Free Markets, Free People

Monthly Archives: July 2009


The “Obama Economy”

If this NPR poll has any validity, it removes, once and for all,  the “I inherited this mess” meme from Obama’s rhetorical quiver. Americans see this as his mess now and they’re not particularly happy with how he’s handling it:

In another part of the poll, respondents were asked which of two statements on the economy came closer to expressing their view. The first statement: “President Obama’s economic policies helped avert an even worse crisis and are laying the foundation for our eventual economic recovery.” The second statement: “President Obama’s economic policies have run up a record federal deficit while failing to end the recession or slow the record pace of job losses.” A plurality preferred the second statement, 48 percent to 45 percent.

Another indicator of the point:

Greenberg and Bolger found that 38 percent considered the country to be going in the “right direction,” while 54 percent saw it on the “wrong track.” But that 15-point negative reading was the least negative of any NPR poll in more than year. The portion saying “wrong track” had been nearly 90 percent in the NPR poll done in the fall of 2008.

The principal reason for negativity appeared to be the economy. Asked to assess the current state of the economy, 49 percent called it poor while 42 percent opted for “not so good.” Only 8 percent said it was good and only 1 percent said excellent.

While NPR tries to soften the news, the fact remains that a solid majority think the country is on the wrong track. As mentioned above, there’s a 15 point difference between right and wrong track polling.

Lastly:

The so-called generic ballot question was also very close. Asked whether they would support a Democrat or a Republican for Congress in 2010 if the election were held today, 42 percent said they would choose a Democrat and 43 percent a Republican, a difference well within the poll’s margin of error (plus or minus 3.4 percentage points for each number in each question).

All three areas show a trend that has to be troubling to Democrats and the administration. In political terms, 2010 is right around the corner. And yes, it’s still early in the administration, but after the honeymoon, it appears those polled are not happy, for the most part, with what they’re seeing from either Congress or Obama.

~McQ


Maxine Waters – Political Rocket Scientist

I ran across this today and got a good chuckle:

Liberal frustration started to boil over in the House on Tuesday as negotiations over healthcare reform with centrist Blue Dog Democrats dragged into a second week.

The delay prompted Rep. Maxine Waters (D-Calif.) to lash out at the Blue Dogs as hypocritical and even hint that more liberal Democrats might challenge them in primaries.

Apparently Ms. Waters doesn’t quite understand why they’re called “Blue Dogs”:

Asked if she would recruit more liberal candidates to run against Blue Dogs, Waters said, “That’s normally not done.”

But she added: “There may be people out there listening and observing all of this who may get motivated based on what they’re seeing and throw their hat into the ring.”

Yeah, well, unless they too are “Blue Dogs” its unlikely they’ll be able to take a conservative district. And the present BDs know that if they’re a party to a liberal government program being stood up on their watch and with their support they’re not long for DC either.

But I’m sure Republicans would love to see a more liberal type take on a BD and help spend their war chest in the primary effort. It would only make the mid-terms a little brighter for the GOP in those districts.

~McQ


Health Care Blast From The Past – Hayek Has His Say

Here’s a post I did in January of 2007. It is very appropriate now that the health care reform business is well afoot.

So here’s ” Friedrich Hayek on Universal Health Care“, January 2, 2007:

As the 110th Congress prepares to convene and the run for the ’08 presidential nominations begins in earnest, we’re seeing far more appeals from the left, both from politicians, bloggers and opinion makers to address the supposed “health care problem”.

The appeals range from governmentally run universal health care to single-payer (again government) health insurance. The reasons given are also varied from the emotional “for the children” rhetoric favored by some to the technical “it would be more efficient and less costly” sobriquet.

Reading through Friedrich Hayek’s monumental “The Constitution of Liberty” again over the holidays, I revisited his discussion of the topic. And, willing to risk boring you out of you skull I thought I’d share it with you. Fair warning: Long post follows.

One of the most important thoughts he has on the subject gets to the crux of designing a system which would supposedly provide equal care to all. Health care cannot really be quantified and thereby presents peculiar problems which must be understood:

“They result from the fact that the problem of “need” cannot be treated as though it were the same for all who satisfy certain objective criteria, such as age: each case of need raises problems of urgency and importance which have to be balanced against the cost of meeting it, problems which must be decided either by the individual or for him by somebody else.”

And therein lies the great dilemma and the greatest threat to liberty. Because in a state run scheme it is the latter which will, indeed must, prevail.

He approaches the topic of health insurance and “free health care” by saying:

“But there are strong arguments against a single scheme of state insurance; and there seems to be an overwhelming case against free health service for all. From what we have seen of such schemes, it is probable that their inexpediency will become evident in the countries that have adopted them, although political circumstances make it unlikely that they can ever be abandoned, not that they have been adopted. One of the strongest arguments against them is, indeed, that their introduction is the kind of politically irrevocable measure that will have to be continued, whether it proves a mistake or not.”

That line is one of the most important points about this entire debate and one of the major reasons that many, especially among libertarians and fiscal and small government conservatives, resist the implementation of such a plan. Witness Medicare, Medicaid and Social Security. Once it is in place there is no turning back even if it is an outrageous mistake.

Fine, you say, but other than resisting it, to this point, because it may turn into an expensive and inefficient debacle, what can you offer to at least lend credence to an argument against such a system?

Fair question. And for that, I offer Hayek’s argument, an argument that is well reasoned, not emotional, and provides some unique insights.

He begins his critique by pointing out that the case for free health service is based on two fundamental misconceptions:

“They are, first, the belief that medical needs are usually of an objectively ascertainable character and as such that they can and ought to be fully met in every case without regard to economic considerations, and, second, that this is economically possible because an improved medical service normally results in a restoration of economic effectiveness or earning power and so pays for itself.”

But, as he argues, both miss the mark because they mistake the nature of the problem involved in decisions concerning “the preservation of health and life”:

“There is no objective standard for judging how much care and effort are required in a particular case; also, as medicine advances, it becomes more and more clear that there is no limit to the amount that might profitably be spent in order to do all that is objectively possible.”

Now make sure you’re clear on his point here. He’s not claiming it is profitable (or rational) to spend what is necessary to do all that is objectively possible. He’s arguing that if you agree that even marginal improvement, no matter how small, is “good” (“no objective standard”) then there is no limit as to how much you can spend for marginal improvement. Without an objective standard for making judgments as to how much care and effort are enough care and effort, the want is infinite.

He continues:

“Moreover, it is also not true that, in our individual valuation, all that might yet be done to secure health and life has absolute priority over other needs. As in all other decisions in which we have to deal not with certainties but with probabilities and chances. We constantly take risks and decide on the basis of economic considerations whether a particular precaution is worthwhile, i.e., by balancing the risk against other needs. Even the richest man will normally not do all that medical knowledge makes possible to preserve his health, perhaps because other concerns compete for his time and energy. Somebody must always decide whether an additional effort and additional outlay of resources are called for. The real issue is whether the individual concerned is to have a say and be able, by an additional sacrifice, to get more attention or whether this decision is to be made for him by somebody else. Though we all dislike the fact that we have to balance immaterial values like health and life against material advantages and wish that the choice were unnecessary, we all do have to make the choice because of facts we cannot alter.”

The fundamental issue he confronts here is the right of individual choice and the attack on that right which programs such as “free health care” pose. In essence individual choice is, at some point, overruled by collective choice. As Hayek implies in his discussion of “objective standards” and the real lack of them in judgments of how much care and effort are required in a particular case, those sorts of standards must be part and parcel to any “free health service”. Infinite need/want meets finite fiscal and physical resources in such a system, and consequently some method of defining the limits of “health care” within those fiscal and physical constraints must, of necessity, be made. Individual choice then is reduced to those standards and the freedom to pursue “additional sacrifice” in terms of spending more on your health is removed from your array of choices.

Even when such “objective determinably standards” are outlined, they prove not to be well considered or, as Hayek says, have any “relation to reality:”

“The conception that there is a an objectively determinable standard of medical services which can and ought to be provided for all, a conception which underlies the Beveridge scheme and the whole British National Health Service, has no relation to reality. In a field that is undergoing as rapid change as medicine is today, it can, at most, be the bad average standard of service that can be provided equally for all. But since in every progressive field what is objectively possible to provide for all depends on what has already been provided for some, the effect of making it too expensive foremost to get better than average service, must, before long, be that this average will be lower than it otherwise would be.”

Why the US continues to be the gold-standard for the most progressive and best medical care available instead of the British National Health Service is to be found in that paragraph. When their health is involved, people will rarely, if ever, chose the “bad average standard of service” over one which provides them the opportunity to access the best and most progressive. Health care, as provided by any universal scheme can, at best, only offer that “bad average standard of service”.

Hayek then addresses another part of the base misconceptions he identifies above:

“The problems raised by a free health service are made even more difficult by the fact that the progress of medicine tends to increase its efforts not mainly toward restoring working capacity but toward the alleviation of suffering and the prolongation of life; these, of course, cannot be justified on economic but only on humanitarian grounds. Yet, while the task of combating the serious diseases which befall and disable some in manhood is a relatively limited one, the task of slowing down the chronic process which must bring about the ultimate decay of us all is unlimited. The latter presents a problem which can, under no conceivable condition, be solved by an unlimited provision of medical facilities and which therefore must continue to present a painful choice between competing aims. Under a system of state medicine this choice will have to be imposed by authority upon individuals. It may seem harsh, but it is probably in the interest of all that under a free system those with full earning capacity should often be rapidly cured of temporary and not dangerous disablement at the expense of some neglect of the aged and mortally ill. Where systems of state medicine operate, we generally find that those who could be promptly restored to full activity have to wait for long periods because all the hospital facilities are taken up by the people who will never again contribute to the needs of the rest.”

Or who are presently too young to contribute.

What Hayek says, without saying it, is even in a system of “free health service”, there must and will be a system of rationing. Of course one of the main objections to our present system is we ration health care by price. But it doesn’t matter as the nature of health care, unlimited need meets limited means, requires it in every scenario imaginable short of a magic solution of some sort.

If we deal just in the economics of such a system, that which makes the most sense is to give priority of treatment to those who can recover quickly and contribute. That wouldn’t be the retired and children. Or stay at home moms. And those, usually, are the ones first identified as needing this sort of a system. But they are the very reason such systems fail to deliver on the promises made.

Hayek hints that such a system has an outside chance of working if it focuses on “restoring working capacity” and not much else. If and when it becomes focused on the “alleviation of suffering and the prolongation of life”, economic justification is impossible because the need/want for that is unlimited.

Such a system that gives priority to restoring those able to work productively would give further priority to treatment of the immediate problem and not necessarily the treatment of the chronic problem, if there is one – not if it wished to remain economically viable.

Thus far then, with such a system we’re reduced to a “bad average standard of service” which will, in some way, be rationed and in which individual choice will be abridged.

Last point, and privacy advocates should zero in on this:

“There are so many serious problems raised by the nationalization of medicine that we cannot mention even all of the more important ones. But there is one the gravity of which the public has scarcely yet perceived and which is likely to be of the greatest importance. This is the inevitable transformation of doctors, who have been members of a free profession primarily responsible to their patients, into paid servants of the state, officials who are necessarily subject instruction by authority and who must be released from the duty of secrecy so far as authority is concerned. The most dangerous aspect of the new development may well prove to be that, at a time when the increase in medical knowledge tends to confer more and more power over the minds of men to those who possess it, they should be made dependent on a unified organization under a single direction and be guided by the same reasons of state that generally govern policy. A system that gives the indispensable helper of the individual, who is at the same time an agent of the state, an insight into the other’s most intimate concerns and creates conditions in which he must reveal this knowledge to a superior and use it for the purposes determined by authority opens frightening prospects. The manner in which state medicine has been used in Russia as an instrument of industrial discipline gives us a foretaste of the uses to which such a system can be put.”

Now scoff if you wish, but that is the inherent risk any such system has because of its very nature. Such access to information is ripe for abuse, and, as Hayek notes, the fundamental change in the relationship of the doctor to the patient in this scheme makes such a risk of abuse more likely instead of less. The authority in this process is no longer the patient for whom the doctor used to work, but the entity which instructs the doctor on what he can or can’t do and pays him for the service. And the authority which makes such decisions must and will have access to all the information necessary to make them. What was once privileged information shared between doctor and patient would become shared information within the bureaucracy with possible potential abusive uses of which Hayek reminds us. Some may see those abuses as far fetched. I see their potential as a logical result of the system. One of the arguments we constantly make about corruption in the Congress is that the problem is systemic. It comes from the very nature of the institution its structure. This system is of similar construct and cannot help, at some time, becoming corrupt. Such corruption would most likely see the information within its databases used for purposes other than the treatment of patients.

An example? How hard do you suppose it would be to sort all the new mothers out of the population and offer them a choice of limited future service or complying with a government mandate that they see a doctor regularly? Some might argue that’s actually good. Ok, how about obese people? Alcoholics? Drug users?

Oh, wait, couldn’t the list of drug users be used for other purposes?

Yes. And so could a lot of other lists.

While all the lure of “free” health care sounds wonderful, especially to those who may not have access to health care at the moment, it is an emotional appeal which ignores the huge down-side such a program imposes on a society. No one argues that the system we have is perfect, and it certainly isn’t the least expensive, but, it appears it is the most responsive and provides access for most to the best and most innovative medicine available. There are some obvious things which could be done to improve it (remove health insurance from the realm of the employer, for one). But given the power of Hayek’s arguments, it should be a little more clear that putting our health care into the hands of the government is not one of them.

~McQ


World Will Warm Faster Than Predicted In Next 5 Years?

That’s what the Guardian is saying.   And, it claims, that will “silence” global warming skeptics.

You mean man’s link to warming has finally been proven and we will now reap what we’ve sown?

Well, not exactly.  Here’s the reason they give:

[The] [n]ew estimate [is] based on the forthcoming upturn in solar activity and El Niño southern oscillation cycles.

They then trot this out:

The hottest year on record was 1998, and the relatively cool years since have led to some global warming sceptics claiming that temperatures have levelled off or started to decline. But new research firmly rejects that argument.

The research, to be published in Geophysical Research Letters, was carried out by Judith Lean, of the US Naval Research Laboratory, and David Rind, of Nasa’s Goddard Institute for Space Studies.

The work is the first to assess the combined impact on global temperature of four factors: human influences such as CO2 and aerosol emissions; heating from the sun; volcanic activity and the El Niño southern oscillation, the phenomenon by which the Pacific Ocean flips between warmer and cooler states every few years.

The analysis shows the relative stability in global temperatures in the last seven years is explained primarily by the decline in incoming sunlight associated with the downward phase of the 11-year solar cycle, together with a lack of strong El Niño events. These trends have masked the warming caused by CO2 and other greenhouse gases.

Notice anything in there that sounds familiar? Remember the report on this peer reviewed study? The Guardian apparently doesn’t:

Three Australasian scientists have published a study in the Journal of Geophysical Research claiming that virtually none of the observed temperature increases in the Earth’s atmosphere in recent years can be attributed to man-made factors.

And to what did the 3 scientists attribute recent warming?

“The surge in global temperatures since 1977 can be attributed to a 1976 climate shift in the Pacific Ocean that made warming El Niño conditions more likely than they were over the previous 30 years and cooling La Niña conditions less likely” de Freitas said.

“We have shown that internal global climate-system variability accounts for at least 80% of the observed global climate variation over the past half-century. It may even be more if the period of influence of major volcanoes can be more clearly identified and the corresponding data excluded from the analysis,” he added.

Again, what was it the scientists the Guardian are trumpeting included in their analysis?

“…volcanic activity and the El Niño southern oscillation…”

And the sun – something we’ve been pointing out for a while has a huge impact on heating or cooling on the earth. It has also been very quiet for a few years.

We have obvious agreement between the two studies that three natural activities over which man has absolutely no control are driving the climate. And the Guardian gives us nothing – absolutely nothing – that supports the AGW connection which it implies the inclusion of man-made CO2 emissions and aerosols. No percentage of cause or contribution to the warming, no idea if the inclusion has any effect at all, nothing. The Australians reached pretty much the same conclusion but found no connection with man-made emissions.

One final word – I’m not a “global warming” skeptic. The globe warms and cools. Its a natural thing that the globe has been cycling through since its formation.

I’m an AGW skeptic. And this study does nothing to change that. In fact, it reinforces what the Australians did. The globe my very well warm in the next 5 years. But I still am not seeing anything that definitively links that to man. I’m seeing a lot that links it to nature though.

~McQ


The Health Care “I Told You So” Post

When your political opposition is self-destructing (even while in the majority and in control of the legislative and executive branches), most political observers would advise stepping back and allowing them to do so.

But not the Republicans. They’re going to be the “significant other” that gives this president a win on his signature issue and help him maintain both his momentum and the viability of the rest of his agenda.

The “I told you so” part of this is, as I (and many others) have said, Democrats will eventually pass something they can call “health care reform” and save the viability of Obama’s presidency. What you didn’t figure is the Republicans would be both complicit and key to that:

Sen. Olympia Snowe (R-Maine) confirmed that the three Republicans and three Democrats negotiating the Senate Finance bill are moving away from a broad-based mandate that would force employers to offer insurance. The senators instead are leaning toward a “free rider” provision that requires employers to pay for employees who receive coverage through Medicaid or who receive new government subsidies to purchase insurance through an exchange.

Snowe stressed the committee hasn’t reached a final agreement on any of the key provisions but said, “There is not a broad-based employer mandate. … There are approximately 170 million Americans that receive coverage through employers. That is a significant percentage of the population. We don’t want to undermine that or create a perverse incentive where employers drop the coverage because their employees could potentially get subsidies through the exchange.”

On the nonprofit insurance cooperative, Snowe also said no final decisions have been reached, but “it is safe to say it is probably one that will remain in the final document.”

This is what everyone who talks about it means when they say that Republicans “talk the talk but don’t walk the walk”. Here is a group, and I’d bet there are more that will sign on, who are involved in one of the biggest expansions of government undertaken since the “New Deal”. And when November of next year rolls around, this is the party that is going to want you to believe they are all for less government, less spending and less government intrusion.

And they’ll have this to point to as proof. [/sarc]

The reason the GOP is a shrinking party isn’t because it is the party of the Southern white male. It’s because no believes their nonsense any longer.  Sometimes being the party of “no” is the right thing to do.

[Welcome RCP readers]

~McQ


Trying Too Hard To Make It About “Aggrieved White Guys”

Michael Crowley has a post at The New Republic’s blog (“The Plank”) in which he works is hardest to push a new meme. Yes friends, we’re now in the “post-Bush” era of “the aggrieved white guy”.

Apparently the Gates/Crowley (no relation I’m sure) dustup provided him the final and definitive proof. Apparently it wasn’t a cop and an increasingly hysterical man pushing each other’s buttons and, as usual, the guy with the badge and gun winning. Oh no, it is a “teachable moment” that was ripe for our teacher-in-chief, sans all the facts, to conclude it was the cop’s fault. And, of course, the cop being white and the homeowner who was misidentified as a burglar being black and a FOO, well what more needs to said, hmmm?

And, as proof, Michael Crowley offers one of the left’s favorite punching bags – Joe the Plumber. Yup, Joe was the guy who began to clue Crowley into this phenomenon – “the aggrieved white guy”. Uh, sorta:

This is the third time in the past year that Obama has squared off, directly or indirectly, with working-class white men. First, there was Joe the Plumber. Last fall, John McCain’s campaign became, to an astonishing degree, connected to the grievances of an (unlicensed) Ohio plumber. JTP’s message wasn’t explicitly racialized–he complained primarily that Obama was leading America down the path toward socialism. But it was impossible to ignore the way he embodied a working-class white everyman who has traditionally felt threatened by minority groups in America. Although McCain lost badly, JTP did allow him to abandon his ineffective emphasis on foreign policy issues like Iraq and Russia and focus his message late in the campaign around Obama’s social spending–a preview of the GOP’s most potent line of attack today.

Well Joe, you know, he wasn’t “explicitly racialized” (I mean when you’re trying to make a point about race and you can’t even figure out a way to brand one of the main figures you’re using to make your point as racist or “racialized”, maybe you ought to hit the “delete” button and try something else). Nope, Joe complained mostly about “spreading the wealth around”.

But, concludes Crowley, even though Joe wasn’t racialized and mostly complained about socialism, he “embodied” – emfreakinbodied – “a working-class white everyman who has traditionally felt threatened by minority groups in America.

Really? Where did you make that point, Mr. Crowley? Where did you even get close to it? Talk about trying too hard.

Second “aggrieved white guy” moment? Sotomayor:

Then, there was the Sotomayor nomination. His Supreme Court nominee was controversial for a recent court ruling which denied promotions deprived a group of white firefighters, coupled with her ill-advised advised assertion that “a wise Latina” might reach a better decision that a white male judge. Senate Republicans and conservative pundits clobbered Sotomayor for the implication that she was biased against white guys. Their point was illustrated with potent stagecraft, in the form of uniformed white firefighters–the losers in the New Haven case–who attended Sotomayor’s Senate confirmation hearings in their dress uniforms. They were icons of the heroic working-class white guy. Sotomayor’s hearings went about as smoothly as possible, but the GOP did use them to lay the groundwork for a narrative that the Obama administration gives special preference to minority groups.

Smoothly missing from Crowley’s analysis is the fact that the racist phrase in question here came from the Supreme Court nominee, not some “aggrieved white guys”. You have to wonder if her example of a wise Latina woman making a better choice had instead used a black male judge. I’m sure we all know how that would have worked out.

Instead, it is apparently assumed, in the post-racial Obama era, we’re just supposed to let what appeared to actually be a racist statement slide. Or, when exception is taken too it, hand wave that away as “the aggrieved white guy” thing. Had Sotomayor never uttered those words, they’d have aggrieved no one, regardless of race. That is the salient “post-racial” point.

And now we come to the point of this “analysis” which will try to hand us “the aggrieved white guy” label to play with over the next few years:

Now comes Sergeant Crowley. Conservatives could hardly ask for a more effective vehicle for this burgeoning narrative. While Joe the Plumber was an obvious moron, and Sotomayor too sympathetic and skillful to demonize, Crowley (no relation, sorry) is political gold.

Clever, huh? He must have stayed up late trying to figure out how to stitch Joe the Plumber, Sotomayor and Sergeant Crowley together to make this rather lame attempt at launching his AWG meme. Get ready for it, here comes the “thud” as it hits the floor. Speaking of Crowley, the other Crowley says:

He is the hard-working white man who wears a uniform and risks his life for his country. Note that such a uniformed civilian hero is especially valuable for a Republican party which, through the fiasco in Iraq, has largely lost its monopolistic claim on representing the uniformed American soldier. And while it’s hard to defend Crowley’s arrest of Gates, he does seem to be winning the spin war over character and temperament (particularly after African-American members of the Cambridge police force came to his defense last week). Crowley also plays into the only theme conservatives like more than race, which is class. For Obama to be in the defense of a Harvard professor who summers on the Vineyard against a police officer who attends neighborhood softball games at night–particularly after Obama admitted during his first comments about the case that he did not know all the facts–is almost too good to be true, from the GOP’s perspective.

Have you picked up on it yet? Are you aware of how Crowley is using the words “Republican party” in this? As a pretty obvious code phrase for – heh, yup, you’ve got it – “aggrieved white guys”. See they’re obviously not taking offense at the President of the United States using a nationally televised news conference to call the cop stupid even while admitting he didn’t have all the facts. Nope they’re trying to develop something which the President had every opportunity to avoid and didn’t. Who was trying to develop what? And if Obama considered it a teachable moment as Crowley contends, why isn’t it a teachable moment for Obama as well?

Frankly that’s how it came out as I’ve observed it. Obama stuck his foot fully in his mouth and paid for it. He hasn’t yet learned what is or isn’t appropriate in his new office.  Crowley of course, seems to have forgotten the glee of Democrats each time Bush did something like that – but I don’t remember him trying to push some  “aggrieved” meme then although I believe for some at the time, “aggrieved loon” might have fit nicely.

Crowley concludes:

Obama and his advisors surely realized this. They understood that Crowley represented something far more dangerous to their post-racial narrative than either Joe the Plumber or those uniformed firefighters. For once, conservatives stood to gain real traction on both issues of race and class in one simple episode. It wasn’t going to ruin his presidency, but it was too volatile to be ignored. Obama had to take control of the story before it took control of him.

Nonsense. Utter balderdash. All Obama had to do was look at the questioner and politely say, “I don’t have all the facts and prefer not to say anything until I do,” and then call on the next questioner.

In fact he caused the ruckus and managed to overshadow the message he was trying to push that night – health care. As it turns out,  I’m glad he did.

However let’s not pretend that Obama exercised any “control over the story”. He reacted to his own stupid statement and tried to cover it up like a cat trying to cover, well, you know.

And, by the way, Mr. Crowley – it didn’t work.

“Aggrieved white guy”, my rear end.

~McQ


Carefully Reporting That For Some “Global Warming” Wasn’t So Bad

This story in the UK’s Times is as interesting for what it doesn’t say as what it does say.

Apparently the world went through some global warming (most know it as the Medieval Warm Period) roughly between AD1100 and 1500 that allowed the Inca Empire to rise and spread. And note, there was no “A” in that “GW” at that time. In fact the temperature rose several degrees during that period. The Times chooses to characterize the 400 years as a “spell of good weather”. But the last 20 years of more current time with a net zero degrees of warming? Gloom and doom.

And let there be no question about it, that 400 year “spell of good weather” was the most significant factor in the rise of the Inca empire:

“Yes, they were highly organised, and they had a sophisticated hierarchical system, but it wouldn’t have counted a jot without being underpinned by the warming of the climate,” says Dr Alex Chepstow-Lusty, a palaeo-ecologist from the French Institute for Andean Studies in Lima, Peru.

The study’s authors say that the findings have important implications for Peru and other countries facing the prospect of the most extreme shifts in climate because of global warming. For many countries, the prospect of warming is unwelcome. However, with the correct landmanagement techniques some of these countries might be able to turn a warmer climate to their advantage.

Well assuming that the rest of the world went through the same sort of warming over that 400 years (and yes, it did) and we somehow survived and apparently thrived, it would seem that “other countries” facing the “unwelcome” prospect of warming may want to reassess the whole concept, doesn’t it?

I mean if scientific findings have any weight with the AGW crowd and all.

~McQ


Against Obama’s Global Tax Hike

I’m not keen on many taxes to begin with, but as a practical matter, some are more destructive than others. Some are so bad that they’re a train wreck even by their proponents’ stated standards.

President Obama has proposed a package of tax hikes on the overseas operations of American firms. The supposed benefits sound like political winners: over the next decade the feds get $210 billion to shovel into the yawning budget hole, and at the same time discourage those companies from outsourcing jobs. Congressmen who promise more jobs but are wary of mounting deficits might think they’re hitting two birds with one stone.

But there are more appetizing birds than the goose that laid the golden egg.

See, there are just a few things that offer relief from the fact that the US is one of the few countries to tax its companies’ operations all over the globe. One is “deferral” – companies don’t pay taxes on most earnings until the money is returned to the US parent company, so they can delay getting slapped with the double tax by reinvesting their foreign earnings in foreign operations.

Another big relief is being able to claim credits on the taxes they pay to foreign governments.

Obama is proposing, among other things, to place new limits on deferral and clamp down on tax credits. These changes won’t work as advertised: they won’t reduce outsourcing (they may increase it) and won’t raise nearly as much revenue as originally claimed.

First, most American companies that expand overseas do it to get around trade barriers and get close to their customers. When a new KFC opens up in China, that’s not an outsourced American job; that’s an American business getting to expand into a growing market. The vast majority of sales made by foreign affiliates – think 90 to 94 percent – were to foreigners, not exports back to the US.

Second, the roughly 2,200 US-based corporations with overseas operations either employ or support the employment of 22 million Americans, and those companies create half of all American exports. Jobs here rely on providing direction to foreign workers (managers, engineers) and producing goods for affiliates to sell in foreign markets.

The growth of US foreign affiliates is “consistently accompanied(PDF) by the growth of their parent companies, the opposite of what you would expect from a zero-sum perspective on “outsourcing”. More expansion abroad means more jobs, compensation and investment at home.

So making American firms uncompetitive abroad not only threatens jobs at home but even encourages businesses to headquarter themselves outside the US.

And as a result of that, the policy changes won’t raise nearly as much revenue as Obama claimed.

  1. The global downturn has been worse than Obama suspected back when that $210 billion figure was calculated.
  2. We’ve tried cutting back deferral before: in 1986, the government repealed deferral for the shipping industry, and consequently we lost half of our shipping capacity, taking a bunch of jobs and tax revenues with it.
  3. Even still, never underestimate the creativity and industriousness of tax lawyers.

That last part might not be such a problem if Obama’s proposals simplified the tax code, like he claims. But they make things worse on that score, not better.

As a note to my fellow Virginians: these companies with overseas operations are responsible for over half of the private sector jobs in the commonwealth (PDF source), and they tend to be the better-paying jobs (averaging over $70k compensation) like computer systems design and telecommunications. Is that going to sit well with the likes of Sen. Warner?

Bills that hurt this many people are loaded with political liabilities, yet I got word a few days ago that a bill with Obama’s proposals may come up for consideration in the House in September.

Get the word out. The more people know what this is going to cost them, the harder it will be to sell. By all rights, Obama’s Globo-Hike should fail politically before it has a chance to fail as policy.


A Word To The “Birthers”

Do you remember how we all laughed at the “truthers” and wondered how they could be so gullible as to believe all the nonsense being spread about (fire doesn’t melt steel, etc.)?

Well now you’re the one’s being laughed at. You’re just like the truthers and the leftist dead-enders who wouldn’t let the 2000 election go.

Birthers.  Truthers.  One in the same.

Barack Obama is from Hawaii, he’s the president, there is no “smoking gun” here and you need to get off of this before you further ruin your credibility. I mean think about it – you’re taking your lead from a ditzy lawyer who has become addicted to the media coverage she can generate and dimbulb’s like this Army Reserve Major who played the reserve system to allow him to make a political statement.  The vast majority of Republicans know a stinker when they smell one.

Get over this stuff.  This is the “Bush/AWOL” story for the right.

~McQ


Health Care Reform – Peeling The Onion

There are a number of things going on in the health care reform debate that are the reason Democrats are at odds with each other. One, obviously is cost. What should be apparent, even to rocket scientists like Nancy Pelosi, is that the American people are not buying into the premise that “government can expand coverage, improve care and do it for less”. It’s not happening.

And, of course, those on the blue side that are leading the “no way, no how” charge are the so called Blue Dogs. Bolstering the Blue Dog position is the CBO, or Congressional Budget Office – a non-partisan organization which “scores” proposed bills for cost and savings. In the last few weeks it has consistently found Democratic Congressional legislative proposals wanting – pointing out none delivered the promised savings over the long haul.

Predictably, the CBO has come under fire from the left, and yesterday the White House joined the fray. Peter Orszag, the White House budget director, Peter Orszag said – carefully – that the CBO’s recent analysis might be feeding a perception that its tendency is toward “exaggerating costs and underestimating savings.”

Given how the costs of most government programs skyrocket after implementation, I’m having difficulty buying into this supposed perception. And it may say more about Orszag, former CBO director, than it does about the CBO now.

However, what Orszag is talking about specifically is a proposal that is another part of the infighting going on among Democrats.

“The point of the proposal … was never to generate savings over the next decade,” Orszag said in a letter posted on Saturday.

“Instead the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.”

In fact, the proposal is about shifting power from Congress to the Executive Branch:

The new council, if approved, would replace the current Medicare Payment Advisory Commission, which is made up of doctors and health care experts. Once a year, it gives recommendations about coverage and reimbursement rates for Medicare but has no authority to enforce its ideas. Its report in March recommended that payments for primary care physicians be increased and home health services rates be decreased.

The proposed council would be comprised of doctors and health care experts making their recommendations based on extensive data and analysis of best health care practices, according to administration officials.

It would be an independent executive branch agency — which would give its recommendations more weight. The president would have to approve or disapprove the its recommendations as a package. If it is approved, the package would be enacted if Congress did not vote against it within 30 days.

This isn’t necessarily about “best health care practices” – this is about centralizing the decision making and making it harder and harder for Congress as a whole and individual Congressmen specifically, from excepting their district or certain constituent health care providers from some of the provisions. The White House wants to take that little perk away from them. And that’s another one of many stuggles going on within this fight to pass something.

A Democratic president trying to take power away from a Democratic congress is probably not the best way to try to pass something that the President can call “health care reform”. That’s not to say I support this council in either form – its more to point out how clumsily this administration is proceeding in all of this. If you want legislation passed so your signature issue doesn’t fail, it may be best not to try to take power away from a friendly Congress and take it yourself. Executive power grabs don’t just happen in the national security area as the Democrats constantly criticized Bush for attempting. They can occur in many other areas. We’ll see if the Dems will be as critical of this power grab as they were of the ones alleged of the previous administration.

~McQ