Free Markets, Free People

Daily Archives: August 15, 2012


Economic Statistics for 15 Aug 12

The following statistics were released today on the state of the US economy:

The consumer price index was unchanged in July, after being unchanged in June and falling -0.3% in May. Excluding food and energy, the core CPI rose 0.1%, following 0.2% in the last two months. On a year-over-year basis, the CPI is up 1.7%, with the core CPI rising 2.2%

Industrial production rose 0.6% in July following a 0.4% increase in June. Overall capacity utilization improved to 79.4% from 78.9% in June.

The Empire State manufacturing index for August fell sharply to -5.85 from July’s 7.39, indicating weakness in the manufacturing sector.

The net capital inflow of long-term securities rose only $9.3 billion in June, the the weakest since October, 2011.

The NAHB housing market index rose 2 points this month to 37, nearly the highest since early 2007.

The MBA reports mortgage applications declined last week, falling a sharp -4.5%. Purchase apps fell -2.0%, while re-fi apps fell -5.0%.

~
Dale Franks
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What part of “health care is a finite resource” does the left not understand?

Regardless of all the promises made by ObamaCare, there are still only 24 hours in a day and there are a finiteobamacarethumb number of doctors available to fulfill the starry-eyed promises the law makes.

That’s reality, something the left routinely attempts to pretend doesn’t exist.

Some examples of the point – ObamaCare will put 30 million more people on insurance rolls  Yay, problem of health care solved, right?

No, of course not.  There will still be the same number of doctors and hours in a day.  As we’ve been saying repeatedly, getting insurance does not mean you’ll be able to see a doctor.

And then there are the new requirements placed on doctors by ObamaCare that further exacerbate the problem.

For instance:

Take preventive care. ObamaCare says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health (2003), scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary-care physician’s time each year, or 7.4 hours per working day.

So, a doctor either commits to 10 or 12 hours of work a day or she sees patients for other reasons for 2/3rds an hour a day.

Or try this:

Meanwhile, the administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Its new campaign is focused on women. Thanks to health reform, they are being told, they will have access to free breast and pelvic exams and even free contraceptives. Once ObamaCare fully takes effect, all of us will be entitled to a long list of preventive services—with no deductible or copayment.

Of course, none of that is “free”, but much of it will also tie up a doctor’s time.  Preventive care costs money – lots of money – and when you have someone else paying for it, even more people will try to take advantage of that.

The left thinks that’s a feature, not a bug.

Here’s the real-world problem, however:

If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.

In effect, it is government mandating treatment that fills up the doctor’s time when much of that treatment may not be necessary.  But that call has been taken out of the doctor’s hands with this law.  If a patient demands all their “free” stuff, then what?

I often harp on the fact that the left seems sublimely ignorant on how the laws of economics work.  Well, what ObamaCare has set up are exactly the same conditions that plague most government run healthcare systems:

When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.

Prepare yourself for long waits for what you now consider to be routine problems.  If it is routine you will likely have less of a chance of seeing a doctor than you do now.  Best hope you can self- medicate or just wait out the problem.   If it is a serious problem, you’ll most likely still be in for a wait. 

Why?

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.

Econ 101.  So what is likely to happen?

When people cannot find a primary-care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms.

Uh, wasn’t that a big part of the impetus behind creating ObamaCare?  To “solve” that problem?  In fact, it is likely to exacerbate it.

Of course the solution to the government made problem will be what?  Most likely more government.  Those patients who are in those plans that pay below-market reimbursement will complain to whom?  Politicians.  And vote hungry politicians will try to do what? "Fix” the problem they created.  And who will they make the bad guys?  Well, certainly not them – greedy doctors or insurance companies most likely.

You can see this coming from a mile off – well if your eyes aren’t full of moon dust and you have even a passing acquaintance with how the real world works.

As P.J. O’Rourke so aptly said, “If you think health care is expensive now, wait until you see what it costs when it’s free.”

Unless this monstrosity of a law is repealed, we’re about to find out.

~McQ

Twitter: @McQandO

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Government cronyism in full bloom is the US west

Last month I pointed this out:

The Obama administration will open public lands in six Western states to more solar projects as part of a solar energy road map it publicized Tuesday.

The Interior Department set aside 285,000 acres in Arizona, California, Colorado, Nevada, New Mexico and Utah for the initiative. Firms can apply for waivers to develop projects on an additional 19 million acres.

At the same time the administration opens those lands up (19 million acres!?  For solar?), it has essentially closed federal land to oil and gas exploration and exploitation.

The Wall Street Journal (subscription) explains:

Several weeks ago in a remarkable but little-noticed policy directive, the Interior Department announced that it will allow construction permitting on 285,000 acres of public land in Arizona, California, Colorado, Nevada, New Mexico and Utah for solar energy projects. Even more remarkable, Interior said that energy firms can petition Interior to build solar installations "on approximately 19 million acres"—a larger land mass than Connecticut, Massachusetts, New Hampshire and Vermont combined.

Interior boasts that "this represents a major step forward in the permitting of utility-scale solar energy on public lands throughout the west." This means opening up huge chunks of U.S. desert and wilderness to the installation and long-term placement of hundreds of thousands of solar panels. The dirty secret of solar and wind power is that they are extremely land intensive, especially compared to coal mining, oil and gas drilling or building a nuclear power plant.

Question: Where are the environmentalists?  I can’t imagine anything more disruptive to “fragile eco-systems” and endangered species than carpeting hundreds of thousands or millions of acres with solar panels.  And yet I’m finding little to nothing in the press about their protests of projects of such a scale.

What’s surprising is that few if any nature groups are protesting this regulatory rush to approve renewable energy projects. Environmental groups have never hesitated to block a dam to save a snail darter, or oppose a forest-clearing to save an owl, but desert tortoises and bighorn sheep are apparently expendable as sacrifices to the gods of green energy. So much for protecting wildlife from big, bad profit-making industry.

Those groups are complicit in the cronyism and have abandoned their so-called calling (protecting the environment and wild life) for politics.  Like happened to the National Organization of Women during the Clinton years, the environmental movement’s complacency and silence regarding this move by the administration destroys their credibility.

Not only that:

That’s only part of the special treatment for solar companies. Interior says it plans to expedite solar-project approval and cut up-front costs for developers. The agency is also streamlining National Environmental Policy Act approval and facilitating the linking of solar electricity generation to transmission lines that will carry the electricity to substations. All of this is on top of the $9 billion in taxpayer handouts for solar and wind projects that were approved between 2009 and 2011.

In short, green energy is getting an EZ Pass through the Administration’s costly regulatory tolls. Since taking office in 2009, the Obama Administration has approved 17 major solar projects on public lands. All of this is facilitated through a program called the "roadmap for solar energy development."

Apparently the costly and lengthy environmental impact studies required of fossil fuel or nuclear projects just don’t need to be done by “approved” energy sources, even if it is clear that in terms of real environmental impact (just by footprint alone) these projects are far more intrusive than fossil fuel projects.

But hey, that’s where cronyism comes in.  That’s where we socialize (subsidize) the cost and privatize the profit.  That’s where the taxpayer pays the difference while the government streamlines its procedures (or doesn’t enforce its own regulations) in favor of its chosen industry.

Interior is just not going to entertain the same sort of nonsense it imposes on fossil fuel projects when it is a project it favors.

Oil shale though?  Oh, we have regulatory hoops, more hoops and requirements out the wazoo if you want to do that:

Meanwhile, the Institute for Energy Research notices that the new solar policy is "in sharp contrast to the Obama Administration’s canceling lease sales for oil shale deposits in Colorado, Wyoming and Utah early in the President’s term and significantly downsizing development plans for those resources since then."

This is roughly the same list of western states that got the green light for solar, but with different results. Oil shale—not to be confused with shale oil, which is extracted through hydraulic fracturing—is recovered by heating rock at high temperatures, which releases petroleum. The U.S. has the largest oil shale deposits in the world, totaling a little under one trillion recoverable barrels, or about 150 years worth of supply. But most of it is located on public lands and is still off limits.

Consider the 2005 Energy Policy Act that authorized oil shale leasing on public lands. In 2008 the Bush Administration issued rules on oil shale exploration, but in February 2009 Interior Secretary Ken Salazar said those rules would be delayed. Only this year, says Mary Hutzler, former acting administrator of the Energy Information Agency, "did the Interior Department announce its plan for shale drilling, but the administration closed off 75% of the federal land containing oil shale resources that were to be offered for lease under the Bush rules."

Remember the post from yesterday in which I pointed to the promise of fossil fuel if government would just get out of the way?  3.6 million jobs and a 3% increase in GDP by 2020.

Instead, this is the way this administration has chosen to go.  An unproven and land intensive energy source instead of backing a tried and true one.   Like it has done in the medical field it is wreaking havoc in the energy field pushing its favored industry that can only survive by government subsidy.

And this administration has the gall to call anyone else “ideologically” driven?

Really?

~McQ

Twitter: @McQandO

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