Tag Archives: Unintended consequences

President Biden’s Plan For Inflation

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On Tuesday, Hot Air posted an article about one way the Biden administration plans to fight inflation. It’s a plan guaranteed to be rife with unintended consequences.

The article reports:

Enough about Joe Biden’s mindless nastiness. I’ll take my cue from Donald Trump and Biden himself and focus on policy this morning.

Specifically, let’s talk about Joe Biden’s mindless and nasty demagoguery on economic policies. Faced with the electoral consequences of his corrosive inflationary wave, especially in shelter costs, Biden has to come up with some promised policy solution. And that is … federal rent control:

According to the Associated Press:

President Joe Biden is ready to propose a 5% cap on annual rent increases for tenants of major landlords as he tries to show he’s doing something about the high cost of housing, according to a person familiar with the plan.

The proposal, to be announced while the president visits Nevada on Tuesday, is being championed by Biden in the middle of a tense presidential campaign and a time when housing costs have been a major driver of overall inflation.

Hasn’t this man ever studied economics?

Housing costs are a major driver of overall inflation. That is true, but let’s examine why. Interest rates are double what they were under President Trump. According to U.S. News, the interest rate on November 19, 2020, for a 30-year mortgage was 2.72 percent. A loan of $250,000 would be paid back at the rate of $1,016.63 per month. On May 16, 2024, the interest rate on a 30-year mortgage is 7.02 percent. That loan would be paid back at a rate of $1,666.62 per month. The cost of the actual house you would be financing has also increased significantly in the past four years. So exactly what would be the result of federal rent control? First of all, find rent control in the U.S. Constitution. It’s not there. The 10th Amendment does not include rent control.

In January 2020, The Manhattan Institute posted an article about rent control.

Here are some highlights from the article:

Rent Control Makes It Harder to Find an Apartment

    • Cities that implement rent control see substantial declines in the availability of rental housing.
    • Locking people in to existing rental units leaves many renters in apartments much larger or much smaller than they would prefer.
    • In some cities, waitlists for rent-controlled housing are decades-long.

Rent Control Does Not Increase Diversity

    • Rent control benefits incumbent tenants at the expense of migrants hoping to relocate to a city. In New York City, white tenants have disproportionately benefited relative to black or Hispanic tenants, and landlords give preference to older and childless households.
    • Many of rent control’s benefits typically flow to higher-income households even as rent control drives up rents for everyone else.

Rent Control Degrades the Quality of Its Beneficiaries’ Housing

    • Rent control reduces investment in a property’s quality and causes a city’s housing stock to decay.
    • By suppressing property values, rent control also reduces tax revenue to municipalities, hindering their ability to provide essential services.

It will not decrease inflation, but it will increase government control.

Is This Legal?

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Campaign finance laws require the candidates to list the names of their donors. Generally that works, although not all candidates follow the law. On Wednesday, The Daily Caller reported the following:

Fulton County Superior Court Judge Scott McAfee, who is overseeing the case against former President Donald Trump, made a small donation of $150 to Fulton County District Attorney Fani Willis’ campaign prior to his appointment.

McAfee, who was sworn in on Feb. 1, 2023 after being appointed by Republican Georgia Gov. Brian Kemp, made his donation in June 2020 while still working as an assistant U.S. Attorney for the Department of Justice (DOJ), according to financial disclosures. He will soon have to decide whether Willis should be disqualified over allegations that she financially benefited from appointing her romantic partner, Nathan Wade, to work on the Trump case.

McAfee also formerly worked under Fani Willis when she led the complex trial division in the Fulton County District Attorney’s Office, according to the New York Times.

Atlanta-based criminal defense attorney and legal analyst Philip Holloway told the Daily Caller News Foundation McAfee’s donation was “nominal,” but said it should still have been disclosed to the defendants so they could determine “whether they believed that amounted to a conflict of interest on the part of the judge.”

I agree that the judge should be able to donate whatever amount is legal to whatever candidate he chooses. However, I also agree that the defendants in this case should have been informed of his donations. Logically, they could have asked for a different judge.

From what I have seen of the legal cases against President Trump, I am not convinced of the honesty, integrity or intelligence of those bringing the cases. All of them are fraught with problems on the part of those pursuing them. In Georgia, Fani Willis is going to have her hands full with her own legal issues. In New York, the law was changed to allow Jean Carroll to bring her suit against President Trump. That seems questionable. And also in New York, major business leaders are pulling out of the State, and truckers are refusing to make deliveries there. I don’t think any of these lawsuits are going to have the desired impact and there may be some serious unintended consequences along the way.

Most Parents Already Knew This

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Yesterday Breitbart posted an article about a study released Monday by the Boston-based Pioneer Institute. The study shows the complete failure of the Common Core academic standards to educate American children.

The article reports:

A study released Monday by the Boston-based Pioneer Institute reveals a historic drop in national reading and math scores among U.S. students since the adoption of the Common Core Curriculum Standards a decade ago.

“Nearly a decade after states adopted Common Core, the empirical evidence makes it clear that these national standards have yielded underwhelming results for students,” said Pioneer executive director Jim Stergios in a statement. “The proponents of this expensive, legally questionable policy initiative have much to answer for.”

The study, titled “The Common Core Debacle” and authored by education policy researcher Theodor Rebarber, asserts the “shocking trends” in American student performance in critical math and reading skills since the creation of the U.S. Education Department 40 years ago recommends reevaluation of federal involvement in education.

Performance in reading and math since the adoption of Common Core has especially declined in the nation’s lowest-achieving students – many of whom come from low-income families and failing public schools – widening the achievement gap and creating further inequality.

Supporters of Common Core, however, touted the Obama-era federally incentivized standards would be “rigorous” and also “level the playing field.” The Common Core State Standards Initiative boasted that the standards are “important” because:

[h]igh standards that are consistent across states provide teachers, parents, and students with a set of clear expectations to ensure that all students have the skills and knowledge necessary to succeed in college, career, and life upon graduation from high school, regardless of where they live. … The standards promote equity by ensuring all students are well prepared to collaborate and compete with their peers in the United States and abroad.

Rebarber observed, however, that while national fourth- and eighth-grade reading scores were rising at about half a point each year from 2003 to 2013, since that time, reading scores have dropped.

One of the unintended consequences of Common Core is that many parents are getting involved in their children’s education after being alarmed at what they are being taught and what they are not being taught.

The article notes:

“Several of us allied with Pioneer Institute have been pointing out, ever since it was introduced, the deeply flawed educational assumptions that permeate the Common Core and the many ways in which it is at odds with curriculum standards in top-achieving countries,” Rebarber said.

In the wake of the Common Core “debacle,” a national organization of parents has risen and is calling for an end to federal involvement in education and a return to policy-making at the local level.

United States Parents Involved in Education (USPIE) has produced Truth and Lies in American Education, a film focused on what the coalition of parents says is “the scheme behind the workforce development model of education and liberal indoctrination of children in government schools”

…“The sustained decline we’re now seeing, especially among our most vulnerable students, simply cannot be allowed to continue,” Rebarber also said.

“It’s time for federal law to change to allow states as well as local school districts to try a broader range of approaches to reform,” he added. “With a more bottom-up approach, more school systems will have the opportunity to choose curricula consistent with our international competitors and many decades of research on effective classroom teaching.”

It’s time for parents to take back their children’s education. Some of the states that claim to have removed Common Core have simply renamed it. Teach your children phonics,  and teach them to ‘carry the one.’

 

 

Harming Women In The Name Of Equality

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The law of unintended consequences seems to spend a lot of time in Washington. One of the best recent examples is the “Equality Act” promoted by the Democrats in the House of Representatives. If the Democrats can maintain their majority in the House of Representative and win a majority in the Senate in 2016, they will pass the Equality Act. So what will the Equality Act do? It will allow men transitioning to women to compete in women’s sports in high school. High school women are losing athletic scholarships because they are losing to transgender women in sports events (article here).

Yesterday The Daily Caller posted an article about the Democrat Party’s plans for America’s future.

The article notes:

Democrats have made girls’ sports a 2020 campaign issue, but establishment media outlets are keeping their viewers and readers in the dark.

Every Democratic frontrunner has pledged their support of the Equality Act, which would make “gender identity” a protected characteristic under federal anti-discrimination law. Among other things, the bill would force public schools to expand female athletic teams to include biological males who identify as transgender girls.

Every Democratic frontrunner for president has pledged their support for the bill, which passed the House in May with unanimous Democratic support. But when establishment media outlets have covered the Equality Act in relation to the 2020 election, the girls’ sports issue has gone missing.

An Oct. 10 CNN article noted that passing the Equality Act is a “top priority” for the 2020 campaigns of California Sen. Kamala Harris, Massachusetts Sen. Elizabeth Warren and South Bend Mayor Pete Buttigieg, but made no mention of the bill’s impact on female sports. CNN’s LGBT town hall the same day included zero questions about transgender athletes in girls’ sports.

The article concludes:

Polling from Morning Consult shows that majorities of Republicans, Democrats and independents agree that male athletes who identify as transgender have a competitive advantage in girls’ sports, a view supported by scientific research on the subject.

Biologically male athletes have racked up victories in female sports.

Two biologically male runners in Connecticut have dominated girls’ high school track in the liberal state, which allows self-identified transgender athletes to compete as the opposite sex. At the NCAA level, a male runner who identifies as transgender won an NCAA women’s track championship in May after previously competing on the university’s men’s team.

Men competing as women harms women’s athletics. It defies science and common sense.

The Law Of Unintended Consequences

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It’s hard to defend the actions of the Federal Reserve right now. The people who propped up the economy under President Obama seem determined to destroy the economy under President Trump. But we know that the Federal Reserve is apolitical. Sure we do. However, there may be some unintended consequences of the current Federal Reserve actions.

The Gateway Pundit posted an article today which explains some of those consequences.

The article reports:

The Chinese were relentless in their efforts to obtain Western technology and grow their economy.  They set up trade barriers and manipulated their currency in ways that helped China. The US was at a disadvantage in trade resulting in massive deficits into the billions.

Along comes the Trump Administration, the first administration to address China’s unfair trade advantage.  President Trump is a shrewd negotiator and he obviously believes now is the time to encourage China to make changes to their trade barriers with the US.  China may have no choice but to go with what the US offers to keep its economy afloat.

The more pressing issues for China surround real estate, in a manner similar to the US in 2008.  As China grew, it invested in its infrastructure and in addition it invested in large housing projects throughout the country.  These efforts helped bolster China’s already fast growing economy.

The problem is that China over invested in these random properties all over China and these properties today remain empty.

…Now to add to China’s misery, the Fed is doing all it can to kill the US economy.  China is dependent on the US economy to stay afloat.

…The US debt now stands at $21.8 trillion. A 2.25% interest increase on this amount of debt is an annual increase in debt interest payments of $500 billion!!!

The Fed is doing all it can to destroy President Trump’s economy. What the Fed doesn’t realize is that a flat US economy means disaster to the Chinese.

China’s financial crash may make the 2008 crash in the US look small.  The implications will no doubt impact the entire world.  Jerome Powell at the Fed has no idea what he is doing!

Hang on to your hat, if the Federal Reserve continues on its current path, this may be a very bumpy ride.

Those Nasty Unintended Consequences

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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.

More Research Needed

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On Thursday the U.K. Daily Mail posted an article about some recent studies involving treating pain with marijuana.

The article reports:

A small study found people who use cannabis require higher doses of painkillers than non users after major traumatic event like a car crash.    

The drug, which is legal for medical use in the majority of US states, is mainly prescribed to ease pain. 

But this new research conducted in Colorado – which was the first state to legalize – suggests that short-term pain relief could weaken the body’s resilience to pain over time. 

The researchers, from the Swedish Medical Center, Colorado, analyzed around 260 people who were involved in minor vehicle accidents and admitted to trauma centers. 

Of these, 54 tested positive for recent marijuana use while 16 claimed they used the drug more or less every day.

Around nine percent of the participants tested positive for other prescription or illegal drugs, such as cocaine and opiates.

On average, the marijuana users required 7.6mg of opioid painkillers a day in hospital, compared to 5.6mg for non-drug users.

This is probably not a surprise to people in the medical profession. I have been told by nurses who work in the operating room that people who are heavy users of alcohol require larger doses of anesthesia to put them to sleep. The body builds up a tolerance for drugs, whether the drug is alcohol, opioids, or marijuana. Those who blame big pharma for the fact that marijuana has not been legalized need to remember that just as big pharma has a huge lobby with lots of money, big marijuana also has a big lobby with lots of money. Legalizing marijuana in Colorado has brought the drug cartels into the state to mass produce their product for the local market. I don’t think that is what we want.

The medical values of marijuana are not proven and the unintended consequences of legalization are still unfolding. I think we need more research.

The Definition Of Serendipity

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Serendipity means a “fortunate or happy unplanned coincidence”. We may be seeing an example of that concept in one of the unintended consequences of the recently passed tax bill.

Yesterday the Associated Press reported the following:

In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes. In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll. A few governors have even called for tax cuts.

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump signed into law last month. Lawmakers and governors in some states are grappling with how to protect their constituents.

Loosely translated this is what is happening as a result of the fact that states with low state taxes will no longer be subsidizing states with high state taxes. Under the current plan, if your real estate taxes were $20,000 a year, which is not unusual in New York, Connecticut, New Jersey or California, you knew you could deduct them on your federal income tax, so it really wasn’t that important to you. Now those deductions will be limited to $10,000 and you will still have to pay the balance to your state.

No one likes it when their gravy train is cut off.

The article further reports:

This week, New York Gov. Andrew Cuomo used his state-of-the-state speech to pledge to sue over the GOP tax plan, which he called “an assault” by the federal government. A lawsuit would add taxes to the growing list of Trump administration policies that Democratic states have challenged in court.

Other states have not committed to sue, but some leaders have indicated they’ll explore the idea.

“I’m certainly not a constitutional lawyer, but the notion that this is not constitutional is something we want to pursue,” said Phil Murphy, New Jersey’s Democratic governor-elect.

Officials in California and Connecticut also said this week they were considering legal options.

In high-tax states, officials have been focused on protecting taxpayers from the impact of a new $10,000 cap on deductions for paying state and local taxes. In California, Connecticut, Massachusetts, New Jersey and New York, more than one-third of tax filers claim the state and local tax deduction on federal taxes; the average deduction in each state is over $15,000.

The Constitution gives Congress the right to levy taxes. Good luck with your lawsuit.

It is remotely possible that fiscal responsibility may be forced on some of our high-taxed states. When you consider that the Founding Fathers saw each state as a laboratory to experiment with unique ideas, it becomes obvious that some states did better than others in controlling expenses. Those states which controlled expenses have been subsidizing those that spent wildly for years. It is nice that things are changing. Now the governments of those states who have overspent need to change.

Unintended Consequences Of A Bad Law

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Investors.com posted an article today about one of the unintended consequences of ObamaCare. The law as it was explained by the Obama Administration states that if a person’s income is less than 400% above the poverty line, they are supposed to get a subsidy for their health insurance. However, there is a glitch in this law that denies that subsidy to most childless single people between the ages of 18 and 34. Unfortunately, this is the group that needs to participate in ObamaCare in order for ObamaCare to work.

The article explains the problem:

The reason for the disparity in subsidies stems from the formula ObamaCare uses to calculate the subsidy amounts. Under the law, people making less than 400% of poverty will only be required to pay a certain percentage of their income toward insurance coverage. Anything above that amount will be paid by taxpayers.

So, for example, someone making $34,470 — or 300% of poverty — would have to pay $3,275 in premiums before ObamaCare subsidies kick in.

But because most young people in this income group will be able to buy insurance in the ObamaCare exchanges for less than $3,275, they won’t get any subsidy help. That was the case in the 14 states that, along with Washington, D.C., had announced their ObamaCare rates when the study was conducted.

The article further reports:

“On balance, insurance in the exchanges will be a much better deal for older and sicker people,” said Sean Parnell, president of Impact Policy Management, who co-authored the study with Hogberg.

And that, the authors note, could lead to an insurance “death spiral,” if the young avoid paying full price for coverage while older, sicker people take advantage of the generous ObamaCare subsidies.

Further evidence that ObamaCare is not yet ready for prime time.

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