Obamacare Implosion With R & R

As expected, Obamacare is imploding.  In Wisconsin we are choosing between Ron and Russ for the Senate.  Russ voted for it and we voted him out.  Why on earth would we want him back at this serious point in time.

On the other hand, Ron sees it his way:

Grave damage is being done to our nation’s health care system by this law that President Obama and Democrats in Congress pushed through on a strictly partisan basis. Americans are being harmed now by the law and losing their freedom. Their livelihoods and their economic security are being put in jeopardy and the health insurance plans that they are now required to buy may not even meet the needs of their families. If we continue on this path, the future of our health care system is rationed, lower quality care, increased medical costs and severe limits on medical innovation.

So are you going to go with Russ and proven failure (motto: let’s throw enormous amounts of taxpayer money at the problem to show we are at work) or be serious and go with Ron to work on health care legislation that might really be reform.  It is, as they say, your choice.

Sidebar: The WSJ reports that Democrats like Elizabeth Warren are fighting the Aetna-Humana merger on the basis that:

“The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will.”

The WSJ notes the gall on disclosure of information from Aetna but doesn’t really tie that the problems caused by the Democrats necessitate the merger so Aetna can survive Obamacare.  End sidebar

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Breaking Windows with Russ and Ron

Kevin Williamson has a nice story at NRO about the Obama Administration breaking windows.  The administration is making trucks more expensive and old ones obsolete by requiring new fuel consumption standards.  Kevin reports:

Brady Dennis of the Washington Post reports that the new fuel-efficiency standards will add about $14,000 to the price of a big rig — or $28 billion, more than a third of the commercial-trucking industry’s annual revenue and many times more than its annual profit.

Sidebar: The broken windows fallacy (or Katrina or the riots in Milwaukee were a good thing) is that non-creative destruction leads to the use of resources to fix them.  See the link for a more detailed explanation.  End Sidebar.

Here in Wisconsin we are locked in the Senate battle with Russ and Ron.  We have not seen either candidate mention this.  What are the odds that Russ wants to drive some truckers out of business and distract the truck manufacturers and Ron wants to leave them to their on devices.  We will give odd.  We hope you will support Ron.  We need people in DC who are not there to enforce their preferences on entire industries.

Strange Lede

The Hill reports:

In a blow to the healthcare law, Aetna — one of the largest health insurers in the country — announced Monday that it will significantly scale back its presence on the ObamaCare marketplaces next year. [emphasis added]

The lede has it exactly wrong.  Aetna is reeling from trying to comply.   The healthcare law, which one is that now, is forcing higher prices and lower profits.  A bit later on:

The mix of ObamaCare enrollees has been smaller and sicker than expected. Some experts say that insurers also set their premiums too low. Premiums are expected to rise more sharply in 2017, which could help insurers address some of the losses.

That is a neat trick.  But Aetna’s decision is not the blow to the healthcare disaster named after our current president.  It is a disaster because it was set up poorly causing decisions by the policy sellers, policy buyers, and regulators to cause this mess.  Aetna did not do it to Obamacare.  Obamacare did it to Aetna and the rest of the country.

Come On WSJ

In today’s WSJ:

To try to resolve this mismatch between potential workers and the businesses that want to hire them, Mr. Owens and Pastor Smith last year started a partnership called the Joseph Project that has already seen some early notable successes. They’ve also got an unlikely partner— Ron Johnson, Wisconsin’s Republican senator.

Seriously, it is unlikely that the GOP will support private charity?  Is a thousand points of light too old school?  Is the GOP looking to ban low paying jobs?  Is the the GOP responsible for the Obama outburst of job killing regulation?  Which party encourages private initiative?  At least they give Johnson a chance to explain why such a comment is so silly:

“It is a joy, being able to participate in that, seeing people’s lives be turned around. That’s true conservative values and they work. You [folks other than conservatives] outsource compassion to the federal government, that doesn’t work so good. You show your compassion here in your community, one person at a time.”

Rather than trying to send everybody to college and have the taxpayers support it, let’s try things like this:

Economically speaking, the Joseph Project removes friction from the labor market and solves a human-capital problem for employers. Since the best type of skills training happens on the job, for workers the program helps break “the cycle of cycle of poverty and despair,” as Mr. Johnson puts it.

Let’s be serious about helping people rather than try to see how much taxpayer money can be thrown at the problem.  On-the-job training (OJT) is a big part of the jobs solution.  The challenge is how to connect firms and folks.  The Joseph project is one way.   Another is happening at local hospital where they have created a training program for medical assistants (the first person you see in your doctor visit) that they pay for.  We need to keep a balance between academic training, mostly in college, and OJT.

Opportunity Costs

We have much to celebrate as we recently noted but we have incurred substantial opportunity costs as a country.  We have missed many benefits that were easily available.  Signs are that we will continue to miss benefits.

John Taylor details the lack of productivity in the US for most of this century.  Some have argued it is a secular thing.  We are with John and think it is a result of economic policy.  To us it is a missed opportunity for the current president.  All he needed was a little restraint.  That, however, was not in the cards.

There has been much complaining and carrying on about our two major party candidates for president and rightly so.  The opportunity lost was Mitt.  If we were enjoying the reelection campaign of Mitt and Paul there would be lots of complaints (go back and check out the commentary during the Reagan years) but it would be less bitter and less comprehensive and John Tayor would have happier news.

Our thesis: sensible economic policies do not have a direct immediate effect but they change likelihoods.  Thus, Taylor’s chart stops its free fall under more sensible economic policies but the ability to reach old maximums every year is questionable.  What are more sensible economic policies?  They would start with less regulation, less regulation, and less regulation.  We realized we were redundant but it is the easy way.  There are also important issues about taxes, spending, and the deficit.  Reducing regulation is the easy solution as we work on the others.

The probability of Herself becoming the next president is high.  Presidents are not all powerful and Herself will be less worse the the current president.  Still she is a treasure trove full of bad ideas and ethical lapses.  We hope for a single term.

The success of The Bernie and the revival of socialism in the US and particularly among the young is potentially the biggest opportunity cost of all as shown by his continuing impact on the Democrat platform and the positions of Herself.  We should be clear to distinguish between The Bernie’s adoration of Denmark and socialism.  A big welfare state like the US or Denmark is much different from a socialistic state.  As Kevin Williamson correctly noted (and we have often referred to the Heritage Index of Economic Freedom):

Welfare states are welfare states and socialism is socialism, and, in spite of the Bernie Sanders gang and the Right’s talk-radio ranters, they are not the same thing. Welfare states use taxes and transfer payments to enable higher levels of consumption among certain groups, usually vulnerable ones: the poor, the sick, the elderly, children….

Socialism, as I have written at some length, is a different beast entirely. Like the welfare state, it involves the public provision of non-public goods, but it achieves this in a different way. Rather than levying taxes and distributing checks or vouchers, the socialist government owns and operates the means of production, or, in the corporatist variant, puts the means of production under political discipline effectively indistinguishable from government ownership of them.

To summarize: We are not in favor of big government but can understand its adherents. Neither are we a small government absolutist.  We are OK with government being larger than two centuries ago.   Socialism is different and we cannot understand those folks. They cannot be convinced that socialism is that unlucky.  There are, to be realistic, a few things that fall on cusp between big government and socialism.  As Kevin says, putting the means of production under political discipline is socialism.  The VA is socialism (oh, and a failure).  Is Obamacare?  Still, there is generally a fairly clean cut line between the two.  We can see the opportunity cost in China and India where years of stagnation under socialism has led to them joining the Great Enrichment.  Why would the US choose to leave?

By Land or By Sea?

Mike Tighe writes on Wisconsin Shows Potential As A Storage Spot Of Nation and it brings up an interesting measurement point.  Mike says Wisconsin is 65,496 square miles and the 23rd largest state.  Wikipedia has a similar answer that adds a couple of square miles and notes that it includes water.  My atlas lists Wisconsin’s land area as 54,310 square miles and a rank of 25th.  There are lots of lakes (over 14,000 including two Greats) in Wisconsin.

Sidebar: this list in Wikipedia puts Wisconsin total area at 59,425 but the land and water on that list add to more than the total.  On the other hand, Georgia’s total is more than the sum of its water and land areas.  Go ahead and check it out we have all the time in the world.  End Sidebar

Our take is we see land area as a better measure.  Where that line is on Lake Michigan is really doesn’t tell us much about which state is bigger.  Still there is the issue of having the states and the USA total.  And there is Mike’s storage problem.

We don’t want to be on Jeopardy and see the answer The Second Biggest State East of the Mississippi.  It might be Wisconsin.  And there is, as always, reason to be nervous about Wikipedia.

Celebrate

Don’t worry, we will follow this post with another with more pessimism.

Celebrate because in less than three months we will elect a better president and vice-president then we currently have.  No, we don’t know who is going to win.

Celebrate because we will replace the current unfit president with a simple election in the ordinary course of business.  It won’t happen soon enough but it will happen soon.

Celebrate that despite our current governing woes or perhaps because changes are on the horizon the stock market is moving merrily along:

On Thursday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all rose to highs on the same day, an alignment that hasn’t occurred since Dec. 31, 1999.

There is, as has been said, there there is a lot of ruin in a country.  Venezuela is our more recent proof that it can be done.