American Elephants


“If You Like Your Job…” ObamaCare Will Increase Unemployment by The Elephant's Child

The Congressional Budget Office says that ObamaCare will increase unemployment. There are 7.8 million Americans working part-time who want full-time work. Mr. Obama changed the subject to raising the minimum wage.

On Tuesday no less than the Congressional Budget Office reported that the health law is causing Americans to work less or not at all, in a remarkable intellectual turnabout for the budget shop that Democrats cited repeatedly when selling ObamaCare. Now CBO—full of liberal-leaning economists—says the economy will lose the equivalent of two million full-time workers by 2017 and 2.5 million over the next decade, a threefold increase over its prior estimate.

ObamaCare’s complex design includes new subsidies, new taxes and new mandates. For low wage, lower-skilled or discouraged workers ObamaCare offers incentives that can force them to trade jobs for entitlement benefits. The CBO concludes that ObamaCare will encourage people to supply less labor by working fewer hours to qualify for more benefits. The incentives suggest watching carefully the overtime, a promotion or training in hopes of higher future earnings — it might boost you into another category with less or no subsidy. The question becomes how many people can the nation support on entitlements? I thought the numbers were already too high.

The CBO’s job-loss prediction doe not include the impact of ObamaCare’s employer mandate, which requires businesses with 50 or more full-time employees to offer insurance or pay a $2,000 penalty for each worker beyond 30 employees. The mandate has been delayed by executive order for a year. so it won’t take effect till 2015, which probably means the CBO is vastly underestimating job losses.

The White House, of course, denies everything. “Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report,” the White House, in the person of Jay Carney, declared. The White House seems to mean that the report is positive because”individuals will be empowered to make choices about their own lives and livelihoods” and “have the opportunity to pursue their dreams.” Didn’t Nancy Pelosi suggest that they would have more time to do art or crafts or maybe music?

Incentives matter. People respond to incentives. And there’s nothing in the act that encourages businesses to hire more workers and be more competitive. Like “if you like your doctor,” it may include “If you like your  job…” The law is a job destroyer that is taking away rungs from the ladder of upward economic mobility.



Fickle Foreign Policy, Increased Risk. by The Elephant's Child

I rely a good deal on Richard Epstein’s take on President Obama. Epstein knew Obama at the University of Chicago, and through Epstein’s next-door neighbor, who is one of Obama’s best friends. Epstein’s description of Obama was simply a clear-eyed assessment of the man, but not pejorative. It was a fair assessment. One particular thing he said has stuck with me. He says that Obama does not change his mind. If he once believed something, he still believes it today.

Early on, Obama expressed his idea that the crisis and trouble in the Middle East was entirely due to Israel’s refusal to make peace with the Palestinians, and if the Israelis are forced to make peace, return land to Palestine, and give Palestinians the “right of return” then there would be peace in the entire Middle East — Obama’s great accomplishment.

This seems a remarkably strange take on a group who teach their little children to hate Israel, bomb Israeli cities and houses, and grow up to be suicide bombers. But that is clearly the marching orders Obama has given to Kerry.  “In a short time, John Kerry has managed to make the Israelis and the Arabs hate him almost as much as American do. And he did it in the traditional way by saying stupid and ugly things.”

The State Department hastened to say that Kerry didn’t really mean that, “Today’s status quo absolutely to a certainty, I promise you 100 percent, cannot be maintained. It’s not sustainable. It’s illusionary.” That’s what he said at the Munich Security Conference. But that same status quo has been maintained for two decades.

How odd that you seldom see mention in the press of the Palestinian children needing complicated heart surgery or other advanced medical treatment, and the Israelis step in and save lives. Syrians bring their badly wounded people to the Israeli border in hopes that the Israelis will save them. Obama clearly has no interest in foreign policy, and wants America to pull back and let others cope with it. He has no understanding of the nature of the world.

Angelo M. Codevilla is professor emeritus of international relations at Boston University and a fellow of the Claremont Institute.  He is the author of To Make and Keep Peace Among Ourselves And With All Nations to be published by the Hoover Institution Press. His article for The Federalist: “Obama’s Unserious Foreign Policy And America’s Permanent War Footing,” is really worth your time. The subtitle”Fickle foreign policy, increased risk”sums it up.

He ended the war in Iraq, and is ending the war in Afghanistan. In Syria, he is supporting the good guys. He has put al Qaeda “on the path to defeat, and is doing the same to all similar folk. He is ridding Syria of Chemical weapons, while American diplomacy is at work settling the Arab-Israeli war – the key to a larger peace. He asked Americans to believe that Obama is moving the country “off a permanent war footing.” How, he gave no hint. It is difficult to imagine foreign nations, friend and foe alike, taking any of this seriously. Or Americans for that matter.

In fact, foreigners ceased taking Obama seriously long ago. That is one reason why so much of the world is moving in directions that do not augur well for America.

Do read the whole thing.



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.



Pay Attention to The Bitter Truths About NHS — And Our Future? by The Elephant's Child

I refer frequently to Britain’s National Health Service, which is the oldest of the “single payer” health care plans, initiated right after World War II, when Labour returned to power. When Obama’s health care advisers began talking about health care, they all expressed their admiration for NHS. In devising a health care plan, they talked a lot about how the big costs all came from old people in their final years. And they talked about things like life years and useful life, and did a lot of comparing a vigorous young person with many life years ahead — contrasting it with useless old people.

Well, I had this strange idea that that’s what the practice of medicine was all about, caring for people and their health problems throughout their lives, from every kid’s broken arm to the failing health of someone who has lived a long and valuable life. The Inuit supposedly left their old people to die out on the ice when they were no longer useful, and there have been tribes who eat their enemies as well. Are we still struggling to find an ethical way to deal with life?

Britain still has private health care for those who can afford it. The NHS provides care that is free at the point of service, and just what every liberal wants as their most cherished goal. But it doesn’t work. The incentive for the people immediately becomes to use as much as they want because it has no (visible) cost. This inevitably drives costs up sharply. The incentive for the government immediately becomes to control costs. The government who hires, fires and pays for the medical establishment, cannot do much about the people whom they urged to use all the medical care they want, but they can put a lot of pressure on the medical establishment to cut costs.

Escalating problems and the inevitable results should be obvious to the dimmest intelligence, but  politics and ideology get in the way. Not everyone believes in incentives, in spite of  overwhelming evidence that they are what moves events.

Can’t have people piling up waiting to get into the emergency room, ordered to fix that, hospitals took to holding people in ambulances so admissions would be spread out more equally. Cut costs more, and pretty soon hospitals were saving money by keeping the same sheets on the bed. When all the incentives become to cut costs, the old folks don’t get clean sheets or fresh water, and start dying of dehydration and starvation in the hospital.

ObamaCare incentives are just the same. We are just taking our first stumbling steps down the same long road to perdition. Nobody has even experienced actual ObamaCare yet. So far it’s all just the incredible fiasco of the rollout. The exposure of Obama’s lies about the law is just the surface. Everybody’s insurance is getting cancelled, if not this year — just wait until next year. Premiums are drastically higher, deductibles reach levels that almost make insurance useless. People don’t know if they are actually enrolled. They don’t know if their doctor will still be available to them, or who will be in their physician network. They don’t know if the drugs they need will be in the formulary. All is uncertainty. Much of the details of enrollment and payment have not yet been written.

A panicky HHS is just making up new ObamaCare ‘laws’ on the spot. They’re extending deadlines for making payment for coverage, requiring insurers to accept premium payments, changing due dates, ‘strongly encouraging”  insurance companies, HHS won’t release real numbers, and those numbers include those who haven’t paid anyway. Glenn Reynolds asks: “Where, exactly, do they get the authority for all these exemptions, waivers, and extensions?” Good question.

Please read this article from yesterday’s Telegraph, and do read the whole thing. This is the state to which the NHS has fallen, and it is our future if we don’t fight to stop it. See the related articles listed in the column. They are not just talking about dirty sheets, they are talking about lives lost unnecessarily.  Unnecessarily!



Milton Friedman: “Incentives for Immoral Behavior” by The Elephant's Child

Incentives matter. When you get the incentives wrong, you can expect things to go wrong. Sometimes people even end up dead.



Even Unions Blast Hidden Fees in ObamaCare by The Elephant's Child

There are all kind of little-noticed fees hiding here and there in the thousands of pages of the  Affordable Care Act. Should be titled ‘unaffordable care.’ The federal health care law will charge employers $63 for each person they insure next year. This is one of the clearest cost increases companies face when the law takes full effect.

Companies and other plan providers will together pay $25 billion over three years to create a fund for insurance companies to offset the cost of covering people with high medical bills. The fees will hit most large U.S. employers, and several have been lobbying to change the levy because it subsidizes individually purchased policies that will not cover their workers at all.

Insurance companies which helped to put the fee into the law, say the fee is essential to prevent rates from skyrocketing when insurers get an influx of patients with pre-existing conditions. This is all part of the plan to cover 30 million people with pre-existing conditions, who are expected to need far more care. Employers didn’t notice the fee and have been caught by surprise. They are understandably upset about it. $63 multiplied by large numbers of workers soon adds up to a big cost.

Boeing, for example, expects the fee will apply to about 405,000 workers and dependents it insures, costing the Chicago-based airplane company an estimated $25 million in 2014 alone. Some benefits experts expect that employers will at least partially pass on the $63 to workers.

The president of an insurer trade group, America’s Health Insurance Plans, claims that those with pre-existing conditions had been going to the emergency room. raising costs for everyone. A representative of an organization of emergency room physicians said some time ago that most visits to emergency rooms were by people with insurance, not the uninsured. HHS claims the high-risk program will lower the premiums for people who buy plans through the individual insurance market between 10% and 15%.

History offers clues — most federal programs come in costing vastly more than original estimates, often doubling and tripling, if not more. When insurance offers “free” care, people use more of it. Folks who would normally go to bed with a decongestant and a hot water bottle with a miserable cold, will, when it’s free go to the doctor’s office instead.  Mothers, alarmed when their kid seems to be sick,  rush off to the emergency room when it is free. Free is apt to trump common sense. Democrats don’t seem to understand incentives at all.

Secretary Kathleen Sebelius has been generous with exemptions so far, but now that the law is about to go into full force, multiemployer insurance plans which are run jointly by unions and employers found that federal regulators told the plans the lacked the authority to exclude them from the levy. SEIU is also squawking. “The funds would be bearing additional costs without gaining any additional protections,” said the director of the Benefit and Pension Funds.

Every time this kind of thing comes up, I always return to the vision of Nancy Pelosi announcing smugly “We’ll have to pass the law so we can find out what’s in it.”  Uh huh. Surprise!




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