American Elephants


Individual Freedom and the Welfare State by The Elephant's Child

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From William Voegeli’s excellent Never Enough: America’s Limitless Welfare State:

The socialist dream of organizing an economy around the purpose of advancing social welfare as it is governmentally determined and meted out, seems destined to remain an abstraction irrelevant to the world’s political and economic needs. One strange result of the collapse of socialism and the absence of any other credible way to avoid relying on markets is that the welfare state is heavily dependent on the health of capitalism. The government cannot disburse wealth that never gets created, and creating the wealth required for modern prosperous societies without the knowledge conveyed by prices set in markets appears to be impossible.

And also:

The liberal response to the question of paying for the welfare state has been a protracted exercise in intellectual dishonesty, borne of a conviction that the question doesn’t need to be answered if it can be made to go away. Liberals have generally been happy to tell people what they want to hear. It’s possible to have a big welfare state without worrying all that much about the costs. The programs will pay for themselves. Or an affluent society can pay for them out of the petty cash drawer. Or, the taxes required for a much bigger welfare state are ones that will be borne largely by the very rich and big corporations. None of these propositions can withstand even gentle interrogation, however, making it difficult to know whether the liberals who put them forward are remarkably cynical or remarkably feckless. In either case, whatever political advantages are secured by telling people what they want to hear about paying for the welfare state, the already murky argument for the welfare state becomes ever more incoherent.

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The Trump Administration is Reforming Medicare with Competition and Common Sense. by The Elephant's Child

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President Trump has approved a new medicare rule to reduce prescription drug prices through competition. U.S. Health and Human Services Secretary Alex Azar explained to reporters on Saturday. Few people know that America leads the world in encouraging doctors and patients to use low-cost, high-value generic drugs. More than four-fifths of all prescriptions in the U.S. are for unbranded, off-patent generic drugs that cost less than a typical bottle of mineral water. A tremendous help for people with ordinary medical issues like high blood pressure, early-stage diabetes, and high cholesterol.

The cost problem is the high cost of branded, on-patent prescription drugs. Pharmaceutical companies take advantage of their market power to charge unreasonably high prices unrelated to the true clinical and economic value of the underlying medicine. The way Medicare — with four different insurance programs with different premiums and copays—covers different kinds of prescription drugs. Medicare Part A covers hospital stays, including the drugs administered there. Medicare Part B, covers drugs administers in doctors” offices such as intravenous infusion. Medicare C, “Medicare Advantage”, is a new, popular, privately-administered Medicare program that covers the same services and Parts A and B. The Bush administration created a 4th Medicare program to cover retail prescription drugs from your pharmacy.

Part D has done a great job of helping competition among private insurers and drug companies to bring lower prices, and the program has come in way under budget. A novelty in U.S. history. However Medicare’s design puts a ceiling on competition because it prevents competition among retail drugs and those administered in doctors offices and hospitals.

A number of expensive drugs for rheumatoid arthritis are administered in doctors offices under Medicare Part B. Doctors get a 6% commission on the average selling price of prescription drugs they administer in their offices, which means a big incentive for doctors to steer patients to these drugs. A new generation of treatments for rheumatoid arthritis are oral drugs financed through Medicare Part D. Because the different Medicare programs operate separately, seniors don’t get the benefit from competition between the new oral drugs and the older drugs covered by Part B.

The new rule allows Medicare Advantage plans to use “step therapy” under which seniors might start with an oral drug paid for by Part D, if it’s of equal clinical value but lower cost, and then step to a more expensive injectable drug if the first medicine fails to work. Insurers would be required to return at least half of the savings to seniors, possibly in the form of those Visa gift cards often sold in grocery stores and pharmacies.

This gives Medicare Advantage plans the tools to get a better deal for patients. Competition works. This is free market capitalism at its best.

There are two short books that I recommend highly, by Philip K. Howard: The Death of Common Sense and The Lost Art of Drawing the Line. He explains how government rule books (law) dictate results that never make sense. Government, with the best of intentions, hands out new legal rights that screw up something else. Intending to be fair, in the name of individual rights, Americans end up losing much of their freedom. Brilliant books that help in understanding why free market capitalism brings prosperity that simply eludes the control freaks of the world.



If At First You Don’t Succeed, Do a Better Job Next Time! by The Elephant's Child

The Republican bill to take a tiny poke at fixing ObamaCare went nowhere. They didn’t have the votes—largely because the bill didn’t do much of anything. Everything you need to know about ObamaCare can be summed up in one quotation from Thomas Sowell.

It is amazing that people who think
we cannot afford to pay for doctors,
hospitals, and medication somehow
think that we can afford to pay
for doctors, hospitals, medication
and a government bureaucracy
to administer it.

Aside from affordability, federal government bureaucrats have no idea how to manage or control or supply health care. Every attempt by government to do health care has ended in disaster. The federal government cannot do VA health care, and veterans die while waiting to be seen. Indian health care is a disaster. Even the FDA is a disaster. Over regulated and over controlled.

Medicare was built on the idea that a growing population meant that if each generation paid in for the smaller generation that came before, then Medicare would go along smoothly with the old folks always cared for. This is usually called a Ponzi scheme. Nobody planned on the baby boomers. They are a huge generation beginning to retire, and Medicare is going broke, because the next generations are not larger. Oooops!

The Democrats devised all sorts of things that they thought would make their health care plan work better, and all sorts of regulations that they thought would save money, and all sorts of requirements that they thought would make people like the program better, and they lied about their basic purpose. Their basic purpose was to initiate a Single Payer Plan. But not because it would provide better care.

The British have a single payer plan in the National Health Service. The people get taxed and they get free health care. And the reason that it was the Democrats’ basic purpose was because the British people were so afraid of losing their health care that they always voted for keeping it, and for the Labour Party who promised that they could keep it. Unfortunately it doesn’t work, and the government keeps making new regulations to cut costs, and old folks die from neglect, and dehydration, and dirty sheets and infection, and long lines of ambulances line up at hospitals waiting for a vacant bed for the next patient. That’s Single Payer.

Here at home, the ideas that were behind all the regulation and requirements that they thought would save money didn’t, because Democrats do not understand the free market—that’s why they are Democrats. And because they do not understand the free market and competition, their bureaucrats had no idea how to devise plans that worked, and they didn’t even know how to get people to sign up, nor how to get enough insurance companies competing to bring costs down. Being Democrats, they assumed that insurance companies were evil (Capitalists) without any understanding that insurance companies have a lot of expertise in devising insurance, and with all insurance companies competing, there’s a lot of demand to be efficient, to create policies that work for consumers, to figure out how to keep prices down so the other insurance companies can’t take their business away. That’s how the free market works.

The Republicans said they had been working on a replacement for 8 months, but we have been stuck with a failing and unworkable ObamaCare for 7 years.

We are going to have to pay for most of the little stuff ourselves, with help for those who cannot care for themselves, and remember just what insurance really is. Insurance is meant to protect you from the big disasters, not the little things.Your car insurance protects you when someone runs into you and wrecks your car. Your homeowner insurance protects you when you have a kitchen fire or a broken pipe that floods the house. Health insurance should protect you when you break your leg, or find a cancer, or need immediate surgery, not buy your tampons or pay for your immunizations.

And if you devise a new health care plan for the people, you’d better damn well make sure that every member of Congress and the bureaucracy has to deal with exactly the same system.



Will Obama Get His 16-Year Era Of Progressive Rule to Fundamentally Transform America? by The Elephant's Child

obama older
I received my copy of The Claremont Review of Books summer edition in the mail today, and a paragraph in the editorial statement caught my eye. Charles Kesler reflected on the campaign season.

For President Obama , the stakes are clear. As he told Politico recently; he wants his legacy to include “a 16-year era of progressive rule” that would upend the Reagan Revolution and fulfill his promise in 2008 to transform the country “fundamentally.” Obama’s own achievement, in other words, depends on eight years of a Hillary Clinton Administration, its agenda shoved further left by Bernie Sanders’s “political revolution.”Whether Obama likes it or not, if Change doesn’t continue, Hope will die, above all his hope of being the progressive Reagan.

I am continually amazed at the ignorance of the benefits of free market capitalism that is necessary to believe in a glorious Progressive future. But then, Christiana Figueres, Secretary General of the U.N. Framework Convention on Climate Change, cheerfully admitted that they weren’t really interested in saving the Earth from a forthcoming climate disaster, but that it was their best chance of ridding the world of Capitalism.

How do they continually banish the clear evidence before their eyes of the results of progressive governance? People are voting with their feet to leave the states where the administrative state reigns. Companies cannot make a go of it under confiscatory taxes and ever-increasing regulation. 9,000 businesses have packed up and left California for less regulation and lower taxes. The Cities that have been run by Democrats the longest, are the cities with the highest murder rates, the most dysfunction. There is a long and ugly history of socialism, but they just didn’t do it right? Obama has tried to open up Cuba with a visit and promises of closer relations, and the Castros simply said fine, but we’re not changing anything.

Venezuela is a classic example—an oil rich country that cannot feed their people who are breaking into the zoo to kill the starving animals for food. The absence of toilet paper has been the most celebrated, but there is little food in the stores, and long lines when the slightest truck loads come in. Nicholas Maduro has tried to confiscate all weapons — as he has some idea of his future.

Steven Hayward captured the essence of the administrative state in one paragraph.

Here’s Richard Epstein on “The Perils of Executive Power.

David Harsanyi  writes about “California: The Ultimate Nanny State.”

 



Be Grateful for Income Inequality. It’s a Precursor Of The American Dream. by The Elephant's Child

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The United States government spends over a trillion dollars a year that it doesn’t have. To make that number go away, you either have to reduce spending or increase revenue.

Our wealthiest citizens, the top 20% of the economic pie, pay 70% of all taxes. The poorest 20% pay 3/5ths of one percent of all taxes. So we have to raise taxes on the wealthiest citizens to be “fair” or “balanced.”

There is, however, a problem. If you confiscate the entire wealth of the richest citizens — every penny the  Forbes 400 have — it would cover one year’s federal deficit.

Raising tax rates on everyone in the top 2% of the wealthiest citizens would not cover one year’s federal deficit.

Washington borrows $188 million every hour.

I wrote this down a while back, I’m not sure just how long ago, but I can assure you that nothing has improved.  Food for thought.

—  How You, I, and Everyone Got the Top 1 percent All Wrong by Derek Thompson, The Atlantic

—”Greedy’ Rich Actually The Most Generous Among Us” by Kerry Jackson, Investors Business Daily

— Obama orchestrated a massive transfer of wealth to the 1 percent,” by Matthew Gray, New York Post

There is, of course, an answer. Wealth is created by the free market and capitalism. Free people are endlessly inventive, and the hope of improving your financial situation, making a new idea the next big thing, becomes in a free market the opportunity to succeed. Where did Uber come from? Or telephones unconnected to phone lines that are actually tiny computers keeping track of everything and entertaining you as well?

Getting rich or richer, improving your situation, or changing your life is commonplace in America, yet in many parts of the world it is impossible to move beyond the status into which you were born. I cannot understand why the Left cannot think beyond “income inequality.” They are still stuck back in the French revolution railing against the opulence of the King and all his court. “It’s not fair” they whine.

Some people simply want to get rich —  that probably accounts for all the Powerball tickets sold. Some want to accomplish something worthwhile. Some want to move to a better neighborhood. Some want to build something important, others want to discover something new. If you know or are convinced that you can never move beyond where you are — I guess envy is all you have left.



Never Enough, or What’s Wrong With the Welfare State? by The Elephant's Child

one-dollar-bill-largeFrom William Voegeli’s Never Enough:

“The socialist dream of organizing an economy around the purposes of advancing social welfare, as it is governmentally determined and meted out, seems destined to remain an abstraction, irrelevant to the world’s political and economic needs. One strange result of the collapse of socialism, and the absence of any other credible way to avoid relying on markets is that the welfare state is heavily dependent on the health of capitalism. The government cannot disburse wealth that never gets created, and creating the wealth required for modern, prosperous societies without the knowledge conveyed by prices set in markets appears to be impossible.”



Employment and Unemployment for July, 2015. by The Elephant's Child

So the job situation for the month of July remains — dismal. There were 215,000 new jobs in July, a little less than the expected 225,000. 93,770,000 working-age people, 16 and older, aren’t working. This takes us back to 1977 levels of employment, and we are a bigger country now. This is a 36-year low. A record 56,209,000 women are not in the work force.

Since 2007, 1.4 million manufacturing jobs have been lost. There are 1.4 million new waiter and bartender jobs that have been created in the same time period.

Possibly a more interesting discussion for the debates? How are you going to fix this one?

Unemployment




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