American Elephants


The Total Absurdity of ObamaCare, Explained. by The Elephant's Child

Another comment on changing times: In 2012 and in 2013, roughly $34 billion went into venture capital deals in the United States. The cities were what you would expect, Silicon Valley, Boston, Austin, Seattle, New York and Los Angeles. Innovation is fast and varied.

One sector that is seeing a rapid drop in investment is in healthcare and devices. ObamaCare has a big medical device tax buried in it, and money has pulled back from taking a risk in healthcare while ObamaCare gets sorted out. Once again, it is all about incentives. When you tax something, you will get less of it. What Obama is taxing is not “devices” — but innovation.

What this appears to relate to is a vague idea that insurance companies are greedy rip-offs, doctors get paid way too much and hospitals charge outrageous amounts for an aspirin — which seems to be the impetus behind ObamaCare. That is, a bunch of people, with no qualifications for the job, have devised regulations — the impact of which they do not understand — for a business, the workings of which they do not understand in the slightest.

Next time you are in a doctor’s office or in the hospital, assuming it’s routine, look around and count up the “devices,” from the stethoscope around the doctor’s neck, to the examination table, the sink, the thermometer and blood pressure monitor to the $1 million CT scanner or the $4 million radiation machine. Take a serious look at one of the Stryker hospital beds.

Consider the absurdity of developing a new government-run health care plan — because health care costs too much, (a health care plan that actually increases cost and decreases care), that increases the cost of everything used by the medical profession with a tax on each item — and then expects costs to go down in the future because of medical innovation.

Hospitals across the country are engaged in cutting costs wherever they can. This will have the inevitable effect of gradually diminishing quality and care. The incentives for the medical establishment become how to get adequately paid for their services. The incentive for the government is reducing costs in a system in which they have guaranteed a rising spiral of expense.



The Slow Collapse of the Democrat Party, Continued. by The Elephant's Child

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From our excellent neighbor to the North, Small Dead Animals, a juxtaposition:

March 1, 2013

USAF Announcement: The implementation of across-the-board cuts in federal spending has caused the curtailment of the Thunderbirds 2013 show schedule. Effective April 1, all of the team’s performances have been cancelled.

March 3, 2013

Secretary of State John Kerry announced Sunday that the United States would provide $250 million in assistance to Egypt after Egypt’s president promised to move ahead with negotiations with the International Monetary Fund over economic reforms.

P.S. Here’s what it costs to keep the Thunderbirds flying annually.

Be sure to click on the links. Mr. Obama does want to be sure that the public feels his real pain. His strategy is completely obvious, and so small and spiteful.

Here in the Seattle Area our big summer festival is Seafair, which is centered around the hydroplane races and the Blue Angels performance, but includes everything from the milk carton derby, the usual queen and princesses, pirates,  parade, street performances, Navy visit and ship tours — plus all the usual and unusual summer festival stuff.

One of the highlights for me is when the Blue Angels pass right over my house in formation. Scares the hell out of the cats, but I love it.  Sound of Freedom! So that is going away too. If the choice is to get to see the Blue Angels or fuel our aircraft carriers, I can live without the Blue Angels.

But that is not the choice. The choice is between an arrogant president’s belief that he cannot under any circumstances cut back on government waste, sell empty government buildings, dump programs that don’t work, discontinue unnecessary duplicate programs,  or stop subsidizing cronies who supported his campaigns. Instead, he wants more money to spend to influence voters. He wants to win back control of the House in the next election so he can put the rest of his misguided agenda into effect.



Sorting out the early signs from the Office of the President-elect. by The Elephant's Child

The signs are not encouraging.  President-elect Barack Obama has named Michigan governor Jennifer Granholm to his 17-member economic advisory panel.  Granholm’s vision has led to heavily subsidized ethanol plants and renewable-power mandates for utilities, which pleased the Obama team.

Unfortunately, the ethanol boom is fading as ethanol companies go bankrupt.

Granholm has also presided over the worst state economy in the country since her election in 2003.  With a huge budget deficit, and unemployment rates reaching 8.7% she has raised personal income taxes by 17 percent. Her energy plans have raised the utility bills for Michigan’s citizens by an estimated 12%.

To combat the increased unemployment and high union costs, she has offered her “investments” in alternative energy and increased road construction to grow jobs. But then her failing auto industry is asking for a government bailout. Which makes her a questionable economic adviser at best.

Leftists put a lot of “hope” in the promise of “green jobs”. This promise remains fairly gauzy and often includes, according to Chris Horner of CEI, gimmicks like shifting “steel jobs” into the “green jobs” column because windmills have steel arms.  The Washington Policy Center’s Todd Myers says” Nuclear, hydro, and other “non-green” energy sources produce more power per worker than renewable alternatives.  Moving from efficient to inefficient energy means more people are needed to do the same amount of work.”

Kathleen Hartnett White of the Texas Public Policy Foundation points out some of the changes in the climate for climate change policy:

The European Union’s (EU) Emission Trading System (ETS), once the model for a U.S. program, continues to fail.  Europe’s program is not reducing CO2 and has led to higher energy costs.  The U.S. has reduced more CO2 by market efficiencies and without any complicated cap-and-trade programs.  Growing numbers of EU member countries, including Italy, now want to delay (read: scratch) the ETS because of economic woes approaching crisis proportions.

Obama’s plan was to stick the oil companies with a “windfall profits tax” to get the money for a big stimulus package, but the declining price of oil is taking the profits out of the windfall.  And a windfall profits tax would drive up the price of oil again, harming consumers. But then, stimulus packages don’t work either.

Obama’s campaign proposals have been heavy on giving government (taxpayer) money to those he found more deserving, but these actions have consequences. Raising taxes as the economy is declining is a very bad idea, as any student of the Great Depression would tell you. Something Obama has yet to learn.

The Environmental organizations that have been vigorous supporters of Obama are, above all, true believers in clean energy, strong global warming legislation, and locking up America’s natural resources so they cannot be defiled.  Larry Schweiger, President and CEO of the National Wildlife Federation said:

President-elect Obama and the incoming Congress offer new hope that Americans will come together to repower America with clean energy that revitalizes our economy and defends a planet in peril from the climate crisis…to pass strong global warming legislation that invests boldly in clean energy, caps and cuts the pollution that causes global warming, and restores America’s natural resources.

Other environmental CEOs rhapsodized about the environmental mandate that voters demanded.  Unfortunately, four of five environmental initiatives lost heavily at the ballot box.  Voters are more skeptical about excessive regulation and exorbitant costs with no clear benefits.  And even more, a study by the American Climate Values Survey found that only 18% of respondents strongly believe that global warming is real, caused by humans and is harmful.

As I said, the signs are not encouraging.  If you add in the observed fact that the sun has gone quiet, and the earth has not been warming for the last ten years, but cooling. And it is expected to continue cooling for the next two decades at least, you can see that there are some things that badly need to be sorted out.

You might want to keep an eye on an over-enthusiastic Congress.



Those Dratted CEO’s Get Way too Much Money! (or Do They?) by The Elephant's Child

Thomas Sowell had a wonderful column last week at National Review on CEO pay.  He began:

Congress is never more ridiculous than when it tries to look like it is serious.

In the midst of a major national financial crisis, what was one of the first things Congress zeroed in on? The pay of Chief Executive Officers of financial institutions.

If all those CEOs agreed to work for nothing, that would not be enough to lower the bailout money by one percent.  Anyone who was really serious would start with the 99 percent and let the one percent come later.

But however insignificant the pay of CEOs is economically, it is big stuff politically.  Whatever the shortcomings of the Democrats, they are consistent in their message and class envy is a great part of that message.

People who say that they cannot understand how CEOs in general get so many millions of dollars seem not to realize what a trivial thing they are saying.  Most people do not understand most things.  But that is no reason to have national policy guided by their ignorance. …

What really sets some people off is the fact that a CEO who has mismanaged some corporation into losing billions of dollars is rewarded with a severance package worth millions.

Think about it.  If the CEO’s decisions are costing the company billions, it is a bargain to get him out the door immediately for millions, rather than having his departure delayed by either internal struggles or battles in the courts….

Politically imposed limits on the pay of CEOs is one of the most penny-wise and pound-foolish things that can be done.  The difference between a top-notch CEO: and a second-rate CEO can be billions of dollars on the bottom line.

That is what drives up the pay of CEOs.  If you want someone who will be top-notch in running organizations as huge and complex as Fannie Mae or Freddie Mac, there is no point offering $5 million a year if similar enterprises elsewhere are paying $20 million for people with the kind of ability required. [emphasis mine]

Do read the whole thing. It’s a great corrective for faulty thinking, and being honest, we all indulge in a lot of that. Clarifies a lot of the conversation about the “bailout” too. Not too many CEOs enjoy a very long tenure at their firms.




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