Questions and Observations

Free Markets, Free People

3/4 of ObamaCare enrollees? Previously insured …

Or so says a new McKinsey survey of the numbers:

One of the principal flaws in the coverage of Obamacare’s exchange enrollment numbers to date has been that the press has not made distinctions between those who have “signed up” for Obamacare-based plans, and those who have actually paid for those plans and thereby achieved enrollment in health insurance. A new survey from McKinsey indicates that a large majority of people signing up are now paying for their coverage. This is progress for the health law. But the survey still indicates that three-fourths of enrollees were previously insured.

Of course we’ve seen the propaganda push from the White House that has claimed the numbers (8 million enrolled) mean that the law is working.  As usual, the devil is in the details.  If the law was designed to provide coverage to those who were uninsured, 25% of the total enrolled fitting that description is hardly indicative of that claim’s efficacy.  And when you break down that 25% number, it’s even less indicative:

At most around 930,000 people have gained coverage from Obamacare’s under-26 “slacker mandate” (not 3 million, as is commonly suggested); another 3 million or so have gained coverage from the law’s expansion of Medicaid. Approximately 2.6 million previously uninsured individuals have obtained coverage through the ACA exchanges and the related off-exchange individual markets; however, the off-exchange purchases are mostly unsubsidized, and therefore can’t necessarily be credited to Obamacare.

Here’s a graphic that breaks the McKinsey survey’s results down into a more understandable form:

McK-enroll-Apr-2

In reality, what the law has essentially done rearranged the burden of payment among those enrolled while really not doing much at all in terms of reaching those for whom it was supposedly designed to help:

What the exchanges appear to be doing is mainly helping people who were previously insured. If you’re 62 years old, say, and your income is $30,000, and you were paying for your own coverage before, you’re now eligible for plans that are much cheaper for you, thanks to taxpayer-funded subsidies and higher premiums for young people.

Of course that means that other people are paying more. “My old plan was canceled under Obamacare,” an exasperated Californian told me last week. “The new Obamacare plan costs twice as much, and the deductibles are higher. And yet Obama is counting me as one of his 8 million people!” But hey—at least he has maternity coverage.

And I’m sure our Californian is eternally grateful for big brother deciding for him that maternity care was an absolute necessity for which he must pay.  But the point is the 8 million number remains very shaky (and that’s being kind) and it really doesn’t at all reflect what the White House would have you believe it reflects – that the law is working.

~McQ

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Health Insurance Tax – another governmental attack on small business

So a day or so ago, I talk about how regulation and government intrusion is helping to kill entrepreneurship and, as a result, small businesses. The same problem, as we all know, is also exacerbating the unemployment picture.  A prime example?  That odious law known as ObamaCare.

The US Chamber of Commerce blog has this chart for us to peruse. It is all about the recently implemented “Health Insurance Tax”, aka “HIT”: As this awful law continues to be implemented when it is politically convenient for the Democrats, we see even more disaster lurking for those who are employed and actually “like their insurance and like their doctor”.  But HIT is already taking a toll.

The National Federation of Independent Business’ Research Foundation estimates that the Health Insurance Tax (HIT) will result in a reduction in private sector employment of 152,000 to 286,000 jobs by 2023, with 57 percent of the job losses coming from small businesses. This will amount to a reduction of U.S. real output (sales) by between $20 billion to $33 billion during the same time frame.

Just what we need – another “hit” to employment and a “hit” to GDP. But it is clear the Democrats don’t really care about that.  As one of our low information commenters is want to say “a few eggs must be broken” to make an omelet … or something. Any inanity will do when it is clear that a law is a bust and a failure. As the Chamber of Commerce blog notes:

The HIT, which went into effect on January 1, 2014, levies a tax on health plans sold on the fully-insured market. Eighty-eight percent of it is made up of small businesses. Revenue from the tax will rise by 41% in 2015 and reach $14.3 billion in 2018.

“Small businesses are crucial to rebuilding an economy that allows all Americans to prosper,” Katie Mahoney, Executive Director of Health Policy at the U.S. Chamber said. “We need to work to find ways to ensure small businesses and their employees have the tools to build on their current success, not hinder future growth.”

You’d think what she says would be fairly common knowledge, but apparently the deluded administration that runs this country thinks we’re coming out of the economic malaise it has worked so hard to keep in place, and thus its time for another little shot to the head of small business.

With the HIT – mission accomplished.

~McQ

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Economic Statistics for 8 May 14

Those chain stores that still report monthly sales showed exceptionally good April sales, helped by warmer weather and a late Easter.

Weekly initial jobless claims fell 26,000 to 319,000. The 4-week average rose 4,7540 to 324,750. Continuing claims fell 76,000 to 2.685 million.

The Bloomberg Consumer Comfort Index fell -0.8 points to 37.1 in the latest week.

The Fed’s balance sheet rose $7.1 billion last week, with total assets of $4.303 trillion. Total reserve bank credit rose by $5.6 billion.

The Fed reports that M2 money supply rose $51.2 billion in the latest week.


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Economic Statistics for 7 May 14

The MBA reports that mortgage applications rose 5.3% last week. Purchases rose 9.0% and re-fis 2.0%.

Gallup’s Job Creation Index rose 2 points to 25 in April.

Non-farm productivity fell a sharp -1.7% annualized in the 1st Quarter of 2014 while unit labor costs rose 4.2%. Weather distortions are being blamed. On a year-over-year basis, productivity is up 1.4%.

The JP Morgan Global Composite PMI fell -0.7 points to 52.8 in April. The Global Services PMI fell -0.8 points to 52.7.

Consumer credit expanded by a sharp $17.5 billion in March, but it’s mainly in non-revolving credit.


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Slowly killing the Golden Goose

You all know the nursery story about the Golden Goose.  Well, as we head into “Recovery Summer V” with no real recovery in sight, subject to false unemployment numbers and pitiful quarterly GDP earnings, it might be useful to look at something else that is likely a factor in all of this:

Business dynamism is the process by which firms continually are born, fail, expand, and contract, as some jobs are created, others are destroyed, and others still are turned over. Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation.

And all of that is a function of what?

That evil thing called “capitalism”.  Yup, evil capitalism encourages entrepreneurship and through that cycle, we see the market at work – creating profit, which creates jobs, which expands businesses and creates more of them and more jobs and more wealth and … etc., etc., etc.  It is that repeating cycle that has, at least till recently, gotten us where we are in terms of wealth and power as a nation.

Not government.  Government is a net leech.  It sucks the blood out of productivity in the form of taxes.  But government also plays another role – as a regulator. Most look at that as a necessary evil.  But most governments always go overboard with their regulatory regimes and end up making it harder and harder for entrepreneurs  to do what they do best.  The Brookings institute has taken a look at this and found that over the past few decades, the entreprenurerial role has declined and, as a result, we have, for the first time, seen more businesses exiting the economy than entering it:

Now Brookings tries to stay claim this can be reversed, even though it is such a widespread trend it should alarm us all.

In fact, we show that dynamism has declined in all fifty states and in all but a handful of the more than three hundred and sixty U.S. metropolitan areas during the last three decades. Moreover, the performance of business dynamism across the states and metros has become increasingly similar over time. In other words, the national decline in business dynamism has been a widely shared experience.

While the reasons explaining this decline are still unknown, if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurship enhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.

Note the oblique way Brookings points to government, but nevertheless identifies the problem.  The phrase is “entrepreneurship enhancing policies”.  And what would that look like?  Well Brookings thinks liberalizing entry of high-skilled immigrants might to the trick.  I, on the other hand, think a thorough review of the regulatory regime and revocation of all unnecessary regulations along with those found to punish or hinder entrepreneurship would have a much speedier and positive effect than the Brookings suggestion.

Certainly, we know why there was a precipitous drop in 2008, but again, what has the government, in terms of policy, done to ease the situation?  Nada.  Nothing.  Except play a little crony capitalism (i.e. pick winners and losers) in the green energy game.  And, of course, most of their “winners” have gone belly up.

As a consequence of this refusal to consider steps concerning rolling back regulations (and, instead heaping even more on the books), we see the trend get worse on both the entry and exit levels.

Entrepreneurship IS the “Golden Goose” of capitalism.  One of the big reasons our economy continues to lag badly can be found in the chart above.  And what has this administration done in 5 plus years to address this problem?  Well, to be honest, it’s done more to exacerbate it that help it. Thus the Golden Goose on life support.

All hands prepare for “Recovery Summer VI”.  And VII.  And VIII …

~McQ

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Delusion – see it in action

David Gergen provides us with a perfect example:

Obama’s second term is a total aberration. Resisted by obstructionists among Republicans and plagued by his own mistakes, the first 12 months after re-election were a bust. Why he and his team didn’t take more care in the rollout of the Affordable Care Act website will remain one of the great mysteries for historians.

But it has now become equally puzzling why he has not become more sure-footed in foreign affairs. He is one of the brightest men ever to occupy the office, and yet his learning curve has been among the flattest. Talking to players on the world stage — most of whom still want him to succeed — one finds them genuinely rattled, worried about a lack of national will and operational competence.

I have to tell you I laughed my rear end off reading the highlighted sentence.  Did he not reread what he said there?

Now maybe its just me, but I would suggest that a sign of intelligence – being “bright” – is that  you learn.  You learn from history.  You learn from your own mistakes.  You learn from others. I.e. you don’t have a flat learning curve if you’re actually bright. Especially when you’ve had almost 6 years to figure it out.  And make no mistake, Obama hasn’t figured it out yet. He’s not even close. And currently he’s on a global whine-a-thon, lamenting his fate, calling himself a “singles hitter”, blah, blah, blah.

Yet despite all of this Gergen and other Obama supporters can’t see past this incredible contradiction (which says a lot about how “bright” they are).  They have deluded themselves into thinking that this fellow is just so bright that it must be the fault of others that he can’t seem to learn (those damned “obstructionists” for one).   They cannot yet face the fact that Obama is a bust.  He’s been a bust from day 1.  Yet here we are, almost 6 years later, with supposed “bright” people making statements like Gergens’.

Why can’t they own up to the fact they were wrong – wrong about Obama’s capabilities, wrong about his competence, and, apparently wrong about his level of intelligence.  After so many millions of gushing words about the man, that’s embarrassing. And it is a reflection on their intelligence as well.  So instead they delude themselves and write sentences like Gergens’.

But even they, at least some of them, are beginning to understand the depth of the mistake they made, whether they’ll ever admit it or not:

America needs a strong, effective president year in, year out, to help propel us forward. Our success as a people has depended on our capacity to solve the problems of today so we can move on to tomorrow. The endless evasions and diversions are tying us in knots and draining our spirits.

The world needs strong, effective American leadership as well; for all our mistakes like Iraq, the U.S. is the one nation that still has the power to keep world order. But in the twinkle of an eye, we have gone from being indispensable to indisposed.

You have to chuckle about the need to include “Iraq” as a mistake.  No mention of the legion of foreign policy mistakes and disasters of this administration.  But Gergen, other than that, is quite correct.  The problem now is the utter depths to which our foreign policy has plunged are so obvious even they must acknowledge it.

And it burns to have to do so, as you can tell.  But the delusion that it really isn’t the man or his ideas that are at fault persists.  It’s everyone else’s fault.  Just ask them.

~McQ

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New White House priority? Climate change!

Apparently tomorrow, President Obama will “showcase” his climate change agenda.  According to the Washington Post:

After years of putting other policy priorities first — and dismaying many liberal allies in the process — Obama is now getting into the weeds on climate change and considers it one of the key components of his legacy, according to aides and advisers. He is regularly briefed on scientific reports on the issue, including a national climate assessment that he will help showcase Tuesday. He is using his executive authority to cut greenhouse gas emissions from power plants and other sources, and is moving ahead with stricter fuel-efficiency standards for the heaviest trucks. And while he routinely brings up climate change in closed-door meetings with world leaders, according to his aides, he also discusses it in his private life, talking about global warming’s implications with his teenage daughters.

As usual, he intends to proceed by using executive power, whether or not the people or their representatives agree.  And also without any consideration of the cost to the consumer.  All in the face of mounting evidence that the supposed crisis of CO2 is a non-crisis. According to the WaPo, this intention to address “climate change” was spurred by Obama viewing satellite pictures of the California mountain snow pack:

The satellite images viewed by President Obama before a meeting with eight Western governors were stark, showing how snowpack in California’s mountains had shrunk by 86 percent in a single year.

Of course, most of us know that’s likely a local weather phenomenon, not a result of “global warming” or we’d be unlikely to be seeing things like this:

Antarctic sea ice continues to set new records, with extent in April at the highest since measurements began in 1979.

Remember, Antarctic and Arctic sea ice melts were to be the harbingers of doom.  In fact, the Arctic was supposed to be ice free last year according to the perpetually wrong alarmists.  Instead we saw record sea ice there as well.  Factor in the fact that there has been no global warming for over 17 years and one has to ask why this, in the face of a badly performing economy and over 92 million Americans being out of work, is suddenly to become a priority for the White House?  As one editorialist puts it:

The problem is, it’s just so hard to be an alarmist these days. Temperatures aren’t rising, U.S. CO2 emissions are down, and now it turns out that peak oil won’t peak. What’s a scare-monger to do?

The answer is keep on trying to gin up the alarm to satisfy the true-believers who are an important political constituency of the Democrats.  And it is becoming clearer every day that the Democrats are going to need all of their constituencies to even have a ghost of a chance in the November mid-terms.  To this point, the left environmental movement hasn’t been to happy with the Obama administration and it certainly wants more drastic action to be taken to curb the use of fossil fuel. So its time to shore up their support:

Environmentalists such as Democratic donor and billionaire Tom Steyer want him to veto the Keystone pipeline and wean the nation from natural gas. Natural Resources Defense Council President Frances Beinecke said of the administration: “We have to increasingly get them to acknowledge that there has to be a major transformation away from fossil fuels.”

That desire the Natural Resources Defense Council voices has resulted in such things as the “war on coal” and the reduction in production of oil on federal lands and off our coasts.   It has also meant slow walking the permit process as well as holding the Keystone Pipeline hostage to presidential politics. So why now? Why is this the time to do this?  Because he can:

A White House official, speaking on the condition of anonymity because the plans are not final, said Obama has made it clear that he considers climate change a priority and is less politically constrained now that he no longer faces reelection.

Meanwhile the public views the issue as a low priority if a priority at all, given jobs and economic problems.  Yet Obama persists.  Elections are in the offing.  And if there is one thing he has at least a semblance of competence in, it’s getting elected (or helping others do so).  So all the high flying rhetoric aside, this is about votes, this is about elections and this is about trying to preserve at least one Democratic house in Congress for the last two years of his presidency.  It is one of many such moves he’ll be attempting in the coming months.  But make no mistake – this isn’t about the environment or his legacy, it’s about politics. ~McQ

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