We have exposed Obama’s health care "reform" for what it really is, recent sketches. The response from the chattering class - silence. Can’t get much better than that.
Even BO’s most ardent supporters have fetched up a gag reflex at having a 1000 page bill rammed down their throats. Why the rush? We know the answer. Fortunately BO’s dash for a legacy has been put on hold by the August recess.
During the breathing spell we hope our friends from the left may reconsider their lemming-like behavior. Is your dear leader everything he’s cracked up to be? Maybe a little bit of a phony? He gets a legacy out of this health deal. What’s in it for you guys?
As we highlighted earlier, there is a provision in the bill which will force us out of private health insurance and into the government controlled plan. Is that a good thing? Do any of our left- leaning friends really believe, as pre-programmed as they may be do to so, that the government can deliver more efficiently, or as efficiently as the private sector? We are not discussing an inter-state highway system, or national security; we are discussing individual choice in one’s matters of health - all to be lost. Most people, the left included, area happy with their insurance. Do Obama’s followers really want to give their medical care over to a "health choice commissioner" - the bureaucrat who will make the decisions for them?
Robert Craven
Friday, July 31, 2009
Thursday, July 30, 2009
The Left - Taken in Again
We have highlighted health care before. There is no crisis. Even if there was, Obama’s plan is not reform. Who among us can argue with that?
A recent poll indicated that ninety-one percent (91%) of Americans have insurance and that eighty four percent (84%) of these are happy as clams with their deal. Is that a bad thing? Most Americans prefer private coverage. BO’s plan is about getting everyone insured the government way. Assume 9% or so have no insurance. One fifth of these are illegals. Three-fifths have plenty of money but just don’t care. Most of the rest are eligible for Medicaid. That leaves maybe 2%. And for this 2% BO wants to emasculate the world’s greatest health care system. Wonder why?
Obama is after his legacy as any fool knows. Other programs can be rolled back. Health care cannot - once socialized it is permanent. He wants to steam roll the deal before the masses come to understand which way is up.
Mencken's observation that, "The urge to save humanity is always a false front for the urge to rule it, " pretty much sums up BO’s tactics.
Robert Craven
A recent poll indicated that ninety-one percent (91%) of Americans have insurance and that eighty four percent (84%) of these are happy as clams with their deal. Is that a bad thing? Most Americans prefer private coverage. BO’s plan is about getting everyone insured the government way. Assume 9% or so have no insurance. One fifth of these are illegals. Three-fifths have plenty of money but just don’t care. Most of the rest are eligible for Medicaid. That leaves maybe 2%. And for this 2% BO wants to emasculate the world’s greatest health care system. Wonder why?
Obama is after his legacy as any fool knows. Other programs can be rolled back. Health care cannot - once socialized it is permanent. He wants to steam roll the deal before the masses come to understand which way is up.
Mencken's observation that, "The urge to save humanity is always a false front for the urge to rule it, " pretty much sums up BO’s tactics.
Robert Craven
Wednesday, July 22, 2009
Idolatry, the Left and Paul Krugman
Our friends on the left have a high priest of the economics sort - Paul Krugman. They are passionate about this guy, bordering on lust in the case of the ladies of the Marin left (and a Macy’s window designer or two). My, my. Fact is we hear endlessly from these types - Krugman says this and Krugman says that. For many, it’s the only economist they ever heard of, and, naturally by the way of the NYT’s. These folk read the NYT’s as a daily ritual, thinking that all wisdom is distilled on those pages. It’s cool carrying a copy to work, even cooler if you hold it just right - pages folded just so. Those pages are about to disappear of course because more and more Americans want the news, not the left’s opinion, but until they do our friends will parrot Krugman in support of Obama’s rush to socialize America.
Krugman is a devotee of Keynes. That means right now this guy wants the government to spend every $ you’ve got (and some you’re yet to get). Our training was at UCLA and that is where we first encountered the wisdom of Ludwig von Mises, the great Austrian economist who did see through all of this nonsense. Von Mises was the first to prove that it was impossible for socialism to undertake "economic calculation," that is, the government will always come in second best in comparison with the creative destruction of free enterprise and the private sector. And pertinent to our current situation, von Mises wrote that, "... a government can spend or invest only what it takes away from its citizens … its additional spending and investment curtails the citizens' spending and investment to the full extent of its quantity." Our point all along.
Krugman supports massive US government spending to spark a recovery. Krugman ignores US economic history at his followers' peril. Past evidence suggest that the impact of government spending programs that are intended to encourage economic growth did nothing of the sort; at best they were a wash. We have touched on this repeatedly in past sketches. Recall that the Japanese government tried this foolishness in the 1990's. Didn’t go too well, did it? Unless of course you call nearly two decades of economic stagnation a success.
We would suggest liberals begin to think out of the box, try a little original insight, or at the very least, maybe open a book or two on US economic history. Painful as if may be, try to decouple from the NYT’s and your (false) messiah Paul Krugman.
Robert Craven
Krugman is a devotee of Keynes. That means right now this guy wants the government to spend every $ you’ve got (and some you’re yet to get). Our training was at UCLA and that is where we first encountered the wisdom of Ludwig von Mises, the great Austrian economist who did see through all of this nonsense. Von Mises was the first to prove that it was impossible for socialism to undertake "economic calculation," that is, the government will always come in second best in comparison with the creative destruction of free enterprise and the private sector. And pertinent to our current situation, von Mises wrote that, "... a government can spend or invest only what it takes away from its citizens … its additional spending and investment curtails the citizens' spending and investment to the full extent of its quantity." Our point all along.
Krugman supports massive US government spending to spark a recovery. Krugman ignores US economic history at his followers' peril. Past evidence suggest that the impact of government spending programs that are intended to encourage economic growth did nothing of the sort; at best they were a wash. We have touched on this repeatedly in past sketches. Recall that the Japanese government tried this foolishness in the 1990's. Didn’t go too well, did it? Unless of course you call nearly two decades of economic stagnation a success.
We would suggest liberals begin to think out of the box, try a little original insight, or at the very least, maybe open a book or two on US economic history. Painful as if may be, try to decouple from the NYT’s and your (false) messiah Paul Krugman.
Robert Craven
Health Care - The Crisis To Come
Obama claims we have a health care crisis. No we don’t. We have a crisis in the making however if this guy’s plans see the light of day.
Recently Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health bill. One blogger referred to the recent claim by the IBD that Section 102 of the House version would outlaw private insurance. He asked Obama is this was true, if he could keep his insurance if HR 3200 is passed. Obama replied, "You know, I have to say that I am not familiar with the provision you are talking about." Whoa now!! BO hasn’t read his own bill yet he’s taking a stick to Congress to pass it?
Obama in fact does understand the legislation, he simply doesn’t want the masses to know, hence the rush to passage. The fact is that the House bill does not outright prohibit private insurance, it just regulates it out of existence. From The Heritage Foundation, "The House bill does allow private insurance to be sold, but only ‘Exchange-participating health benefits plans.’ In order to qualify as an Exchange-participating health benefits plan, all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well."
Best estimates are that yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare. That fit’s perfectly with Obama’s objective which is to push all of us into the government-run plan.
Robert Craven
Recently Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health bill. One blogger referred to the recent claim by the IBD that Section 102 of the House version would outlaw private insurance. He asked Obama is this was true, if he could keep his insurance if HR 3200 is passed. Obama replied, "You know, I have to say that I am not familiar with the provision you are talking about." Whoa now!! BO hasn’t read his own bill yet he’s taking a stick to Congress to pass it?
Obama in fact does understand the legislation, he simply doesn’t want the masses to know, hence the rush to passage. The fact is that the House bill does not outright prohibit private insurance, it just regulates it out of existence. From The Heritage Foundation, "The House bill does allow private insurance to be sold, but only ‘Exchange-participating health benefits plans.’ In order to qualify as an Exchange-participating health benefits plan, all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well."
Best estimates are that yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare. That fit’s perfectly with Obama’s objective which is to push all of us into the government-run plan.
Robert Craven
Tuesday, July 21, 2009
We Want an Apology
You want an apology from them? We want one from you.
Obama says he sees a lack of humility among bankers. While noting that some of the nation's most powerful banks had repaid federal bailout money, Obama said: "What you haven't seen (in the financial sector) is a change in culture, a certain humility where they kind of step back and say gosh, you know, we really messed things up." What about Ground Zero, what about Frank and Dodd, Clinton and Obama who together are more responsible than anyone else for sinking the US economy (see past posts)? We’ve had an apology from one Democrat, a representative from Arkansas. That’s it. Unfortunately, the masses don’t know enough to demand not only an apology, but their heads. So forget the bankers BO until you come clean, being at one time a major slurper, along with Frank, Dodd, and Clinton at the Fannie/Freddie trough.
Robert Craven
Obama says he sees a lack of humility among bankers. While noting that some of the nation's most powerful banks had repaid federal bailout money, Obama said: "What you haven't seen (in the financial sector) is a change in culture, a certain humility where they kind of step back and say gosh, you know, we really messed things up." What about Ground Zero, what about Frank and Dodd, Clinton and Obama who together are more responsible than anyone else for sinking the US economy (see past posts)? We’ve had an apology from one Democrat, a representative from Arkansas. That’s it. Unfortunately, the masses don’t know enough to demand not only an apology, but their heads. So forget the bankers BO until you come clean, being at one time a major slurper, along with Frank, Dodd, and Clinton at the Fannie/Freddie trough.
Robert Craven
Tuesday, July 14, 2009
Beware of the Anointed
How about being "dissed" by a Cornell econ prof folks? Robert H. Frank (rhymes with crank, no just kidding) is a Cornell University econ professor and (surprise!) a columnist for the NYT’s. Here is what he had to say about those of us who oppose the so-called stimulus package: "The fact that stimulus opponents are far less numerous, have less distinguished academic credentials, on average, and are far less ideologically diverse than their counterparts does not guarantee they're wrong. But these factors should make rational consumers and investors less likely to side with them. And since this is really an argument about expectations, that's probably enough."
Now that hurts, that really hurts.
But thank you Bob. (The reality that 5 Nobel laureates have joined us is merely an inconvenience for Bob. We don’t need them however; we know we’re right anyway.) The fact is that every time "rational consumers and investors" listen to the likes of Bob they shed the rational part. Bob and his kind never saw a tax or levy or program they didn’t like; they never saw an arm of government that wasn’t soft and furry; they never saw a job that wasn’t secure and privileged. Bob and the rest of the sophisticate elite see the real world - how the unwashed are led, fooled and mesmerized - as their flock, in need of constant herding. Sorry Bob, I’ve seen more stupid people in grad school than I ever did working on my father’s cattle ranch, and I’d trust a good ‘ol cowboy any day not to bankrupt this country more than I would you.
The "stimulus" is nothing but a war against producers. It cannot work and will not work (see past sketches). It is a heist by the Democrats; it is a tragedy.
If you care about your kids dear readers, write your Congressman.
Robert Craven
Now that hurts, that really hurts.
But thank you Bob. (The reality that 5 Nobel laureates have joined us is merely an inconvenience for Bob. We don’t need them however; we know we’re right anyway.) The fact is that every time "rational consumers and investors" listen to the likes of Bob they shed the rational part. Bob and his kind never saw a tax or levy or program they didn’t like; they never saw an arm of government that wasn’t soft and furry; they never saw a job that wasn’t secure and privileged. Bob and the rest of the sophisticate elite see the real world - how the unwashed are led, fooled and mesmerized - as their flock, in need of constant herding. Sorry Bob, I’ve seen more stupid people in grad school than I ever did working on my father’s cattle ranch, and I’d trust a good ‘ol cowboy any day not to bankrupt this country more than I would you.
The "stimulus" is nothing but a war against producers. It cannot work and will not work (see past sketches). It is a heist by the Democrats; it is a tragedy.
If you care about your kids dear readers, write your Congressman.
Robert Craven
Sunday, July 12, 2009
Don't Go There
In the last sketch we highlighted just why it is that any economic resuscitation will take longer than expected. Now we hear rumors of a second "stimulus". Such legislation will only further retard a recovery.
Supporters of the stimulus bill, even many of its critics do not understand (or choose to ignore in the case of some politicians) the key issue. Government spending does not spark the economy on a net basis, for the simple reason that it takes away an equal amount from the private sector. There is zero evidence that it ever worked, plenty that it hasn't.
Few of us are foolish enough to think that the government can spend as efficiently as the private sector. If we gave one dollar to the private sector and one dollar to government and instructed both to have at it, all but the willfully blind will acknowledge that the private sector can fetch more bang for the buck. But the stimulus package is not that. It actually robs the private sector of a dollar - taxes, or borrowing, or inflation.
The obvious solution to our problem then (no secret to Kennedy or Reagan) is to enable the private sector; a 6-month tax holiday for example, roughly the equivalent of the $750 billion "stimulus" package, would work. Why won’t it, or something similar, happen? As an ex-UCLA classmate of mine exclaimed the other day - "Are you nuts? How naive can you be? A dollar spent on a new lawnmower at the hardware store does not generate a single vote. A dollar spent on a new job mowing grass along an interstate highway does." That pretty much says it all. Oh, except one more thing. Our friend also reminded us of the infamous Bill Clinton line of Jan/99, when the federal government ran a surplus. Someone asked Clinton that given the surplus, could we have our money back, a tax cut maybe. His response: "We could do that and hope you spend it right...But....if you don’t...here’s what’s going to happen...." Ah, but for the ignorant unwashed masses.
Some of our friends from the left run real businesses. They curse the economy - naturally it's all Bush’s fault. No. They own this crisis.
Robert Craven
Supporters of the stimulus bill, even many of its critics do not understand (or choose to ignore in the case of some politicians) the key issue. Government spending does not spark the economy on a net basis, for the simple reason that it takes away an equal amount from the private sector. There is zero evidence that it ever worked, plenty that it hasn't.
Few of us are foolish enough to think that the government can spend as efficiently as the private sector. If we gave one dollar to the private sector and one dollar to government and instructed both to have at it, all but the willfully blind will acknowledge that the private sector can fetch more bang for the buck. But the stimulus package is not that. It actually robs the private sector of a dollar - taxes, or borrowing, or inflation.
The obvious solution to our problem then (no secret to Kennedy or Reagan) is to enable the private sector; a 6-month tax holiday for example, roughly the equivalent of the $750 billion "stimulus" package, would work. Why won’t it, or something similar, happen? As an ex-UCLA classmate of mine exclaimed the other day - "Are you nuts? How naive can you be? A dollar spent on a new lawnmower at the hardware store does not generate a single vote. A dollar spent on a new job mowing grass along an interstate highway does." That pretty much says it all. Oh, except one more thing. Our friend also reminded us of the infamous Bill Clinton line of Jan/99, when the federal government ran a surplus. Someone asked Clinton that given the surplus, could we have our money back, a tax cut maybe. His response: "We could do that and hope you spend it right...But....if you don’t...here’s what’s going to happen...." Ah, but for the ignorant unwashed masses.
Some of our friends from the left run real businesses. They curse the economy - naturally it's all Bush’s fault. No. They own this crisis.
Robert Craven
Sunday, July 5, 2009
Now What?
How can we as laymen get our arms around the US economic situation, the basics, then acquire some reasonable odds for projecting reality ahead? Most of us are not economists (although the evidence suggests those guys don’t have a leg up in forecasting anyway). But any of us can glance at the data, then take a look at similar patterns/dynamics in recent history and come up with something, perhaps not the Holy Grail, but at least our own reasonable forecast, a handle over the intermediate term.
From the Bureau of Labor Statistics (http://www.bls.gov/) we can see that since the beginning of this recession (12/07) six million jobs have been destroyed. The unemployment rate is high, not quite as high as the peak during the 1982 recession (10.8%), but high enough. It is true that the pace of job loss has slowed recently; in fact the worst of the labor market deterioration is likely over; still, job depletion remains the trend. We can also see that the workweek (33 hours) is now at a record low. Not surprisingly, growth in hourly and weekly earnings has cratered. We don’t need to be a Fed governor to understand that when earnings slow, spending follows suit. Weakened aggregate spending hits all of us.
Finally, consumer and business sentiment, although improved somewhat from the collapse in Feb/09 (lowest in the 41 years data has been collected), remains at recessionary levels, in the tank. There are good reasons for low consumer sentiment: ongoing job losses, further house price declines, climbing foreclosures, tight credit standards and financial market volatility. There are also good reasons for low business sentiment. Renewed job creation requires business confidence about the structure of the economy, free of uncertainty about the future course of governments and politics. There is no reason to be confident, so most aren’t hiring. Of the sectors measured by the BLS, only two did any hiring in June (education & health, & miscl services). Manufacturing, professional and business services, temp services, construction, gov’t, trade, transportation, utilities, financial activities, information, leisure & hospitality - all shed jobs.
When left to its own devices the US economy has always self-corrected, even more briskly when aided by tax cuts. We can witness the Kennedy cuts in the early 60's, the Reagan cuts in the early 80's. Both times it was over quickly; in 1982, in 6 months. Markets then quickly adjusted to changing economic circumstances. Investors began investing, capital spending rose, workers and employees moved on to new jobs, consumers began spending again. The key to these quick employment recoveries was that the markets for investment, employment and consumption were free of political intrusion, subject only to the "unseen hand".
This time around this key is lacking; that is our problem folks and exactly why none of us can look for any significant improvement in this economy, the stock market, our own personal affairs as they may be linked to macro economic developments, for a considerable while. And why? An old maxim - It is not always better to do something rather than nothing. Obama’s administration doesn’t understand that, or doesn’t care, just as long as the masses don’t catch on. Most interventions do more harm than good, including FDR’s stab at it during the Depression. Substituting political agendas for business judgement during periods of panic is bound to fail. It never worked before and it never will.
In past sketches we have critiqued recent forays of just such intervention, a primary culprit among these the so-called stimulus bill. At best, this unsavory piece of legislation will be a wash, at the worst, a retardant. Obama and Pelosi exploited mass hysteria to fulfill a wish list. Robert Lucas, the 1995 Nobel laureate in economics who specializes in macroeconomics and government policy, recently remarked that the promise of large multipliers presented by private macroeconomic consulting firms in support of the stimulus bill was "schlock economics." And as we noted earlier, Bob Barro, candidate for the 03 Nobel, called the legislation, "probably the worst bill that has been put forward since the 1930's." "I think is garbage," he said. So do we.
It is what is coupled with this bill that most worries business and consumer - outrageous debt loads ahead. We taxpayers issue the IOU but get absolutely nothing in return. So now the national debt is growing faster than the GDP. According to the Congressional Budget Office, within 10 years publicly held debt will double to 82 percent of GDP. The CBO predicts that by 2038, our debt will be 200 percent of GDP. Debt siphons off growth for goodness sake. Dollars go to paying it off rather than investing in something productive.
Well, that’s the stimulus package. There is more: 1) Health insurance reform, which scares the pants right off businesses; the cost estimates, from $1 trillion to $3.6 trillion, will be footed much by them. 2) Cap and Trade - massive new taxes, yet this work of genius will not remove an ounce of carbon from the atmosphere for a decade. Even if you think climate change is a huge threat, the bill's own supporters admit its impact on global warming will be trivial. As the IBD put it, "It's nothing but a huge scam that will bankrupt any business that relies heavily on energy, boosting fuel prices by 22 cents a gallon and socking the average family with an $1,800 a year tax hike." Gee. 3) The threat of a stimulus II (are you kidding, BO?!).
So no way the private sector — the real engine of economic growth — is going on a hiring binge anytime soon. Why would it? It's concerned by what it sees coming out of Washington - higher taxes, uncontrolled spending and layer upon layer of new regulation.
Look for a long, hard pull. And the pity is, it didn’t have to be.
Robert Craven
From the Bureau of Labor Statistics (http://www.bls.gov/) we can see that since the beginning of this recession (12/07) six million jobs have been destroyed. The unemployment rate is high, not quite as high as the peak during the 1982 recession (10.8%), but high enough. It is true that the pace of job loss has slowed recently; in fact the worst of the labor market deterioration is likely over; still, job depletion remains the trend. We can also see that the workweek (33 hours) is now at a record low. Not surprisingly, growth in hourly and weekly earnings has cratered. We don’t need to be a Fed governor to understand that when earnings slow, spending follows suit. Weakened aggregate spending hits all of us.
Finally, consumer and business sentiment, although improved somewhat from the collapse in Feb/09 (lowest in the 41 years data has been collected), remains at recessionary levels, in the tank. There are good reasons for low consumer sentiment: ongoing job losses, further house price declines, climbing foreclosures, tight credit standards and financial market volatility. There are also good reasons for low business sentiment. Renewed job creation requires business confidence about the structure of the economy, free of uncertainty about the future course of governments and politics. There is no reason to be confident, so most aren’t hiring. Of the sectors measured by the BLS, only two did any hiring in June (education & health, & miscl services). Manufacturing, professional and business services, temp services, construction, gov’t, trade, transportation, utilities, financial activities, information, leisure & hospitality - all shed jobs.
When left to its own devices the US economy has always self-corrected, even more briskly when aided by tax cuts. We can witness the Kennedy cuts in the early 60's, the Reagan cuts in the early 80's. Both times it was over quickly; in 1982, in 6 months. Markets then quickly adjusted to changing economic circumstances. Investors began investing, capital spending rose, workers and employees moved on to new jobs, consumers began spending again. The key to these quick employment recoveries was that the markets for investment, employment and consumption were free of political intrusion, subject only to the "unseen hand".
This time around this key is lacking; that is our problem folks and exactly why none of us can look for any significant improvement in this economy, the stock market, our own personal affairs as they may be linked to macro economic developments, for a considerable while. And why? An old maxim - It is not always better to do something rather than nothing. Obama’s administration doesn’t understand that, or doesn’t care, just as long as the masses don’t catch on. Most interventions do more harm than good, including FDR’s stab at it during the Depression. Substituting political agendas for business judgement during periods of panic is bound to fail. It never worked before and it never will.
In past sketches we have critiqued recent forays of just such intervention, a primary culprit among these the so-called stimulus bill. At best, this unsavory piece of legislation will be a wash, at the worst, a retardant. Obama and Pelosi exploited mass hysteria to fulfill a wish list. Robert Lucas, the 1995 Nobel laureate in economics who specializes in macroeconomics and government policy, recently remarked that the promise of large multipliers presented by private macroeconomic consulting firms in support of the stimulus bill was "schlock economics." And as we noted earlier, Bob Barro, candidate for the 03 Nobel, called the legislation, "probably the worst bill that has been put forward since the 1930's." "I think is garbage," he said. So do we.
It is what is coupled with this bill that most worries business and consumer - outrageous debt loads ahead. We taxpayers issue the IOU but get absolutely nothing in return. So now the national debt is growing faster than the GDP. According to the Congressional Budget Office, within 10 years publicly held debt will double to 82 percent of GDP. The CBO predicts that by 2038, our debt will be 200 percent of GDP. Debt siphons off growth for goodness sake. Dollars go to paying it off rather than investing in something productive.
Well, that’s the stimulus package. There is more: 1) Health insurance reform, which scares the pants right off businesses; the cost estimates, from $1 trillion to $3.6 trillion, will be footed much by them. 2) Cap and Trade - massive new taxes, yet this work of genius will not remove an ounce of carbon from the atmosphere for a decade. Even if you think climate change is a huge threat, the bill's own supporters admit its impact on global warming will be trivial. As the IBD put it, "It's nothing but a huge scam that will bankrupt any business that relies heavily on energy, boosting fuel prices by 22 cents a gallon and socking the average family with an $1,800 a year tax hike." Gee. 3) The threat of a stimulus II (are you kidding, BO?!).
So no way the private sector — the real engine of economic growth — is going on a hiring binge anytime soon. Why would it? It's concerned by what it sees coming out of Washington - higher taxes, uncontrolled spending and layer upon layer of new regulation.
Look for a long, hard pull. And the pity is, it didn’t have to be.
Robert Craven
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