Free Markets, Free People

Law Of Unintended Consequences

Unemployment benefits and the law of unintended consequences

We often point out the unintended consequences of government actions simply to make a point to those who think government is the answer to all problems. Those that believe that need to closely consider the results of government “solutions”.  For instance – let’s extend unemployment benefits and extend and extend them some more.  How could there possibly be a downside to that?

In a state with the nation’s highest jobless rate, landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits.

It is unclear whether this trend is affecting other seasonal industries. But the fact that some seasonal landscaping workers choose to stay home and collect a check from the state, rather than work outside for a full week and spend money for gas, taxes and other expenses, raises questions about whether extended unemployment benefits give the jobless an incentive to avoid work.

Members of the Michigan Nursery and Landscape Association “have told me that they have a lot of people applying but that when they actually talk to them, it turns out that they’re on unemployment and not looking for work,” said Amy Frankmann, the group’s executive director. “It is starting to make things difficult.”

Of course, what is happening is those drawing the benefits are dutifully applying for jobs as required by the state in order to continue to draw unemployment benefits.  But, when it comes down to actually taking a job, they’re not at all interested – they applied to continue to qualify for the unemployment compensation, not actually get a job.

So wait a minute – are you saying that a landscape worker can’t make as much as someone on unemployment.  Well, yes, but not for the reason you think:

The average landscape worker earns about $12 per hour, according to the Michigan Department of Labor and Economic Growth. A full-time landscaping employee would make $225 more a week working than from an unemployment check of $255.

But after federal and state taxes are deducted, a full-time landscaper would earn $350 a week, or $95 more than a jobless check. The gap could narrow further for those who worked at other higher-paying seasonal jobs, such as construction or roofing, which would result in a larger benefits check.

The maximum weekly benefit an unemployed Michigan worker can receive is $387.

Some job applicants are asking to be paid in cash so they can collect unemployment illegally, said Gayle Younglove, vice president at Outdoor Experts Inc. in Romulus.

“Unfortunately, we feel the economy is promoting more and more people and companies to play the system and get paid or collect cash money so they don’t have to pay taxes,” Younglove said.

Heh … ya think?!

Michigan offers unemployment benefits for up to 26 weeks (6 months). When those benefits run out, unemployed can apply for extended federal benefits up to a maximum of 99 additional weeks.

The federal jobless benefits extension “is the most generous safety net we’ve ever offered nationally,” said David Littmann, senior economist of the Mackinac Center for Public Policy, a free-market-oriented research group in Midland. The extra protection reduces the incentive to find work, he said.

It’s impossible to know exactly how many workers are illegally declining employment, but 15 percent of Michigan’s economy is underground, where people trade services, barter or exchange cash without reporting it to the government, Littmann said.

No incentive to go back to work and have a large portion of one’s earnings go to taxes and a large incentive to game the system andcontinue drawing the benefits while engaging in (and growing) the underground economy – all of these unintended consequences provided by?

Government – which as usual doesn’t know when to get out of the way.

But, this will come as a comfort, I’m sure:

A person becomes ineligible for benefits if he or she fails to accept suitable work, said Stephen Geskey, director of Michigan’s Unemployment Insurance Agency.

Yeah, I’m sure that’s strictly enforced and working out very well saving taxpayer dollars – don’t you?

~McQ

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Volcanic Dust Cloud All An Illusion?

This will go down in history as an epic FAIL:

Britain’s airspace was closed under false pretences, with satellite images revealing there was no doomsday volcanic ash cloud over the entire country.

Skies fell quiet for six days, leaving as many as 500,000 Britons stranded overseas and costing airlines hundreds of millions of pounds.

[…]

However, new evidence shows there was no all-encompassing cloud and, where dust was present, it was often so thin that it posed no risk.

The satellite images demonstrate that the skies were largely clear, which will not surprise the millions who enjoyed the fine, hot weather during the flight ban.

Jim McKenna, the Civil Aviation Authority’s head of airworthiness, strategy and policy, admitted: ‘It’s obvious that at the start of this crisis there was a lack of definitive data.

‘It’s also true that for some of the time, the density of ash above the UK was close to undetectable.’

Is there any surprise as to exactly who was responsible for this little mistake?

The National Air Traffic Control Service decision to ban flights was based on Met Office computer models which painted a picture of a cloud of ash being blown south from the Eyjafjallajokull volcano.

These models should have been tested by the Met Office’s main research plane, a BAE 146 jet, but it was in a hangar to be repainted and could not be sent up until last Tuesday – the last day of the ban.

Just think, but for a coat of paint, thousands of Britons could have been home with their families, commerce could have gone on largely as usual, and airlines (which operate on paper-thin margins as it is) would not be out tens of millions of dollars. Given the notorious precision of the models employed by the Met Office to predict weather, perhaps it would have been wise to send that plane up sans its shiny new paint job? Just a thought.

I guess we should just all be thankful that we’re not relying on the expertise of the Met Office to push broad new government powers. Based on this incident, one could imagine how the world economies might come to a grinding halt, and all based on nothing but an illusion coughed up by a computer model. Well, thank goodness, that could never happen.

[HT: HotAir HL]

Legislate in haste, repent in leisure

That’s how Tom Mcguire describes this bit of a laugh about the bill nobody apparently read – health care reform:

The law apparently bars members of Congress from the federal employees health program, on the assumption that lawmakers should join many of their constituents in getting coverage through new state-based markets known as insurance exchanges.

But the research service found that this provision was written in an imprecise, confusing way, so it is not clear when it takes effect.

The new exchanges do not have to be in operation until 2014. But because of a possible “drafting error,” the report says, Congress did not specify an effective date for the section excluding lawmakers from the existing program.

Under well-established canons of statutory interpretation, the report said, “a law takes effect on the date of its enactment” unless Congress clearly specifies otherwise. And Congress did not specify any other effective date for this part of the health care law. The law was enacted when President Obama signed it three weeks ago.

Yes it’s ironic – but it also pathetic.  It gives you an idea of how “carefully crafted” the bill was and how much time our legislators spent considering its consequences and weighing its impact.  Zip.  None.  Nada.  They didn’t even know they’d written themselves out of their present insurance coverage.  Can you imagine they know anything about what they’ve done to yours?

Of course we all know they’ll fix that – and if anyone doubts that, I have a great set of relics from Christian saints you might be interested in. Frankly I think they should be barred from doing so – but that’s just my opinion.  But this certainly indicates that the law of unintended consequences is not only loose, but running rampant in areas the legislators most likely don’t even know exist at this point in time.

Is this what you pay them to do?  Is this a reason to retain their services?

What would you do with an employee this freakin’ dumb and inept?

Unfortunately you can’t do it today – see you in November.

~McQ

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Dear Bad Guys – we welcome chemical and biological attacks

I’ve always been a fan, when talking national defense and deterrence, of telling potential enemies what our strategies are. It helps them formulate their plans on how to best attack us without receiving the most devastating response. For instance, our new unilateral nuclear use strategy:

It eliminates much of the ambiguity that has deliberately existed in American nuclear policy since the opening days of the cold war. For the first time, the United States is explicitly committing not to use nuclear weapons against nonnuclear states that are in compliance with the Nuclear Nonproliferation Treaty, even if they attacked the United States with biological or chemical weapons or launched a crippling cyberattack.

Those threats, Mr. Obama argued, could be deterred with “a series of graded options,” a combination of old and new conventional weapons. “I’m going to preserve all the tools that are necessary in order to make sure that the American people are safe and secure,” he said in the interview in the Oval Office.

Well if that’s true, Mr. Obama, why change our nuclear strategy? You see, in terms of a nuclear arms strategy, “ambiguity” is a feature, not a bug. But when you announce to anyone who can put anthrax in an envelope – or better yet weaponize it and introduce it into the US population via terrorist proxies – that if we find out who you are, you don’t have to worry about nukes, well that may make such an attempt at least appear to be somewhat survivable. And for zealots and other nutballs, that’s all it takes.

Certainly nuclear weapons are fearsome, but their history – their two uses – show them to be just another method of killing in war. For instance between Hiroshima and Nagasaki – the two cities bombed with nuclear weapons – about 105,000 died. That’s a horrific total granted, until you consider the 149,000 to 165,000 estimated to have died in the  conventional bombings of Tokyo and Dresden. Obviously Tokyo was done over an extended period but Dresden wasn’t.

I also know that nuclear weapons are significantly more powerful now than then – significantly. But they come in various sizes, yields and means of delivery. No one wants to use them but that “ambiguity” about their use has certainly served us well to this point. So why the change? What is served – in terms of our national security – by changing it? How are we made safer when you tell potential enemies “hey, if you’re in compliance with the Nuclear Non-proliferation treaty and decide to use chem or bio on us, we will not nuke you?”

“Oh,” they answer, “well then let’s see how we can comply with that new strategy shall we?”

Obama claims he would retain the right to reconsider the use of nukes. Really? So what is the new strategy again? Is that unambiguous ambiguity I hear?

He also claims that his strategy will “edge” the world closer to making nuclear weapons obsolete. Will it? What it will most likely do is make chem and bio weapons the next bad guy growth industries.  Oh, and if you don’t have nukes, there’s no reason to fear them.  If you use chem and bio weapons on us – just as long as you’re in compliance with the non-proliferation treaty, mind you – we’ll only use conventional weapons in return (since we have no chem or bio weapons with which to answer in kind).

This isn’t a strategy, it’s a unilateral weakening of our national security. If the law of unintended consequences runs true to course, we’ll see that played out in a chem or bio attack on America or Americans somewhere.

Our enemies and potential enemies need to understand that if they strike us they will reap the whirlwind – potentially.  When the whirlwind is unilaterally downgraded to a dust devil, it makes them think an attack (a chem or bio attack for heaven sake) may be survivable, and that’s not a thought we should be putting in their heads.

Tell me where I’m wrong.

~McQ

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Voting for Obamacare? Fair warning …

Rasmussen has the numbers that should have Democrats who are voting yes worried:

Fifty percent (50%) of U.S. voters say they are less likely to vote for their representative in Congress this November if he or she votes for the health care plan proposed by President Obama and congressional Democrats.

A new Rasmussen Reports national telephone survey taken Wednesday night finds that 34% are more likely to vote for their Congress member’s reelection if he or she supports the president’s health care plan. Eight percent (8%) say the health care vote will have no impact on how they vote this November, and another seven percent (7%) are not sure.

Rasmussen also reports that 33% favor a single payer system and that heavily influences their plan to vote for their rep if their rep votes for the plan. However, as even Maxine Waters knows, 33 or 34% won’t get you elected. What will get you elected is the independent vote. And that’s pretty bad news for those contemplating a “yes” vote:

But perhaps more significantly, 51% of voters not affiliated with either major party are less likely to support someone who votes for the legislation. Just 32% of unaffiliateds are more likely to vote for someone who supports the bill.

I still don’t get this. If Democrats back off, say “we heard you” and team up with and include Republicans they could actually pass something called health care reform (not that I’d support that either – just discussing the politics here). And by doing that, they could lay it all in the GOP’s lap with a “put up or shut up” move, preserve their majorities in Congress and most likely win over a majorities of Americans to their side (unfortunate, but true).

So why the continued push to get this monstrosity through? Why play dumb power politics when you can accomplish much the same thing with smart politics and preserve your base of power?

Look, we watch politics here at QandO, and this is just dumb politics. It is going all-in for something which is very unpopular, will most likely destroy the Democratic majorities in Congress and doesn’t even begin the benefit cycle (the downside of gaming the CBO) until 2014 when it is entirely likely they may not even hold the White House any more.

I don’t get it – this was supposed to be such a cool and smart man who was well attuned politically – these are not the politics of someone fitting that description. It just says to me again that while he may be the face man, he’s not really in charge of the agenda.

~McQ

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Who’s “optimal” are we talking about here?

Thomas Friedman is at it again. He finds our method of governance just too cumbersome and one which mostly yields “sub-optimal” results. I mean, look at the Chi-coms:

TOM BROKAW: Tom, are we at a kind of turning point in America in terms of being able to make this a functioning country again, or are we dysfunctional?

TOM FRIEDMAN: Well this is what worries me. I’ve been saying for awhile Tom, there’s only one thing worse than one-party autocracy, the Chinese form of government, and that’s one-party democracy. In China, if the leadership can get around to an enlightened decision it can order it from the top down, OK. Here when you have one-party democracy, one party ruling, basically the other party just saying no, every solution is sub-optimal. And when your chief competitor in the world can order optimal and you can only produce sub-optimal? Because what happens, whether it’s health care or the energy bill, votes one-through-fifty cost you a lot. Fifty to fifty-nine cost you a fortune. And vote sixty: his name’s Ben Nelson! And by the time you’ve made all those compromises, you end up with the description David [Brooks] had of the health care bill, which is this Rube Goldberg contraption. I really hope, I hope personally it passes. I hope it works. But I can’t tell you I think it’s optimal.

Well, of course mandating one child and one child only was certainly considered to be “optimal” by the leadership. The polity didn’t agree. And now the mostly male generation which has since grown up and is experiencing a vast shortage of women doesn’t either. Damn law of unintended consequences – it always tends to screw up “optimal” top-down decisions, doesn’t it?

And as I recall, they certainly considered the “Great Leap Forward” to be “optimal”, didn’t they? What are a few million, er 14 to 20 million deaths, when the “top down” solution is so, uh, “optimal”. Indeed, with those 14 to 20 million deaths, the plan ended up working rather well – except for those cases of cannibalism – because there was more for those who were left.

Very “optimal”.

And the “Cultural Revolution” was pretty “optimal” as well, wasn’t it?

It was certainly “optimal” for Stalin to declare the Kulaks “enemy of the people” wasn’t it? It allowed him to essentially steal their farms and “collectivize” them while deliberately starving millions of those “enemies” of his “optimal” plan to death in 1933. Yup, very “optimal” if you’re Joe Stalin and you get to make those “top down” decisions, isn’t it?

I assume Hugo Chavez thought it was an “optimal” solution to nationalize the oil industry Venezuela. None of that sloppy law and democracy stuff for him, by George.  And that’s worked out so well, hasn’t it?

Optimal.

Would someone buy Mr. Friedman a one-way ticket to China please?  There he can forever bask in the goodness of top-down “optimal” decisions and glory in them like so many millions have already done there since the imposition of “optimal” top-down decisions. 

That would be an “optimal” result for me.

~McQ

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Lesson learned?

Simon Heffer of the UK Telegraph pens a fascinating look at the Obama administration’s problems.  Heffer finds the difficulties of President Obama and his team to be a result of their inability to manage “expectations”. The promise of the campaign has not translated into a promising presidency by any stretch.  And the reasons are legion.  But among the most obvious:

Mr Obama benefited in his campaign from an idiotic level of idolatry, in which most of the media participated with an astonishing suspension of cynicism.

Heffer notes that the “sound of the squealing of brakes is now audible all over the American press”, but of course, it’s two years too late. Unlike the determined and concentrated “vetting” of Sarah Palin by the press, things that would have been headlines if it were her, were virtually ignored when it came to Obama. A giant FAIL for the press and the result is sitting in the White House, looking less and less capable every day. Has that lesson been learned or will we be treated to another liberal savior in days and years to come? I opt for the latter and will be interested to again hear the press lament its continued decline as a result.

However, you can bet the press will now try to make up for its malfeasance with a vengeance. And thus the analogy to “squealing brakes” as it stops and changes direction, hoping to salvage some semblance of credibility with the reading, viewing and listening public.

Heffer also notes the telltale signs of a disintegrating administration.

It is a universal political truth that administrations do not begin to fragment when things are going well: it only happens when they go badly, and those who think they know better begin to attack those who manifestly do not. The descent of Barack Obama’s regime, characterised now by factionalism in the Democratic Party and talk of his being set to emulate Jimmy Carter as a one-term president, has been swift and precipitate. It was just 16 months ago that weeping men and women celebrated his victory over John McCain in the American presidential election. If they weep now, a year and six weeks into his rule, it is for different reasons.

Despite desperate attempts to characterize the failure to pass any of its agenda items into law on the opposition party, the Democrats have had the power for a year to pass anything – anything – without a single GOP vote. The failure is not a result of Republican opposition or disagreement, but opposition and disagreement within their own party. And only now, at the 11th hour with the whole health care reform agenda circling the drain and having lost their supermajority in the Senate does Barack Obama step forward and try to lead.

Meanwhile, the infighting goes on, the scapegoat has been fingered (Rham Emanuel) if failure is the result, and the clueless advisers who’ve managed this mess to this point give us Alfred E. Newman’s best “who me?” For those of us who oppose the Obama agenda, it’s been a thankful reprieve from something we pretty much counted on as being inevitable. Some of us remember the Jimmy Carter administration – and not fondly. Again, thankfully, the Obama administration is turning into the Carter administration on steroids.

Speaking of administrations, Heffer points out that, Obama faces what another Democratic president faced with the possible loss of majorities in the mid-term elections. Bill Clinton not only faced them, but saw that possibility come true. Yet he managed to both weather that and successfully campaign for re-election. But, as Heffer says, Obama’s no Bill Clinton:

But Mr Clinton was an operator in a way Mr Obama patently is not. His lack of experience, his dependence on rhetoric rather than action, his disconnection from the lives of many millions of Americans all handicap him heavily.

In fact, the handicap Heffer speaks of has become so obvious it is a joking matter now. Certainly it’s dark humor, but the butt of humor none the less. It reminds me of Hillary Clinton during the campaign talking about Obama’s lack of experience in doing anything by alluding that the only thing he could bring to any situation wan’t experience, but a “nice speech”.   She was widely panned for the comment.  However, in every situation faced by the country thus far, that’s pretty much all he’s brought to the table, isn’t it?

Heffer goes on:

It is not about whose advice he is taking: it is about him grasping what is wrong with America, and finding the will to put it right. That wasted first year, however, is another boulder hanging from his neck: what is wrong needs time to put right. The country’s multi-trillion dollar debt is barely being addressed; and a country engaged in costly foreign wars has a President who seems obsessed with anything but foreign policy – as a disregarded Britain is beginning to realise.

Not only is Britain beginning to realize it, but so is the rest of the world. There is no coherent foreign policy plan. Gaffes are constant. Our South American strategy, for instance, seems to be to cozy up to dictators while ignoring or actively opposing our allies in the region – like Colombia and Honduras. Or dissing them – like Britain. As one expert said recently, Obama wants a “quiet world” so he can indeed ignore foreign policy and concentrate domestically.

However, he appears to be failing in both areas. The rest of the world is noting the diminished American diplomatic presence and leadership and beginning to react in ways not in our best national interest. Domestically the lack of leadership has had telling results as well – factionalism within the governing party that has all but ground Obama’s agenda to a halt.

Above it all, aloof and disconnected, is Obama who, it seems, was under the impression that he was going to be a ruler who merely had to suggest what needed to be done and power of his personality and vision would be enough to have his minions fashion the proper legislation and pass it by acclimation.

Leadership is a very difficult art. Oh certainly there’s some science too it, but for the most part it is an art. And an unfortunate “truth” of that art is you rarely get a second chance to establish yourself in a leadership role. First impressions are incredibly important and lasting. If you are perceived as weak, inexperienced and clueless that will constantly work against you as others attempt to exploit those weaknesses. One of the lessons of leadership in the military, for instance, is when you take a new leadership position, you come in hard, make your mark and then, if the situation warrants it, you can back off at a later date. But come in any other way and you’re likely to see you leadership questioned and challenged.

A variation of that theme is now playing out in Washington DC as Obama’s leadership, such that it is, is most definitely being questioned and challenged. The growing perception is he’s weak and ineffective. That his only strength, as Hillary Clinton alluded too, is a good speech. That he’s all talk and no action.

While that may be greeted as good news among domestic political opponents, it is bad news for this country internationally. And it could lead to all sorts of situations which a very detrimental to our national interest.

That takes me back to the initial lesson to be learned. Heffer talks about Obama “sycophants” (Axelrod, Jarret, etc) and how they’ve done Obama a disservice with their advice. In fact the largest and most complicit group of sycophants that I hold most responsible for the present situation are the press.

They did none of the hard and dirty work of vetting this man that they apparently delighted in doing with other candidates, most notably Sarah Palin. They completely abrogated their self-assumed and oft proclaimed responsibility to inform the public and became cheerleaders and propagandists. And they did the nation a horrible disservice. And because of their overwhelming backing of a marginal and mostly unknown candidate who they found attractive for various reasons and gave a good speech, they ignored his associates, inexperience and lack of accomplishment. He now sits in the White House, his inexperience and ineptness obvious to all.

If there is any lesson in this which should be internalized by any entity, it is the press who should now be doing some very heavy soul searching. Hint: this may also help explain part of your precipitous demise and growing credibility problems as well.

~McQ

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Diplomacy for Dummies (Update)

Surely there’s one of the famous self-help series by that name.  If so, could someone do us all a favor and send copies to Barack Obama and Hillary Clinton?

Argentina was celebrating a diplomatic coup yesterday in its attempt to force Britain to accept talks on the future of the Falkland Islands, after a two-hour meeting in Buenos Aires between Hillary Clinton and President Cristina Fernández de Kirchner.

Responding to a request from Mrs Kirchner for “friendly mediation” between Britain and Argentina, Mrs Clinton, the US Secretary of State, said she agreed that talks were a sensible way forward and offered “to encourage both countries to sit down”.

Uh, sit down for what? Britain claimed the Falklands in 1833 after British settlers settled there during the decade. The islands lay 300 miles off the Argentine coast. In 1982, it had to fend off an attack by Argentina in a bid to take them over. Now 3 British oil companies plan to put an offshore oil rig 100 miles north of the islands.

Somehow Argentina, who should have gotten the message in 1982, is still under the mistaken impression it has some say over what goes on there:

“What they are doing is illegitimate,” said Jorge Taiana, the foreign minister. “It’s a violation of our sovereignty. We will do everything possible to defend and preserve our rights.”

Riiiight. Like they did in ’82. Look, internationally, this is pretty much settled business. Other than Argentina, no one questions which country has sovereign control in the Falklands. And certainly not those who lives there. The 3,000 island dwellers all consider themselves, and have always considered themselves, a part of the British Commonwealth.

Territorial waters, as defined by 1982 United Nations Convention on the Law of the Sea extend 12 miles. Then there is a 12 mile “contiguous zone” in which a state has limited powers. A state also enjoys a 200 mile “exclusive economic zone” which includes “control of all economic resources within its exclusive economic zone, including fishing, mining, oil exploration, and any pollution of those resources.” That zone includes the territorial and contiguous zone as well.

As the cite points out:

Before 1982, coastal nations arbitrarily extended their territorial waters in an effort to control activities which are now regulated by the exclusive economic zone, such as offshore oil exploration or fishing rights (see Cod Wars). Indeed, the exclusive economic zone is still popularly, though erroneously, called a coastal nation’s territorial waters.

With the Falklands being 300 miles off the coast and the rig a 100 miles north of the islands, there is obviously nothing to the dubious claim of Argentine sovereignty (again remember, other than claim the islands, Argentina never settled them or has occupied them).

Enter Hillary Clinton – someone whose job it is to know all of this.

Her intervention defied Britain’s longstanding position that there should be no negotiations unless the islands’ 3,000 inhabitants asked for them. It was hailed in Buenos Aires as a major diplomatic victory, but condemned in the Falklands.

Britain insisted there was no need for mediation as long as the islanders wanted to remain British. “We don’t think that’s necessary,” a Downing Street spokesman said.

[…]

She gave no sign of backing the British position on negotiations, saying instead: “We would like to see Argentina and the UK sit down and resolve the issues between them in a peaceful and productive way. We want very much to encourage both countries to sit down. We cannot make either one do so. We think it is the right way to proceed, so we will be saying this publicly.”

Simply amazing. Our longest standing ally thrown under the bus to solicit warm fuzzies in South America that, as have been proven with others like Hugo Chavez, have the half-life of a Mayfly.

There will be a price to pay in the future for this as anyone who has watched international relations for any time knows.  Britain will extract a pound of flesh.  In the meantime, other than empty words meant to please those who will remain deeply skeptical of the US, all that’s been accomplished is the abandonment of an ally.  Essentially all Clinton has done is give false hope to Argentina and royally pissed off a solid ally.

Too bad the book in question isn’t available for Ms. Clinton.  And apparently she’s also forgotten the old saying about “remaining silent and being thought a fool rather than speaking out and removing all doubt.”

UPDATE:  Ralph Peters provides the back story.

~McQ

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The Dangers Of Reactive Populism

Not necessarily the danger to the politician – they’re seizing upon something which stirs up the public and trying to cash in on it politically.  But such “cashing in” usually leads to bad law.  And bad law leads to unintended consequences and usually more government intrusion.

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.

This “new power” to “block” (i.e control) “excessive” (who gets to define “excessive”?) rate increases is a perfect example of the point.

By focusing on the effort to tighten regulation of insurance costs, a new element not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California and moving to portray the Democrats’ health overhaul as a way to protect Americans from profiteering insurers.

In reaction to a single insurer in a single state raising the premium because of the loss of subscribers and revenue due to the recession, Obama has seized upon that as a populist reason to call for more government control. The subscribers Anthem needs to balance out those they’re paying for are gone. California has been very hard hit by the recession and Anthem is attempting to survive to continue to pay for those subscribers whose treatments it now covers.

Of course that’s seen as “profiteering” by a government which has managed to run up trillions of dollars in future deficits in the medical care program it runs.

Instead of trotting out a suggestion for more control – in this case cost controls (and we all know how well those work – see Venezuela. See Zimbabwe) – the answer should be competition. Clearly if consumers had a choice they’d leave Anthem and hook up with another insurer less likely to raise their fees.  That possibility would limit most insurers from proposing hikes which would run off those they need to support the pool.  And, if Anthem had the opportunity to broaden its base of subscribers by selling across state lines, it most likely wouldn’t have to raise fees or, at least, not 39%.

Consumers don’t have that choice. Insurers are restricted from selling across state lines. Why? Because bad law says so. This is a situation which can pretty easily be remedied and it can be done with less government. Repeal the laws keeping subscribers from buying from whomever they’d like in the US. We do it with every other type of insurance product you can imagine, health insurance should be no different (consider we do it now with Medigap insurance through vendors such as AARP).

Instead we’re likely to see the opposite happen. And, as usual, we’ll suffer the unintended consequences – less coverage, dropping people at the first sign of a disease which carries substantial cost and, of course, insurance companies which aren’t as financially sound as others going out of business.

The bottom line is Obama still doesn’t understand the unrest and dissatisfaction with the direction of this country (as represented by the Tea Parties) has to do with the size, scope and cost of government. The solution here is simple and something which has been proposed by the GOP for quite some time. The administration’s answer, however, is to do precisely the opposite. Obama’s answer to everything is more government, more control, more spending.

And that’s the wrong answer.

~McQ

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Stimulus Watch: Green Jobs Created Overseas

I’m sure the politicians who wrote, didn’t read and passed the $787 “Stimulus” bill would tell you they never intended for your hard earned tax dollars to “stimulate” foreign manufacturers. But in the field of wind energy, that’s precisely what has happened.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

“Most of the jobs are going overseas,” said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. “According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.”

In fact, the American Wind Energy Association has reported a drop in U.S. wind manufacturing jobs last year. Again, our central planners have screwed up. And what do they have to say? Well let’s hear from one of the more vocal ones who usually never misses a chance to tell everyone how well he does his job:

Sen. Chuck Schumer, D-N.Y., called the flow of money to foreign companies an outrage, because the stimulus, he said, was intended to create jobs inside the United States.

“This is one of those stories in Washington that when you tell people five miles outside the Beltway, or anywhere else in America, they cannot believe it,” Schumer told ABC News, “It makes people lose faith in government, and it frankly infuriates me.”

Yeah – like this is the first time the results of actions by Schumer and his colleagues has caused people to “lose faith” in government. Seen the polls lately Chuckie?

Meanwhile the administration is engaged in pure and unadulterated lying about the subject:

Matt Rogers, the senior adviser to the Secretary of Energy for the Recovery Act, denied there was a problem.

“The recovery act is creating jobs in the U.S. for American workers,” said Rogers, “That is what the recovery act is about, that is what it is doing. Every dollar from the recovery act is going to create jobs for the American workers here in the U.S.”

Really Mr. Rogers? Then explain this:

Iberdrola, one of the largest operators of renewable energy worldwide, is based in Spain and has received the most U.S. stimulus dollars — $577 million. It buys some of its turbines from another Spanish manufacturer, Gamesa, which has a U.S. connection. Gamesa has two facilities to manufacture turbine blades in Pennsylvania, but the company said the market forced it to temporarily lay off nearly 100 workers.

Half a billion dollars plus to a foreign manufacturer and the net result is 100 US workers end up being layed off.

Your tax dollars at work, spent by an inept and out-of-touch Congress and administered by a clueless administration who will tell you with a straight face that they’re “creating and saving” jobs when the facts say otherwise. The same administration which is now threatening increased taxes for US companies with overseas operations is handing out borrowed money in the billions to wholly owned foreign corporations.

Now, with this new “jobs bill” they’re going to want more money (anywhere from $85 to $150 billion) when only a 1/3 of the previous “stimulus” has actually been spent, and, as indicated above, not very well. Naturally, the GOP is making noises about supporting the latest effort.

And they wonder why there are Tea Parties.

~McQ

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