Questions and Observations

Free Markets, Free People

Is the IRS overstepping its authority in ObamaCare enforcement?

This should be interesting to watch:

A group of small business owners (and individuals) in six states today are suing the federal government over an IRS regulation imposed under the Affordable Care Act (Obamacare), which will force them to pay exorbitant fines, cut back employees’ hours, or severely burden their businesses. Complaint can be viewed here.

The Affordable Care Act authorizes health insurance subsidies to qualifying individuals in states that created their own healthcare exchanges. Those subsidies trigger the employer mandate (a $2,000/employee penalty) and expose more people to the individual mandate.  But last spring, without authorization from Congress, the IRS vastly expanded those subsidies to cover states that refused to set up such exchanges.  Under the Act, businesses in these nonparticipating states should be free of the employer mandate, and the scope of the individual mandate should be reduced as well.  But because of the IRS rule, both mandates will be greatly enlarged in scope, depriving states of the power to protect their residents.

Michael Carvinpartner at Jones Day, who co-argued the Supreme Court Obamacare cases in March, 2012 and who represents the plaintiffs in this lawsuit, stated: “The IRS rule we are challenging is at war with the Act’s plain language and completely rewrites the deal that Congress made with the states on running these insurance exchanges.”

33 states have refused to set up these exchanges.  The IRS, per the complaint, is ignoring that ability given by the states by the law and proceeding as if it didn’t exist.  The argument is the IRS is overstepping it’s authority.

“Agencies are bound by the laws enacted by Congress,” said Sam Kazmangeneral counsel of the Competitive Enterprise Institute (CEI).  “Obamacare is already an incredibly massive program.  For the IRS to expand it even more, without congressional authorization and in a manner aimed at undercutting state choice, is flagrantly illegal.”  CEI is coordinating the lawsuit.

We’ll see.  Given the way the law is interpreted anymore, I wouldn’t at all be surprised to see the IRS upheld (or the suits be dismissed out of hand).  Such is the lack of respect and confidence I hold for our “legal system” anymore.

~McQ

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Economic Statistics for 1 May 13

Here are today’s statistics on the state of the economy:

The MBA reports mortgage applications rose 1.8% last week, with purchases down -1.4% but re-fis up 3.0%.

ADP is reporting private payrolls rose by only 119,000 in April, down sharply from March’s 158,000, which seems like bad news for Friday’s Employment Situation.

The PMI Manufacturing Index fell to 52.1 in April on slowing order growth and employment.

The ISM Mfg Index fell to 50.7 in April, largely from a drop in inventories.

Construction spending fell -1.7% in March, with both public and private construction spending in decline. Spending is up 4.8% from last year.

Automakers are reporting sales today, and they look good. Ford reports an 18% increase, while GM and Chrysler report 11%.

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Dale Franks
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Are MoDo, et al, finally figuring it out after 6 years?

Maureen Dowd must be a little slow on the uptake if she is just figuring this out:

ABC News’s Jonathan Karl asked Obama if he was already out of “juice” to pass his agenda, citing the president’s inability to get a watered-down gun bill passed in the Senate, Congress swatting away Obama on the sequester cuts, and the recent passage of a cybersecurity bill in the House with 92 Democrats on board, despite a veto threat from the White House.

“Well, if you put it that way, Jonathan, maybe I should just pack up and go home,” President Obama said with a flash of irritation, before tossing off a Mark Twain line: “Rumors of my demise may be a little exaggerated at this point.”

Then he put on his best professorial mien to give his high-minded philosophy of governance: Reason together and do what’s right.

“But, Jonathan,” he lectured Karl, “you seem to suggest that somehow, these folks over there have no responsibilities and that my job is to somehow get them to behave. That’s their job. They are elected, members of Congress are elected in order to do what’s right for their constituencies and for the American people.”

Actually, it is his job to get them to behave. The job of the former community organizer and self-styled uniter is to somehow get this dunderheaded Congress, which is mind-bendingly awful, to do the stuff he wants them to do. It’s called leadership.

He still thinks he’ll do his thing from the balcony and everyone else will follow along below. That’s not how it works.

That may not be how it works, but for 6 long years, that’s how he’s pretended it worked, acted like it worked and claimed it worked.  Of course he’s not ever been a leader nor has he ever lead.  Even his foreign policy has been a position of non-leadership (euphemistically called “leading from behind”).  The great sucking sound you hear in DC these days isn’t just the GOP leadership.  It’s the leadership void of this president.

Of course, it is a bit funny that the sycophants of the press are just now getting around to figuring out how ineffective the man is. And while we’ve been pointing out this lack of leadership from day 1 of his presidency, let me note that, in a meta sense, it is probably a good thing he’s such a lousy leader. Lord knows what other abominable laws we’d be stuck with right now if he had even a clue about how to lead.

~McQ

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Economic Statistics for 30 Apr 13

Here are today’s statistics on the state of the economy:

The Conference Board’s consumer confidence index rose 6.2 points to 68.1 in April.

The Chicago Purchasing Managers Index fell 3.4 points to 49 in April. A reading below 50 indicates economic contraction, and this is the first negative reading for the Chicago PMI since September 2009.

The S&P/Case-Shiller 20-city home price index rose 1.2% in February, up 9.3% from last year.

The Employment Cost Index rose 0.3% in the 1st Quarter, a gain of 1.8% from 1Q 2012.

ICSC-Goldman reports a weak 0.4% increase in chain-store sales last week, and only a 2.6% increase from last year. Redbook reports a 2.8% increase in chain-store sales from last year.

The State Street Investor Confidence Index rose 5.5 points in April to 93.6, mainly on a jump in American investor confidence.

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Dale Franks
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Economic Statistics for 29 Apr 13

Here are today’s statistics on the state of the economy:

Personal income and spending both rose 0.2% in March. The PCE price index fell by-0.1% at the headline level and was unchanged at the core. On a year-over-year basis, income rose 2.5% while spending rose 3.5%. The PCE price index rose 1.0%, while the core rate rose 1.1%.

The Pending Home Sales Index rose 1.5% in March to 105.7, the highest reading this year.

The Dallas Fed Manufacturing Survey collapsed from 7.4 in march to -15.6 in April. The production component slipped from 9.9 to -0.5. The series of negative Fed manufacturing reports continues.

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Dale Franks
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The death of “common sense” and the age of dependance

If ever there was an apt description of our general problem in this country, Dr. Milton Wolf nails it in the first paragraph of his discussion of the building disaster we call ObamaCare.

The fatal conceits of Obamacare are the absurd notions that the government can spend your money more wisely than you can and that bureaucrats are more capable than you are to make your own most intimate, personal decisions. The antithesis of government-centered Obamacare is what I simply call “Patientcare.” Patients should be at the center of our health care universe, not President Obama and not the government.

We suffer under a landslide of the same fatal conceit applied to literally hundreds of government programs in this country.  These fatal conceits (or flawed premises if you prefer) have cost us literally trillions of dollars and much of our freedom.  Government has essentially decided that it’s priorities for your money are more important than your priorities for what you earn.  And, it had also decided that in many areas it can make better decisions for you than you can make for yourself.

But, that’s not the problem in full.  In full, the problem is exacerbated (and the notion “validated”) by the number of people who, for whatever reason, have bought into the efficacy of these conceits.  They believe the flawed premises to be true and willingly cede their money and freedom believing government does indeed spend their money more wisely and is more capable than them of making “good” decisions on their behalf.

The problem, of course, is that as long as those people who willingly enslave themselves to government exist in large enough numbers, they’ll succeed in putting the shackles on the rest of us as well.   As long as they look at the federal government as their care giver, they force that on the rest of us as well.

One of the reasons we have the debt and deficit problems we currently suffer is the left has been very successful in selling those flawed premises via emotional appeal to low information (and frankly, ignorant) voters.  They’ve avoided rational discussion with “for the children” campaigns.  They’ve often claimed “market failure” where government created problems through preverse incentives and market intrusion and then push government as the solution.

Years ago we came from a people that knew that nothing was “free”.  They knew that there really wasn’t anything called a “free lunch”, someone had to pay for it.  The knew that you were responsible for your own welfare, self-defense and freedom.  And interestingly, so did most of the politicians of the time.  Oh there were certainly those among them that believed as the left does today, but they were a distinct minority.  Their creed was considered extreme and, frankly, un-American.

Now it is they who are “main stream” and those who call for much less government intrusion in our lives who seem to be considered the extremists.  Common sense, the ability to see through the blarney and nonsense, seems to have died.  In the so-called information age, we seem to have a growth of ignorance.  Part of that I lay at the feet of another government program that has been a woeful failure – public schooling.  Common sense tells you that such an institution would be unlikely to teach anything negative about government and, in fact, might even become a bit of a propaganda arm for it.  That it might involve itself in a bit of indoctrination.  That it might fill fairly benign subjects with information preferred by government and spend less time on information that wasn’t in favor at the time or is contrary to the agenda it prefers.  But that all assumes an ability to teach the core competencies, something most of our school systems seem unable to do with any great success.  So we have the misinformed and the illiterate buying into the government’s flawed premise in droves.

Obviously a great deal of things over the years have led us to this point of dependency on government.  And we know how it ends.   It is the blue state model and the blue state model is failing all over the country and the world.

Yet was still hear it extolled by its zealots and lapped up by the ignorant who refuse to look beyond the promises.  It still amazes me that we’ve managed to get in this mess and can’t seem to find the intestinal fortitude to say “enough” and begin doing the very unpleasant task of reversing it.  But that’s the problem, isn’t it? It would be unpleasant.  And we don’t like unpleasant.  So instead, we continue to believe the fantasy.

The problem, of course, is like Toto in the Wizard of Oz, reality is going to pull back the curtain very soon and expose the fantasy for the fraud it is.  And then we’ll look back at “unpleasant” as something we wish we’d done.

By then, it will be way too late.

~McQ

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Observations: The QandO Podcast for 28 Apr 13

This week, Michael and Dale discuss Syria and Obamacare.

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.

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Economic Statistics for 26 Apr 13

Here are today’s statistics on the state of the economy:

The Reuter’s/University of Michigan’s consumer sentiment index rose to 76.4 from the mid-month reading of 72.3.

GDP growth in the 1st Quarter was a worse than expected 2.5% annualized. The GDP Price Index rose to an annual 1.2% rate. Essentially, GDP growth is still below trend, which should surprise no one.

~
Dale Franks
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Worst. Political. Class. Ever.

Pretty much everybody knows Obamacare is a disaster. I mean, everybody who has an ounce of sense. Obviously, that excludes a lot of rank and file Lefty Democrats who think Obamacare is actually a fix or a cure for something, but most of those people are simple dolts anyway. But, apparently there’s plenty of agreement on both sides of the Congressional aisles that Obamacare is an unworkable albatross. How do we know this? Because Democrats and Republicans are negotiating some way to exempt Congress from Obamacare.

Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides…

The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case, the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty.

Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.

In other words, unless they can exempt themselves from Obamacare’s exchange requirements, health costs for the Congressional employees will rise so much that they won’t be able to afford it.

So, both Democrats and Republicans clearly realize that Obamacare, if implemented in Congress, will kill jobs and raise health insurance costs. Is their solution to repeal Obamacare and save the rest of the country that same burden? No. Of course not. Their solution is to see how they can exempt themselves from the law. The rest of us, who have to live with it? Tough cookies, proles. Health care costs money. Deal with it.

I guess my only question is, why are we not not dragging members of Congress—of both parties—naked and screaming from their offices for a good tar and feathering?

The Republicans may make pleasant mouth noises about repealing Obamacare, but they will never do it. Even if they passed a bill, it’d die in the Senate or get vetoed by the President. So, knowing that, their fallback position is, "Well, let’s at least see if we can get ourselves exempted from it."

Both parties in Congress know Obamacare is an unworkable, unaffordable disaster, and their response is to just give a big "F you" to the American people. And, as far as I can see, the American people are just…gonna take it, tug their forelocks, and say, "As you wish, m’lud." As far as I can tell, the majority of Congress is composed of people so stupid it’s a wonder that they can think clearly enough to walk erect. And yet we keep electing them, and doing what they tell us to do. That idiot from Georgia, for example, who complained in a Congressional hearing that if we send too many marines to Guam the island will tip over and capsize…he got re-elected by his idiot constituency.

We really do deserve the total crapstorm that’s headed our way.

~
Dale Franks
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