Free Markets, Free People

Monthly Archives: October 2010

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ObamaCare – Boeing to increase health insurance costs for workers

As the monstrosity that is ObamaCare is gradually phased in, expect to see more and more companies saying this:

"The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years," wrote Rick Stephens, Boeing’s senior vice president for human resources.

And with that, Boeing has informed its workers that their premiums will be going up.  Why?  Well they have a “Cadillac” plan apparently:

Spokeswoman Karen Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law.

The tax on so-called "Cadillac" health plans doesn’t take effect until 2018, but employers are already beginning to assess their exposure because it is hefty: at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan.

Of course, that’s just not “fair”, is it? 

One has to wonder, though, if Boeing may not be playing a little politics here, following McDonald’s example – make this visible and see if the administration won’t do for them what it did for McDonalds … issue them a waiver.

After all the administration that arbitrarily enforces the law in other areas certainly would trade a waiver for better PR as they did with Mickey D’s, wouldn’t they.

~McQ


NYT and climate change

The New York Times editorializes today on the fact that many of the Republicans running for Senate who have a good chance to win reject the notion of man-made global warming.  The canard used is a familiar one:

The candidates are not simply rejecting solutions, like putting a price on carbon, though these, too, are demonized. They are re-running the strategy of denial perfected by Mr. Cheney a decade ago, repudiating years of peer-reviewed findings about global warming and creating an alternative reality in which climate change is a hoax or conspiracy.

Really?  Or are they instead, like Carly Fiorina, “not sure”.  I’m certainly not sure.  And neither is science if you actually take the time to look into it.  There’s more and more coming out daily about the uncertainty within the scientific community that anything that has been theorized before is correct.  There is no “consensus” except in the propaganda cobbled together in the politically driven and discredited IPCC report.

So do I think it is a purposeful hoax?  Not in the beginning, but now you have to wonder as those who’ve been shown their “science” is deficient appear to want to double-down.  Is it a conspiracy?  Not as one is generally thought of but again, as this continues and more comes out about this subject, the less credible those who claim previous findings are settled science appear.

For instance, speaking of peer reviewed work, this study recently came to light (check out the excellent graphic at the link):

In “Short-lived uncertainty?” Joyce E. Penner et al. note that several short-lived atmospheric pollutants—such as methane, tropospheric ozone precursors and black-carbon aerosols—contribute to atmospheric warming while others, particularly scattering aerosols, cool the climate. Figuring out exactly how great the impacts of these other forcings are can radically change the way historical climate change is interpreted. So great is the uncertainty that the IPCC’s future climate predictions, which are all based on biased assumptions about climate sensitivity, are most certainly untrustworthy. As stated in the article:

It is at present impossible to accurately determine climate sensitivity (defined as the equilibrium warming in response to a doubling of atmospheric carbon dioxide concentrations) from past records, partly because carbon dioxide and short-lived species have increased together over the industrial era. Warming over the past 100 years is consistent with high climate sensitivity to atmospheric carbon dioxide combined with a large cooling effect from short-lived aerosol pollutants, but it could equally be attributed to a low climate sensitivity coupled with a small effect from aerosols. These two possibilities lead to very different projections for future climate change.

Again we see science noting that as we get more and more into the details of climate, we find we know much less than we thought. Hardly "settled science" then. Dr. Penner goes on to point out the complexity of climate science and what they’re just now learning and what is still unknown:

Of the short-lived species, methane, tropospheric ozone and black carbon are key contributors to global warming, augmenting the radiative forcing of carbon dioxide by 65%. Others—such as sulphate, nitrate and organic aerosols—cause a negative radiative forcing, offsetting a fraction of the warming owing to carbon dioxide. Yet other short-lived species, such as nitrogen oxides, carbon monoxide and volatile organic compounds, can modify the abundance of both the climate-warming and climate-cooling compounds, and thereby affect climate change.

Quantifying the combined impact of short-lived species on Earth’s radiative forcing is complex. Short-lived pollutants—particularly those with an atmospheric lifetime of less than two months—tend to be poorly mixed, and concentrate close to their sources. This uneven distribution, combined with physical and chemical heterogeneities in the atmosphere, means that the impact of short-lived species on radiative forcing can vary by more than a factor of ten with location or time of emission. The situation is further complicated by nonlinear chemical reactions between short-lived species in polluted areas, as well as by the interactions of clouds with aerosols and ozone. These processes add further uncertainty to the estimates of radiative forcing.

What she’s basically saying is they’re just now actually beginning to identify and get into all the complexities that are the climate. They’re discovering variables that can either intensify or mitigate. They can also heat or cool. And sometimes the same variable can do both. If anyone thinks the models that have been cited as the basis of the "settled science" used all these variables and used them correctly, then I have a bridge in Brooklyn you might be interested in buying.

Which brings us back to point one – the NYT claiming that the GOP are deniers and implying they’re anti-science.  No, they’re just not as gullible as the NYT and many on the left who want believe that man is ruining the planet and see it as a justification for even more government control of our lives.  They’re skeptics – thank goodness – as are most respectable and reputable scientists.  Climate science, as Dr. Penner’s work points out, is in its infancy.  Making policy decisions based on questionable science is a fool’s work.  Thankfully the GOP has realized this and taken a stand against rushing into horribly expensive solutions which will hurt the economy and further extend the government’s already extensive intrusion into our lives.

I’ll say this now – if and when science – and not the climate hustlers of today – is able to prove to my satisfaction that a) man has a significant role in climate change and b) changing behavior would be beneficial and something that could actually be accomplished without impoverishing the world, I’ll listen.   Until then, I remain a skeptic – and the more new science I see, the more I think I’m right to be a skeptic.

~McQ


It’s not us, it’s them …

The "smartest man in the room" strikes again:

"Part of the reason that our politics seems so tough right now, and facts and science and argument do not seem to be winning the day all the time, is because we’re hard-wired not to always think clearly when we’re scared," Obama told the assembled Democrats, who paid $15,200 a person to attend. "And the country is scared."

Ye gods – who knew we were getting a psychiatrist-in-chief when Obama was elected? He’s certainly no commander-in-chief so I suppose this will have to do. We, the "bitter clingers" are at it again.

Obviously the resistance he and the Democrats are encountering comes from our ignorance not their enlightened rule.  Now we’re scared and reactionary – unable to process how wonderful the things Democrats have done really are.  We can’t clearly comprehend that trillion dollar deficit budgets for the next 10 years are a “good thing”.  We can’t fathom that increased government intrusion into our lives at every level is for our benefit.  Obviously we’re just too dumb to understand the “science” that drives the cap-and-tax debate.  And we’re so on edge we clearly can’t comprehend the “arguments” which justify government take-overs of car companies and the health care system.

Good grief.  You really have to wonder what country this man grew up in, because I’m seriously doubting it was the US I grew up in and learned about before the liberal portion of my generation took over the schools.

It is never the ideas, concepts or policies that are the problem – it is, it seems, always the dumbass citizens who don’t “get” what these wonderful politicians are trying to do for them.  Forget that old and outdated belief in self-reliance and government in the role of night watchman.  It is obsolete.  It is no longer a government of the people designed to serve the people as a protector of individual rights.  Under this evolving concept of government, the people are there to serve government.  It is the collective that holds the exalted position, not the individual.  And “rights” are government’s to define, not nature.

The concept of governance which made the US the most successful nation in the world is nearing it conclusion and the people are resisting it. Why? Because they’re just not thinking clearly and are scared.

What a load of horseapples.

~McQ


Observations: The Qando Podcast for 17 Oct 10

In this podcast, Bruce, Michael, and Dale discuss the Economy, and the government’s effect on it.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.


Why no warrant?

You go to get an oil change and while your car is up on the rack, the mechanic notices a strange wire.  It leads to some sort of device that is not a part of your car.  You pull it off, take pictures and put it on the internet trying to get some help identifying the object, and the next thing you know, the FBI is at your door demanding you return their GPS device.  You were under surveillance, something the FBI needed no probable cause or a warrant to do.

Of course the point is this isn’t something that occurred in China or some banana republic.  It happened here.

I’m not saying that perhaps their isn’t a need for surveillance or that the use of a GPS tracking device wouldn’t be a good way to do it.  What I’m questioning is the lack of due process before it is done:

One federal judge wrote that the widespread use of the device was straight out of George Orwell’s novel, "1984".

"By holding that this kind of surveillance doesn’t impair an individual’s reasonable expectation of privacy, the panel hands the government the power to track the movements of every one of us, every day of our lives," wrote Alex Kozinski, the chief judge of the 9th U.S. Circuit Court of Appeals, in a blistering dissent in which a three-judge panel from his court ruled that search warrants weren’t necessary for GPS tracking.

But other federal and state courts have come to the opposite conclusion.

Law enforcement advocates for the devices say GPS can eliminate time-consuming stakeouts and old-fashioned "tails" with unmarked police cars. The technology had a starring role in the HBO cops-and-robbers series "The Wire" and police use it to track every type of suspect — from terrorist to thieves stealing copper from air conditioners.

So the argument is it is convenient for law enforcement?  While I don’t normally agree with 9th Circuit judges, I certainly agree with Kozinski on this one.  And why is it such a bother for the FBI or any law enforcement agency to have to get a warrant to track a suspect. Probable cause.  Due process. Those are deeply embedded concepts that are designed to protect individual liberty.  In effect, Kozinski is exactly right – as it stands, law enforcement literally is empowered to track every single person in the US without their permission.

That isn’t the country steeped in individual liberty that I grew up to expect.

~McQ


Stop the war on business

That’s the central theme of a Ken Langone op/ed in the Wall Street Journal. Langone is a co-founder of Home Depot who gives Obama a lecture he’s long deserved. He does a good job of summarizing the absurd rhetoric used by Obama and his administration and the attitude they project that has done nothing to help and everything to hurt the recovery:

Your insistence that your policies are necessary and beneficial to business is utterly at odds with what you and your administration are saying elsewhere. You pick a fight with the U.S. Chamber of Commerce, accusing it of using foreign money to influence congressional elections, something the chamber adamantly denies. Your U.S. attorney in New York, Preet Bahrara, compares investment firms to Mexican drug cartels and says he wants the power to wiretap Wall Street when he sees fit. And you drew guffaws of approving laughter with your car-wreck metaphor, recently telling a crowd that those who differ with your approach are "standing up on the road, sipping a Slurpee" while you are "shoving" and "sweating" to fix the broken-down jalopy of state.

That short-sighted wavering—between condescending encouragement one day and hostile disparagement the next—creates uncertainty that, as any investor could tell you, causes economic paralysis. That’s because no one can tell what to expect next.

Again we confront the difference between a politician in a permanent campaign and a leader.  And we see the result.

Obama seems mystified by the role of the president.  He seems not to understand that leaders don’t use the old, divisive and politically charged rhetoric of the campaign trail, but instead have the job of doing (and saying) what is necessary to move things in a positive direction.  That has not been something Obama has done at all when it comes to business.

There’s another point Langone made that is worth featuring:

A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.

We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.

If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.

Regulations, taxes, compliance and mandates cost businesses billions each year.  That’s billions that aren’t spent on employees, customers, expansion or growth.  And it is especially stupid to increase all of those in a recession – yet that’s precisely what is going on now.  And it keeps the market unsettled and at least defers or may in fact kill any possible action by businesses which may benefit the overall economy.

Obama’s actions and rhetoric are a case study of someone who doesn’t understand his job, doesn’t understand the power of the words he utters (because he doesn’t understand his job) and has been very irresponsible with his rhetoric at a time when the damage that rhetoric can do are compounded by the situation (recession).

OJT is not something a president should be doing – especially in a recession.  And for the supposed “smartest guy in the room”, he sure seems like a slow learner when it comes to his job and the requirements of leadership.

~McQ


Taliban attack in US imminent?

There’s apparently corroborated intelligence which says there’s a Pakistani Taliban operative within the US preparing to stage an attack similar to the Times Square plot that failed some months ago.

I would assume the newest terrorist has undergone much more intensive bomb construction training than did Faisal Shahzad.

Of course, making bombs isn’t particularly difficult nor does it take exceptional brain power or technical knowledge.  Any fanatic boob can be taught how to do it.

Frankly I’ve been surprised that we haven’t suffered a number of these sorts of attacks.  Perhaps it is because in the past, the terrorists have attempted to send in one of their own from Pakistan or Afghanistan.  In the case of the latter, unless extensive cultural training was done prior to the insertion of such an operative, he’d be like an alien landed on a new planet.  And then there are all the visa and travel difficulties to contend with.

Nope, the way you do this is how the Taliban is proceeding at the moment.  Recruit citizens from the target country to do the dirty work.  Like the 8 “Germans” who were just killed in Pakistan.  Or, Faisal Shahzad for that matter.

That’s probably the biggest hurdle – getting someone in country who can operate without raising suspicion.  They used to tell stories in South Korea about how easy it was for authorities there to identify North Korean agents – because of the culture they came from, they were just obvious.  And they didn’t last long in South Korea (any number of them defecting when they got a quick taste of the “decadent” South).

I don’t believe defecting is a particular concern, but it is a pretty fair surmisal that a rural Afghan would not fit in particularly well in the US culture.   So stage 2, that which is apparently underway now, is to recruit those who can move easily through the culture and society – US citizens of the Muslim faith they can radicalize.

That, of course, significantly narrows the group that authorities most likely have to concern themselves with, but it also smacks of “profiling” – a sin worse than seeing Americans blown up by a terrorist, apparently.  Of course profiling has been used successfully many times in chasing down serial killers and the like, but woe be unto authorities that admit it might be useful in chasing down a terrorist.

Anyway, the other aspect of this is the availability of bomb making substances and the ease by which they can be obtained.  Certainly after the OKC bombing some steps were taken to better account for the obvious substances that can be used, but in reality, so many bomb making substances are in such wide use that unless you had unlimited manpower and unlimited time to follow up every purchase of propane, fertilizer or other bomb making substances, the probability of someone gathering the right stuff in the right quantities is high.  That too is certainly better accomplished by a citizen than by an alien.

Finally, there’s opportunity.  The bad guys want to make a bloody statement.  That means a mass casualty scenario.  The opportunities for that are almost endless in a country of this size in which large crowds gather routinely for any of a number of reasons.  This is where constant intelligence and analysis are necessary to constantly monitor those opportunities as they occur and narrow them down to a small group of “most likely”.  Not an easy job. 

If, for instance, intelligence says that the terrorist is most likely to use a device like the Times Square (failed) Bomber, then he’s going to need an outdoor venue, not an indoor one – so you cross off all the indoor venues in the time frame.  Since it is likely to have to be vehicle mounted, perhaps outdoor venues where the crowds are safely away from the streets can be crossed off as well.  So maybe, for that day, they narrow it down to a couple of political rallies held in parking lots, or similar scenarios. 

That’s all good for that day only.  Next day starts the process all over again – in addition to continually attempting to identify and find the terrorist and his network (he’s most likely going to have some in support and logistics roles as well).  One needle in a multitude of haystacks.

Anyway, back to the subject at hand – if this is an effort by the Taliban, it seems ill timed given the reports of high level talks between the Taliban and Afghan government aimed at stopping the Afghan war.  Perhaps they are of the opinion that a successful attack here (and the promise of more if the US doesn’t get behind the effort) might actually help their cause.

Having watched the American people react to such attacks in the past, I’m not so sure that’s a great read on how to proceed.  Of course they could be aiming this at the leadership here which may be much more influenced by such an attack in the way the Taliban would prefer than the people.

Bottom line: be aware.  Per the intelligence out there somewhere someone is plotting American deaths in the US.  Nothing particularly new there and nothing which should stop you from doing what you want.  But understand as well, that this is the world we live in, keep your eyes and ears open and have a situational awareness about you that is tuned to security.  I’m not trying to scare anyone – heck you risk you life every day when you drive to work.  I’m just saying that this is and will be our on going reality for years to come.   May as well get used to it.

~McQ


Immigration and the Mosque – is it about race?

According to the NYT, Obama’s MTV appearance wasn’t as “light” as those who proposed it hoped it would be and essentially he was on the defensive for most of it.

I didn’t watch, so I can’t say, however if true, it simply validates the overall feeling of frustration and dissatisfaction with the present state of affairs.  He was hit with a question of unemployment and DADT.   Probably the most interesting, at least to me, was this:

A graduate student, citing Arizona’s immigration law and the opposition to an Islamic center in New York, said race relations in the country seem to have deteriorated since the idealism inspired by Mr. Obama’s election, and he asked, “What happened?” Mr. Obama said racial progress has been fitful throughout history, and “oftentimes misunderstandings and antagonism surfaces most strongly when economic times are tough.”

What has “race” to do with either Arizona’s immigration law or the Ground Zero Mosque?  Seriously – if those coming across our border and wanting to build a mosque next to where Islamic extremists killed 3,000 Americans were lily white, would it change the argument?

If they were white Muslims would everyone say, “oh, well, never mind – build your mosque where ever you want”? 

If those coming into our country illegally were blond haired and blue eyed, would the prevailing consensus be, “hey, that’s fine, no problem”?

No.  It wouldn’t.  This is more of the left’s attempt to create the narrative that any opposition to radical Islam or illegal immigration is based in race hatred.   Would I guess that’s probably the case for a small minority?  Sure.  But is it the case for the vast majority? 

Consider the questions I’ve asked and whether or not you’re concerned because the majority of those coming across our border are Mexican or because they’re doing so illegally.  Or whether your opposition to the GZM is based in race hatred or the inappropriateness of the attempt to build such a structure representing the religion of the zealot killers next to the site of those they killed?

Certainly there is still some work to do in the area of race relations – but it is not at all helpful to try to invent it where it really doesn’t exist.  Of course you can’t call your opponents “Nazis”, “brown shirts” or “racists” if you don’t do the groundwork first, can you?

~McQ


Looking at the PPI

Today’s release of the Producer Price Index raises some interesting and scary questions. The core PPI was up only 0.1%, but a 1.2% increase in good prices and a 0.5% increase in energy prices brought the overall PPI up by 0.4%.

Now, the reason that food and energy are excluded from the core PPI and CPI is that they often show a lot of monthly volatility. Those prices simply rise and fall quickly, so, on a month-to-month basis, they may not mean much. Ultimately, however, a trend of price increases in, say, energy will trend to raise prices across the board, as that increases the cost of production.

The traditional Keynesian argument about inflation is that it tends to decrease when the economy is struggling, as aggregate demand is stifled. Sadly, in the 1970′s we learned that simply wasn’t true, and the existence of stagflation sent the Keynesians back to the drawing board for about 15 years to reformulate a Neo-Keynesian economic model. Essentially what happened in the late 60′s and early 70′s was that the Fed pursued a very accomodative monetary policy. Ultimately, even a slow economy couldn’t prevent that monetary expansion from showing up as inflation.

Sound familiar?

It should, because the housing boom was kicked off by a similar policy, and since the collapse, the Fed has pursued a policy of “quantitative easing”, i.e., buying $1.2 trillion of securities with hastily printed money. Overall, the monetary base has more than doubled over the past two years, also, as the Fed has kept short-term interest rates at 0%.

So, I guess the question is whether today’s PPI is just a monthly outlier due to the volatile sectors, or whether it’s a sign that monetary expansion is beginning to kick off an inflationary spike that will soon begin to show up in the CPI as real, noticeable inflation.


Barney Frank – when in trouble, just lie

Greg Mankiw produces a story from 2003 which makes a statement Barney Frank made during a recent debate with Sean Bielat an absolute lie.

During the debate, Bielat, the Republican challenger for Frank’s seat, said this:

“He has long been an advocate for extending homeownership, even to those who couldn’t afford it, regardless of the cost to the American people,’’

Frank’s response?

“Low-income home ownership has been a mistake, and I have been a consistent critic of it,’’ said Frank, 70. Republicans, he said, were principally responsible for failing to reform Fannie Mae and Freddie Mac, the mortgage giants the government seized in September 2008.

“I was always against it and it’s the GOP’s fault”.

Two things implied by this statement.  First Frank is obviously admitting that “low-income ownership” was a mistake.  Secondly, he’s admitting that Fannie and Freddie were integral to the financial problems we’re enduring.

Now, to the record.  First the “it’s the GOP’s fault”:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry….

All opposed? Say "aye":

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

But there’s even more evidence than just that. How about a letter to President Bush in 2004 signed by Frank, Pelosi and 74 other Congressional Democrats?

"We urge you to reconsider your Administration’s criticisms of the housing-related government sponsored enterprises (the GSEs) and instead work with Congress to strengthen the mission and oversight of the GSEs. We write as members of the House of Representatives who continually press the GSEs to do more in affordable housing.

We have been concerned that the Administration’s legislative proposal regarding the GSEs would weaken affordable housing performance by the GSEs, by emphasizing only safety and soundness. While the GSEs’ affordable housing mission is not in any way incompatible with their safety and soundness, an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.

We also ask you to support our efforts to push the GSEs to do more affordable housing. Specifically, join us in advocating for more innovative loan products and programs for people who desire to buy manufactured housing, similar products to preserve as affordable and rehabilitate aging affordable housing, and more meaningful GSE affordable housing goals from HUD."

But, you know, Frank has always been a critic of low-income housing and it’s the GOP who prevented reform.

Again, a lie designed to influence and placate the low-information voter who will, unfortunately, accept it at face value. 

Another in a long line of reasons to give Frank the opportunity to apply for unemployment benefits.

~McQ

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