Questions and Observations

Free Markets, Free People

Observations: The QandO Podcast for 05 Dec 14

This week, Bruce, Michael and Dale talk about Global Warming, NSA Spying, and Obamacare.

The direct link to the podcast can be found here.

Observations

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Economic Statistics for 2/3 Jan 14

The Gallup U.S. Job Creation Index fell a point to 19, the first reading below 20 in several months.

Initial jobless claims fell 2,000 to 339,000 last week. The 4-week moving average rose 8,500 to a 357,250. Continuing claims fell 98,000, but the 4 week averages for both weekly and continuing claims are above the month-ago levels, so the trend is negative.

The Markit PMI Manufacturing Index rose 0.3 points to 55.0 in December.

The ISM Manufacturing Index fell -0.3 points in December to a still nicely positive 57.0.

The Bloomberg Consumer Comfort Index fell -1.3 points to -28.7 .

Construction Spending is still going strong, up 1.0% in November, continuing a string of monthly gains.

Motor vehicle sales fell in December to an annualized 15.4 million rate. GM -6.3%, Ford 1.8%, Chrysler 6.0%, Toyota -1.4%.

The Fed’s balance sheet fell $-8.9 billion last week, with total assets of $4.024 trillion. Reserve Bank credit fell $-1.4 billion.

The Fed reports that M2 Money Supply increased by $23.5 billion last week.


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ObamaCare’s net effect so far? More cancellations than enrollments

Not that anyone should be surprised:

Even without the full number of enrollments, Obamacare’s current net effect is clearly in favor of cancellations. Millions are already seeing Obamacare’s adverse effects — largely due to more mandates for more services.

The mandates?  Well they’re one of the major reasons for most of the cancellation notices – their plan just doesn’t have all the benefits your wise and caring public servants think you should have:

The health-care law requires that all insurance plans cover 10 “essential benefits,” eliminating millions of plans that don’t fit the bill and boosting costs for consumers that have to purchase coverage for services they may not want or need.

All plans must include maternity coverage, for example — including plans for men and post-menopausal women. Even customers without children must purchase plans that cover pediatric services. Other newly established essential benefits include hospitalization, mental-health services and preventive and wellness services.

While a grandfather clause allowed plans purchased before Obamacare passed in 2010 to continue, HHS estimated that 40-67 percent of plans would eventually lose their status and cost millions of Americans their insurance plans.

So you see little horror shows like this family’s acted out all over the nation.

And those cheap affordable plans?  How are they working out so far (if you can even get one).  Well with high deductibles, not so hot (but all the men have maternity coverage, that’s a plus):

Experts are worrying that some new enrollees will be discouraged from seeing doctors if they have to pay the full charge, rather than simply a copayment. In Miami, for example, 40 percent of bronze plans require consumers to pay the full deductible before coverage kicks in, according to an analysis by online broker eHealthinsurance.com, a private online marketplace, for Kaiser Health News. The average deductible among the examined bronze plans in Miami is $5,735.

Patients in those plans who haven’t yet met their annual deductibles would have to pay the full cost of the visits, unless they were for preventive services mandated by the law. A typical office visit can run $65 to $85, while more complex visits may cost more.

So, as Ed Morrissey puts it:

Put it this way: If the average deductible is $5,735 and a doctor visit is $85, it would take sixty-eight doctor visits before the insurance kicked in — more than one visit per week. And it would start all over again every year.

So how’s ObamaCare going?

About how you’d expect a politically driven piece of law from an incompetent administration to go.

However the apologists have a different reason in mind:

“[S]outhern White radicals vowed to stop implementation of the Obama-care law leading one to wonder if Tea Party members would oppose affordable healthcare if it came from a nonBlack [sic] President,” writes Browne-Marshall.

Yeah, that’s the reason.

~McQ

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Economic Statistics for 31 Dec 13

In weekly retail sales, Redbook reports a strong 4.5% increase from the previous year. ICSC-Goldman reports a weekly sales increase of 1.0%, and a 3.0% increase on a year-over-year basis.

The S&P/Case-Shiller 20-city home price index rose a solid 1.0% in October, with a year-on-year 13.6% price increase.

The Chicago Purchasing Managers Index fell from an unsustainably high 63.0 in November to 59.1 in December.

The Conference Board’s consumer confidence index rose a strong 6.1 points in December to 78.1.

The State Street Investor Confidence Index rose from a revised 91.2 in November to 95.9 in December.


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Coming in 2014 whether you like it or not

Just for an intro:

A Russian expedition ship carrying global warming scientists got stuck in ice earlier this week. Now a Chinese ice breaker sent to rescue the scientists is frozen too just miles away.

Yes friends, “global warming”, “climate change” or whatever the alarmists choose to call it next year, will be with us and with a vengeance.

You see, “if you like your insurance you can keep it” Obama has said it will be one of his highest priorities.  There’s gold in that thar air.  It is an as yet untapped revenue source that, well, he’s bound and determined to tap – science, or lack thereof, be damned.

Nevermind that 13 new Obama taxes go into effect this next year and will likely stunt economic growth … again.  Global warming produces an entire new opportunity to gouge taxpayers “for their own good” — you know, just like ObamaCare.  And, of course, the grab will be couched in language much like ObamaCare.  They’ll promise the moon.  They’ll deliver misery. The only institution which will benefit?  Government.

What will be chipped away?

A little more of your freedom.  Your liberty.

It is obviously okay now for government to just engage in bald faced lies and get away with it.  Obama’s “if you like your insurance …” lie led the parade of Pinocchio awards by that renowned right-wing rag the Washington Post. Result? Nada? Penalty? Nada?

Lesson learned by the perpetrators of the lie?

Hey, it’s okay, there are no penalties and it works.

Next up?

Global warming (and your wallet).

You’ve been warned.

~McQ

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Economic Statistics for 26 Dec 13

Initial jobless claims fell 42,000 to 338,000. The 4-week average rose 4,500 to 348,000, while continuing claims rose 46,000 to 2.923 million. Holiday volatility is still skewing the claims numbers wildly.

The Bloomberg Consumer Comfort Index rose 2 points to -27.4 in the latest week.

The Fed’s balance sheet rose $24.5 billion last week, with total assets of $4.033 trillion. Reserve Bank credit increased $27 billion.

The Fed reports that M2 money supply rose by $5 billion in the latest week.


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Insufficiently Servile

I got a taste of what modern policing has become today—which is to say, an absolute unwillingness to allow anything but complete, unquestioning obedience. Officer Friendly has long since retired, apparently.

For the past fifteen years, I have worked every day on the same very small military installation as a contractor. This morning, as I was approaching the main gate, when I started off after the stoplight, I didn’t shift upshift. So, the Goat was just wailing that sweet V8 growl as I approached the gate. About fifty yards from the gate, I slowed down, rolled down my window, and had my ID outside the car as I approached. Usually, there are civilian DoD police at the gate, but this morning, it was manned by a reservist, a 2nd Class Master at Arms—the Navy’s equivalent to Military Police. We had a brief conversation that went, as nearly as I can remember it like this:

PO2: (Snippy) Are you running late this morning?

Me: No.

(At this point, I could instantly see that my answer displeased him.)

PO2: (Scowling) You need to keep your speed down.

Me: I always observe the speed limits when I’m on the installation.

PO2: (Waving me through) You need to keep your speed down off-base, too.

Me: (Starting to drive away) What happens off-base isn’t your jurisdiction.

I got to my office, turned on my computer, and went into the break area to warm up a couple of delicious whole-wheat Eggos. While I was standing in the kitchen, a uniformed DoD police officer walked in and asked me if I owned the Red GTO. When I said I did, he then asked for my driver’s license. I asked, since I wasn’t operating a motor vehicle, if I was required to show it to him. (In CA, you are not required to do so when not operating a vehicle, nor are you required to show an ID otherwise. It’s different on military bases, of course, in that you are required to show an ID).

When I gave it to him, he then began to tell me how bad my attitude was, and how I should be more respectful of the police, what with them having such a hard job and all. I said that, when it came to respect, maybe the gate guard should’ve been a little less snippy. He said they didn’t need me making smart remarks about their jurisdiction, because they have a close relationship with civilian law enforcement, and he himself, had worked for Atlanta PD for fifteen years. I denied driving at an excessive speed when I approached the gate, said that my comment about jurisdiction was completely valid and that did not have the authority to issue traffic citations off-base, and that if they felt they needed to call CHP to give me a citation, they should do so. Otherwise, he should present me with a citation or arrest me for a military-related offense. Failing that, I was uninterested in further conversation. He seemed a bit upset when he left.

About twenty minutes later, two more DoD policemen came into my office. One of them was the major who serves as the installation’s police chief. They asked to talk to me outside. I told them that, since it appeared that I was the target of some sort of investigation I would refuse to answer any questions without consulting legal council. They asked me to step outside the building and I complied. The major then asked me where I was getting my legal knowledge from, and I replied that I had been an active-duty military policeman for 10 years. They asked for my license, registration and insurance card, and workcenter supervisors. While one officer began to write down my information, the major then told me that as a military policeman I should have a better attitude and be more cooperative. He  then presented a  hypothetical situation about approaching the gate at a high rate of speed. I said, "Hypothetically, I would categorically deny any such allegations". He began to ask me more questions, and I stopped him, saying:

Me: Don’t I have the right to remain silent?

Major: Well, if you are a former MP you should know that Miranda only applies to custodial interviews, not voluntary ones."

Me: So, is this a voluntary interview?

Major: Yes.

Me: So, I’m free to go?

(The major hesitated at this point, probably because both he and I knew what the only correct answer was.)

Major: Yes, you’re free to go.

Me: Then, I think we’re done here.

I retrieved my documentation from the other officer, put it my car, and walked back into the building.

Another twenty minutes passed when two different officers showed up at my office and asked me to come outside. When I did, they presented me with a base traffic ticket for not having my car registered on base. Quite honestly, I didn’t know I was required to, since the Navy no longer issues vehicle decals. We were told that registration was no longer necessary, but apparently the registration regulation is still on the books. The ticket had already been written before the officers approached me. One of them—the officer who had been sent over to speak with me the first time—said, "By direction of the base police chief, I am issuing you a citation for failure to register your vehicle within ten days. You can call the base traffic office if you have any questions." I said, "Wait a second, I haven’t even had my plates for ten days. I just bought the car." He said, "Your registration is dated more than 10 days ago. That’s the date we go by." Then they left.

So, I went to Pass & ID register my car—as well as my motorcycle, which has never been registered either—and they tore up my ticket. Then when I got back to my office, I called to the regional headquarters, and spoke directly with the GS-15 who runs all the local Navy police operations. I explained that I had a brief, snippy conversation with the gate guard, and since then, had been pulled out of my workcenter three separate times by five DoD police officers, and that I felt it was a little excessive, especially considering the chief of police himself had been one of the officers. He said he would take care of it, which, I hope, means he will tell the local police to turn it down from 11.

So, that was my contact with the DoD police today. At every confrontation, they clearly expected me to respond with the appropriate degree of subservience, and were baffled and angered that I refused to do so. So, they couldn’t let it go. They just kept coming back to my office, as if repeated confrontations would make me more, rather than less, servile. And all this for something that wasn’t any sort of criminal offense.

It says a lot—none of it good—that the police seem to have the expectation of unquestioning obedience. It also says a lot that they seem used to getting it, which is our fault, not theirs.


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Economic Statistics for 24 Dec 13

The Richmond Fed Manufacturing Index remained unchanged at 13 for December.

The MBA reports that mortgage applications fell -6.3% last week, with purchases down -4.0% and re-fis down -8.0%.

In weekly retail sales, ICSC Goldman reports a 1.4% weekly sales increase, and a 2.7% year-on-year increase. Meanwhile, Redbook says sales rose 3.9% on a year-ago basis. These are the strongest sales results of the holidays.

Durable goods orders rose a sharp 3.5% in November, with orders ex-transportation orders up 1.9%. On a year-over-year basis, orders are up 10.9% and ex-transportation orders are up 6.1%.

The FHFA House Price Index rose 0.5% in October, a year-over-year increase of 8.2%.

New Home Sales fell -2.1% in November, to a 464,000 annual rate. This exceeded expectations, but looks soft against a sharply upward revised October annualized rate of 474,000.


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What good is a union if it can’t deliver the goods?

That’s kind of the $64,000 dollar question (yes, I’m showing my age … bite me) isn’t it?

You’ve seen the news about the fast food walkouts and claims that food service people should be paid $15 an hour?  That what the United Food and Commercial Workers union claims workers in that industry should have.  But what do workers they actually represent in that industry actually get?  Not much over minimum wage and union dues to pay out of that:

An examination of UFCW contracts shows that even senior union members are not receiving the wages that ROC and Jobs for Justice demand.

Consider a department manager at Kroger’s union shop in Michigan. She earns a maximum rate of $13.80, even after over half a decade on the job. If this is the highest wage the UFCW can negotiate for skilled, experienced workers, how can the union provide entry-level, low-skilled workers with $15 an hour?

It is not possible for them to accomplish this. Yet, receiving media coverage for the protests they sponsor is an effective way to increase membership and dues collections. The wage they demand is more than twice what similarly skilled union members are paid, namely $7.40 an hour for an entry-level cashier.

Courtesy clerks are paid a starting rate of $7.40 an hour and can work their way to up a wage ceiling of $7.45, after 12 months on the job. Fuel clerks do not fare much better; they start at the same $7.40 and can earn $7.80 an hour after three years of experience, barely over half of the $15 an hour wage worker centers supported by the UFCW demand. Specialty clerks also start at $7.40 an hour, but can earn up to $9.35 after six years. This amount is still 25 percent below the $12.50 an hour “living wage” Jobs for Justice claims all entry level workers should be paid. Read the full union contract between Kroger and the UFCW here.

The take-home pay is even lower once dues—and federal and state taxes—are removed. Dues are mandatory and usually take between $19 and $60 a month from members’ paychecks.

A non-union member could negotiate that without even trying hard.  So, what good is the union really done for those those it represents?  Other than pay it’s union staff very well?

It is expensive to run a union. The average total compensation for those employed by the UFCW—rather than represented by the UFCW—is $88,224 a year. This income is almost six times what the union negotiated for cashiers at Kroger’s. Joseph Hansen, the International President of UFCW, earns in excess of $350,000 a year—over twenty times the earnings of many of the workers he represents. The Executive Vice President and National President both earn over $300,000. Are entry-level union workers receiving benefits from paying dues out of their $7.40 an hour paychecks to fund these salaries?

But you know, it’s “management” that’s the problem, right?  I mean how could a cashier negotiate a $7.40 an hour paycheck without the union – and then give the union its “dues” out of that same paycheck?  Hey, the president of the union has to have his perks, right?

I know, I know, don’t look at the paycheck, look at the other benefits … like a pension, right?

The UFCW has one of the worst records for funding of union pension plans. The Labor Department has informed the UFCW that nine of its pension plans have reached “critical status,” meaning they are less than 65 percent funded. Many of these funds have been underfunded for six years. They have low chances of regaining sustainable financing unless they can convince more new members to join and pay dues without receiving similar benefits.

Sigh.

And, of course, there’s the political side of things … it is important to help fund the union’s political activities, no?

Some portion of dues goes towards political contributions. The UFCW contributed $11.6 million during the 2012 election cycle, of which nearly 100 percent went to Democrats.

Well of course it went to Democrats.  Democrats have been in the union’s pocket (and vice versa) since time began, apparently.  Put $11.6 in the pension fund?  What are you, a Republican?

Yes, it’s a crying shame people aren’t represented by this union … said no libertarian, ever.

~McQ

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