Free Markets, Free People

Daily Archives: September 30, 2010

Dale?s Observations for 9-30-2010

First official photos of the new BMW K1600GTL are available. I-6 engine with 160HP, 129 ft-lbs of torque. Nice bike. http://bit.ly/9BSadX



Fisher-Price releases new toy: small plastic lozenges called “Chokies”.


Favorite Tony Curtis line: (In a thick New York accent) “Yonda lies da castle of my fodda, da caliph.”


Poll: Among California?s likely voters, 52 percent favor the proposition to legalize marijuana. http://bit.ly/9Lr9A5


It’s troubling that when jobless benefit applications are at 453K, it’s considered good news. http://bit.ly/cL9QXo


US mortgage rates drop, with the 30-year fixed at 4.32%. http://reut.rs/9PcSvx


China snubs US on boosting yuan’s value. Why wouldn’t they? They need a devalued yuan to keep exporting. http://bit.ly/95iEWh

Mickey D and health care – an exception to the rule?

Over on Memeorandum, there’s a frenzy of writing about a Wall Street Journal report that says McDonalds may drop its health care plan as a result of the impact of ObamaCare.

Note the operative word – "may". It doesn’t say it will, it doesn’t say it might, it says it "may" drop it because of the type of health insurance it offers and the impact of new regulations governing what amount of money must be spent by insurance companies for care. Specifically:

The requirement concerns the percentage of premiums that must be spent on benefits.

[...]

Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.

It is called the "medical loss ratio", but in reality it is government telling a business how it must spend its money. What the business is telling the government is, given the type of insurance offered by the business, driven primarily by the type of business it does, it won’t be able to comply with the regulation and will have to drop it’s present coverage altogether.

Of course this is bad news for the administration which is still out there pushing the lie that if you like your insurance nothing changes and you get to keep it.  Naturally this flies right in the face of the lie and it’s such a high profile company that, well, something has to be done.

Like, make them an exception to the rule maybe?  You know, special interest government.  If you’re big enough and you can cause us enough embarrassment, we’ll “except” you from that which we require all the other drones to comply.

And that appears to be exactly what’s in the works if Jonathan Cohn is to be believed:

By this morning, both McDonalds and the administration were saying the story is overblown. McDonalds says it has no plans to drop the coverage and that it’s been in discussions with the administration over how to make sure it can keep offering the policies. The administration is saying much the same thing–that it’s aware of the issue, has been talking to industry representatives, and has already made clear these plans will be exempt from some of the early regulations on insurance.

Of course those plans obviously aren’t yet exempt since one assumes the legal team at Mickey D’s was able to successfully interpret how the new law would apply to them.  So what Cohn is really saying is “nothing to see here citizen, move along, nothing to see” – a fairly routine attempt at spinning a situation in which the administration got caught with its pants around its ankles on the road in front of a school into one that’s “no big deal”. 

But it is a big deal.  And, if “these plans” are exempt, why?  And which plans aren’t exempt.  Is Burger King off the hook too?  How about Taco Bell?

More importantly, where does the government get off telling a business how to spend its money?  Cohn tells us it is because the want to make sure executive salaries and perks aren’t excessive and overhead is kept to a minimum.  I say it is plain and simple unwarranted government intrusion that is becoming all too familiar since this administration has been in charge:

More important, the administration has yet to finalize the rule about how insurance companies spend their money (or what is known as the "Medical Loss Ratio".) It’s entirely possible the administration will phase in the requirement slowly. Most likely, then, McDonald’s employees who like these plans will get to keep buying them, at least for the immediate future.

Good thing we can read the bill now to find out what’s really in it, isn’t it?

~McQ

[ad] Empty ad slot (#1)!

Premise check – who has first claim to your earnings?

Richard Thaler, a professor of economics and behavioral science at the Booth School of Business at the Univ. of Chicago, writes a justification in the NY Times for increasing taxes on the rich.

It’s a curious effort. To end up where Thaler does, the premise one must use is “other’s have more of a claim on the money of those earning $250,000 than they do”. If you believe that, then it is easy to buy into the subsequent arguments Thaler makes in the article. For instance:

There is another possible argument for including the rich in these tax cuts, one based on “fairness.” By this reasoning, the wealthy are entitled to low tax rates because they have temporarily had them, and it would now be unfair to take them back.

But by that same argument, unemployment insurance should never expire, and every day should be your birthday. “Temporary” has no meaning if it bestows a permanent right.

The question comes down to whether we want a society in which the rich take an ever-increasing share of the pie, or prefer to return to conditions that allow all classes to anticipate an increasing standard of living.

Per Thaler, if you earn – note the word, "earn" – more than $250,000, wanting to keep what you earn is the same as desiring "unemployment insurance should never expire". If ever there was an example of a false equivalence, this one takes the cake. Per Thaler, earning equals a hand out.  If however, you believe government has first claim, Thaler’s comparison makes sense.

Note also Thaler’s implicit point that in reality you have no "permanent right" to your own earnings.  The only entity with that “right”, apparently, is government (and that’s primarily because they can enforce their “right” at the point of a gun).  Therefore it claims first right to what you earn and every "right" to arbitrarily decide what is "enough" for you to keep.

If you’re still having a problem understanding the absolutely abhorrent premise under which Thaler and much of the left operate, or believing that’s actually the case, let’s go back in the article to the first paragraph:

Want to give affluent households a present worth $700 billion over the next decade? In a period of high unemployment and fiscal austerity, this idea may seem laughable. Amazingly, though, it is getting traction in Washington.

"Present"? Again, how is it a "present" when the person or persons who earned the money are allowed keep it, unless you believe others have first claim on it?

This is the stealth premise that the left operates on consistently. It underlies every argument made to increase the taxes not only on the rich, but everyone. And that’s what many of those not seeing their tax increased don’t seem to understand when they applaud the class warfare the left uses to demonize the rich. They’re as susceptible to arbitrarily increased taxes once economic conditions improve as the rich are now – and it is all because of this premise which says “government has first claim on your earnings, not you”.

Unfortunately, it is something the GOP either doesn’t understand or is incapable of explaining.   It is a premise which must be challenged and exposed each and every time it is trotted out to substantiate tax increases for anyone.

And yes, that includes the rich.

~McQ

[ad] Empty ad slot (#1)!

Congress and the coming lame duck session

If you want to know why we get stuck with bad law, the conduct of the 111th Congress might provide the perfect case study on the subject. On the surface you’d think, with Democratic majorities in both chambers and a Democratic president, that it would work like a well-oiled machine.

But that’s not been the case. While Democrats have consistently tried to blame the problems of Congress on Republicans, most Americans understand that the GOP comes in for only a small part of the blame. Most of the problems with its lack of accomplishment fall directly in the lap of Democratic infighting and disagreement.

Even when Democrats had filibuster proof margins in both chambers, they only passed a portion of their agenda.  Part of it is because they spent so much time and political capital on the health care reform abomination.  That sort of sucked the air out of everything else.  And, the election of Scott Brown to the Senate finally put Democrats there in a position that required they finally consider the opposition when crafting their legislation – a distasteful but necessary added requirement (they’d much rather fight among themselves and blame the Republicans who had absolutely no power to stop anything prior to Brown’s election).

After wasting most of two years, the Democratic leadership is faced with two realities – the probability that they’ll lose their House majority in the upcoming elections (as well as some seats in the Senate) and only a lame duck session remaining to pass legislation they deem critical to their agenda.  That leaves them with about 6 weeks to jam pending legislation through the Congressional process (at the end of the session, any legislation not acted upon is in effect “killed” and must be introduced again in the next Congress).  In the Senate that means these Democratic priorities:

Finance Committee Chairman Max Baucus (D-Mont.) wants the Senate to consider a package of tax-relief extensions he has been working on all year.

Sen. Jeff Bingaman (D-N.M.), chairman of the Energy and Natural Resources Committee, is intent on passing a renewable electricity standard.

Sen. Joe Lieberman (I-Conn.), chairman of the Homeland Security Committee, says his cybersecurity bill should also come up for a vote, while Sen. John Kerry (D-Mass.), chairman of the Foreign Relations Committee, has called for ratification of the New START arms-control treaty with Russia.

Sen. Jay Rockefeller (D-W.Va.) says he intends to hold Majority Leader Harry Reid (D-Nev.) to a promise to schedule a vote on legislation that would bar the Environmental Protection Agency from taking action to curb carbon gas emissions for two years.

Sen. Charles Schumer (D-N.Y.), the vice chairman of the Senate Democratic Conference, told reporters Friday that leaders would also bring up a bill to address Chinese currency manipulation.

Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, hopes Congress will pass food-safety legislation Reid tried to bring to the floor last week. Democratic leaders pulled the bill even though they could have had enough votes to stop a Republican filibuster.

And, of course there’s the Defense Appropriations bill to which Reid has added the contentious DREAM act and the repeal of Don’t Ask Don’t Tell, assuring quick passage won’t happen.  None of the legislation listed is “minor”.  All deserve extensive review and debate.  Neither of those things will happen as the Senate leadership tries every parliamentary trick in the book to limit both and push the legislation through before the end of the lame duck session.  The House is no better and actually would add to the legislative backlog in the Senate if it does manage to pass its education bill.

Also remember that this Congress, for the first time in anyone’s memory, will not be passing a budget, but has punted that responsibility (or shirked it if you prefer) to the next Congress.  They have cobbled together and passed a CR (continuing resolution) which will keep government functioning and spending that 7 million dollars a minute it has become so used to spending.

This Congress has been, in my estimation, one of the worst in history.  Not because they didn’t pass megatons of legislation – I’m actually fine with fewer laws and less intrusion.  Instead its about what they did pass and how they passed it.  Additionally its about what they didn’t do (they’re responsible to present a budget but didn’t because of political consideration – that’s shirking your duty where I come from) and what they’re about to do (try to cram mountains of legislation through in a 6 week funnel which will most likely be ill considered, undebated, costly and poor in quality – although if ObamaCare is any indication, not lacking in quantity.

This isn’t how it is supposed to work. It is, however, all the reason you need to change the leadership and majority party.  I remember Harry Reid and Nancy Pelosi charging that George Bush was “incompetent”.  Their leadership of the 111th Congress has redefined the word.

~McQ

[ad] Empty ad slot (#1)!