same poor person a windfall of $1 million, and he is more likely to buy a fancy car.

A large number of Parisians ride motorcycles. This makes me more confident in my conclusion about sunroofs. Parisians might like motorcycles more than Americans do, or Paris' weather might make motorcycles more practical than in America. The most plausible explanation for the larger volume of motorcycle traffic is that Parisians are less wealthy than Americans.

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Do We Want to Mimic Western Europe’s Stagnant Welfare States?
02/26/10 - Cato@Liberty by Daniel J. Mitchell

[edited] America today is richer than Western Europe. Per-capita living standards are about 30 percent higher in the United States, according to the statists at the Paris-based Organization for Economic Cooperation and Development (see page 6 of this report). And we have been growing faster, which presumably should not be the case according to convergence theory (see Annex Table No. 1 of this OECD database).

Left-wing populists seem to believe (wrongly) that the economy is a fixed pie, so their fixation on redistribution is understandable. Their view is that robbing Peter is the only way to lift Paul.

Why does the left want America to be more like Western Europe, when their living standards lag America, and the gap grows wider each year? I think they are so fixated on differences in income (or resentful of success) that they are willing to make poor people worse off if they can impose even greater damage on rich people.

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The Political Dictionary: Liberal Economics
11/07/08 - EasyOpinions

Money falls from heaven for everyone to use. But, the immoral and sneaky rich gather more than their share. The government's purpose is to redistribute the money the way God intended. Or, if you wish, the way Gaia, or the Tooth Fairy, or whoever intended.

Taxes remove the excess income of the rich and give it to the voting poor, through a fair and organized bureaucracy. The rich oppose this action by selfishly and spitefully decreasing employment. Government responds by increasing grants and spending, to boost employment. The government runs a deficit while it discovers the "knack" for creating the jobs that the rich are hiding.

The Good Side of Dictatorship

Totalitarian governments past and present are receiving some praise from liberal sources. This alarms me.

Benito Mussolini was the Fascist dictator of Italy from about 1936-1943, and was killed in 1945 when Italy surrendered to the Allies.

A joke about his governance is: "Yes, he was a dictator, with all the harm and problems that came from that, but he did a lot of good, too. He made the trains run on time". Of course, this is dark humor. No reasonable person would excuse dictatorship and arbitrary control by saying "but, some good came from it".

I am reminded of the occasional tragic story about wild mushrooms. The dish killed all at the table. The participants remarked how delicious the mushrooms were, just before they died. Usually, these people were experts at identifying and preparing wild mushrooms. I'm sure they were quite surprised to die, because of their superior knowledge.

I don't care at all how delicious the mushrooms were. Those mushrooms are an unacceptable risk for having a delicious dinner.

So, what possible purpose is there in understanding the good parts of a dictatorship? I don't care if a much stronger government can do some good things, because the risk of harm is greater also. It is fine if you can isolate a policy that had a good effect and doesn't need dictatorial power to be implemented. In that case, why mention the dictatorship at all, except as a curiosity?

If you can't isolate the policy, then you are arguing for dictatorship, and I want none of it.

Read more ...

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It’s Not Censorship, It’s "Reasonably Enlightened"
01/12/10 - Investors.com by Ed Carson. Via Ed Driscoll.

[edited] Google defiantly stated late Tuesday it may exit China, citing attempts to hack into dissidents’ e-mail accounts. It strongly suggested the Chinese government was behind the attacks. Google will no longer censor search results in China.

Clearly, Google doesn’t understand the nuances of China’s totalitarian rule the way New York Times columnist Thomas Friedman does.

Our One-Party Democracy
09/08/09 - NY Times - Op Ed by Thomas L. Friedman

[edited] One-party autocracy certainly has its drawbacks. But, when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.

Our one-party democracy is worse. The fact is, on both the energy/climate legislation and health care legislation, only the Democrats are really playing. With a few notable exceptions, the Republican Party is standing, arms folded and saying “no.”

Many of them just want President Obama to fail. Such a waste. Mr. Obama is not a socialist; he’s a centrist. But if he’s forced to depend entirely on his own party to pass legislation, he will be whipsawed by its different factions.

Sarcastic restatement:

Democracy is so inefficient. When half of your country disagrees with your policy, it is so much easier to have autocracy, the absolute rule by one faction. This is useful for suppressing the Republicans, and also for suppressing the "different factions" within your own party. Where is Mussolini when you need him?

It is so much better when the leader is called a "centrist", because his policies are then necessarily good for everyone. Friedman says we should not mind a "centrist" dictator.  As long as a "reasonably enlightened group of people" is running things, all will be well. If they aren't enlightened, then what? Where do our politicians get this enlightenment? At the top of a mountain in Tibet? Where?

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I Have Your Hitler Context Right Here
01/12/10 - Big Hollywood by Kurt Schlichter

[edited excerpts] Oliver Stone’s latest, desperate grasp at relevance is a new cable series which promises to place der Furher into der context. Does Stone really believe that Hitler somehow lacks “context”, or that “American corporations from GM through IBM were involved with the Nazis”?

His Secret History will not be “history”, in the sense of reporting what actually happened in the past. Nor is its tired leftist wisdom a "secret", about how America was somehow to blame for the rise of the Nazis, and to blame for all evil throughout the ages.

The real Secret History which Stone won’t disclose is the identity of the Americans who actually thought the Nazis had quite a lot to offer: their collectivist, anti-capitalist vision; their refusal to let democracy stop their agenda; and their fondness for eugenics. Those Americans were the Progressives.

I would not be at all surprised if the Secret History shows the silver lining of the Third Reich which we short-sighted conservatives always overlook.

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Oliver Stone's 'Secret History' to put Hitler 'in context'
01/09/10 - The Live Feed by David Hibberd. Via Ed Driscoll.

Oliver Stone as quoted by Hibberd [edited]:

Stalin, Hitler, Mao, McCarthy -- these people have been vilified pretty thoroughly by history.

Stalin has a complete other story. Not to paint him as a hero, but to tell a more factual representation. He fought the German war machine more than any single person. We can't judge people as only 'bad' or 'good.' Hitler is an easy scapegoat throughout history and has been used cheaply. He's the product of a series of actions. It is cause and effect.

People in America don't know the connection between WWI and WWII. I've been able to walk in Stalin's shoes and Hitler's shoes to understand their point of view. We're going to educate our minds, and liberalize them, and broaden them. We want to move beyond opinions.

Go into the funding of the Nazi party. How many American corporations were involved, from GM through IBM. Hitler is just a man who could have easily been assassinated.

What could be the motivation for showing the "more complex" Hitler, the Hitler that reacted to historical imperatives, the Hitler who wasn't completely bad?

Collectivist:  Hitler had the strength and vision to reorganize German society in a coordinated, comprehensive, scientific way. He saw the state as the only power that could tame the unruly masses and produce a glorious future for Germany and all of the territories that would come under Germany's influence.

Unfortunately, divisions in German society and some defects in Hitler's world vision caused more human suffering than was necessary to that cause. His goals and methods were rational and effective, but some of his results were regrettable.

We should not tar Hitler's methods and major visions with those few unfortunate results. We have the capability today, as then, to use organized government to accomplish greater goals for society. We are wiser now, and we will do it better.

Just to be clear, I hate the Collectivist.

Exchanging Gifts Cooperatively

The short story The Gift of the Magi by O. Henry (William Sydney Porter) is an ironic, painful, and sweet story of a poor couple who want to give a fine Christmas gift to each other, out of true love. Their gift giving is impractical because it is selfless.

Here is my contribution to the genre, far out at the other end of the subject. (smile)

John:  Let's shop together for something that you would really enjoy. What would you like for Christmas?
Mary:  I would like a nice, snuggly, terry-cloth robe.
So, sweetie, what would you like for Christmas?

John:  [thinks a moment] I would like a nice, snuggly, terry-cloth robe, in your size.
Mary:  [thinks, gasps] Wait a minute. That is like me buying the robe for myself!

John:  What's the problem? I will be giving you what you really want, and you will be giving me what I really want. Sweetie?

Healthcare Price Controls

Medical Economics 101
12/08/09 - MDOD by 911Doc

911Doc practices Emergency Medicine. He writes about what happens to doctors and patients when a bureaucracy sets prices and rewards. The emergency department became a jungle. He now works for lower pay in an environment where he can be a doctor under reasonable rules.

[edited excerpt] What happens when the government imposes price controls? You can find out for yourself by reading "Basic Economics" by Thomas Sowell. (For purchase at Amazon or free online as PDF -ag)  He is a black conservative with the Hoover Institution, so half of you can quit reading, because you care more about that fact than you do about logic.

Here is what happens in my little branch of the world. When price controls are imposed in medicine, EMTALA is a good example, then particular medical procedures and services lose any meaningful relation to their actual worth. Price and cost cease to have any real relation.

I'm happy with my pay cut and have no plans to go back and use my unique skills in the ER. The ER is a circus of pain and silliness, and the same kind of silliness is being debated right now in Washington. You should pray that it doesn't pass.

I find myself in agreement with what Shrodinger's Cat said a few years ago. They could pay him four times as much, and it would not make it worth working in the ER. Good luck all.

- -
Amy comments:

[edited] A lame piece on PBS pushed government healthcare, highlighting the amazing medical services of several other nations and how cheap they are. They used Japan as an example.

My inlaws have lived in Japan for over 20 years. They have ample experience with the healthcare system in Tokyo. The government sets the cost of everything from an office visit to an aspirin. PBS didn't mention that Japanese health care is based on rationing. It is not overt rationing, but that is exactly what it is.

They depend on Eastern medicine first. No matter what you come in with, they give you a little purple powder to mix up and try first. If it doesn't work, you come back and get a crack at Western medicine. Maybe you get sick and die, too bad. No one under the age of 12 can get an organ transplant. Hospitals do not accept ambulances. If you have a heart attack, you die in the bus. Japanese doctors strongly rely on the wait and see approach, even if current medical literature stresses prompt action.

Healthcare in Japan is 20 years behind the US. Yes, they make those robots for laproscopic surgery, but they don't use them, or they don't know how.

My mother-in-law fell and had a blow-out fracture of the orbit. She had a sagging eyeball and severe double vision. Her Japanese surgeon insisted that she wait a month to see if it got better. If not, they would operate to remove a piece of bone from her hip to plug the hole in her eye socket. This is about 20 years behind what a U.S. surgeon did, two weeks after the accident.

My in-laws can buy the best. The problem is, you just can't buy that in Tokyo thanks to the government.

(There is more.)

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ER Medicine and Bureacracy
08/31/08 - MDOD by 911DOC

Medicine becomes more expensive, harder to do, with worse outcomes, as government imposes intrusive regulation and arbitrary quality measures, despite good intentions.

Government Motto: You say you are a caring doctor, so treat the poor for free.

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The Medicare Tomato Market
06/24/09 - EasyOpinions quotes The Happy Hospitalist

A readable analogy and explanation of Medicare economics. Say that tomatoes were declared vital to life and made available free through the Medicare National Tomato Bank. The story of the healthcare market is translated to the tomato market.

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More on Healthcare

Congressional Sports Team

Worthwhile Analogy
12/10/09 - ChicagoBoys

Quip:  It is painful to think of Barney Frank coaching pro-basketball, or running U.S. business.

David Foster:

[edited] Imagine that Congressmen Barney Frank, Chris Dodd, Dennis Kucinich, and Robert Byrd managed a professional sports team. Would anyone invest money in that team?

The average Congressman probably knows far more about sports than he knows about business. He watches sports on TV and he may have played in his younger days. Whereas, his knowledge of business is comparable to not understanding the difference between balls and strikes.

Yet, this Congress and an approving Administration is acquiring the power to micromanage every business in the country in excruciating detail.

Entrepreneurs Go on Strike
11/20/09 - American Thinker by C. Edmund Wright

[edited] The big opportunity now is to spend government money: on an $18 million government contract to create an awful Recovery.org website, SEIU union jobs in ObamaCare, bankruptcy lawyers, and the coming carbon credits. There are ACORN-style crony contracts to be had, and all the jobs created by David Axelrod astroturf media escapades.

If you are connected, or if your dream is to enrich yourself by killing the dreams of others, then the field is ripe for you.

Entrepreneurs can sense it. This is not now the country for you if you simply want to build a better mousetrap. This is not just about tax policy, health care, or cap-and-trade (which are all terrible and need to be stopped).

The American dream is dying. This kind of economy cannot work, not until pigs fly, or until Barney Frank dunks on Lebron James.