Karma Anyone?

A lot of elected officials have never worked in the private sector. This impacts their view of economics and how it works. Often people who support liberal ideas have not had enough economic experience to understand that ideas that may sound wonderful may not work out as planned.  A recent example of this is a bookstore owner in New York City.

Yesterday Steven Hayward posted an article on Power Line Blog about Chris Doeblin, the owner of Book Culture, a four-location independent bookseller in New York City. The bookstore has a reputation of being a progressive bookstore.

The owner of the bookstore is quoted in the article:

“Our four stores are in danger of closing soon and we need financial assistance or investment on an interim basis to help us find our footing. This is true in spite of the fact that business has been good and we are widely supported and appreciated,” [owner Chris Doeblin] wrote. “In the last 30 months the payroll costs for Book Culture have risen by 50% and it has been difficult to adapt quickly enough. We have now made the structural changes to our company and the cuts that will allow us to move ahead profitably once we find the financial resources we need.”

The operative statement in that quote is that the payroll costs have risen by 50%. The article explains:

Doeblin blamed payroll cost increases on the city’s minimum wage raise, which he says increased hourly wages for his employees “from $10 to $15.25 since December 2016” and forced him to initiate layoffs and reorganizing.

Now Doeblin has a solution for the problem, which further confirms his lack of understanding of how economics and the free market work:

Doeblin explained to Gothamist what he believes the business needs to survive, and his larger ambitions to try to help other small businesses stay alive in an ever-changing city: “I think we need at least $500K in a term loan but I hope to find $750K to a $1M,” he said. “I would like the city to immediately [guarantee] such a loan and then embark on a serious plan to improve the odds of small business in New York. I would like to be on that panel too, because there is a lack of creative optimistic thinking and action.”

This illustrates the reason we need to teach economics and the principles of the free market in high schools and colleges.

Helping Solve The Healthcare Problem

It is becoming obvious that the Democrats in Congress are not really interested in solving problems. They have been absent on the border crisis and they have been absent on healthcare and health insurance. Meanwhile, President Trump is making gains in both of those areas.

Yesterday John Hinderaker at Power Line Blog posted an article about a recent change in health insurance regulations announced by the Department of Health and Human Services. The change will allow businesses to fund employees who buy health insurance on the individual market–something that until now has been illegal.

The article includes the announcement:

Today, the U.S. Departments of Health and Human Services, Labor, and the Treasury issued a new policy that will provide hundreds of thousands of employers, including small businesses, a better way to provide health insurance coverage, and millions of American workers more options for health insurance coverage. The Departments issued a final regulation that will expand the use of health reimbursement arrangements (HRAs). When employers have fully adjusted to the rule, it is estimated this expansion of HRAs will benefit approximately 800,000 employers, including small businesses, and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured.
***
Under the rule, starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market, subject to certain conditions. … Individual coverage HRAs are designed to give working Americans and their families greater control over their healthcare by providing an additional way for employers to finance health insurance.
***
The HRA rule also increases workers’ choice of coverage, increases the portability of coverage, and will generally improve worker economic well-being. This rule will also allow workers to shop for plans in the individual market and select coverage that best meets their needs. … [T]he final rule should spur a more competitive individual market that drives health insurers to deliver better coverage options to consumers.

Moving healthcare and health insurance back to free market principles will be better for everyone–it will increase competition and eventually drive costs down. This is a step in the right direction.

Wisdom From A Friend

John Droz, Jr., is a physicist who has spent a lot of time studying the impact of wind farms and wind energy. The following is the result of some of his research:

Wind Energy: Local Economics 101

What about the claim that industrial wind energy projects are a “financial boon” to hard-pressed rural communities? On the surface that sounds plausible, but to evaluate this assertion this we need to look a bit deeper. This is a two part answer…

First, we do not select our electrical energy sources based on the economic impact to host communities. Instead our electrical energy sources are chosen because of their reliability, true cost to ratepayers & taxpayers, proximity to demand centers, dispatchability, etc.

Wind energy fares poorly on ALL such metrics — which is why wind salespeople try the sleight-of-hand tactic to talk instead about local taxes, local lease payments, etc. We need to be careful about getting tricked by such marketing tactics.

Secondly, the only way that we can know if these projects are genuinely an economic asset, is if a proper NET financial analysis is done. In other words we need to do a comprehensive and objective investigation into the pros and cons of these projects.

We know the positives, as the developers and their proponents have done a fine job at spelling out the possible benefits: property tax income, lease payments to selected landowners, several construction jobs, a few permanent jobs, etc.

But what about the negatives? How do we come up with the numbers on the other side of the equation, so that we can do an accurate NET financial assessment? The answer is to carefully research studies done by independent experts — i.e scientists, academics, economists, physicians, etc. who generally have no dog-in-the-fight.

After carefully doing that research here are some reasons why a wind project can be an economic liability to a host community:

1 – Independent experts have concluded that local agricultural income can decrease as: a)bats being killed will reduce crop yields, b) turbines can affect local weather [up to 15 miles away!] which will also lower crop yields, and c) in some cases, farmers with turbine leases will reduce or terminate operations. For much more on this, see here.

2 – Studies from independent experts have concluded that there can be serious hydro-geological consequences from wind projects. Here is a sample study done in Vermont.

3 – Studies from independent experts have concluded tourism will drop in the region. For example, North Carolina State University (avid wind proponents) surveyed tourists. Although the majority of the visitors stated that they supported wind energy, 80%± said that they would not vacation in an area where wind turbines were visible. Some other studies that have concluded that tourism will be reduced are listed here.

4 – Studies from independent experts have concluded that property values will decrease for residences within 1± miles of a wind project. This was the conclusion of largest study in the world on this topic, done by the London School of Economics. Here is an extensive list of other studies and articles that came to the same conclusion.

5 – Studies from medical professionals have concluded that some nearby citizens will experience adverse health effects. The biggest concern is from infrasound (noise we can not hear). The World Health Organization has stated (p53) that infrasound is more problematic than audible sound. Infrasound can be so harmful that the US military is researching weaponizing it. Over a hundred studies have concluded that there will be health consequences (here is a representative sample, including cancer).

6 – Studies from independent experts have concluded that industrial wind projects can cause major eco-system damage. See this sample study (esp. pages 103-122).

7 – Studies from independent experts have concluded that industrial wind projects can harm wildlife and livestock animals. Sample reports: here, here, here, here and here.

8 – Studies from independent experts have concluded that industrial wind projects can adversely affect local hunting (and possibly fishing). Here is an explanation of that.

9 – Research by independent experts has shown that wind projects can cause serious interference with military facilities. Here is an overview of the topic.

10-Despite implications otherwise, leaseholders can suffer economic losses. See this explanation of 40+ possible legal and financial liabilities to signing turbine leases.

So what might the NET be after taking the positives and negatives into account? A sample analysis was done of the proposed NY Horse Creek wind project. The conclusion is that the NET economic impact would likely be a loss of $10± Million a year. For comparison, an analysis of the NC Timbermill wind project was also done. The conclusion is that there could be a NET economic loss of $12± Million a year.

So before any community can say that a “wind project is a financial windfall,” a comprehensive and objective financial analysis must be done. Right now, no one in any federal, state or local agency, is thoroughly investigating these wind energy liabilities.

Without such an analysis, all financial claims are simply one-side of the economic equation — and are not an accurate representation of the NET economic impact. The evidence to date indicates that wind energy is the “gift” that keeps on taking.

Let me know any questions (email: “aaprjohn at northnet dot org”). john droz, jr. physicist 5/31/19

PS — For additional information on all of these costs, please see WiseEnergy.org.

Wind energy is probably a good idea, but we are not there yet in terms of technology. If the free market were allowed to function in the energy industry, we might get there faster.

Note:  I have linked a few of the studies listed in this paper. To go to the original paper and get the complete list go here.

Better Late Than Never

Yesterday The Hill reported that the Justice Department has announced that it has found the Affordable Care Act unconstitutional.

The article reports:

The DOJ previously argued in court that the law’s pre-existing condition protections should be struck down. Now, the administration argues the entire law should be invalidated.

U.S. District Judge Reed O’Connor ruled in December that the Affordable Care Act’s individual mandate is unconstitutional and that the rest of law is therefore invalid.

The DOJ said Monday that it agrees the decision should stand as the case works its way through the appeals process in the U.S. Court of Appeals for the 5th Circuit.

“The Department of Justice has determined that the district court’s judgment should be affirmed,” the department said in a short letter to the appeals court.

The article concludes:

Many legal experts in both parties think the lawsuit, which was brought by 20 GOP-led states, will not ultimately succeed. The district judge who ruled against the law in December is known as a staunch conservative.

The case centers on the argument that since Congress repealed the tax penalty in the law’s mandate for everyone to have insurance in 2017, the mandate can no longer be ruled constitutional under Congress’s power to tax. The challengers then argue that all of ObamaCare should be invalidated because the mandate is unconstitutional.

Most legal experts say legal precedent shows that even if the mandate is ruled unconstitutional, the rest of ObamaCare should remain unharmed, as that is what Congress voted to do in the 2017 tax law that repealed the mandate’s penalty.

This is another example of the consequences of Congressional inaction. First of all, the government has no business in healthcare or health insurance. It the government wants to make a few minor rules to make sure people can obtain healthcare, that is fine, but other than that, we need to go back to free market healthcare. Our current policies have made insurance more expensive than it should be and care more expensive than it should be. We need to go back to the days of knowing how much things cost and being able to shop around for our care.

This Lady Needs To Read American History

The Herald Mail Media reported yesterday that Representative Alexandria Ocasio-Cortez, speaking at the South by Southwest conference in Austin, Texas, stated the following:

“Capitalism is an ideology of capital — the most important thing is the concentration of capital and to seek and maximize profit,” Ocasio-Cortez said. And that comes at any cost to people and to the environment, she said, “so to me capitalism is irredeemable.”

Although she said she doesn’t think all parts of capitalism should be abandoned, “we’re reckoning with the consequences of putting profit above everything else in society. And what that means is people can’t afford to live. For me, it’s a question of priorities and right now I don’t think our model is sustainable.”

…While America is wealthier than ever, wealth is enjoyed “by fewer than ever,” she said.

“It doesn’t feel good to live in an unequal society,” she said, citing an increase in homelessness in New York City among veterans and the elderly while penthouses sit empty. “It doesn’t feel good to live in a society like that.”

Let’s look at those statements through the lens of American history. In November 2005, the Heritage Foundation published an article about communism in America.

The article included the following notes on American history:

Recalling the story of the Pilgrims is a Thanksgiving tradition, but do you know the real story behind their triumph over hunger and poverty at Plymouth Colony nearly four centuries ago? Their salvation stemmed not so much from the charitable gestures of local Indians, but from their courageous decision to embrace the free-market principle of private property ownership a century and a half before Adam Smith wrote The Wealth of Nations.

Writing in his diary of the dire economic straits and self-destructive behavior that consumed his fellow Puritans shortly after their arrival, Governor William Bradford painted a picture of destitute settlers selling their clothes and bed coverings for food while others “became servants to the Indians,” cutting wood and fetching water in exchange for “a capful of corn.” The most desperate among them starved, with Bradford recounting how one settler, in gathering shellfish along the shore, “was so weak … he stuck fast in the mud and was found dead in the place.”

The colony’s leaders identified the source of their problem as a particularly vile form of what Bradford called “communism.” Property in Plymouth Colony, he observed, was communally owned and cultivated. This system (“taking away of property and bringing [it] into a commonwealth”) bred “confusion and discontent” and “retarded much employment that would have been to [the settlers’] benefit and comfort.”

The most able and fit young men in Plymouth thought it an “injustice” that they were paid the same as those “not able to do a quarter the other could.” Women, meanwhile, viewed the communal chores they were required to perform for others as a form of “slavery.”

On the brink of extermination, the Colony’s leaders changed course and allotted a parcel of land to each settler, hoping the private ownership of farmland would encourage self-sufficiency and lead to the cultivation of more corn and other foodstuffs.

As Adam Smith would have predicted, this new system worked famously. “This had very good success,” Bradford reported, “for it made all hands very industrious.” In fact, “much more corn was planted than otherwise would have been” and productivity increased. “Women,” for example, “went willingly into the field, and took their little ones with them to set corn.”

The famine that nearly wiped out the Pilgrims in 1623 gave way to a period of agricultural abundance that enabled the Massachusetts settlers to set down permanent roots in the New World, prosper, and play an indispensable role in the ultimate success of the American experiment.

A profoundly religious man, Bradford saw the hand of God in the Pilgrims’ economic recovery. Their success, he observed, “may well evince the vanity of that conceit…that the taking away of property… would make [men] happy and flourishing; as if they were wiser than God.” Bradford surmised, “God in his wisdom saw another course fitter for them.”

There will always be inequities in wealth. A person who works 12-hour days will generally earn more than a person who works a 6-hour day. People who invent things or have new ideas generally do very well financially. Rewarding innovation provides an incentive for progress. Capitalism (or the free market economy) is not perfect, but it creates fewer problems than any other economic system. Those touting the wonders of socialism need only look at the economic history of Venezuela during the past ten years. Once the wealthiest country in South America, now a place of unspeakable poverty. That is the fruit of socialism or communism.

Representative Ocasio-Cortez, please learn your history.

Good News–Temporary Good News, But Good News

Breitbart is reporting today that a White House study released on Friday found that President Donald Trump’s Obamacare reforms will save Americans roughly $450 billion over the next ten years.

That is wonderful news, but it is only temporary wonderful news.

The article reports:

A White House Council of Economic Advisers (CEA) study released on Friday found that Americans will save $450 billion through Trump’s Obamacare reforms. The CEA suggested that Trump’s repeal of the Obamacare individual mandate and the expansion of short-term insurance plans and Association Health Plans (AHPs) will save Americans billions over the next ten years.

The White House also suggested that the benefits of Trump’s deregulatory actions saved Americans billions, increased access to more health insurance options, and did not amount to a “sabotage” of the Affordable Care Act (ACA).

Unfortunately these savings are a result of Executive Orders, not legislative action. That means that the changes can theoretically be reversed by a future President. It would have been wonderful if Congress had stepped up to the plate and made the necessary changes.

The article concludes:

Many Americans have contended that because 80 percent of those who paid the Obamacare mandate made less than $50,000 a year, the individual mandate repeal serves as a significant middle-class tax break.

The CEA said about 87 percent of Obamacare exchange enrollees receive ACA subsidies and “only pay a fraction of their health insurance costs.”

Many Obamacare proponents suggested that the repeal of the individual mandate, as well as the expansion of short-term plans and AHPs, would lead to higher premiums on the Obamacare exchanges.

In contrast, the CEA contended that because more people will use AHPs and short-term plans and fewer people will use the ACA exchanges, the government will save $185 billion over the next ten years.

The CEA said that instead of sabotaging the ACA, the Trump administration offered millions of Americans more affordable health insurance options.

“The oft-expressed view that deregulation ‘sabotages the ACA’ by giving consumers more insurance-coverage options is misguided,” the CEA said.

The free market is always the best answer.

Have We Passed The Point Of Being Able To Have A Serious Discussion Of Issues?

On Friday, The Daily Signal posted an article that provides some background information on Stacey Abrams.

These are some basic facts about Ms. Abrams listed in the article:

1. She ‘Wouldn’t Oppose’ Noncitizen Voting  –  she did support the idea of non-citizens voting to local elections, but the fact remains that people who are here illegally are breaking the law and should not have voting rights.

2. She Wants to Turn Georgia Blue – that’s not all that unusual, but her approach in somewhat interesting.

3. She Wants to Promote ‘Race and Gender’ Issues – has anyone else noticed that promoting race and gender issues divides us rather than unites us?

4. She Was Endorsed by Planned Parenthood – just for the record, Planned Parenthood receives on average approximately $500 million a year in taxpayer funds. How much of that money is essentially laundered and spent on campaign contributions?

5. She Is ‘Sick and Tired’ of Free Market Role in Health Care – actually health care worked very well until the government got involved – people were taken care of and the cost was not prohibitive.

6. She Says ‘Liberal’ Is a Good Word – that is her privilege.

7. She Says the AR-15 Doesn’t Belong in Civilian Hands – Don’t look for her to support the Second Amendment.

And finally:

8. She Is a ‘Romance’ Novelist – she writes sexually explicit romance novels under the name of Selena Montgomery.

The comments in bold type are from the article. Other comments are mine.

This is the person the Democrats have chosen to respond to the State of the Union address.

If You Give A Mouse A Cookie…

I think “If you give a mouse a cookie…” is going to be my motto for 2019. If You Give a Mouse a Cookie is a children’s book written by Laura Numeroff and illustrated by Felicia Bond. The book was published in 2015 and contains more wisdom than most adult books. The basic premise is that if you give a mouse a cookie he will want milk to go with it. Then he will want a chair to sit in and a table to sit at. You get the picture. Well, on January 11th, The Las Vegas Review-Journal posted an article that beautifully illustrates the message of the book.

The article reports:

The Fight for $15 isn’t living up to its promise.

For years, liberals have claimed that the minimum wage needs to increase to $15 an hour to provide a living wage for full-time workers. The stated goal, as socialist Sen. Bernie Sanders writes on his website, is straightforward, “We must ensure that no full-time worker lives in poverty.”

In one way, the campaign has been remarkably successful. California and New York are phasing in a statewide $15 an hour minimum wage. Numerous cities, including Seattle, Minneapolis and Washington D.C., have passed $15 an hour minimum wage laws as well.

But as sure as the sun comes up in the morning, progressives are now demanding more.

“$15 an hour: A higher wage, but hardly a living,” a CBS News headline from October reads. After bemoaning the inadequacy of the $7.25 an hour federal minimum wage, the CBS story asserts that “even at $15 an hour, life doesn’t get a whole lot easier.”

The article continues:

“The arrival of a $15 hourly minimum wage cannot be considered the end of something,” New York Times columnist Ginia Bellafante wrote last week. Her suggestion? A $33 an hour minimum wage for the Big Apple.

Ah, the wonders of progressive economics. Just pass a law mandating that everybody must make at least $68,000 a year — with full medical benefits, vacation time and family leave allowances, of course. But why stop there? Why with a stroke of the pen, we could all be millionaires!

The argument for a higher minimum wage is that in some cities housing is very expensive. Might this be an argument for the free market? If housing is too expensive and people cannot easily afford to live there, don’t they move to places they can afford? If people can’t afford housing in a city, doesn’t the availability of housing increase and put downward pressure on the price?  It seems to me that is one of the reasons many states are losing rather than gaining population.

The article concludes:

The minimum wage was never intended to provide a living wage. Most minimum wage workers aren’t trying to make a living. A great many are earning supplemental income. Most are between 16 and 24 and work part-time. Inexperienced workers don’t produce that much value. It can still be profitable for the company to hire them — at a lower wage rate.

This creates a win-win. Companies make money by hiring less expensive workers. The workers receive the experience and training that allows them to move up the career ladder. According to the Heritage Foundation, two-thirds of minimum wage workers see their wages increase within a year of starting their job.

This normal career progression is short-circuited when politicians meddle in the marketplace and set unreasonable wage floors. As some leftists are now acknowledging, it’s not even as beneficial as advertised for the workers who manage to find work.

Raising the minimum wage isn’t going to end poverty. But it can make it worse.

If the minimum wage ever increases to $50 an hour, I promise to come out of retirement!

Plymouth Rock Began As A Socialist Colony.

The new Democrat party has moved left very quickly in the past two years. The term Democratic Socialist has been used to describe some of the young Democrats just getting their footing in the party. Actually, Socialist would probably be a better description. These young Democratic Socialists are a tribute to the damage done in recent years by our education system. They have not been taught the failures and atrocities associated with Socialism and believe that it is a fair system. They are not familiar with the Pilgrims early socialist experiment.

OffTheGridNews has a brief description of what happened:

Since the Pilgrims did not have enough funds to outfit for the journey and establish a colony, they sought help from the Virginia Company of London and the Virginia Company of Plymouth, companies known as “adventurers,” which were organized to fund and equip colonial enterprises.

One of the key points of the contract between the Pilgrims and the Adventurers said that all colonists were to get their food, clothing, drink and provisions from the colony’s “common stock and goods.” In addition, during the first seven years, all profits earned by colonists would go into the “common stock” until they were divided.

“Today we would call this a socialist commune,” Patton wrote. “In other words, the Pilgrims accepted the socialist principle, ‘from each according to his ability, to each according to his need.’ Each person was to place his production into the common warehouse and receive back, through the Governor, only what he needed for himself or his family. The surplus after seven years was to be divided equally, along with the houses, lands, and chattels, ‘betwixt the Adventurers and Planters.’”

The Pilgrims actually wanted to own their own lands and homes and to work two days a week for their own gain, but the adventurers would not allow it.

Once the agreement was signed, two ships were outfitted for the journey, the Speedwell and the Mayflower. But the Speedwell proved unseaworthy, so everyone still willing to make the journey—102 persons—crowded aboard the Mayflower and set sail.

Patton wrote that after landing on Dec 21, 1620, the Pilgrims suffered horribly their first winter, with around half the colonists perishing. Aid from the now-famous native, Squanto, helped them survive with new planting techniques, but the harvests of 1621 and 1622 were still small.

The colony’s governor, William Bradford, wrote that its socialist philosophy greatly hindered its growth: Young men resented working for the benefit of other men’s wives and children without compensation; healthy men who worked thought it unjust that they received no more food than weak men who could not; wives resented doing household chores for other men, considering it a kind of slavery.

Governor Bradford wrote that to avoid famine in 1623, the Pilgrims abandoned socialism, Patton said.

“At length, after much debate of things, the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go on in the general way as before. And so assigned to every family a parcel of land,” Bradford wrote.

The colonists, each of whom now had to grow their own food, suddenly became very industrious, with women and children who earlier claimed weakness now going into the fields to plant corn. Three times the amount of corn was planted that year under the new system.

Yes, America began as a socialist colony. When socialism did not result in prosperity, the Pilgrims switched to a free market economy and everyone prospered. We need to learn the lessons of history.

The Consequences Of Not Understanding Economics

I am not an authority on economics. I am, however, a person who watches what goes on around me and sometimes learns lessons from what I see. Some economic principles are obvious enough to be learned that way.

In 2013, Forbes Magazine posted an article quoting a statement by then-President Obama on the subject of economic freedom. Economic freedom was not something President Obama believed in. President Obama acted on his belief that economic freedom was not a good thing, and the American economy suffered during his presidency.

The article quotes a speech President Obama gave in Kansas:

there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes–especially for the wealthy–our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. (Laughter.) But here’s the problem: It doesn’t work. It has never worked. (Applause.) It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. (Applause.) I mean, understand, it’s not as if we haven’t tried this theory.

Well, have we tried this theory? A little history is in order here.

The article reminds us:

I pick 100 years deliberately, because it was exactly 100 years ago that a gigantic anti-capitalist measure was put into effect: the Federal Reserve System. For 100 years, government, not the free market, has controlled money and banking. How’s that worked out? How’s the value of the dollar held up since 1913? Is it worth one-fiftieth of its value then or only one one-hundredth? You be the judge. How did the dollar hold up over the 100 years before this government take-over of money and banking? It actually gained slightly in value.

Laissez-faire hasn’t existed since the Sherman Antitrust Act of 1890. That was the first of a plethora of government crimes against the free market.

…Obama absurdly suggests that timid, half-hearted, compromisers, like George W. Bush, installed laissez-faire capitalism–on the grounds that they tinkered with one or two regulations (Glass-Steagall) and marginal tax rates–while blanking out the fact that under the Bush administration, government spending ballooned, growing much faster than under Clinton, and 50,000 new regulations were added to the Federal Register.

The philosophy of individualism and the politics of laissez-faire would mean government spending of about one-tenth its present level. It would also mean an end to all regulatory agencies: no SEC, FDA, NLRB, FAA, OSHA, EPA, FTC, ATF, CFTC, FHA, FCC–to name just some of the better known of the 430 agencies listed in the federal register.

Even you, dear reader, are probably wondering how on earth anyone could challenge things like Social Security, government schools, and the FDA. But that’s not the point. The point is: these statist, anti-capitalist programs exist and have existed for about a century. The point is: Obama is pretending that the Progressive Era, the New Deal, and the Great Society were repealed, so that he can blame the financial crisis on capitalism. He’s pretending that George Bush was George Washington.

Please follow the link to read the entire article. It accidentally explains the reasons the economy has prospered under President Trump. I also strongly recommend reading The Creature From Jekyll Island by G. Edward Griffin for the story behind the creation of the Federal Reserve System.

 

 

Those Nasty Unintended Consequences

On Monday, Investor’s Business Daily posted an editorial detailing the impact of ObamaCare on doctors.

The editorial reports:

A year before ObamaCare became law, an IBD/TIPP Poll warned that it would lead to doctor shortages because many would quit or retire early. New evidence shows that our warnings were dead on.

A recent report from the Association of Medical Colleges projects doctor shortages of up to 121,300 within the next 12 years. That’s a 16% increase from their forecast just last year.

Not only are medical schools having trouble attracting doctors (New York University plans to offer free tuition to its med students), but current physicians are cutting back on patient visits, retiring early or switching careers.

An article in a recent issue of the Mayo Clinic Proceedings says that nearly one in five doctors plan to switch to part-time clinical hours, 27% plan to leave their current practice, and 9% plan to get an administrative job or switch careers entirely.

The editorial cites one possible reason for the declining number of doctors:

One of the big drivers of doctor exits, by the way, is the Obama administration’s “electronic health records” mandate, which was supposed to vastly improve the quality and efficiency of care.

It’s had the opposite effect. A Mayo Clinic survey found that the EHR mandate is reducing efficiency, increasing costs and paperwork hassles, and pushing more doctors to quit or retire early.

A Harris Poll found that 59% of doctors say the current EHR system foisted on them by the Obama administration needs “a complete overhaul,” and 40% say it imposes more challenges than benefits.

ObamaCare continued what had been a long and sorry trend in health care. Government-imposed rules designed to fix some problem in the system instead generated mountains of new administrative work.

The result has been that while the number of physicians in the country has climbed modestly over the past three decades, the number of health care administrators exploded.

This is an illustration of the consequences of government interference in the free market. The free market isn’t perfect, but it is the best way to keep prices down, innovation up, and industries (and professions) moving forward.

Not Really A Surprise

The American Spectator posted an article today that tells us everything we already knew about ObamaCare. The Centers for Disease Control (CDC) has just released a report about uninsured Americans.

The article reports:

Anyone with the intestinal fortitude to subject themselves to the legacy media will have seen countless “news” stories about the devastation wrought by President Trump’s “sabotage” of Obamacare. A typical headline appeared a couple of weeks ago in the Washington Post: “Americans are starting to suffer from Trump’s health-care sabotage.” This work of fiction claimed that the number of working-ageAmericans without health insurance had risen to 15.5 percent, a 3 point increase since 2016. But a report just released by the Centers for Disease Control (CDC), says the real number is 12.8 percent — exactly what it was in 2015.

…NBC recently reported that the total number of uninsured Americans rose by a preposterous 3.2 million in 2017. According to the CDC, however, “There was no significant change from the 2016 uninsured rate.” The percentage is, like the working age statistic, precisely what it was in 2015. NBC, parroting the Post, based its uninsured propaganda on an unreliable source.

There are a few things to keep in mind when evaluating ObamaCare. The first is that is was never about health insurance–it was about giving government control of a major sector of the American economy and a major sector of people’s lives. We have seeen how well socialized medicine works in Britain when a child isn’t even given a chance to leave the country to receive alternative medical care that could possibly save his life. ObamaCare was a planned failure that would lead to socialized medicine in America during the presidency of Hillary Clinton. We have dodged that bullet (at least temporarily).

The major change that occurred to ObamaCare this year was the end of government subsidies to insurance companies and changing rules for insurance pools to make it easier for people to get health insurance in various groups. The real answer to health insurance is the free market–let companies compete without being over-regulated and let people know how much they are actually paying for healthcare services. It would also help to end ObamaCare completely. In order to end ObamaCare completely, the Republicans would have to learn how to get their message out over the din of the mainstream media. They would also have to develop a spine.

The article concludes:

A multi-year study dubbed the “Oregon Health Experiment,” whose results were published in the New England Journal of Medicine in May of 2014, has demonstrated that health outcomes for Medicaid patients are no better than those enjoyed by the uninsured. Scott Gottlieb, the current Commissioner of the Food and Drug Administration, summarized various Medicaid studies in the Wall Street Journal and also concluded that being covered by Medicaid is demonstrably worse for your health than having no coverage at all.

The CDC report doesn’t weigh in on this issue, of course. It just attempts to show us where the uninsured rate was and where it is now. But that is damning enough. It not only shows that the projections originally touted for Obamacare were wildly off the mark — it was supposed to have brought the non-elderly uninsured rate down to 7.6 percent by 2016 — it demonstrates that the Democrats and their media co-conspirators have been lying about what the real uninsured numbers are as well as President Trump’s role in their mythical increase. Not that this is new. The Democrats and the media have been lying about Obamacare from day one.

As more Americans realize that the media has been lying to them from the beginning, we may have a chance to get rid of ObamaCare. Until then, we are stuck with it.

Former Governor Dalrymple’s Statement About the Dakota Access Pipeline

On Wednesday, The Grand Forks Herald posted former Governor Dalrymple’s statement regarding the Dakota Access Pipeline. As usual, much of what you have read in the press is untrue.

This some of what the former Governor said:

The Dakota Access Pipeline has been marred by a steady stream of misinformation and rumor. As governor of North Dakota, I feel it’s important to share facts regarding the route, permitting and our North Dakota law enforcement’s exemplary management of protesters.

North Dakota’s connection to the pipeline began in 2014 when Energy Transfer Partners officially filed an application for corridor compatibility and a route permit through our Public Service Commission. It is the job of our three-person elected commission to handle all such matters according to state law. A 13-month review process included public-input meetings held across the state. As a result of these meetings, the route was modified 140 times to ensure environmental safety, including a shift to follow an existing gas pipeline corridor so an entirely new pathway didn’t have to be created. The final route was legally approved and permitted by the state of North Dakota. The location for the crossing of the Missouri River was approved by the U.S. Army Corps of Engineers. And the easement was forwarded to the assistant secretary for signature.

There are some essential facts in this unfolding situation.

  • First and foremost, not one person from the tribe attended any of the meetings and hearings publicly noticed by state regulators over the course of two years.Second, the pipeline’s permitted route never crosses tribal land.
  • Those opponents who cite the 1851 Treaty of Fort Laramie to dispute who owns the lands conveniently ignore the later treaty of 1868.
  • Finally, with respect to the pipeline’s proximity to the Standing Rock Reservation’s water supply, its existing intake already was scheduled to be shut down by the end of 2016 and replaced by an intake in South Dakota, some 70 miles away.

All of these facts were validated by a U.S. District Court judge in Washington, D.C., who ruled against a request for an injunction.

While the right to disagree with projects such as the Dakota Access Pipeline absolutely exists, and those who disagree are welcome to exercise their right to free speech to declare that, it never should be acceptable to ignore straightforward facts and trample on a legal process that was followed carefully. It is unacceptable that the facts of the permitting process not only were omitted in much of the discussion among those who disagreed with the pipeline but were twisted in order to paint the state of North Dakota and federal government as reckless and racist. Nothing could be further from the truth.

…Who were these people who came from all over the country to Cannonball? Hundreds of them were peaceful protesters, drawn to the general cause of environmental protection by a flood of social media calls for “help.” But many were actually professional agitators recruited by large environmental activist organizations to intimidate people to drop their support for the project. This subgroup hurled rocks and debris at law enforcement and harassed their families. What started out as a tribe’s objections to a pipeline siting grew into something far different.

This particular pipe is state-of-the-art when it comes to safety. It will be buried 92 feet below the bottom of the Missouri River. It will be double the strength of the pipe buried on land. And it will have sophisticated flow-monitoring devices on both sides of the river with automatic shut-off valves.

To date, the 1,172-mile pipeline is virtually complete from North Dakota to Illinois — with the exception of this river crossing. When complete, the pipeline will deliver one-half of the petroleum production from the Bakken region to markets throughout the U.S. And it will be much, much safer from an environmental standpoint than the alternative modes of truck or rail transportation. Again, the pipeline does not cross reservation land.

Please follow the link to read the entire article and the entire statement. One thing to remember here is that there are people who will make a lot of money if this pipeline is not built. Those people own the rail cars the oil is currently being transported on. Pipelines have a much better safety record than rail cars and have a much lower carbon footprint, so the protest cannot really be about the environment. Also, many of the protesters are paid protesters. It would be interesting to know who is paying them and how much.

The statement concludes:

What ultimately has happened is that the Standing Rock Sioux Tribe’s voice now largely has become overshadowed. Environmental activist organizations, which never before showed much interest in North Dakota, used a massive social-media machine to drive misinformation about the pipeline and protests and to accuse law enforcement and the National Guard of criminal mistreatment of protesters. Nothing could be further from the truth.

Now that winter, including several feet of snow and subfreezing temperatures, has settled into our state, law enforcement and several neighboring communities have gone above and beyond to help rescue and shelter people who came unprepared. Public schools have been opened as shelters, and law enforcement repeatedly has given warnings to safely leave camp ahead of major storms.

We are proud of the restraint and the professionalism of our law enforcement officers. Attacks on their conduct have been totally inaccurate, and I hope time will help reveal the facts surrounding this ongoing situation and that reason will prevail.

Like it or not, our economy is carbon-fuel dependent. Until the technology in green energy improves, that is not going to change. Oddly enough, the technology in green energy will not improve until the government removes itself from the green energy market–right now green energy depends on government subsidies and has no reason to become more efficient. The government’s support of companies like Solyndra did not advance the cause of green energy. The free market will advance green energy if it is allowed to function as it should.

The Cost Of Paying A Higher Minimum Wage

Yesterday Twitchy reported that Wendy’s will be introducing self-service kiosks in their 6000 stores nationwide this year.

Investor’s Business Daily reported yesterday:

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

It’s not surprising that some franchisees might face more of a labor-cost squeeze than company restaurants. All 258 Wendy’s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated. Likewise, about 75% of 200-plus restaurants in New York are run by franchisees. New York’s fast-food industry wage rose to $10.50 in New York City and $9.75 in the rest of the state at the start of 2016, also on the way to $15.

Wendy’s plans to cut company-owned stores to just 5% of the total.

There are some things those asking for significant increases to the minimum wage should keep in mind. Very few people are actually attempting to support families on minimum wage jobs–generally those holding those jobs are people attempting to enter the work force for the first time. These jobs allow them to develop basic workplace skills–showing up on time, being polite to customers, and showing up for work every day. Companies are in business to make a profit. If they do not make a profit, there is no reason for them to stay in business. No government has the right to determine what profit is acceptable–left alone, the free market will do that. Part of our current problem is that the government has interfered so much with the free market, that that normal checks and balances within the free market are not working as they should. The solution would be to get the government out of the marketplace–let businesses complete for workers and pay them what is necessary. It is also telling that because economic growth in America is currently slow, workers who would not normally be working in minimum wage jobs are working there.

If It Won’t Work, Why Is The Government Funding It?

One of the biggest problems in the American economy right now is crony capitalism. Rather than a free market system where innovation is rewarded, we have devolved into a system where the federal government picks which companies will receive money from the government to become successful and which companies will simply have to rely on their own abilities to become successful. One of the places where this has been the most obvious has been the ‘green energy‘ industry. On Thursday, The Daily Caller posted an article stating some basic facts about green energy.

The article reports:

Researchers at the Massachusetts Institute of Technology have confirmed what many in the energy world already knew: Without government support or high taxes, green energy will never be able to compete with conventional, more reliable power plants.

…The MIT study also noted that solar and wind power are more than twice as expensive as natural gas, and tax on carbon dioxide emissions could increase electricity prices enough for green sources to compete. Even environmental groups such as The Sierra Club worry increasingly cheap energy will make the case for green power weaker.

The article goes on to explain that fossil fuel is cheap and reliable. As of yet, green energy is neither. We would probably have a better chance of developing green energy if the government would get out of the way and let the inventors take over and be rewarded for their efforts. Until change becomes extremely profitable (outside government subsidies), it is unlikely to happen.

The Answer To Social Security Is In South America

Investor’s Business Daily posted an article today about the success of private, personal retirement plans in Chile.

The article reports:

In 2012, the Chilean government invited a group of journalists to the South American country to show off its innovations — language programs, new uses for llama fur, greenie aquaculture, microfinance, quake-proof skyscrapers and the world’s most powerful telescope.

But there was one thing missing amid all these new ideas: recognition for Chile’s most spectacular innovation, the one that made the country’s development into a first-world country possible.

That concept? Chile’s 35-year old private pension program, which a new report confirms is working spectacularly well.

Sergio De Castro, the dean of Santiago’s Catholic University, became Finance Minister of Chile in 1976. He began a free market revolution in the Chile. Jose Pinera designed and implemented the profoundly innovative private pension system, which up until then had never been tried — and which was copiously praised Milton Friedman?

The article further reports:

Pinera, who was Chile’s labor minister in 1978, knew that the idea of private pensions would have to be sold to the public. Economic ignorance was widespread, and he utilized the most important media outlet of the day, radio broadcasting, to give five-minute talks for the citizens on savings, ownership, control, responsibility and wealth building — which are the pillars of the Chilean Model — and have as their ultimate reward a comfortable retirement, which Chileans now do.

His daily broadcasts led to sign-ups for the new private pension option that went well beyond expectations. At the time, Chile’s leaders had expected 4% of the population to sign up, but got 25% right off the bat.

I am somewhat convinced that the problem in America is not economic ignorance–it is people who are wrongly informed on the subject of economics.

So what were the results:

A Wharton professor, Olivia Mitchell, recently went down to Chile to sort the complaints out, and found that there was nothing to complain about — the system worked exactly as advertised, creating wealth and providing a dignified retirement for millions of people well beyond what the state could accomplish and, in fact, a much better one than Americans get with Social Security.

We need a leader with the courage to copy what has already proven successful rather than continue with the current ponzi scheme that we call Social Security.

 

How Crony Capitalism In North Carolina Impacts Medical Costs To Patients

I am a member of an organization called the Coastal Carolina Taxpayers Association (CCTA). The CCTA is essentially a watchdog organization that supports the U.S. Constitution and the concept of free markets. One of the things that has come across the radar of the CCTA lately is the requirement for a Certificate of Need (CON) to build a heath care facility in North Carolina. The bureaucracy surrounding the requirement for a CON prevents competition, innovation, and results in high health care costs for North Carolina residents.

Forbes Magazine posted an article on this subject in December 2014.

The article reported:

Under the existing statute, medical providers often times must ask permission from “The SHCC,” the governor-appointed State Health Coordinating Council, to build or expand an existing health care facility, offer new services, or update major medical equipment. For more on the history and flawed reasoning behind CON laws, see my previous post on the issue here.

The article also reported the state legislature’s desire to change the status quo:

As 2015 approaches, North Carolina legislators have plans to disrupt the health care status quo. Reforming the state’s Certificate of Need (CON) law will hopefully ignite some competition within the health care sector and help to reduce costs for patients.

Approval for another ambulatory surgery center (ASC), a gamma knife, or even a hospital bed is determined in part by a data-driven formula that produces the annual state Medical Facilities Plan, a 450-page inventory that accounts for all types of health care settings and services delivered across the state. North Carolina has one of the most micromanaged CON programs in the country. The SHCC regulates over 25 services, and it can take years for new and established health facilities to break ground. My colleague, economist Dr. Roy Cordato, compares the entire CON with Chinese restaurants:

The commission might have a formula that would look at data regarding how many Chinese restaurants exist per 100,000 or 50,000 or 25,000 in population; how many of those are strictly take-out restaurants and how many are eat-in or ‘sit-down’ restaurants…if it is determined that the community does ‘need’ one more Chinese restaurant…it may not be able to offer take-out service if there are already ‘enough’ take-out restaurants in the area.

The methodology behind the State Medical Facilities Plan may have good intentions, such as preventing underused facilities and incentivize better health care access in underserved areas, but unhealthy limits on competition lets incumbent providers inflate health care costs.

The free market works. Competition lowers prices and promotes innovation. I hope that the North Carolina legislature will follow through on its desire to do away with the Certificate of Need. The Certificate of Need is another example of government interference in the free market that hurts the consumer.