Free Markets, Free People

Daily Archives: June 1, 2010


Dale’s Observations For 2010-06-01

48% of voters say they want state laws similar to AZ's immigration law. 76% oppose anti-AZ boycotts. http://bit.ly/cRS5Sn #

Newest poll shows CA voters favor penalizing pot 49% to 41% opposed. Well, they'll get their chance in November. http://bit.ly/aWjbNh #

BP's Oil Spill Plan B appears to be "grasp at straws". I presume Plan C is to detonate some sort of nuclear device. http://bit.ly/dA3HU8 #

Al & Tipper Gore are splitting up. Thank God we won't uave to watch those two make out on national TV ever again. http://bit.ly/ctirAs #


Canada healthcare – the future of the US?

Guess what folks, Canada’s moon pony and unicorn “what’s wrong with you Americans, you’re so uncivilized to not have national health care” health care system is in serious financial trouble. And, unbelievably, for the very same reason critics of the recent US health care law said would inevitably happen here. I know, I know – just hard to believe, isn’t it?

Go figure.

The crux of the problem? Well lack of money, what else?

Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

[...]

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

They’re kidding, right? Weren’t we told that once government got involved this stuff would be affordable and would go on forever?

Their first target, of course, is pharmaceutical companies. They want them to slash prices. But at some point, pharma is going to say it can’t anymore. Because pharma isn’t the problem. Central control of health care delivery is. It has no flexibility, or at least not to a level that it can adapt to changes in the market with any nimbleness. That means it continues to hemorrhage money. Health care spending rises at 6% a year by plan. But it is going to, as mentioned above, begin to crowd out all other government services unless the Canadian government gets a handle on it and does so fairly quickly. Anyone know what that means?

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

“As Ottawa looks to repair its budget balance … one could see these one-time allocations to specific health projects might be curtailed,” said Mary Webb, senior economist at Scotia Capital.

My guess is more than “one-time allocations” might be curtailed. Consider Ontario:

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

“Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them,” Ontario Finance Minister Dwight Duncan told Reuters.

That’s bureaucratise for “we’re going to have to ration this stuff and do it pretty darn radically” – unless, of course, Ontario would prefer to spend 70% of its budget on health care costs.

I doubt that’s the case.

Here again we have the end game (or at least the results of the game at this point headed to its inevitable end) of where we’re headed.

My favorite line in the story:

Scotia Capital’s Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. “(The public) will use the services more wisely if they know how much it’s costing,” she said.

“If it’s absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?”

No – she really said that. And that’s the type of person who first embraced the moon pony and unicorn promises that were made for the system.

The problem with all of this “reality” suddenly descending on the system? It is pretty apparent to anyone who has studied a welfare state (and the same place we’re now headed):

But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.

“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population.

And so it goes, another chapter in the inevitable end of all such programs – over used, broke and headed toward strict rationing. And the moon pony crowd thinks that if they just tell Canadians how much it really costs when they see a doctor, they’ll do it less and save the system.

Heh, yeah, good luck with that.

~McQ


Oil spill – reshuffling the PR deck

Since hopping out in front of the cameras, thinking the top kill had worked and claiming that the administration has been in charge of the effort from “day one,” things have gone down hill for President Obama. As it turns out the top kill effort was unsuccessful. And, as the Washington Post tells us today, now the effort is to distance the administration from the oil company is supposedly was directing to do its bidding:

Struggling to convey command of the worsening Gulf of Mexico oil spill, the Obama administration is taking steps to distance itself from BP and is dispatching Attorney General Eric H. Holder Jr. to the Gulf Coast to meet with federal and state prosecutors. The Holder trip could signal that the environmental calamity might become the subject of a criminal investigation.

Holder has said Justice Department lawyers are examining whether there was any “malfeasance” related to the leaking oil well, and investigators, who have already been on the coast for a month, have sent letters to BP instructing the company to preserve internal records related to the spill. But federal officials indicated that Holder’s trip, which will include a news conference in New Orleans on Tuesday afternoon, will focus on enforcement of environmental laws and holding BP accountable.

The opening of a criminal investigation or civil action against BP, if either were to happen, would create the unusual situation of the federal government weighing charges against a company that it is simultaneously depending on for the most critical elements of the response to the record oil spill.

Usually, if there is a possibility of a criminal investigation and charges in a situation like this, they are kept in abeyance until there’s some resolution to the problem. But in this case, desparate for something which will cast the administration in a favorable light, it appears this is the chosen method. Holder’s news conference will be a welcome distraction from the constant “but what are you doing to stop the leak” questions the administration gets.

That’s the act of symbolic separation.

Step two is to physically separate the administration from the bad guys BP.

The relationship between the federal government and the oil company has been an awkward collaboration all along — “We have them by the neck,” Interior Secretary Ken Salazar said of BP in congressional testimony last week — but it reached a turning point Monday when the administration said it no longer wants to share a podium with BP at the daily briefing in Louisiana. Instead, the national incident commander, Coast Guard Adm. Thad W. Allen, will give a solo briefing wherever he happens to be.

It is a “we’re still in command, but it is an arm’s length, hold-your-nose, we’re forced to work with these people, command.” The perfect setup for something this administration is actually quite good at – demonization.

As for the spill itself, the next step is in contention. Apparently Carl Browner, the head of the EPA has become an expert in fluid dynamics and underwater blowout prevention:

The administration and BP have disagreed over whether the company’s next maneuver would cause a temporary increase in the flow of oil into the gulf. In the coming days, BP plans to saw off the top of the leaking riser pipe where it emerges from the blowout preventer that sits on the well. BP will then lower a containment dome, or cap, onto the riser in an attempt to capture the leaking oil. White House official Carol M. Browner said Sunday that after the pipe is cut, about 20 percent more oil would probably escape before the new cap is in place. BP officials said that they think that is unlikely and that there might be no significant change in the flow.

I’m not sure where she gets the idea that cutting the riser will allow a 20% increase in the flow. They’re cutting it, not removing it. It will still be there with the same diameter it’s always had, it’ll just be shorter so they can deal with it better.

The salient point, of course, is like it or not, the administration is stuck with BP, both in the plugging of the leak and in the clean up effort. And frankly, they wouldn’t have it any other way – this is the company that will be blamed for every failing of the administration. Note I said failing of the administration – it has a role and a duty in this disaster. What it is going to do, or at least attempt to do with this distancing, is to lay all blame on BP from this point on.

Holder’s trip to the Gulf is only the opening salvo.

~McQ

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