Free Markets, Free People

Monthly Archives: June 2011


ObamaCare will allow middle class retirees to go on Medicaid

Good thing we passed this ObamaCare monstrosity so we could finally find out what is in it.  More and more surprises, as the Daily Caller points out:

President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed.

The change would affect early retirees: A married couple could have an annual income of about $64,000 and still get Medicaid, said officials who make long-range cost estimates for the Health and Human Services department.

Brilliant.  The states, which pay over 40% of Medicare costs, are, of course, not thrilled by this revelation.

Governors have been clamoring for relief from Medicaid costs, complaining that federal rules drive up spending and limit state options. The program is now one of the top issues in budget negotiations between the White House and Congress. Republicans want to roll back federal requirements that block states from limiting eligibility.

Medicaid is a safety net program that serves more than 50 million vulnerable Americans, from low-income children and pregnant women to Alzheimer’s patients in nursing homes. It’s designed as a federal-state partnership, with Washington paying close to 60 percent of the total cost.

Early retirees would be a new group for Medicaid. While retirees can now start collecting Social Security at age 62, they must wait another three years to get Medicare, unless they’re disabled.

Some early retirees who worked all their lives may not want to join a program for the poor, but others might see it as a relatively painless way to satisfy the new law’s requirement that most Americans carry health insurance starting in 2014. It would help tide them over until they qualify for Medicare.

Remember, they have a mandated requirement to carry insurance.  They’re not eligible for Medicare and they’re retired.  COBRA is very expensive.  But the new rules in ObamaCare make those who are drawing up to $64,000 a year in retirement eligible for a program that is supposed to serve only the very poorest among us:

The Medicare actuary’s office roughed out some examples to illustrate how the provision would work. A married couple retiring at 62 in 2014 and receiving the maximum Social Security benefit of $23,500 apiece could get $17,000 from other sources and still qualify for Medicaid with a total income of $64,000.

That $64,000 would put them at about four times the federal poverty level, which for a two-person household is $14,710 this year. The Medicaid expansion in the health care law was supposed to benefit childless adults with incomes up to 133 percent of the poverty level. A fudge factor built into the law bumps that up to 138 percent.

The actuary’s office acknowledged its $64,000 example would represent an unusual case, but nonetheless the hypothetical couple would still qualify for Medicaid.

Now you’re saying, “wait a minute, they’re at 4 times the poverty level with their income and it clearly states that only those who are at 138% can get Medicaid – that’s exactly what $17,000 represents.

Oh, didn’t I tell you?  ObamaCare’s new law doesn’t count Social Security as income.  So in essence, our mythical couple only claims $17,000 a year income and qualifies.

So, they look at the options – let’s say COBRA would run $1,000 a month for the two of them for sake of argument (it could be much higher) and simple math.  They’re looking at an outlay of $12,000 a year.  Medicaid, however, is probably less than a $100 a month and copays.  A thousand a month or a hundred a month – you make the call.

Here’s the bottom line truth:

Former Utah governor Mike Leavitt said bringing early retirees in will “just add fuel to the fire,” bolstering the argument from Republican governors that some of Washington’s rules don’t make sense.

“The fact that this is being discovered now tells you, what else is baked into this law?” said Leavitt, who served as Health and Human Services secretary under President George H.W. Bush. “It clearly begins to reveal that the nature of the law was to put more and more people under eligibility for government insurance.”

It is hard not to interpret it that way, isn’t it?  Everyone claims they didn’t know this was “in there”.  Really?  And it literally has been discovered recently.  Not only does it make you wonder what else is “baked into this law”, but it makes you realize how really “half baked” this law is.

This is a law that has to be repealed in full.  It is terrible law.  It continues to see little surprises like this pop to the surface.  And, as governor Leavitt points out, these sorts of revelations do indeed point to the real nature of the law – that is to make more and more people dependent on government.

Any presidential candidate who is wishy-washy on this issue doesn’t deserve the time of day, much less your vote.

~McQ

Twitter: @McQandO


30,000 troops to be pulled out of Afghanistan

I’m all for winding down our commitment in Afghanistan, but it should be for solid reasons to do with the security and stability of that nation and not because of US politics.  Alas I fear what we’ll hear tonight has been decided for exactly that reason and no other.

Barack Obama is set to reject the advice of the Pentagon by announcing on Wednesday night the withdrawal of up to 30,000 troops from Afghanistan by November next year, in time for the US presidential election.

The move comes despite warnings from his military commanders that recent security gains are fragile. They have been urging him to keep troop numbers high until 2013.

The accelerated drawdown will dismay American and British commanders in Kabul, who have privately expressed concern that the White House is now being driven by political rather than military imperatives.

And, of course, they’re entirely right.  Obviously military commanders are going to argue for more, not less – and most people understand that.  They will always say they need more.  But in this case, what they’re arguing is they need to keep what they have.  The so-called “surge” has barely been completed and full deployment of those assets is only months old.  We’re in the middle of a “fighting season”.  Certainly it would be better to announce and begin these withdrawals, whatever their size, in the colder months when the fighting is naturally less.

But to the point – “listening to the generals” is apparently only something Republican Commanders in Chief should do.  Obama has decided, for entirely unmilitary reasons, it is time to pull the plug on any hope of holding our gains in Afghanistan.  Note, I didn’t say get out of A’stan.  30,000 troops isn’t even close to a full withdrawal (100,000 there now).  However, it is a margin of difference between consolidating and keeping what we’ve driven the Taliban out of and being too thinly spread to do that.   In fact, that was the whole purpose of the surge (just as in Iraq) – take and hold.

The withdrawal has created deep divisions in Washington. The defence secretary, Robert Gates, argued for a modest reduction – at one point as low as 2,000 – citing the advice of US commanders in Afghanistan that they need to protect gains made during the winter against the Taliban.

But senior White House staff, conscious that the president has an election to fight next year, argued in favour of a reduction that would send a signal to the US public that an end to the war is in sight.

General Petraeus and his staff have made clear the risk of pulling out 30,000 troops this soon.  Obama has chosen to ignore their advice for political reasons.  Some will attempt to characterize this as a “gutsy call” when in fact it is anything but that.  It is the antithesis of a gutsy call – it is a decision driven by political and not military reasons.  In fact, it would appear the military’s reasons for wanting a much smaller withdrawal weren’t really considered at all.  That is to say, this was a decision made on a timeline, reality be damned. 

Interestingly, this was the “good war”, the “necessary war”, the “war we ought to be fighting” when Mr. Obama was a candidate.  As with much he does, he’s taken a swipe to satisfy political critics and is now pulling out to satisfy others.  The war (or is it a “kinetic event?”)?

It’s a “distraction.”

~McQ

Twitter: @McQandO


Did Obama save us from a second “Great Depression”?

That’s the spin from the White House and its supporters, or has been for quite some time.   The story goes, “if we hadn’t passed the stimulus bill, we’d have seen even worse economic performance than we have and we’d have worse unemployment to boot”.

Investor’s Business Daily (IBD) took a look at the claim and found it … wanting.

For instance:

White House economists forecast in January 2009 that, even without a stimulus, unemployment would top out at just 8.8% — well below the 10.8% peak during the 1981-82 recession, and nowhere near Depression-era unemployment levels.

The same month, the Congressional Budget Office predicted that, absent any stimulus, the recession would end in "the second half of 2009." The recession officially ended in June 2009, suggesting that the stimulus did not have anything to do with it.

Now we can argue the unemployment numbers and whether or not the real number of unemployed is approaching the Depression-era level (it’s not), but what can’t be argued are the forecasts from that time.  Obviously, the supporters of the stimulus knew of these forecasts and believed that with the stimulus we could come in well under those numbers.

As it turns out, unemployment shot past 8.8% and the recession ended exactly as forecasts said it would without any stimulus.  That makes it a bit difficult to argue the stimulus had a positive effect.  In fact, it can be argued that it may have had a negative effect.   But, there are also those who claim it would have been “a lot worse” without it, not to mention those who claim it was too small to begin with.

But that’s unsupportable in the face of the economic forecasts.

The argument is often made that the recession turned out to be far worse than anyone knew at the time. But various indicators show that the economy had pretty much hit bottom at the end of 2008 — a month before President Obama took office.

Monthly GDP, for example, stopped free-falling in December 2008, long before the stimulus kicked in, according to the National Bureau of Economic Research. (See nearby chart.) Monthly job losses bottomed out in early 2009 while the Index of Leading Economic Indicators started to rise in April.

So looking back we see all the indicators of an economy trying to begin a recovery.  Yet here we are still struggling and we spent a trillion dollars of borrowed money in the meantime on goodness knows what.

One other thing to keep in mind – the establishment of the most hostile climate toward business I’ve ever seen from government in my lifetime began about this time as well.

No, per IBD, it appears if there’s any credit at all for saving the country from depression, it should go to the other guy:

Also often overlooked is that a tremendous amount of stimulus already was in the economy when Obama took office, including President Bush’s $150 billion stimulus, two unemployment benefit extensions and $250 billion spent on "automatic stabilizers."

More importantly, the Bush administration pushed through the controversial $700 billion TARP program (which Obama sustained), while the Fed pursued an aggressive anti-recession campaign by, among other things, effectively lowering its target interest rate to zero.

Now agree with it or not (not – I’m still not convinced it was necessary), and buy into the “saved us from depression” or not (not – we’d have gotten over the pain much more quickly and wouldn’t be at the beginning of a “lost decade”), it appears that economic history is being revised here.   The Obama stimulus was a latecomer to the party.   Most of the action had already taken place.  What Obama and his administration did was create a hostile business climate.  The business community reacted by sitting on its hands and its money waiting for a clear signal (one they’ve yet to receive) that they’re not going to be taxed and regulated to death.

But Obama save us from a depression?  

Just for the record, It doesn’t appear to be the case.

~McQ

Twitter: @McQandO


Food police want to regulate foods "for the children"

At RightOnLine, Ann Macelhinny (author of “Not Evil Just Wrong) said that while many believe that the right wants to control what happens “in the bedroom”, it is the left which wants to control everything that goes on in every other room in the house to include the kitchen and garage (what car you should drive and what fuel it should use).

An example of her point comes to us today via this proposed “voluntary” regulation by the Federal Trade Commission, Centers for Disease Control and Prevention, Food and Drug Administration and the U.S. Department of Agriculture.

“The Interagency working group recommends that the food industry, through voluntary self-regulatory efforts, make significant improvements in the nutritional quality of foods marketed to children and adolescents ages 2 to 17 years,” the proposal says.

“By the year 2016, all food products within the categories most heavily marketed directly to children should meet two basic nutrition principles.  Such foods should be formulated to … make a meaningful contribution to a healthful diet and minimize the content of nutrients that could have a negative impact on health and weight.”

The foods most heavily marketed directly to children and adolescents fall into 10 categories: “breakfast cereals, snack foods, candy, dairy products, baked goods, carbonated beverages, fruit juice and non-carbonated beverages, prepared foods and meals, frozen and chilled desserts, and restaurant foods.”

Again, this proposed regulation calls for voluntary compliance, but apparently there’s also a proposed penalty for those foods which aren’t reformulated:

If the food is not reformulated, no more ads or promotions on TV, radio, in print, on websites, as well as other digital advertising such as e-mail and text messaging, packaging, and point-of-purchase displays and other in-store marketing tools; product placement in movies, videos, video games, contests, sweepstakes, character licensing and toy branding; sponsorship of events including sport teams and individual athletes; and, philanthropic activity tied to branding opportunities.

That includes softball teams that are sponsored by food companies and school reading programs sponsored by restaurants.

That’s why the FCC is involved (in case you were wondering).  Additionally, as most of us know:

“When regulators strongly suggest a course of action, it’s treated as a rule, not a suggestion,” said Scott Faber, vice president of federal affairs for the Grocery Manufacturers Association.  “Industry tends to heed these suggestions from our regulators, and this administration has made it clear they are willing to regulate if we don’t implement their proposal.”

That’s just reality.  Of course, the underlying premise is that parents are inept and children rule the household and make all the buying decisions as well as eating what they want when they want too.  Thus government must step in.

Oh – and of course, any reformulation will cost money which will, of course, be passed on to the consumer, if the consumer buys the product at all (vs. going to a substitute or alternative).

Between the EPA, the Department of Interior, and now this bunch, the war on US businesses continues apace.

Choice – the lost concept of freedom.

~McQ

Twitter: @McQandO


Repatriating corporate profits with tax breaks

It’s under consideration, and if you read the article, the NYT isn’t particularly thrilled about it.

Why?  Because those nasty corporations didn’t create jobs the last time this was done:

But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage.

Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.

This money comes from overseas operations and in some cases accounting maneuvers that shift domestic profits to low-tax countries. The study concluded that the program “did not increase domestic investment, employment or research and development.”

My question is, it didn’t increase “domestic investment, employment or research and development” where?  Because unless the stockholders took their money and buried it in a coffee can in the back yard, that’s most likely exactly where it went – via a more circuitous route that the NBER didn’t bother to follow.  That money didn’t just disappear when it went to share holders.  Where did it go?

Well, first remember that share holders are what?  Investors.   So even if all they did was let that money ride, it was “invested”. 

If, in fact, it was invested elsewhere, then one would assume that those companies in which the investment was made may have increased employment or R &D.  But you have to chase the money to find that out.

Bottom line, repatriation of overseas profits means more tax revenues, even at the reduced rate that would be found in a “holiday” as is being proposed.   And even if shareholders get the lion’s share of the money (and that’s why they’re called “shareholders” NYT, because they own a share of that money), they’re going to spend it, save it or invest it themselves.  

If one could get past the first step in the process and look at how money usually flows and is used, they’d realize that whining about “shareholders” getting most of the money is about as ignorant as complaining that if government gives taxpayers a tax break we wouldn’t spend the money properly, ala Bill Clinton.

Injecting billions of dollars of private money into the private economy in times like this isn’t going to hurt anything.  But it stands a great chance of helping.   But hey, those damn corporations wouldn’t spend it the way the NYT thinks they should, so they’re against it.

~McQ

Twitter: @McQandO


Opposing “dumb war” is now “isolationist”?

As badly as I wish Obama wasn’t president, I constantly try to look at the bright side of things and remember neither is this guy:

Former Republican presidential nominee Sen. John McCain (R-AZ) took aim at his party for what he called its growing movement towards isolationism, chastising the current GOP presidential field for not supporting U.S. military intervention in Libya and calling for speedy troop withdrawals from Afghanistan.

"This is isolationism. There’s always been an isolation strain in the Republican party, that Pat Buchanan wing of our party," McCain told "This Week" anchor Christiane Amanpour. "But now it seems to have moved more center stage."

That’s the most absurd bit of argument I’ve seen in some time.  Libya is a “war of choice” and a “dumb war” – two things Obama was supposedly against.  You can give him grief for getting involved, but it is obvious that John McCain has never met a war he didn’t like and, my guess is we’d be involved in even more if he had succeeded in capturing the White House.

Being against Libya has absolutely nothing to do with “isolationism”.  It has to do with involving ourselves in yet another military action at a time when our current military is stressed with a seeming unending deployment cycle, spending money we don’t have for something that has no connection whatsoever with our national interest and letting the UN and NATO dictate our participation instead of Congress.  Not to mention the fact that this is actually a real, live “illegal war” as opposed to the unfounded claim that Iraq was illegal.

Those four things alone are more than sufficient to oppose the war in Libya on sound principle.  

It is also apparent that John McCain is a fan of perpetual nation building, even while the nation we’re “building” is resisting it.  At some point, perhaps, it is time to reassess the situation and, like the mother bird to the baby bird, push the little blighter out of the nest.  If you can’t get a country to stand up on its own after 10 years, chances are it isn’t going to happen.   Iraq may not be the model of democracy or stability, but it at least is functional after the years we spent there.  And we went in there later than Afghanistan and we turned it all over to the Iraqis in a reasonable amount of time.

Again, pointing that out doesn’t make one an “isolationist”.   It makes one a realist.   Something with which John McCain has been acquainted.

~McQ

Twitter: @McQandO


A little followup (RightOnLine)

This story:

A group of around ten women in Muslim headscarves crashed the RightOnline conference for about ten minutes Saturday, protesting what they said was an incident targeting Muslim women Thursday night.

The event was the latest spark kicked up by the proximity of Netroots Nation and RightOnline. The two conferences are blocks apart — RightOnline is being held in a hotel many Netrootsers are staying in — and interaction between the progressives at Netroots and the conservatives at RightOnline has been inevitable.

A spokesperson for the group of women told TPM they weren’t sure of the identity of the man responsible for the Thursday incident — when two hijab-wearing women were followed by a man with a cell phone camera who reportedly asked them why they were dressed the way they were "in America" — but rumors that the incident involved an employee of conservative blogger Andrew Breitbart were rampant at Netroots.

Got it?

A few points.   It wasn’t a “flash mob” – at least not as I understand the term.   I stood on the second floor balcony, watched them arrive  together.  I then watched a person, who I assume was John Aravosis, interview one of them for at least 10 minutes and then I watched them ascend the elevator and go up into the RightOnLine crowd.  

All of this action based on a rumor that it was an “employee” of Breitbart involved in asking someone why they were dressed the way they were. Not fact – rumor.  Unfortunately for them, all they drew was curious stares from the crowd.  No confrontations, no heckling, no nothing.

I’m not sure why TPM felt compelled to make of this much more than it was, but then I always find it interesting to actually witness something as it happens and then read the report in what passes for the left’s media.

The spokesperson for the "flash mob," Allison Nevitt, told TPM that there was a larger message to their protest beyond the Thursday incident, which Nevitt said had been reported to Minneapolis police.

"The point was mostly that Muslim women are an equal part of this nation, and that we have an equal right to exist here," Nevitt said.

Is that the point?  Well other than a rumor, who at RightOnLine denied it?

~McQ

Twitter: @McQandO


On the road again

Headed home from the Twin Cities meetup. Sitting in a truck stop cafe typing this on the iPad. Isn’t technology wonderful?

Met a lot of folks, saw a number I knew, heard Bachman, Cain and Pawlenty. More on that later.

Long road trip but definitely worth it. There’s 30years of road warrior in me that needed this. There’s also the fact that one can get isolated and a little disconnected from life and reality sitting in a house or office daily writing about what one reads or sees on TV.

So it’s nice to get out and see a bit of the country and people again.

That means 12 states in a week. Call it a “grounding” experience. Makes you remember what a vast, beautiful and great country we have.

By the way, if you’re ever near Little Chicago south of Minneapolis (off I-35), stop into The Steer for breakfast. Get the “Trucker’s Special”. Good stuff.

~McQ

Twitter: McQandO


Breakin’ up is hard to do

Why are the Netroots so angry?  They won, right?

John Aravosis, another panelist, who blogs about gay-rights issues on AMERICAblog, reminisced about the heady early days of the left’s relationship with Obama.

"I honest to God thought I was voting for these guys and that it was going to be the first time in my lifetime that I’m finally in a position of power, where I could be working with the White House on a regular basis, saying, ‘OK what could we do this year on gay stuff?’ Wouldn’t it be cool, oh, ‘Don’t ask, don’t tell,’ this is great.’ "

But panelists agreed that it hasn’t turned out so well for progressives on overhauling health care or financial systems or the wars in Afghanistan and Iraq and a host of other issues.

Interesting – the naiveté evident is, well, not surprising.  These folks apparently actually believed they’d have both access and impact.

But it seems the “gay stuff” has been the bell weather issue to prove both of those assumptions wrong.   And, of course, there’s Iraq, Afghanistan, the environment, Gitmo, – in fact just about everything.

So what does that all mean?  Well let’s contrast it a bit with RightOnLine going on concurrently in the same city.  Motivated, enthusiastic, optimistic along with record attendance.  The difference in the “enthusiasm gap” is evident.  Jane Hamsher:

This is the time when Barack Obama has to care. This is the time when he needs your vote. So don’t give yourself away cheaply. Ask for what you need and what the country needs and this is the time to do it.

That reminds me of some on the right when John McCain was running.  It doesn’t sound like a very confident or enthusiastic group does it?

~McQ

Twitter: @McQandO


Notes from RightOnLine

The conference has a full list of breakout sessions that are quite interesting. I’ve attended two now, both fairly basic, but they’re on “tracks” meaning that subject will be built upon as the day progresses and you follow the track through to its conclusion.

I’ve run into some friends and acquaintances here and its good to see them. But the vast majority are obviously strangers. I’m wondering though whether this is more regional than an event like CPAC.

One interesting thing going on concurrently is the left is holding Netroots Nation right across the street and a good number of them are staying in the hotel in which RightOnLine is being held.

Sweet.

~McQ

Twitter: McQandO

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