Free Markets, Free People

Government

Cantor, cheese and other stuff

So Eric Cantor went down in flames in the Virginia Republican primary I see.  I can’t say I’m the least bit chagrined.  Cantor is the quintessential establishment Republican.  And like most of that ilk, he was more worried about what the press thought of him than doing what was right by his principles.  I notice the media spin doctors are immediately claiming that he really didn’t lose because of his stand on immigration (i.e. a hard lean toward “amnesty” for illegals although he tried to deny it).  After all if they admit that immigration reform was a reason for his defeat, then they have to admit that its dead for this year (as, given this lesson, no Republican running for reelection in the House  – that would be all of them – is going to touch it with a 10 foot pole).  The spin doctors also know that if it is dead for this year, it may be dead, at least in its present form, for good, if Republicans win the Senate.  One also assumes that Republicans are aware of the polls out there that place immigration reform as a low priority issue for voters right now (yeah, surprise, they’re much more interested in jobs and economic growth than illegal aliens).

I think another reason for Cantor’s loss is a deep dissatisfaction with Republican House leadership – such that it is.  Add his lack of popularity within his own district and an acceptable alternative candidate and you have the prefect electoral storm. Finally, Tea Party candidate Dave Brat’s win signaled, much to the annoyance of the left, that the Tea Party is hardly “dead”.  It’ll be interesting to see how the establishment Republicans react to this upset.

On another subject, yesterday we saw where the FDA had unilaterally decided that it might be necessary to ban the centuries old tradition of aging cheese on wooden shelves.  Because, you know, there’s been such an epidemic of sickness from such practices here lately and over the ages. What?  There hasn’t?  There hasn’t been any real problem at all?  However:

The Food and Drug Administration (FDA) has issued an executive decree banning the centuries old practice of aging cheese on wooden boards.  One bureaucrat within the FDA, without surveying all of the scientific literature, and without public commentary, has rattled hundreds of small businesses across the United States.  Consumers who eat any kind of aged cheese should prepare for a potentially catastrophic disruption in the market for artisan, non-processed cheese.

Now that was yesterday.  Today, yeah, its cave in time.  There has been such an outcry from cheese makers, the public and just about anyone else that could find a forum that the FDA is hastily backing down.  Overlawyered brings us up to date:

Following an enormous outcry from cheese makers, commentators, and the general public, the agency beats a hasty retreat. Commentator/ Pepperdine lawprof Greg McNeil has the details at Forbes (and his earlier commentary on the legalities of the agency’s action is also informative). Earlier here.

In a classic bureaucratic move, the agency denied it had actually issued a new policy (technically true, if you accept the premise that a policy letter from its chief person in charge of cheese regulation is not the same as a formally adopted new policy) and left itself the discretion to adopt such a policy in future if it wishes (merely declaring itself open to persuasion that wood shelving might prove compatible with the FSMA).

McNeal:

This is also a lesson for people in other regulated industries. When government officials make pronouncements that don’t seem grounded in law or policy, and threaten your livelihood with an enforcement action, you must organize and fight back. While specialized industries may think that nobody cares, the fight over aged cheese proves that people’s voices can be heard…

Yes, true.  But … there’s always a ‘but’, Overlawyered points out something that is true and often overlooked.  You have to be willing to fight for it all, not just the popular stuff.  You have to be willing the challenge all the nonsense bureaucrats put out there:

There is a less optimistic version, however. It happens that a large number of editors, commentators, and others among the chattering classes are both personally interested in the availability of fine cheese and familiar enough with the process by which it is made to be un-cowed by claims of superior agency expertise. That might also be true of a few other issues here and there — cottage food sold at farmer’s markets, artisanal brewing practices — but it’s inevitably not going to be true of hundreds of other issues that arise under the new Food Safety Modernization Act. In a similar way, the outcry againstCPSIA, the Consumer Product Safety Improvement Act, rose to a politically effective level only on a selected few issues (publishers and libraries got a fix so that older children’s books would not have to be trashed; youthmotorsports eventually obtained an exemption, and so forth) but large numbers of smaller children’s products and specialties whose makers had less of a political voice simply disappeared.

Absolutely true.  I think of those who want to drink raw milk for instance.  Where does the government get off saying you can’t drink something you choose to drink if you’re willing to take the risk and suffer any consequences?  Something that, until pasteurization, everyone drank?  But since those who prefer raw milk don’t have a large lobby, they’re subjected to government bullying and laws prohibiting them from making that choice.

Choice is freedom.  Limiting of choice is limiting freedom and government is in the freedom limiting business.  The premise is you’re not able to make good choices yourself, so government must keep you from doing so.  Question?  If aging cheese on wood was dangerous to our health and it had been the reason from many deaths over the centuries, how do you suppose the market for such cheeses might have been effected by now?  Right.  It certainly wouldn’t have come down to some government bureaucrat making a unilateral decision in 2014, that’s for sure.

In Iraq, Mosul has fallen to terrorists.  Nightwatch brings us up to date:

ISIL has been trying to take Mosul since earlier in June, but only lately assembled enough forces to rout the security forces and overrun the city.

ISIL now controls two major cities in the Sunni region of Iraq: Fallujah and Mosul. Its fighters tried to overrun several other cities, but failed. Its aim is to create an Islamic emirate that joins Iraq and Syria.

The group had been affiliated with al Qaida for many years, since the time of Abu Musab Zarqawi, according to the National Counter Terrorism Center. In February al Qaida disavowed all links with ISIL because its actions were more extreme than al Qaida and it would not follow orders to stop fighting the al Nusrah Front in Syria, which al-Qaida supports.

On Sunday in Syria, ISIL fighters clashed with the al-Qaida-affiliated al Nusrah Front in eastern Syria, while its Iraq wing fought to capture Mosul in Iraq. This is a formidable group. Only the Syrian Kurds stand in the way of ISIL consolidating large areas in Iraq and Syria under its control.

Mosul’s capture reinforces the judgment that Iraq has re-entered civil war. ISIL is more than an insurgency because it has an effective organization and is conquering territory. By force of arms, it has created a power-sharing arrangement with the government in Baghdad and fragmented the country. A statement by the Muslim scholars association today encouraged ISIL to hold Mosul and to set up an administration. It urged the youth of the city to defend it against the Baghdad government.

ISIL’s control in Syria seems tenuous and contested by other opposition groups. In Iraq, it is the dominant anti-government force and it has broken Iraq, for now.

My position?  If Iraqi’s want a free Iraq, they’d better fight for it.  They’ve been given the time, the equipment and the training.  Now, it’s up to them.

Finally, yesterday I literally had to laugh out loud when I read something Robert Reich, a former Secretary of Labor, had written on his Facebook page.  It simply demonstrates how effing silly – and dangerous to your freedoms – these people are:

President Obama announced steps yesterday he said will make student loans more affordable. It’s probably all he can manage with a grid-locked Congress, but it’s still tinkering with a system of college financing that’s spinning out of control. What’s really needed is to make college free of charge and require all graduates to pay 10 percent of their earnings for the first 10 years of full-time work into a fund that pays the costs (additional years of graduate school means added years of payments). That way, nobody graduates with debts; young people from lower-income families can afford to attend; graduates who go into high-wage occupations in effect subsidize those who go into lower-wage work; and we move toward a system of genuinely equal opportunity. What do you think?

Right … free college for all.  Graduate with no debt!

Question: How in the world does this dolt think that making all graduates pay “10 percent of their earnings for the first 10 years” to fund “free college” doesn’t equal being in debt?  Oh, and who would keep track of all this?  Why the IRS of course – another in a long line of ideas to further centralize control of all aspects of your life at the federal level and add to the federal bureaucracy’s reach and power.

Then add the scam value of this.  Ride the gravy train for 3 or 4 years of free college and then walk away as a non-graduate.  Nothing to pay, right?  I mean the stipulation is that “graduates” pay, so why not hang out in a college dorm, eat in the chow hall, do your own thing while also doing barely enough to stay in school.  That way you can let these other dopes subsidize those years for you.  Then, move, apply to a new school and repeat.  Trust me, there are enough “professional students” in this world that I can promise that would be done.

Oh … and read the comments to the Reich post.  They’ll make you weep.

~McQ

A few things to note

I don’t mind at all saying “I told you so” when it comes to the alarmists and “climate change”.  You’ll remember a few weeks ago when the alarmists began screeching about the collapse of an ice shelf in Antarctica and how that was going to raise sea levels by feet, not inches and that there was nothing we could do about it?  Oh, and it was because of man-made global warming?

We found out subsequently, that the “rise in sea levels” might occur with this melting of the ice shelf, but that it would likely take a 1,000 years.  And, at that time, I put forward an article I’d written for QandO in 2009 where I noted that volcanic activity (aka geothermal activity) was responsible for an ice melt then.  I further posited that it was entirely possible it was responsible for the most recent ice shelf melt (since it is very close to the shelf itself) and had nothing to do with man.

Vindication:

Thwaites Glacier, the large, rapidly changing outlet of the West Antarctic Ice Sheet, is not only being eroded by the ocean, it’s being melted from below by geothermal heat, researchers at the Institute for Geophysics at The University of Texas at Austin (UTIG) report in the current edition of the Proceedings of the National Academy of Sciences.

The findings significantly change the understanding of conditions beneath the West Antarctic Ice Sheet where accurate information has previously been unobtainable.

The Thwaites Glacier has been the focus of considerable attention in recent weeks as other groups of researchers found the glacier is on the way to collapse, but more data and computer modeling are needed to determine when the collapse will begin in earnest and at what rate the sea level will increase as it proceeds. The new observations by UTIG will greatly inform these ice sheet modeling efforts.

Using radar techniques to map how water flows under ice sheets, UTIG researchers were able to estimate ice melting rates and thus identify significant sources of geothermal heat under Thwaites Glacier. They found these sources are distributed over a wider area and are much hotter than previously assumed.

The geothermal heat contributed significantly to melting of the underside of the glacier, and it might be a key factor in allowing the ice sheet to slide, affecting the ice sheet’s stability and its contribution to future sea level rise.

Oh my.  Who knew?  Uh, we did. Or at least we were able to apply facts and logic to the event and give a credible hypothesis as to why what was happening was happening.  Nice.

On another subject, the Bergdahl fiasco, it appears that Mr. Obama, who was perfectly fine about taking all the credit for his release when it appeared it would be to his political advantage (thus the Rose Garden announcement with the family), has now found someone he can throw under the bus since it has all gone wrong.  It’s Hagel’s fault:

FInal approval for the prisoner exchange that freed Sgt. Bowe Bergdahl was made by Secretary of Defense Chuck Hagel, members of Congress learned on Monday from administration officials.

‘They indicated (it was) Secretary Hagel (who made the final call),’ Rep. Buck McKeon (R-CA) said after a classified briefing, ABC points out.

‘It was the president of the United States that came out (in the Rose Garden) with the Bergdahls and took all the credit and now that there’s been a little pushback he’s moving away from it and it’s Secretary Hagel?’

Yup … I’ve lost count of all those who’ve found themselves looking at the underside of the Obama bus.  And for those who don’t think that this was an attempt to divert attention from the VA scandal, check this little tidbit out:

The final agreement was brokered in a week by Qatar and dovetailed with Obama’s announcement of a complete withdrawal from Afghanistan by the end of 2017. Engulfed in a scandal over hospital care for veterans, it also provided him an opportunity to demonstrate he was helping those who had served.

So it was Hagel’s final call?  Yeah, right. Again, the administration insults our intelligence.

Meanwhile we find more and more neglect and corruption in the VA, an agency that Mr. Obama criticized when his predecessor was in charge and vowed to clean up:

The agency said more than 57,000 new patients have waited at least 90 days for their first appointments and that about 13 percent of VA schedulers indicated they were told to falsify appointment-request dates to give the impression that wait times were shorter than they really were.

Remember, this is pure government run health care aimed at a very small population, relatively speaking.  And it is a disaster.

The agency also found evidence that in the past 10 years, nearly 64,000 veterans who sought VA care were simply never seen by a doctor.

“Simply”.  Not simply at all. This is mind numbing incompetence and corruption.  This was Ezra Klein’s ideal example for touting the benefits of government run (single payer) health care back when he was shilling so hard for the ACA.  Obama has done nothing to change the situation.  Congress, as usual has simply thrown money at it assuming that would fix it.  But its not just Obama’s problem.  This is a decades old institutional problem driven by a corrupt and incompetent bureaucracy that has given short shrift to the care of our veteran population.  This is the face of “government run healthcare”.

~McQ

Wait … didn’t they say if we didn’t pass ObamaCare this would get worse?!

Why yes, yes they did.  And they also told us it was because of the expense of this sort of medical care that the benevolent and non-intrusive federal government saw a reason to attempt to manage this through its new and wonderful law.

Surprise!

Nationally, nearly half of ER doctors responding to a recent poll by the American College of Emergency Physicians said they’ve seen more visits since Jan. 1, and nearly nine in 10 expect those visits to rise in the next three years. Mike Rust, president of the Kentucky Hospital Association, said members statewide describe the same trend.

Experts cite many reasons: A long-standing shortage of primary-care doctors leaves too few to handle all the newly insured patients. Some doctors won’t accept Medicaid. And poor people often can’t take time from work when most primary care offices are open, while ERs operate round-the-clock and by law must at least stabilize patients.

Plus, some patients who have been uninsured for years don’t have regular doctors and are accustomed to using ERs, even though it is much more expensive.

“It’s a perfect storm here,” said Dr. Ryan Stanton of Lexington, president of the Kentucky chapter of the ER physician group.”We’ve given people an ATM card in a town with no ATMs.”

I love the doc’s line about ATMs.  He’s nailed it on the head.

Now I won’t bore you with the fact that we foresaw this and wrote about it.  I mean we talked about doctor shortages, that an increase in those having insurance didn’t mean they’d be able to see a doctor and how doctors were dumping Medicare because of all the hassles and low payments.

But our ever faithful zealots on the left kept telling us that a) we didn’t know what we were talking about, b) human nature isn’t really human nature and c) now that everyone would have insurance all would be sunshine and roses and costs would magically come down (because, you know, the Democrats said they would).

Instead it is all mostly compost.  ERs are seeing a surge in patient visits and expect it to get worse.   Of course, that sort of care is much more costly than regular doctor office visits (according to the article, about $580 per visit more) but what they hey, they have subsidized insurance now … so you get to continue paying for it.

Another in a long line (and getting even longer) of predictions about the effect of a program that this administration has gotten completely bass ackwards.

Competence?

It just doesn’t exist in Washington DC and especially with this administration.

~McQ

Redefining incompetence

I remember well the liberal Democrat echo chamber calling G W Bush “incompetent”.  It was their mantra.  Their rehearsed talking point.  And the went on the weekend shows and in front of every camera they could find to repeat it.  Over and over and over.

If Bush was incompetent, what in the world does that make Obama?  This inept and incompetent White House just outed their own CIA station chief in Afghanistan in a picture of the Obama trip there over the Memorial Day weekend.  A trip clearly designed to distract from the growing VA scandal goes south in a heartbeat because of  … gross incompetence.

Anyone remember Valerie Plame?  That pales in comparison to this idiocy. Pales? It doesn’t even get on the radar screen in comparision.

And don’t get me started about the VA.

But speaking of VA, it does indeed again make the point that the government  – and especially under this particular administration – can’t run health care … period.  And no, I’m not saying a more competent administration could.  The VA has been plagued by problems for decades.  The fact that they’ve gotten worse under this President doesn’t at all surprise me.  But what may surprise you is this:

Since 9/11, the VA budget has increased by 235%, from FY2001′s $45 billion annual budget to FY2014′s $150.7 billion. On a percentage basis, the only Cabinet agencies that had larger budget increases over that arc have been State (271%) and Homeland Security (245%), the latter of which barely existed at the start of that period. In the Bush era, comparing the final budget with his signature (FY08) to the final Clinton budget (FY01), VA spending rose 88.3% to $84.7 billion. Defense spending rose 104% in the same period.

Barack Obama ran in 2007-8 on failures at the VA, promising more resources and better management. In comparison to that final Bush budget — don’t forget that Obama signed the FY2009 budget in March 2009 with the omnibus spending bill after a Democrat-controlled Congress refused to deal with Bush — VA spending has risen dramatically as well. The annual budget rose 78% in six budget cycles, with double-digit increases in four of the six years — while Defense spending was flat. No other Cabinet agency had a larger budget increase by percentage during Obama’s tenure. The closest was Agriculture (64%), followed by State (59%, which tends to discredit the canard about the Benghazi failure being caused by a lack of resources). Only HHS had a larger annual budget increase in terms of dollars spent, but it amounts to a 37% increase in spending from the FY2008 baseline. The amount of increase in the VA’s budget in the Obama era, $65.9 billion, exceeds the entire VA budget in the FY2004 budget.

So it wasn’t money.  As usual it was leadership.  How many freakin’ times do we have to hear this incompetent who is President say he learned about the latest scandal from television news?  For 6 years it has been all his and he has no idea what is going on in his own executive departments.  For that matter, neither do his secretaries.  The Health and Human Services absolutely blew the launch of the health care website.  Something that is done successfully everyday in the commercial world.  And where did Mr. Obama learn about it?  TV.  He certainly had no idea that it was a bust before then.

Why?  Because he didn’t bother to check.  Didn’t bother to ask hard questions or require a demonstration.  He didn’t lead.  He had already waved his magic hand and told them to get it done.  Words equal action in his world.

Same with the VA.  After lambasting the former administration for its failures in reference to the VA, he, in 6 years and billions of dollars, hasn’t improved it on iota.  And more grating than anything is he didn’t care enough to check.  He didn’t KNOW!  His secretary didn’t know!   An pattern of failure repeated in this administration since the beginning.  Instead the usual liberal panacea was applied: throw money at it and the problems will go away.  Just check out public education to see how well that’s worked – or the “War on Poverty”, etc.

Nope, this was a culture problem and a leadship problem.  The culture still survives and thrives and the leaders are nowhere to be found.  Oh the guys who are supposed to be in charge are still kicking, but they’re sitting in front of their television sets to see if there have been any new developments.  Meanwhile, this is going on and has been going on:

The VA department has been directly providing health care to millions of veterans for decades and evidence is growing that relying on the system can literally be a fatal decision. The Washington Examiner’s Mark Flatten reported May 12 that a Texas VA clinic implemented a cost-cutting measure in 2010 that required a patient to undergo three positive bloody stool screens before the government would approve a colonoscopy. Dr. Paul Krugman, who protested the policy while serving in the VA facility, told Flatten that “by the time that you do the colonoscopies on these patients, you went from a stage 1 to a stage 4 [colorectal cancer], which is basically inoperable.”

As many as 15,000 vets were subjected to this treatment. There is no way of knowing how many died because they spent their final days at home or in a private facility. Suffering and dying in obscurity due to a cost-cutting measure by a government-run health care system is the ultimate SNAFU, and nobody can guarantee it won’t be an commonplace under Obamacare.

Hell of a way to treat our veterans, isn’t it – but then when its all about bureaucrats and budgets, the focus isn’t on patients is it?  That’s government run health care in a nutshell.

Silver lining?  The VA, with a population of 9 million to serve, can’t get the job done competently and has, for the most part never been able to do so. THAT is the story of government run health care.  And all you need to cement that fact firmly in your head is to read the open letter one of our veteran triple-amputees penned this past week:

I remember candidate Obama promising to overhaul the VA and reduce the backlog.  You claimed that America’s support for its veterans is obvious by the way we treat our vets. You really nailed that one didn’t you?

Just like you were going to fix Detroit or fix foreign policy.  Your high school like approach to solving complex issues can’t be fixed by tweeting hashtags with propaganda to people who want to kill us. Anyone with an ounce of common sense can see you’re unfit to lead our nation, let alone act as our Commander In Chief.  What our country needs now, more than ever is real leadership, someone who doesn’t wait for a crisis, but is able to foresee an issue and deal with it before it happens. Unfortunately for America, you’ve been too busy campaigning and don’t have time to deal with the health care crisis of our veterans. The only thing you seem to care about is your own radical agenda, and now our vets are paying for your negligence with their lives.

As I sit here typing this out I’m dealing with my own VA nightmare which involves the Phoenix VA.  I have given 3 limbs for this country, but apparently that is not enough.  A “clerical error” made by a VA employee has resulted in nearly a year of abuse and mismanagement of my case. In other words, the VA is stealing over $7000 from my disability compensation that I earned when I lost 3 of my limbs for our country.

On this Memorial Day, as I battle your incompetent bureaucrats my family would like to thank you for once again failing our veterans. We can’t help but wonder about the disastrous socialized medicine program that we will surely be dealing with if Obamacare is allowed to be fully implemented. If our incompetent VA cannot handle government healthcare for a fraction of our population, who would be foolish enough to believe a massive health care system designed to provide health care for all American’s would be any different?  You can’t even find someone to build a competent website to work for your socialized medicine program when you had your name attached to it, so why would you care about our veterans when you could so easily push the blame off on someone else?

And the irony of it all?

The Department of Veterans Affairs says it will let more veterans obtain health care at private hospitals, VA Secretary Eric Shinseki announced Saturday.

That’s right … just like Canada used US private hospitals to bail its government run system out when it came to wait times, the VA is planning the same thing.  To anyone with an IQ above a donkey, that ought to tell you something.

~McQ

Scientists rebut Obama Administration’s “National Climate Assessment”

Yes, that’s right … scientists.  Here’s their opening.  As you’ll see, they don’t mince words nor do they show much respect for the nonsense spouted in the NCA or those who produced it.  And I don’t blame them:

The National Climate Assessment – 2014 (NCA) is a masterpiece of marketing that shows for the first time the full capabilities of the Obama Administration to spin a scientific topic as they see fit, without regard to the underlying facts. With hundreds of pages written by hundreds of captive scientists and marketing specialists, the administration presents their case for extreme climate alarm.

As independent scientists, we know that apparent evidence of “Climate Change,”however scary, is not proof of anything. Science derives its objectivity from robust logic and honest evidence repeatedly tested by all knowledgeable scientists, not just those paid to support the administration’s version of “Global Warming,” “Climate Change,” “Climate Disruption,” or whatever their marketing specialists call it today.

We are asked to believe that humans are drastically changing the earth’s climate by burning fossil fuels. The problem with their theory is very simple:

It is NOT true.

Here we address the administration’s basic thesis and the essential evidence that they claim support extreme concern.  The theory of ‘Catastrophic Anthropogenic Global Warming’ (CAGW) is based on a string of inferences that begins with the assumptions that carbon dioxide is a ‘greenhouse gas’ and that we are slowly driving up the atmospheric concentration by burning fossil fuels. It is therefore claimed as self-evident that the Global Average Surface Temperature (GAST) has already risen significantly and will continue to do so.

Higher GAST is then presumed to lead to all sorts of negative consequences, especially Extreme Weather. They promote their ‘Climate Models’ as a reliable way to predict the future climate. But these models dramatically fail basic verification tests. Nowhere do they admit to these well-known failures. Instead, we are led to believe that their climate models are close to perfection.

This document is structured around a “fact-check,” where we quote a number of the government’s key claims in the NCA and show each to be invalid. The first three claims involve their three crucial scientific arguments (Three Lines of Evidence or 3 LoE), which, if valid, would satisfy a necessary, but not sufficient, condition for making their case. But each is easily shown to be false; and because each is crucial, their entire theory collapses. That means that all of the overblown “Climate Disruption” evidence that they mention, whether true or not, cannot be tied back to man’s burning of fossil fuels. Hence, efforts to reduce or eliminate Extreme Weather by reducing the burning of fossil fuels are completely nonsensical.

They then present a point by point rebuttal of the “3 LoE”, pointing to evidence that shows them to be demonstrably false.  And, as they point out, since those 3 LoE are the foundation of the CAGW theory, the theory collapses.

You can read it here.

~McQ

Learning the laws of economics the hard way

Tis the season of minimum wage hike demands and fast food protests again. Frankly I don’t have a problem with wage hikes … if they’re voluntary. I do have a problem with coerced wage hikes, however. And that’s precisely what any rise in the federal minimum wage amounts too. It is feel good legislation that uses the force of government to coerce businesses into paying employees more for jobs the businesses don’t deem worth the cost imposed. It is feel good legislation that religiously and studiously avoids the laws of economics.

For instance, what is one of the effects of raising the minimum wage? Job loss. How so? Well, here’s a real world example:

President Obama recently signed an executive order that will increase the minimum wage for employees of companies with new federal contracts beginning Jan. 1. At that time, the minimum wage for all federal contract workers — not just those working for fast food concessions — will increase to $10.10 from the current $7.25. It is not yet known how far-reaching the effects will be for contracts on military installations.

[...]

…new Labor Department rules issued last fall for fast food workers on federal contracts under the Service Contract Act require an increase in the minimum wage for such employees, varying by region. The rules also require payment of new, additional “health and welfare” fringe benefits at a rate of $3.81 per hour to those employees.

Result?

Four restaurants, including three McDonald’s outlets, will close within the next three weeks on Navy installations, according to Navy Exchange Service Command officials.

And two other contractors — a name-brand sandwich eatery and a name-brand pizza parlor — have asked to be released from their Army and Air Force Exchange Service contracts to operate fast food restaurants at two other installations, according to AAFES officials.

A source with knowledge of military on-base resale operations said the issue likely has to do with two new government regulations — one implemented, one pending — that will affect wages for contract workers in such on-base concessions.

Action/reaction. Who loses? Well what’s zero times the new minimum wage? That’s what the former workers of those restaurants can look forward too in the near future. Will other fast food outlets take their place? Possibly – but then as another law of economics points out, businesses do what they do for profit, consequently costs incurred are usually passed on to the consumer in the form of price increases for the product. So who will get screwed then. In this case sailors making about 23K a year. Probable result – business will be down because fewer of their customers will be able to afford their prices with the frequency they once did.

As usual Obama has done this by executive fiat. And, it appears the minimum wage hike may or may not have any life in Congress (even with dopy old Mitt Romney coming out for it). But the debate and the protests roll on. For instance we have today’s fast food protests which are alleged to be happening world wide (backed by about $15 million SEIU dollars here in the US).

Here’s an example of what they’re saying:

Naquasia LeGrand, 22, of Brooklyn, says this was her sixth protest since 2012. She has worked for three years as a cashier at Kentucky Fried Chicken in Park Slope, an affluent neighborhood in Brooklyn. She says makes $8 an hour and pays $1,300 a month for her apartment. “We live in New York City — a multibillion dollar city,” she says. “These corporations … are making all this money. It’s only right that we (workers) come together.”

The sense of entitlement is overwhelming.

So let’s break down what she does for her $8 an hour.  She says “may I help you” to a customer, a customer gives her their order which she enters via a touchpad computer.  The computer computes and totals the order.  She enters the amount of cash tendered and it tells he how much change to give back. Or she swipes a credit card, waits for the receipt to print and hands both back to the customer.  At some point after that, she hands the customer a tray with food on it or a bag containing it.

Guess what else can do most of that?

And what can the employer know will never happen with this?  Well, it won’t be out in 6 protests in 3 years and won’t have an attitude every day it cranks up and goes to work.  And other than initial cost and maintenance costs, it will likely be more accurate than a human, faster than a human and cost less than a human in the long run.  The technology is already here and as it proliferates it will get cheaper and cheaper.  And it is proliferating.  Guess who just bought 7,000 of them?

The point of course is when costs go up businesses have to consider their options, especially if they’re in a very competitive industry – like fast food. They know that they can only pass on a certain percentage of higher costs to their customers. So they have to look for alternatives to doing that. One of the fastest and easiest ways to increase the bottom line is to reduce headcount. Another is to automate low skill jobs. What Ms. LeGrand is doing is inviting her employer to consider one of those options if higher wages are forced on them. And there are few jobs requiring less skill at a fast food joint than cashier/order taker. See picture above for confirmation.

Every time the minimum wage goes up, it prices some jobs out of the marketplace. Anyone – who usually fills those jobs that get eliminated? Low skill workers. The one’s who need jobs, any job, the worst. Instead of letting the market have the ability to set the worth of work, the government imposes a wage floor and essentially outlaws any wage below that floor.

Of course that doesn’t change the worth of the work to the potential employer. A $6 an hour job is still worth $6. Only a fool is going to pay $10.10 or $15 or whatever above that an hour. So the work goes undone and a person willing to do the work for that price goes unhired. Instead, other options and substitutes are considered, like automation or contracting it out overseas where labor costs are cheaper. Why do you think so much is “made in China?”

The do-gooders are our own worst enemies when it comes to this. Its all about them feeling good about helping the “little people”. They never look beyond that to the real consequences of their do-goodism. There are a couple of reasons they don’t: A) it is apparently beyond their understanding and B) it’s all about them feeling good about themselves, not what happens afterward.

The “market” is stuck with the consequences.  And when it all goes tango uniform and what people like me predicted comes true, we’re treated to claims that the cause was “market failure” (btw, read this great rant on “market failure”).  That’s about the time you see people like Ms. LeGrand, the SEIU, Harry Reid and the usual suspects start talking about hiking the minimum wage again.

And the cycle repeats.

~McQ

3/4 of ObamaCare enrollees? Previously insured …

Or so says a new McKinsey survey of the numbers:

One of the principal flaws in the coverage of Obamacare’s exchange enrollment numbers to date has been that the press has not made distinctions between those who have “signed up” for Obamacare-based plans, and those who have actually paid for those plans and thereby achieved enrollment in health insurance. A new survey from McKinsey indicates that a large majority of people signing up are now paying for their coverage. This is progress for the health law. But the survey still indicates that three-fourths of enrollees were previously insured.

Of course we’ve seen the propaganda push from the White House that has claimed the numbers (8 million enrolled) mean that the law is working.  As usual, the devil is in the details.  If the law was designed to provide coverage to those who were uninsured, 25% of the total enrolled fitting that description is hardly indicative of that claim’s efficacy.  And when you break down that 25% number, it’s even less indicative:

At most around 930,000 people have gained coverage from Obamacare’s under-26 “slacker mandate” (not 3 million, as is commonly suggested); another 3 million or so have gained coverage from the law’s expansion of Medicaid. Approximately 2.6 million previously uninsured individuals have obtained coverage through the ACA exchanges and the related off-exchange individual markets; however, the off-exchange purchases are mostly unsubsidized, and therefore can’t necessarily be credited to Obamacare.

Here’s a graphic that breaks the McKinsey survey’s results down into a more understandable form:

McK-enroll-Apr-2

In reality, what the law has essentially done rearranged the burden of payment among those enrolled while really not doing much at all in terms of reaching those for whom it was supposedly designed to help:

What the exchanges appear to be doing is mainly helping people who were previously insured. If you’re 62 years old, say, and your income is $30,000, and you were paying for your own coverage before, you’re now eligible for plans that are much cheaper for you, thanks to taxpayer-funded subsidies and higher premiums for young people.

Of course that means that other people are paying more. “My old plan was canceled under Obamacare,” an exasperated Californian told me last week. “The new Obamacare plan costs twice as much, and the deductibles are higher. And yet Obama is counting me as one of his 8 million people!” But hey—at least he has maternity coverage.

And I’m sure our Californian is eternally grateful for big brother deciding for him that maternity care was an absolute necessity for which he must pay.  But the point is the 8 million number remains very shaky (and that’s being kind) and it really doesn’t at all reflect what the White House would have you believe it reflects – that the law is working.

~McQ

Health Insurance Tax – another governmental attack on small business

So a day or so ago, I talk about how regulation and government intrusion is helping to kill entrepreneurship and, as a result, small businesses. The same problem, as we all know, is also exacerbating the unemployment picture.  A prime example?  That odious law known as ObamaCare.

The US Chamber of Commerce blog has this chart for us to peruse. It is all about the recently implemented “Health Insurance Tax”, aka “HIT”: As this awful law continues to be implemented when it is politically convenient for the Democrats, we see even more disaster lurking for those who are employed and actually “like their insurance and like their doctor”.  But HIT is already taking a toll.

The National Federation of Independent Business’ Research Foundation estimates that the Health Insurance Tax (HIT) will result in a reduction in private sector employment of 152,000 to 286,000 jobs by 2023, with 57 percent of the job losses coming from small businesses. This will amount to a reduction of U.S. real output (sales) by between $20 billion to $33 billion during the same time frame.

Just what we need – another “hit” to employment and a “hit” to GDP. But it is clear the Democrats don’t really care about that.  As one of our low information commenters is want to say “a few eggs must be broken” to make an omelet … or something. Any inanity will do when it is clear that a law is a bust and a failure. As the Chamber of Commerce blog notes:

The HIT, which went into effect on January 1, 2014, levies a tax on health plans sold on the fully-insured market. Eighty-eight percent of it is made up of small businesses. Revenue from the tax will rise by 41% in 2015 and reach $14.3 billion in 2018.

“Small businesses are crucial to rebuilding an economy that allows all Americans to prosper,” Katie Mahoney, Executive Director of Health Policy at the U.S. Chamber said. “We need to work to find ways to ensure small businesses and their employees have the tools to build on their current success, not hinder future growth.”

You’d think what she says would be fairly common knowledge, but apparently the deluded administration that runs this country thinks we’re coming out of the economic malaise it has worked so hard to keep in place, and thus its time for another little shot to the head of small business.

With the HIT – mission accomplished.

~McQ

Slowly killing the Golden Goose

You all know the nursery story about the Golden Goose.  Well, as we head into “Recovery Summer V” with no real recovery in sight, subject to false unemployment numbers and pitiful quarterly GDP earnings, it might be useful to look at something else that is likely a factor in all of this:

Business dynamism is the process by which firms continually are born, fail, expand, and contract, as some jobs are created, others are destroyed, and others still are turned over. Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation.

And all of that is a function of what?

That evil thing called “capitalism”.  Yup, evil capitalism encourages entrepreneurship and through that cycle, we see the market at work – creating profit, which creates jobs, which expands businesses and creates more of them and more jobs and more wealth and … etc., etc., etc.  It is that repeating cycle that has, at least till recently, gotten us where we are in terms of wealth and power as a nation.

Not government.  Government is a net leech.  It sucks the blood out of productivity in the form of taxes.  But government also plays another role – as a regulator. Most look at that as a necessary evil.  But most governments always go overboard with their regulatory regimes and end up making it harder and harder for entrepreneurs  to do what they do best.  The Brookings institute has taken a look at this and found that over the past few decades, the entreprenurerial role has declined and, as a result, we have, for the first time, seen more businesses exiting the economy than entering it:

Now Brookings tries to stay claim this can be reversed, even though it is such a widespread trend it should alarm us all.

In fact, we show that dynamism has declined in all fifty states and in all but a handful of the more than three hundred and sixty U.S. metropolitan areas during the last three decades. Moreover, the performance of business dynamism across the states and metros has become increasingly similar over time. In other words, the national decline in business dynamism has been a widely shared experience.

While the reasons explaining this decline are still unknown, if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurship enhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.

Note the oblique way Brookings points to government, but nevertheless identifies the problem.  The phrase is “entrepreneurship enhancing policies”.  And what would that look like?  Well Brookings thinks liberalizing entry of high-skilled immigrants might to the trick.  I, on the other hand, think a thorough review of the regulatory regime and revocation of all unnecessary regulations along with those found to punish or hinder entrepreneurship would have a much speedier and positive effect than the Brookings suggestion.

Certainly, we know why there was a precipitous drop in 2008, but again, what has the government, in terms of policy, done to ease the situation?  Nada.  Nothing.  Except play a little crony capitalism (i.e. pick winners and losers) in the green energy game.  And, of course, most of their “winners” have gone belly up.

As a consequence of this refusal to consider steps concerning rolling back regulations (and, instead heaping even more on the books), we see the trend get worse on both the entry and exit levels.

Entrepreneurship IS the “Golden Goose” of capitalism.  One of the big reasons our economy continues to lag badly can be found in the chart above.  And what has this administration done in 5 plus years to address this problem?  Well, to be honest, it’s done more to exacerbate it that help it. Thus the Golden Goose on life support.

All hands prepare for “Recovery Summer VI”.  And VII.  And VIII …

~McQ

New White House priority? Climate change!

Apparently tomorrow, President Obama will “showcase” his climate change agenda.  According to the Washington Post:

After years of putting other policy priorities first — and dismaying many liberal allies in the process — Obama is now getting into the weeds on climate change and considers it one of the key components of his legacy, according to aides and advisers. He is regularly briefed on scientific reports on the issue, including a national climate assessment that he will help showcase Tuesday. He is using his executive authority to cut greenhouse gas emissions from power plants and other sources, and is moving ahead with stricter fuel-efficiency standards for the heaviest trucks. And while he routinely brings up climate change in closed-door meetings with world leaders, according to his aides, he also discusses it in his private life, talking about global warming’s implications with his teenage daughters.

As usual, he intends to proceed by using executive power, whether or not the people or their representatives agree.  And also without any consideration of the cost to the consumer.  All in the face of mounting evidence that the supposed crisis of CO2 is a non-crisis. According to the WaPo, this intention to address “climate change” was spurred by Obama viewing satellite pictures of the California mountain snow pack:

The satellite images viewed by President Obama before a meeting with eight Western governors were stark, showing how snowpack in California’s mountains had shrunk by 86 percent in a single year.

Of course, most of us know that’s likely a local weather phenomenon, not a result of “global warming” or we’d be unlikely to be seeing things like this:

Antarctic sea ice continues to set new records, with extent in April at the highest since measurements began in 1979.

Remember, Antarctic and Arctic sea ice melts were to be the harbingers of doom.  In fact, the Arctic was supposed to be ice free last year according to the perpetually wrong alarmists.  Instead we saw record sea ice there as well.  Factor in the fact that there has been no global warming for over 17 years and one has to ask why this, in the face of a badly performing economy and over 92 million Americans being out of work, is suddenly to become a priority for the White House?  As one editorialist puts it:

The problem is, it’s just so hard to be an alarmist these days. Temperatures aren’t rising, U.S. CO2 emissions are down, and now it turns out that peak oil won’t peak. What’s a scare-monger to do?

The answer is keep on trying to gin up the alarm to satisfy the true-believers who are an important political constituency of the Democrats.  And it is becoming clearer every day that the Democrats are going to need all of their constituencies to even have a ghost of a chance in the November mid-terms.  To this point, the left environmental movement hasn’t been to happy with the Obama administration and it certainly wants more drastic action to be taken to curb the use of fossil fuel. So its time to shore up their support:

Environmentalists such as Democratic donor and billionaire Tom Steyer want him to veto the Keystone pipeline and wean the nation from natural gas. Natural Resources Defense Council President Frances Beinecke said of the administration: “We have to increasingly get them to acknowledge that there has to be a major transformation away from fossil fuels.”

That desire the Natural Resources Defense Council voices has resulted in such things as the “war on coal” and the reduction in production of oil on federal lands and off our coasts.   It has also meant slow walking the permit process as well as holding the Keystone Pipeline hostage to presidential politics. So why now? Why is this the time to do this?  Because he can:

A White House official, speaking on the condition of anonymity because the plans are not final, said Obama has made it clear that he considers climate change a priority and is less politically constrained now that he no longer faces reelection.

Meanwhile the public views the issue as a low priority if a priority at all, given jobs and economic problems.  Yet Obama persists.  Elections are in the offing.  And if there is one thing he has at least a semblance of competence in, it’s getting elected (or helping others do so).  So all the high flying rhetoric aside, this is about votes, this is about elections and this is about trying to preserve at least one Democratic house in Congress for the last two years of his presidency.  It is one of many such moves he’ll be attempting in the coming months.  But make no mistake – this isn’t about the environment or his legacy, it’s about politics. ~McQ