Questions and Observations

Free Markets, Free People

Dale’s Observations For 2010-08-09

Russian man dies in searing heat at sauna contest. There's a world championship of…sauna? http://usat.me?39617852 #

Castiglioni completes his rape of Harley-Davidson. http://bit.ly/98Xnd0 #

DNC Chair Tim Kaine is complaining that Michelle Obama's Spanish trip is being politicized. Cry me a river, Weepy. http://bit.ly/98h5Iw #

Mike Pence admits Republicans have "credibility problem" on deficits. http://bit.ly/b792e6 #

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Did he really say that?

Does everything have to be about race today?

Juan Williams, who I have always thought was a somewhat sane liberal, had this to say about the Missouri vote on health care while speaking with Chris Wallace on "Fox News Sunday":

WILLIAMS: Look, I think this is, and as far as the Missouri vote, you get 70 percent inside an echo chamber of older white people, no not in St. Louis not in Kansas City, saying, "Oh yeah, we don’t like a requirement that everybody has to have healthcare even though the hospitals in Missouri say it’s gonna drive up our costs, everyone is just going to run to the emergency rooms when they have their accidents."

Sort of stunning isn’t it?

Well, because a bunch of old white folks in an "echo chamber" decided they didn’t care to be forced into a system they didn’t want, so it really doesn’t mean anything.

He goes on to make it worse:

WALLACE: What happened to respect for democracy?

WILLIAMS: I have tremendous respect for democracy, but as Ted Olson…

WALLACE: The proposition was on the ballot…

WILLIAMS: Yes.

WALLACE: …and 71 percent voted in favor of it.

WILLIAMS: That’s who’s energized. The unions didn’t participate and they didn’t get out there…

WALLACE: Well, that’s their problem, isn’t it?

It is indeed. But using Williams argument, the last presidential election doesn’t mean anything because the side that voted for Obama was "who’s energized" at that time.  But this is the first time I’ve seen “who’s energized” as a basis of dismissing the result.

This is how the left writes you off.  They categorize you, make up nonsensical claims about legitimacy or illegitimacy, try to make it about race or pseudo-rights and then dismiss the result.

That, in a nutshell, is why they’re going to get shellacked in November.  And they haven’t a clue as to “why”.  They think you dumbass white folks, or tea partiers or angry white men or grouchy senior citizens don’t know what you’re talking about.  So you turn out, after being duped in the “echo chamber” and go through your preprogrammed vote. Thus they, and their vote, are irrelevant.

It is an amazing bit of self-delusion, but there you have a perfect example found in the words of Juan Williams.

~McQ

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The Economy In An Anecdote

I think this entire article entitled “Why I’m Not Hiring” could qualify as the QOTD. It neatly explains why businesses are so reluctant to hire anyone right now.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She’s been with us for over 15 years. She’s a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

[…]

Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay … When you add it all up, it costs $74,000 to put $44,000 in Sally’s pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally’s job each year.

There is no grand revelation in Mr. Fleischer’s explanatory essay. Just hard cold reality: make the costs of hiring more expensive, and less hiring will happen.

Some may argue that just because Mr. Fleischer’s company isn’t hiring for these reasons, that doesn’t mean that other companies are refraining on the same basis. True, but what are the other possible reasons then? Logan Penza summarizes some of the arguments:

It’s those Evil, Greedy Corporations.

That’s the simple explanation most of the talking heads have for the continuing high unemployment numbers. Those Evil, Greedy Corporations horde their money and refuse to hire anyone. When they do hire someone, they don’t pay them enough, don’t offer them enough benefits, don’t pay enough taxes, pollute the planet, steal candy from babies, kick puppies, and make obscene gestures at your auntie. Evil, Greedy Corporations are offered up as cartoon villains, detestable and vile and without any redeeming value.

The trouble with cartoon villains is that they are fictional.

Well, yeah, but it’s so much easier to blame fictional bogeymen then to address what the real businesses say.

Another argument I’ve seen advanced is that the marketplace is inherently uncertain, and that businesses who can’t cope with changes in the law are simply unfit to survive. There is a certain laissez-faire appeal to this argument, but ultimately it doesn’t make sense.

The fact of the matter is that the types of market risk that businesses can and do adjust to, aside from increased competition, are changes in demand and supply, natural disasters and war. The more savvy, efficient and customer-sensitive businesses do survive these sorts of uncertainties and ultimately enhance the economy when they do.

In contrast, when the government continually raises the costs of doing business in the first place (or threatens to do so), the only ones who really survive are either the politically connected or the very wealthy (yes, they are often the same thing). That doesn’t have anything to do with building a better mousetrap, as it were, or growing the economy. And it certainly doesn’t do anything to raise everyone’s standard of living. Instead, all it does is reward those closest to the rule-makers, thus creating more competition to be closest to the King rather than satisfying the marketplace. It is exactly the sort of crony-capitalism we claim to detest.

As Mr. Fleischer summarizes:

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government’s message is unmistakable: Creating a new job carries a punishing price.

Perhaps instead of punishing business, the government could get out of the way. Maybe then we could get some of that job growth we’ve all been looking for. Unfortunately, it seems that few in Washington are listening, or worse, that they don’t really care.

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Zombie climate-change – administration says still possible during lame-duck session

Yes, yes, we were assured that the “climate change” portion of any energy bill was dead in this Congress.  More popularly known as the “cap-and-trade” portion of such a bill, we were assured by Democratic leaders that it just wasn’t something that was possible or probable during this session of Congress.

Well, like most things they tell us, don’t ever believe anything:

Carol Browner, the White House’s top energy and environmental adviser, refused on Sunday to shut the door on passing climate change legislation this year — even though Senate Democratic leaders have conceded they lack the votes and have punted on the volatile issue.

Browner said on NBC’s "Meet the Press" that President Barack Obama is still committed to pushing the bill through the Senate, and that there was "potential" for the bill to come up in a post-election, lame-duck session of Congress.

Browner’s remarks will almost certainly give ammunition to Republicans who say Democrats are plotting to do mischief in a lame-duck session — even though top congressional Democrats have thrown cold water on an overly ambitious lame-duck agenda.

Agenda politics is agenda politics and the power shifts to the loser with a majority if in fact Democrats get drubbed in November.  I mean, what do they have to lose at that point.  So it will truly become more about agenda and party  (and not what is best for America) – even more so than it is now.

Never, ever, ever think or believe the left is done with something they want badly.  Ever.  Even though the economics of an additional tax on energy at the height of a recession is absolutely the dumbest thing one can imagine doing, that won’t deter the ideologues from their agenda.

By the way, the EPA is attempting to do by fiat and interpretive regulation what the Congress hasn’t yet been able to do by law.  And, God bless ‘em, Texas has told them to go pound sand.

~McQ

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Political fiction of "Trustees’ report" too much for CMS actuary

You remember last week when the supposed “good news” was released – Social Security wasn’t in as dire shape as we’d been told and Medicare was going to be fine too?  Yeah, since ObamaCare passed and the doc fix was sure to be implemented, not to mention the half trillion in cuts to Medicare, why we were on the road not only to solvency but to deficit reduction.

And the yearly bit of political theater played out as planned:

The normal process with the annual Trustees’ Reports is for the Trustees to develop and publish the best available projections for the future finances of Social Security and Medicare. The respective Social Security and Medicare actuaries then sign a pro forma blessing of those projections, which is tacked to the back of the report when released to the public.

“Pro forma” is the key.  Usually, whether they believe the rosy projections or not, their signatures appear on the report.

But this year, one of them just couldn’t do it in good conscience.  The Medicare Chief Actuary just couldn’t sign his name to the fiction without adding a memo of his own.

The actuary’s alternative memo explains that “the projections in the report do not represent the ‘best estimate’ of actual future Medicare expenditures.” Worse than that, they are not even in the ballpark of reasonability. The official 2010 Trustees’ Report tells us that total Medicare expenses will be total 6.37% of GDP by 2080. The CMS actuary’s alternative memorandum explains that 10.70% of GDP is a more reasonable estimate for that year – though one that is roughly 68% higher.

The two reasons the actuary cites are the “doc fix” – a formula the actuary describes as "clearly unworkable and almost certain to be overridden by Congress” (both the Obama administration and leaders in Congress are on record opposing them – yet there they are in the report on the “plus” side of the ledger).

The other assumption the actuary dismisses as unrealistic is the assumption that future program cost will be contained by “downward adjustments in annual price updates reflecting in turn the assumption that health service productivity growth will parallel “economy-wide productivity.”  The actuary flatly states there is no evidence to support this assumption and, on the contrary, much to call it deeply into question.

E21 notes:

This is a key point; the glowingly optimistic projections in the official Trustees’ Report assume that we as a nation will be content to have 40% of our medical facilities go under within the next 40 years, and that we will happily accept these severe constraints upon beneficiaries’ access to health care. If that is not in fact the societal will after the enactment of health care reform, then the official cost estimates should be tossed into the nearest receptacle.

Bad though all of this is, none of it is actually the worst gimmick in the official report’s advertised improvement in Medicare solvency. That involves the double-counting of Medicare savings. Earlier this year, Congress passed a health care bill containing various new Medicare taxes and constraints on program expenditures. Such savings are assumed in the official report to extend the solvency of Medicare. But Congress chose instead to spend the savings on a new health care entitlement.

Remember, the Trustees’ report, like CBO projections, must be based on current law.  So they must include the assumptions contained within those laws.  What the actuary says very bluntly is the assumptions are a fantasy and that the reality of the situation is far from that included in the report.

“(T)he financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range. . . or the long range. . . . I encourage readers to review the ‘illustrative alternative’ projections that are based on more sustainable assumptions for physician and other Medicare price updates.

You can read that “illustrative alternative” here.  Needless to say the Trustees’ report, as published, belongs on the same shelf in your library as “The Wizard of Oz.”

~McQ

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Observations: The QandO Podcast for 08 Aug 10

In this podcast, Bruce, Michael and Dale discuss the economy, the Democrats’ “Blame Bush” strategy, and the anniversary of Hiroshima.

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.

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BlogTalk Radio – 8pm (EST) Tonight

Call in number: (718) 664-9614 Yes, friends, it is a call-in show, so do call in.

 

Subject(s):

 

The unemployment rate – better, worse, getting better, getting worse? We’ll talk about that.

 

How did the Japanese go from brutal conquerors to "victims" in 65 short years? We’ll explore that?

 

And do the Democrats really want to run against George Bush in the midterms? Really?

 

Tune in and find out.

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Idiots to the left of us, yahoos to the right …

I guess the GOP should thank its lucky stars that weeping George Vionovich is headed for the exit.

Of course, he could still team up with some on the Democratic side to do some damage before January if this is any example:

"Fuel taxes today fund the vast majority of the federal government’s investment in infrastructure projects," Voinovich wrote in the letter. "Due to dwindling fuel tax receipts, Congress has had to transfer billions of dollars from the General Fund to the Highway Trust Fund to maintain our current level of federal involvement."

[…]

"The lack of investment in our crumbling bridge, highway, and transit systems is a missed opportunity for the creation of thousands of well paying jobs and long term economic growth for our Nation," said Voinovich. 

And the chorus warms up – anyone?

Yes, that’s right, a fuel tax is a regressive tax because it hits hardest those who can least afford it, but who’s jobs depend on them being able to drive to them daily.  And who is suggesting such a tax in the middle of a deep recession?

That’s right – a Republican.  Even the Obama administration is against a freakin’ increased fuel tax, and there’s hardly a tax they’ve met they don’t like.

“I believe Americans are willing to pay a higher gas tax to create jobs, improve our infrastructure and better our climate," Voinovich said at a business conference in Ohio last month. "And many of my conservative colleagues do not consider that gas tax as a tax, but as a user fee.”

And I believe you’re as full of beans as you usually are, Mr. Voinovich.  Americans have made it clear over and over and over again that they’re not willing to pay more taxes for any reason until government can prove it can balance its budget and pay down the debt.  On top of that, Americans also don’t give a flip what you and your idiot conservative colleagues consider it, it’s a freakin’ tax.

Now I know that Voinovich doesn’t represent the conservative side of the GOP in the Senate.  But there’s still that “R” beside his name and crap like this is why many people don’t trust the GOP any further than they can throw a Democrat.

~McQ

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Democrats to run against Bush – again – in November

As I pointed out yesterday, for the first time the latest poll shows more blame Obama for the economy than Bush.

However, as someone pointed out, if they’ve blamed Bush this long, the attempt must have met with a measure of success. And that’s probably true.

But, as mentioned in the post, blaming someone else for current problems is only effective if it is clear that person is directly responsible for the situation today.  18 months after taking office and with more than enough time to enact one’s own economic policies makes that former connection iffy at best.  Bottom line – blaming someone else for today’s problems has a shelf life, and in this case it seems it is expiring.

While it may be silly in some respects to blame (or credit) the president in power for the economy, it is the way politics in this country work.  So, given that and the length of time Barack Obama has been in office, people are coming to consider this the Obama economy.  And, as you might imagine, they’re not pleased.

So blaming Bush now, as the new poll demonstrates, is loosing whatever steam it once had.  Common Sense 101 says you abandon that political card in favor of another one then.

But as I’ve pointed out so many times in the past, politicians and common sense seem only to meet by coincidence and not on purpose.  Enter Congressional Democrats.

They’ve decided their best strategy for this November is to dust off the “blame Bush” mantra and have another go at running against the former president.

As they brace for a difficult fall election, dispirited Democrats hoping to get back some of that 2008 magic are turning to the president for inspiration.

President Bush, that is.

Grainy images of the former president flashed across the screen in a recent ad by Sen. Patty Murray (D-Wash.). Rep. Joe Sestak (D-Pa.) is attacking his GOP rival in a Senate race for his "advancement of the Bush agenda."

Even President Obama has begun taking direct shots at his predecessor, something he had been careful to avoid in recent months. "They don’t have a single idea that’s different from George Bush’s ideas — not one," Obama said during a speeches this week at fundraisers in Atlanta and Chicago.

Such a strategy smacks not only of desperation but of an attempt to divert attention.  If, as Democrats like to claim, they’ve “accomplished more” during this presidency and this Congress than any previous Democratic administration, why aren’t they running proudly on their record?

My goodness, they passed health care and financial regulation. They saved the car companies.  They “saved or created” 3 million jobs via the trillion dollar “stimulus”.  And they’ve got a 1.4 trillion dollar debt heavy budget in the wings waiting to be passed after the election.   What’s not to be proud of?

Well, those polls they pay attention too and they know as well as anyone that running on their “accomplishments” is a sure-fire way to defeat. 

So they will attempt to nationalize the mid-terms on the back of a former president thinking it will rescue them by repeating history.

"God bless America that he’s back in the conversation," a senior Democratic official on Capitol Hill said. "It’s a blessing from the heavens. If this becomes a referendum on George Bush, we are in a much better spot than anyone could imagine."

You have to chuckle at the inanity of such a statement, the pure stupidity that would allow someone to imagine that given their performance in these past 18 months and the visceral voter reaction to that performance, that trying to play the “blame Bush” card will do anything but worsen their defeat.

But most of us have always at least secretly wondered how those that reside within that fantasy land called “inside the beltway” become so disconnected from reality.  Well, here’s a perfect example of exactly that.  It must be something in the water.

~McQ

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