American Elephants


ObamaCare Has Barely Begun, And The Horror Stories Start! by The Elephant's Child

President Obama is crowing about enrolling 8 million Americans in ObamaCare. The number seems to have no relation to reality. Nobody is enrolled until they have paid.

In Georgia, insurers received more than 220,000 applications for health coverage in the Affordable Care Act’s exchange as of the official deadline of March 31, according to state officials. The Insurance Commissioner, Ralph Hudgens says that premiums have been received for only 107,581 of those policies which cover 149,465 people. Half.

In California open enrollment is closed, many of the newly insured are finding they cannot find doctors, landing them in a state described as “medical homelessness.” One of the major claims was that ObamaCare would reduce the use of emergency rooms by the uninsured. Uh huh.

Kaiser says it will only get worse. Aging baby boomers increasingly need more care. The  growing medical needs of that group are creating a huge burden for the existing health care workforce. The retirement of many doctors in the boomer cohort is compounding the problem. The federal government estimates the physician supply will increase by 7 percent in the next 10 years. The number of Americans over 65 will grow by about 36 percent. Medical students are avoiding primary care and are choosing specialties instead. 20 percent of Americans live in areas with an insufficient number of primary care physicians, 16 percent in areas with too few dentists and 30 percent in areas with a lack of mental health providers.

Well why can’t we have single-payer health care like, say, Sweden? Sweden is always raised as a rare example of a socialist country that works. But a closer look at its health care system tells a different story. Universal public health care means the average Swede with ‘high risk’ prostate cancer has to wait 220 days for treatment. The overall quality of their universal public health consistently ranks among the very best. That quality can be achieved by regulating treatments to follow specific diagnoses as well as standardizing procedures.

But Sweden’s problem is access to care. According to the Euro Health Consumer Index 2013, the average wait time from referral to start of treatment for ‘intermediary and high risk ‘ prostate cancer is 220 days. For lung cancer the wait between an appointment with a specialist and a decision about treatment is 37 days.

The waiting is what economists call “rationing,”— the delay or even failure to provide care due to government budgeting decisions. The number of people seeking care far outweighs the capabilities of providers— insurance in name but not in practice. This is the inevitable result of ObamaCare as well. That’s why there is the Independent Payment Advisory Board (IPAB) who will decide what the federal government will pay for.

Stories of people in Sweden suffering stroke, heart failure and other serious medical conditions who were denied or unable to receive urgent care are frequently reported in the Swedish media. Recent examples include a one-month-old infant with cerebral hemorrhage for whom no ambulance was available, and an 80-year-old woman with suspected stroke who had to wait four hours for an ambulance. It’s the same deal in Britain’s NHS, which is so admired by the ObamaCare designers.

Here at home, a New York woman suffering from a neurological disease that has required four brain surgeries has been dropped by all of her doctors and denied medications because of her ObamaCare plan. Margaret Figueroa, 49, suffers from a disease that has her vomiting, she has lost 22 pounds and the pain is unbearable. The ObamaCare plan she purchased assured her that she was covered, but when she went to fill her prescriptions, her insurance card was denied. She cannot find a doctor who will see her. Her congressman,Rep Michael Grimm (R-NY) has intervened to help her obtain vital prescriptions. Grimm says he’s already received calls from at least a dozen Staten Island residents facing the same problem with ObamaCare’s “narrow networks”— extreme restrictions on doctor and hospital access imposed by ObamaCare.

The top cancer centers across the country are not available to those on ObamaCare.  38 percent of all ObamaCare plans only allow patients to pick from just 30% of the largest 20 hospitals in their area. The narrow network horror stories will only continue to grow, and the effects will be disastrous. But Obama is crowing about enrolling 8 million people.



Why is Business Not Hiring? The Gibson Guitar Raid Revisited. by The Elephant's Child

Les Paul Is Remembered In New York City
It was August of 2011, when armed federal agents raided Gibson Guitar’s Nashville headquarters, seizing wood, instruments and creating a national outcry over the high-profile  persecution. Agents were supposedly working from a tip that Gibson had broken laws in India and Madagascar, two countries that supply Gibson with ebony and other scarce woods for its guitar frets.

Both India and Madagascar say that Gibson has done nothing wrong, and has complied with all their laws. Federal agents seized more then $1 million of Gibson’s property. The Department of Justice alleged that Gibson imported wood for its guitar frets in violation of the Lacey Act — a federal law that makes it a crime to import flora or fauna in violation of a foreign nation’s laws.

August 7, 2012: the Department of Justice announced yesterday that the Gibson Guitar Corporation had accepted a deferred prosecution agreement regarding the Department of Justice’s allegation that Gibson violated the Lacey Act.  As a result, the Department of Justice will not charge Gibson with a crime (except for maybe a tax offense, left open) for “illegally importing ebony from Madagascar and ebony and rosewood from India” through a German intermediary from June 2008 through September 2009.”  Gibson, in return, must pay a $300,000 fine, make a community service payment of $50,000 to the National Fish and Wildlife Foundation” bulk up its internal procedures, and generally grovel whenever the government asks it to do anything related to this matter.

Heritage points out several features of the agreement worth mentioning:

First: The government acknowledges in the agreement that “certain questions and inconsistencies now exist regarding the tariff classification of ebony and rosewood fingerboard blanks pursuant to the Indian government’s Foreign Trade Policy.” In other words, the government acknowledges that the relevant law—not just our law, but a foreign nation’s law—is unclear. Ordinarily, that conclusion should lead the government to drop any charge that Gibson violated the law, especially the law of a foreign nation.

Second: The government’s case is no better regarding Madagascar. The agreement cites (1) “Madagascar Interministerial Order 16.030/2006,” and (2) some other equally well-known “laws”—all of which may have been written in a foreign language. The agreement alleges that Gibson received a translation (from whom is not stated) of the first whatever-it-is saying that “‘fingerboards’ are considered ‘finished’ under Madagascar law” and therefore may be exported. But, according to the government, “trip organizers”—who, for all we know, could have been Gibson’s trip companions “Greenpeace and other non-profit environmental groups”; the agreement does not say—informed Gibson that “under the organizers’ interpretation of [Madagascar’s] 2006 Interministerial Order, the harvest of ebony was illegal and that instrument part ‘blanks’ would be considered ‘unfinished’ and, therefore, considered illegal to export.” Put aside the obvious problems with government’s reliance on the opinion by the trip’s “organizers” of a foreign order written in a foreign tongue—Gibson was given conflicting views of the law. That should have ended the matter entirely. Remember: Gibson imported wood, not heroin.

Third: The press release is full of all of the chest-puffing that we are accustomed to see the federal government display: The government has enforced the law, prosecuted the wicked, protected the environment, cured the common cold, etc. But the government has made a federal case out of “fretboards” or “fingerboards.” …

Fourth: Gibson must pay the National Fish and Wildlife Foundation $50,000 for its (or its designee’s) use for the environment. Really? Fines paid to the government go into the U.S. Treasury and belong to the public; the NFWF is a private organization. In essence, the taxpayers are subsidizing the NFWF.

Why does it matter that Congress is out of town?  Why, because there are currently two bills before Congress that would have the result of repealing criminal provisions of the Lacey Act.

On the part of Gibson, they made a dollars-and-cents decision. An imperial administration can pretty much beat any poor sucker who gets in their crosshairs into submission.

Reading further on the case it suggests that the “tip” came from the Environmental Investigation Agency, a private group of activists who have appointed themselves to investigate and report “environmental crimes.”

Corporate CEOs pay attention to events like the Gibson Guitar Corporation raids. (There were actually two). This showed the Justice Department of the federal government going after a private corporation with a SWAT team, armed agents, who seized property and shut the Gibson factories down. Although Gibson was able to show that it was in full compliance with the law, they were nevertheless put out of business for a period of time, forced to pay a fine of $300,000, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to a private foundation to promote conservation of “protected tree species.” Improper, illegal, federal government arrogant overreach because they could.

Everybody wonders why so many corporations are sitting on big chunks of cash and not hiring and expanding. They are streamlining, divesting whole departments, to run more efficiently with fewer people. I would submit that the Obama administration’s treatment of Gibson Guitar Corporation is a prime example of why companies large and small are not taking on more risk; why there are more lobbyists than ever.

Hiring a new worker is a risk. It takes months before they are fully pulling their weight. Expanding is a risk, the economy is not healthy. Introducing a new product is a risk. The Obama administration has made it clear that they don’t particularly like the private sector, they don’t appreciate capitalism, they feel free to sic federal agencies (IRS) (EPA)(BLM) on those who disagree, or give them trouble, or stand in their way. The Obama administration had no compunction about taking over the auto industry— and made a mess of it — which they still celebrate as a great accomplishment. You don’t take big risks when the climate is so uncertain, and that uncertainty can be laid directly in the lap of the Obama administration.



“Economics Is Organized Common Sense” by The Elephant's Child

Economists Craig Newmark and AEI’s Mark Perry dug up Nobel economist Thomas Sargent’s shortest U.S. graduation speech ever. A simple list of twelve valuable economic lessons. The speech was delivered at his undergraduate alma mater University of California at Berkeley, May 16, 2007.

“I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.”

“Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.”

1. Many things that are desirable are not feasible.

2. Individuals and communities face trade-offs.

3. Other people have more information about their abilities, their efforts, and their preferences than you do.

4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.

5. There are tradeoffs between equality and efficiency.

6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.

7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.

8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.

9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).

10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.

11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).

12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

That is a remarkably valuable short list. Pin it up beside the mirror in your bathroom so you can read it every morning until you know it by heart.



A Conservative Guide to Liberal Thought: by The Elephant's Child

The common conservative response to a liberal pronouncement is “You’ve got to be kidding!” Can they possibly believe what they are saying? The real divisions between liberals and conservatives are deep and wide, but Andrew Klavan takes a shot at explaining what it is that liberals believe, and how liberals think. It may be helpful, but —It’s not pretty!



Attempting to Regulate Our Way Out of Recession by The Elephant's Child

Capitol Building

President Obama has liked to emphasize the depth and general awfulness of what he calls “the Great Recession”— a term that pleases him because it associates his recession with Franklin Roosevelt’s Great Depression. Roosevelt cheerfully tried to tackle the Great Depression with constant experimentation. Obama has confronted his recession with regulation without end, in the unfortunate delusion that more control would fix things.

Washington set a new record in 2013 by issuing final rules taking up 26,417 pages in the Federal Register. The rules came from various agencies, but Obama remains at the helm and leadership matters. By sheer numbers, President Obama stands at the pinnacle for numbers of rules. The federal Register contained 3,659 “final” rules (which mean you have to obey them), and 2,594 proposed rules on their way to join the others.

Neither politicians nor the media regard this effort to control as anything out of the ordinary, nor important. Yet if you wonder why the recovery has been so far below average —there it is. The bulk of this year’s regulation comes from ObamaCare—a 2,700 page law that has metastasized into a 7 foot tall stack of documents, and Dodd-Frank. Things don’t get done because nobody has the authority to make them happen.

I wrote about the pressing need to protect and update our electrical grid, vital and essential to all life in America, but there is no active plan to rebuild the grid, because the government cannot make the decisions needed to approve it. The average length of environmental review for highway projects, according to a study by the Regional Plan Association, is over eight years. Eight years!

The results and costs of the legal system are not just monetary, everything is too complicated. There are rules in the workplace, rights in the classroom, and government is bogged down in bureaucracy. Responsible people do not feel free to make sensible decisions. We are pushed around by lawsuits, and unable to move for fear of punishment for barely understood regulation.

The point of regulation is to try to make things run smoothly, make sure things work in a crowded society, but rules have consequences, and not always those intended. We now have a court system where even referendums voted on by the public have been taken over by the court system in which judges now feel free to decide these matters. The objections to “judicial activism” are richly deserved, and now even judges are mistrusted.

Consider the case of a fictional Pasquale’s Pizza chain. The typical restaurant has their pizza menu on a large lighted sign behind the counter where you place your order. The federal government has decided that nutritional values for each ingredient must be listed on the menu. Impossible on the customary lighted sign. What to do? How much will it cost? The profit margin is already slim. Pizza chains have dozens of ingredients, and changing featured recipes to entice customers. ObamaCare requires a restaurant to provide health insurance for full-time workers. The cost of policies has gone up sharply. Cut back all employees to 30 hours? Female employees and male employees must work the same number of hours for the same wage.

The requirement for ethanol in gasoline has raised the cost of pizza ingredients. It has also raised the cost of transporting supplies. Requiring a portion of power to come from wind and solar has raised the cost of electricity. Fuel-efficiency regulations have raised the cost of trucking. And all that is before regulations and taxes at the local, state and national levels.

You end up with schools that make fools of themselves over zero-tolerance regulations that do nothing to prevent violence, school lunches that kids won’t eat. You have armed federal agents raiding the Gibson Guitar Company and confiscating their guitars and their materials ostensibly because the wood used for guitar frets violated and environmental law. The wood was legally imported, meeting all the standards of the country of origin, but the costs to Gibson were huge. You not only cannot fight city hall, but you must surrender even though you are in the right, just to avoid further financial damage. There is case after case of people subjected to an armed SWAT raid, accused of violating a regulation they’ve never heard of, and ruined financially.

What business is going to take a big risk, invest a lot of money in a new venture, expanding, hiring new workers in such a climate? There is risk in everything we do. Trying to legislate risk out of our lives just leaves us with rules that keep people hunkered down, trying to avoid bureaucratic attention. In this climate, politicians cannot even get the big things done, let alone attempting to undo the web of regulation that is crippling society.



The Unaffordable Care Act Becomes More Unaffordable by The Elephant's Child

The health insurance policy rate hikes in excess of 6% in December were the largest reported since Morgan Stanley’s research team first started conducting quarterly surveys of insurance brokers in 2010. The April survey shows the largest rise in small and individual groups perhaps ever. The average increases are in excess of 11% in the small group market and 12% in the individual market. Some state increases are 10 to 50 times that amount. The analysts conclude that the “increases are largely due to changes under the ACA.”

The analysts conducting the survey attribute the rate increases largely to a combination of four factors set in motion by Obamacare:  Commercial underwriting restrictions, the age bands that don’t allow insurers to vary premiums between young and old beneficiaries based on the actual costs of providing the coverage, the new excise taxes being levied on insurance plans, and new benefit designs.

For the individual insurance market (plans sold directly to consumers); among the ten states seeing some of the sharpest average increases are: Delaware at 100%, New Hampshire 90%, Indiana 54%, California 53%, Connecticut 45%, Michigan 36%, Florida 37%, Georgia 29%, Kentucky 29%, and Pennsylvania 28%.

For the small group market, among the ten states seeing the biggest increases are: Washington 588%, Pennsylvania 66%, California 37%, Indiana 34%, Kentucky 30%, Colorado 29%, Michigan 27%, Maryland 25%, Missouri 25%, and Nevada 23%.

Think of the bride whose intimate garden wedding grows into a society-page extravaganza as the guest list keeps growing. The simple two-tier wedding cake turns into a multi-storied  edifice with elaborate floral icing on each layer. Not going to cost the same, and all those unneeded flowers and loops add to the cost, just as pediatric dentistry for 60 year-olds adds to the cost on an insurance policy. The massage therapy and acupuncture make a nice selling point, but it really isn’t free.

Since these hikes aren’t coming from HHS, but from the insurance companies, where it cannot be put off till “after the election,” it’s going to get interesting. Affordable Care indeed!



The IRS Scandal: Day 335 — Heating Up! by The Elephant's Child

The IRS scandal is heating up again. Darrell Issa’s committee has released emails that show Democratic staffers from the House’s Government Oversight and Reform Committee communicating with the IRS about True the Vote, an anti-voter fraud organization that the Democrats wanted to suppress. It appears that Elijah Cummings, the ranking Democrat on the committee, to whom these staffers reported, may have lied during a committee hearing when he denied that his staffers had put the IRS on the trail of True the Vote.

The emails show the Democrats calling True the Vote to the IRS’s attention and requesting records about that organization. Lois Lerner was anxious to provide for them. The staffers do consistently refer to “publicly available” information, so there is no evidence that the IRS shared confidential taxpayer information with the Democrats.

House Republicans are closing in on Lois Lerner. The Department of Justice under Eric Holder has failed to do anything about the IRS scandal, or any other scandal involving the Obama administration. It is clear that Lois Lerner has broken the law. The House is threatening to hold her in contempt. If Eric Holder refuses to act, they can, if necessary, arrest and imprison her.

There is no evidence that the IRS pursued any progressive group at any time. Documents show that Ms. Lerner actively corresponded with liberal campaign-finance groups Democracy 21 and the Campaign Legal Center which had asked the IRS to investigate if conservative groups including Crossroads GPS were violating their tax-exempt status. After personally meeting with those groups, Ms. Lerner contacted the director of the Exempt Organizations Examinations Unit in Dallas to ask why Crossroads had not been audited. “You should know that we are working on a denial of the application,: Ms. Lerner wrote in an email.

The Ways and Means Committee disclosed that in January 2013, Ms. Lerner asked her staff to examine five conservative groups that the website ProPublica had called “controversial dark money groups,” including Americans for Responsible Leadership, Freedom Path, Rightchange.com, America is Not Stupid, and A Better America. Four of those groups eventually got the full IRS super-scrutiny treatment and three were audited.

It is particularly interesting that the groups that had to undergo extra examination from the IRS were those who wanted to prevent voter fraud, and those who expected to donate to Republican candidates. Democrats have been aggressive in trying to block any attempt to require photo ID to assure voters are who they say they are and entitled to vote. Kinda’ makes you thing that Democrats depend heavily on voter fraud to win elections, doesn’t it?



If You Want More Jobs, Stop Destroying Them. Incentives Matter. by The Elephant's Child

ObamaCare is not a popular subject, and as people actually begin to interact with it, it’s going to be a lot less popular. Democrats are desperate to make their stand for the mid-term elections about something entirely different. They have decided on the culture wars.

Today it is “Equal Pay for Women” which everyone thought was dead as a doornail after it became illegal to pay a woman differently than a man for the same job— way back in 1963— when the Equal Pay Act of 1963 was passed. President Obama is out there again today trying to claim that women are paid only 77¢ for the same job for which a man was paid $1.

Since that is against the law, it’s hardly surprising that the only place it still happens is in the increasingly lawless White House, where female aides are indeed paid less than male aides.

whitehouse

Obama brags about the Lily Ledbetter Act which he claims was to make equal pay for women a reality, but it actually only eliminated the time limit for filing discrimination claims — and was more correctly referred to as a law to benefit trial lawyers (who donate to Obama).

Nevertheless you constantly hear the 77¢ claim. Why? It is a statistical anomaly. When you look at male and female careers, men are apt to do the dangerous or high risk jobs. They have traditionally been in logging, mining, high-rise construction, linemen, explosive experts —jobs that pay way more because of the risk involved. Women are more apt to be secretaries, teachers, social workers. Women frequently drop out of the job market to raise children, for a few years or for longer periods.Women just assume more responsibility for child-rearing than men. The 1978 Pregnancy Discrimination Act recognized that fact.

The 77¢ number comes from the Bureau of Labor Statistics. The figure refers to the annual earnings of full-time, year-round workers. It doesn’t compare comparable men and women, and does not reflect that full-time men work 8%-10% more hours per week than full-time women.

The Paycheck Fairness Act (PFA) is based on the faulty idea that “It’s Not Fair” in the interest of capturing more votes from women. The bill forces employers to raise women’s pay by sharply reducing their ability to defend what they believe is a justified differential in pay based on merit.  The PFA limits the use of work experience or education to discriminate by requiring employers to demonstrate that they are job-related ‘necessities.’ The bill authorizes grants to supporters of the bill like the AAUW for training women in negotiation skills. Men are excluded. It will increase the cost of employing women, and so reduce job opportunities. It will also provide a bonanza for lawyers.

If you make it more costly to hire someone, employers will hire fewer someones. The current theme in the media is the continuing dearth of jobs, the Great Recession with few jobs, why aren’t there more jobs? No one seems to point out that Obama is passing more and more laws and more regulations that eliminate jobs. Whether the Affordable Care Act, the continuing drive to shut down coal-fired power plants and destroy the entire coal industry in the name of climate change, or the simple refusal to approve the Keystone XL pipeline — Obama talks jobs, but his ideas are that only government really creates jobs. Then we’re back at “crumbling roads and bridges,” job-training programs, and improving education. Same old talk.

It drags on. Businesses I patronized regularly close. Supposedly the job situation here is fine, but health clubs are closing and the biggest ones are increasing their advertising. If you pay attention to new advertisers, you can tell what businesses are hurting.



“Mission Accomplished” says Obama. Now What? by The Elephant's Child

I had a routine doctor’s appointment last week. As she interacted with the new computer system rather than me, my doctor said “I should have gone to secretarial school instead.”

So after “Obama’s ‘Mission Accomplished’ moment—his triumphal Rose Garden speech claiming ObamaCare is now here to stay—where are we? No one believes Obama’s lofty claims for the numbers of enrolled people, and the number who have actually paid their premiums (the only point at which the numbers are real) are numbers that will have to come from the insurance companies.

The underlying signs of the health of this dreadful medical law are something quite different. Kaiser Health News published the following:

Janis Finer, 57, a popular primary care physician in Tulsa, Okla., gave up her busy practice two years ago to care full time for hospitalized patients. The lure? Regular shifts, every other week off and a 10 percent increase in pay.

Lawrence Gassner, a Phoenix internist, was seeing four patients an hour. Then he pared back his practice to those who agreed to pay a premium for unhurried visits and round the clock access to him.  “I always felt rushed,” said the 56-year-old. “I always felt I was cutting my patients off.”

Tim Devitt, a family physician in rural Wisconsin, took calls on nights and weekends, delivered babies and visited his patients in the hospital. The stress took a toll, though: He retired six years ago, at 62.

Physician stress has always been a normal fact of life, but anecdotal stories suggest a significant increase in the level of discontent, especially among primary care doctors who play the central role in coordinating patient care. Just as millions of Americans are obtaining health insurance through ObamaCare because of the threats of fines, or because their insurance policies were cancelled— often because the benefits they chose did not match the government’s one-size-fits-all standard.

A 2012 Urban Institute study of 500 primary-care doctors found that 30 percent of those age 35 to 49 planned to leave their practices within five years. The rate jumped to 52 percent for those over 50. A RAND study for the American Medical Association found that nearly half of physicians called their jobs “extremely stressful” and more than one-quarter said they were “burning out.” Unhappy doctors make for unhappy patients, and unhappy patients result in unhappy doctors.

Janice Finer, who left primary care to work with hospital patients, didn’t want to have to deal with insurers, hiring staff, and the business of a practice —sold her practice to a hospital. But hospital administrators dictated the pace. She was required to see 22 to 28 patients a day. At one point, she said, she was scheduled to see patients every 11 minutes. But meeting patients’ needs is not just busy work, but it doesn’t generate revenue.

President Obama contributed billions to help defray providers’ costs of going digital. The goal was a national system that would provide the government with statistics for further control. Not happening. Every hospital may have a different system, and none of them talk to each other. Digital records mean entering numbers and words in lots of repetitive boxes, but the old kind of personal, nuanced information that was in a doctor’s note, aren’t included. “Many physicians told us “I used to be a doctor, now I’m a clerk.” Anyone who uses a computer can recognize the potential for error. Typos are a way of life. Some doctors have started using ‘scribes’ —laptop carrying assistants who fill in the blanks and take notes— which adds another level of cost.

The association of American Medical Colleges estimates that the U.S. will be short about 45,000 primary care doctors in 2020 when 260,000 are projected to be practicing. Doctors used to encourage their kids to go into medicine. They’re not doing that anymore.

President Obama in his “Mission Accomplished” speech stressed the objective of the Democrats who drummed up this mess: “We are making sure that we are not the only advanced county on earth that doesn’t make sure everybody has basic health care.” Tinkering and improving are expected to lead to single-payer health care which is the their ultimate goal.

Nationalizing health care inevitably leads to conflicting problems.Government programs always cost more than was estimated — way more. The government’s sole incentive quickly becomes a demand to reduce costs.

The incentive for hospitals and clinics is the need to get adequately paid for their services. Those incentives lead to a reduction in innovation unless it is proved to reduce costs— so fewer medical inventions, fewer new drugs.

And pressure on doctors and personnel is to do more in less time with fewer and cheaper materials.  The incentive is also for doctors to leave the profession or for doctors to become government employees. What is inevitable is a lot of burned-out doctors who become more cynical and less caring. Ezekiel Emmanuel, who was one of the advisers for ObamaCare, has advocated disposing of the Hippocratic Oath.

The problem for patients becomes getting an appointment, getting use of expensive diagnostic equipment, and facing long waits for seeing a doctor and seeing a specialist and just getting the needed care. A frequent look at British newspapers’ accounts of the latest NHS scandal is proof of where it all leads.

If health care is free or low-cost at the point of service, the incentive is to overuse medical care which is what got us here in the first place. When someone else is paying the bill, there is no incentive for thrift,  which drives up costs and the vicious cycle repeats and  grows slowly worse, and harder to change.  Incentives matter.

 

 



If You Can’t Trust the Government, There is No Liberty. by The Elephant's Child

Victor Davis Hanson had an important column this last week on “Untruthful and Untrustworthy Government,” that digs into what distinguishes democracies from tinhorn dictatorships and totalitarian monstrosities.

It’s not just the scandals: Benghazi, the Associated Press, the NSA scandal which are troubling enough, but the doubt about the honesty of the permanent government itself. Does anyone still believe in a non-partisan and honest IRS? Our system of voluntary tax reporting rests on trust. If we can’t trust the IRS to treat us fairly, to what extent will the compliance from taxpayers cease to be honest.

Is the report from the Department of Labor statistics on employment accurate? Is inflation really as low as we are told? Nobody knows how many Americans have bought and paid for ObamaCare policies. We don’t know how many were previously uninsured. We don’t know whether we still can see our doctor and the local hospital, nor whether our medication is acceptable.

We don’t know how many foreign citizens have entered the U.S. illegally who were arrested and deported to their country of origin. ICE now counts as deportations those foreign nationals whom the Border Patrol immediately stops or turns away at the border. The Department of Homeland Security caught and then released—back into the U.S. population—68,000 aliens who had previously been convicted of a serious crime, when they could have been deported. In San Antonio, 79 percent of criminal aliens were released back into the general population in 2012.  In Washington D.C. 5,558 criminal aliens were released—64 percent of the 8,688 who were apprehended.

When everything is politicized, what the agencies of the government tell the people can’t be counted on. The Bureau of Economic Analysis has factored research and development costs of business into statistics on investment growth. Is the report on Gross Domestic Product growth honest? It is a vital measure of how the economy is doing. Politically it might be useful to make it look a little better that the numbers show. The government reported an unexpectedly high 2.8 GDP growth in the numbers last year.

Is inflation really as low as we are told? They have changed the way they calculate that as well. Inflation and unemployment numbers are lower, economic growth is higher. Problems disappear behind a screen of Freedom of Information Act requests that drag on for years instead of the prompt response the law demands.

If all is political, we are indeed in deep trouble.



What Is The Proper Size of Government? by The Elephant's Child

Politicians keep debating the size of government. Republicans believe that government tries to do way too much, and that government is not very good at the things it does try to do. Democrats are inclined to believe that government needs to do more to alleviate the problems of society.

The recovery from “the Great Recession” has been sluggish at best, and way too many people have left the labor force. To encourage growth, the Obama administration relies on government action: the latest is manufacturing hubs, and it has been infrastructure projects,  crumbling roads and bridges, wind farms and solar arrays, job training programs, and they have all done little to change the unemployment rate, or significantly increase the labor force. But the belief in government action to change and improve society remains firm.

Over the years, economists have measured the effect of the size of government on economic growth and social outcomes like life expectancy, infant mortality, homicide rates, educational attainment and student reading proficiency. One recent addition to the studies of the result of government size comes from a study published by Canada’s Fraser Institute, entitled “Measuring Government in the 21st Century” by Canadian economist and university professor Livio Di Matteo.

Di Mateo’s analysis confirms a large body of empirical research examining the relationship between the size of government and economic outcomes. Canada’s recent retrenchment is an example of a country shrinking government without a trade-off in economic and social outcomes.

When governments focus their spending on basic, needed services like the protection of property. His findings also demonstrate that there is a tipping point at which more government actually hinders economic growth and fails to contribute to social progress in any meaningful way. Di Mateo examines international data and finds that, after controlling for disparate factors, annual per capita GDP growth rates start to decline when government spending consumes 26 percent of the economy.  Economic growth rates start to decline when government spending exceeds this level. Government spending becomes unproductive when it goes to things like corporate subsides, overly generous wages, overly generous benefits for government employees, and crony capitalism.

According to data from the OECD, the size of government in the United States was approximately 40 percent of GDP in 2012, Which suggests that a smaller size of government than we currently have would translate into higher annual economic growth.

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Progressive Policies Fail in Puerto Rico by The Elephant's Child

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Puerto Ricans move to the United States all the time, but now Puerto Rico has joined New York, New Jersey, Maryland, Illinois and California as tax-and-spend blue states that are losing residents because of government policy. More than 450,000 Puerto Ricans have left over the past decade, with 1.000 arriving in Orlando, FL every 10 days.

More Puerto Ricans— about 5 million—now live in the continental U.S., according to media reports, than live in Puerto Rico. Doctors are leaving, teachers are leaving, lawyers and engineers are pulling out. Unemployment at 15.2% is higher than the bottom U.S. state (Rhode Island, 9.2%) and far exceeds the national average of 6.7%. Only 35% of the working-age population in Puerto Rico actually works.

The economy is in its eighth year of recession and is expected to contract by another 2% this year. It has plunged roughly 14% since 2006. To solve the commonwealth’s problems—a public debt of $70 billion, a downgraded credit rating, and talk of default—the government has done what the left always does, and has hiked taxes.

They might look to Texas as an example of what to do. Low taxes, no personal state income tax, a light regulatory role and an inviting business climate that encourages 52 Fortune 500 companies, and jobs —252,000 jobs created in 2013 alone. And it has added more than a half-million people, 148,000 from California. Even commonwealths can benefit from such policies.




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