Why not barbed wire and guns?

Byline: | Category: Economy, Ethics, Foreign Policy, Government, Taxes & Spending | Posted at: Wednesday, 6 August 2014

I remember when I was a young Soldier in Germany and America stood against the idea of countries erecting walls to keep people from leaving.

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ProhibitionCare

Byline: | Category: Above the Fold, Culture, Economy, Ethics, Government, wine | Posted at: Monday, 18 November 2013

Prior to the disastrous implementation of Obamacare, has there ever been a law that fell that so far out of disfavor that the American people clamored for wholesale repeal? Yes, it was called Prohibition.

The parallels between Prohibition and Obamacare begin with the fact that both laws were the culmination of decades of “Progressive” ideals.  A century ago Progressives believed that people would be better off if they were able to control what individuals were allowed to buy and sell.  Modern Progressives are no different.  From its first attempt in Maine in the 1850s, Progressives in both parties worked tirelessly to extend anti-alcohol laws to the entire country.  This most recent bout of progressivism began sixty years ago with Democrat Harry Truman, who pushed the idea of socialized medicine.  The movement received considerable advancement from Democrat Lyndon Johnson, who created Medicare, Republican George W. Bush, who added prescription drugs coverage, and Republican Mitt Romney, who built the first Obamacare-like system in Massachusetts.

Many Progressives of an earlier era wanted Prohibition for others, but not for themselves.  The progressive United Methodist Church, which was officially dry but whose membership certainly wasn’t, said that, “Under slavery the Negroes were protected from alcohol, consequently they developed no high degree of ability to resist its evil effects.”  A Collier’s editorial elaborated on this form of racial paternalism, “White men are beginning to see that moral responsibility for the negro rests on them, and that it is a betrayal of responsibility to permit illicit sales of dangerous liquors and drugs.” These were the attitudes of “Wet-Drys,” people who themselves drank, but who didn’t want “others” to drink.  Besides racism, anti-Catholicism was rampant among earlier Progressives.  Germans, Italians, and Irish (and let us not forget anti-Catholicism’s sibling, anti-semitism), flooded America’s cities during this period–and they all drank!  Modern progressives similarly want Obamacare for thee, but not for me.  Most infamous is that Congress specifically exempted itself and its employees from the new Obamacare requirements when it passed the law.  Favored Progressive partners too–especially unions–have asked for, and gained their own Obamacare exemptions.  Hypocrisy enjoys a long pedigree among Progressives.

Electoral chicanery is another similarity.  There was a rush to enact the Eighteenth Amendment before the 1920 Census resulted in redistricting that would give more House seats to the cities and the immigrant Catholics who lived there.  Following the census, which recorded a 21% population increase largely as a result of immigration, there was so much concern that “Wets” would gain the upper hand in Congress as well as in state legislatures, that Congress was never redistricted in accordance with the Constitution.  Until 1933 when Prohibition was finally overturned, the House was stuck with the same district lines that were drawn back in 1910.  A century later, modern Progressives played similar games after Republican Scott Walker  Brown’s surprise election to the Senate from Massachusetts meant that the House bill enacting Obamacare could not be ratified.  Instead, an earlier Senate bill, that was nowhere near to ready for implementation and which had not gone through a conference committee, was accepted without modification in the House, and in defiance of the Constitutional provision that revenue bills had to originate in the House.

In 1925 H.L. Mencken observed:

“Five years of Prohibition have had, at least, this one benign effect: they have completely disposed of all the favorite arguments of the Prohibitionists. None of the great boons and usufructs that were to follow the passage of the Eighteenth Amendment has come to pass. There is not less drunkenness in the Republic, but more. There is not less crime, but more. There is not less insanity, but more. The cost of government is not smaller, but vastly greater. Respect for law has not increased, but diminished.”

More than three years after the passage of Obamacare, one could make similar observations:  there is not greater health insurance coverage but less;  there is not lower health care costs, but more; and certainly, respect for the law–even from the law’s namesake and executor–has not increased, but diminished.

There is a final similarity which I am afraid might also come to pass.  While it is popularly believed that the 18th Amendment was repealed, that was actually not exactly true.  The 21st Amendment did not return things to the way they had been.  Instead of repeal, the modfication to the Constitution gave the States special power to legislate alcohol.  Because the Amendment gives the States jurisdiction, alcohol is not afforded protection under the interstate commerce clause.  Each state can, and does, tax interstate sales, while they prevent residents from acquiring alcohol across state lines.  This, and a whole host of other state restrictions, has created a hodge podge of laws that makes life difficult for wine-makers, retailers, and consumers alike.  The only beneficiaries of such legal confusion are the descendants of Prohibition’s bootleggers who are now ensconced in legally mandated monopolies.

Similarly, when Obamacare meets its demise, it is unfortunately likely to die in such a way that the successor system will leave Americans worse off than they were before Obamacare ever became law.  I hope that on this latter prediction, I am proved wrong.

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Obamacare II: The sequel will be worse than the original

Byline: | Category: Above the Fold, Culture, Economy, Government, Taxes & Spending | Posted at: Wednesday, 13 November 2013

There are two consensus opinions that have formed about Obamacare:

1.  The website will not work this year.  Every “fix” of known flaws is going to expose (and perhaps even worsen) underlying flaws that haven’t yet been discovered because few people have gotten far enough into the website to discover them.

2.  The Obamacare law itself will need significant surgery and Democrats in particular are going to need for that surgery to have to happen very, very soon.

Not yet the consensus opinion, but soon will be, is that the second item is very much like the first:  attempts to “patch” flaws in the law, just like patching flaws in the code, will expose huge problems lurking beneath the surface.  When Nancy Pelosi said that we had to pass the 2,000+ page bill to see what was in it, what she could have said is that we’re going to have to actually implement it to really learn what is in there.  It won’t be pretty.

Now here’s some added Washington reality.  Between Thanksgiving and the New Year, nothing significant will happen in Congress.  Nothing.  Even as millions of Americans get Blue Cross pink slips, that won’t get in the way of Congressional Christmas parties and taxpayer-funded vacations to warmer climes.  Oh, sure, there will be the usual press conferences and photo ops; that never stops.  But real work–the kind that is done by armies of staffers and lobbyists who write these bills–that won’t happen.   This means that whatever can be done before or shortly after the fecal matter hits the rotary device on 1 January is going to have to be short and sweet.

Going back to the status quo ante bellum is not possible.  The plans that are dropping people by the millions no longer exist.  They can’t exist under the current law and the new laws under which they could exist, won’t be written by Congress and then implemented by the insurance companies for months.  Many months.  At this point there are only bad options and worse options.  Nothing government can do will forestall this problem.  In fact, every attempt will just make the overall problem worse and further entrench the disarray.

There is only one institution in the world, only one power, that has the ability to quickly react, and that is the free market.  Forget about Washington being able to solve the problem; they have neither the time nor the cognitive ability to diagnose the problem, much less, to fix it.  Instead all Washington should do is to default to the States.  Each of the states already has on their individual state codes, health care laws.  That’s how the bulk of the health care industry was regulated in the past–a past that was only six weeks ago.  With one exception, the Federal government should just get out of the way.  And that exception is that it should allow for cross-state portability.  That will do more than anything else to spur the market to provide health care solutions.  No minimum coverage requirements, no maternity care for 80-year old men, no 26-year old children on their parents’ plans.  Nothing.  Let people shop in any state to find the plan that fits them.  The market will quickly move in to meet most customers’ needs.  And while that won’t insure everyone, it will insure most of those who have been recently dropped or who physically can’t buy coverage now.

Will it happen?  Not a chance.  You see, there’s another Washington reality at work:  Never let a crisis go to waste.  And Democrats, as well as Republicans, adhere to that ideal.  Nothing so simple could disguise the payoffs and graft that Congress can’t wait to attach to the Omnibus package to “fix” Obamacare.  And that means that the fix will be long in coming and will only make matters worse.

Now go and have a Merry Christmas!  (Too bad it’s going to feel more like a Groundhog Day version of Halloween.)

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The end of logic

Byline: | Category: Above the Fold, Culture, Economy, Education, Ethics, Government, Taxes & Spending | Posted at: Wednesday, 13 November 2013

Washington Post columnist Richard Cohen is in a bit of trouble for making this statement in his Monday column:

People with conventional views must repress a gag reflex when considering the mayor-elect of New York — a white man married to a black woman and with two biracial children. (Should I mention that Bill de Blasio’s wife, Chirlane McCray, used to be a lesbian?) This family represents the cultural changes that have enveloped parts — but not all — of America. To cultural conservatives, this doesn’t look like their country at all.

While there is some, surprisingly, the bulk of the criticism does not come from the Right for having been portrayed as knuckle-dragging dinosaurs whose acceptance of Justice Clarence Thomas’ biracial marriage and former VP Dick Cheney’s lesbian daughter belie Cohen’s stereotype un-updated since the Archie Bunker era.

No, it’s actually the Left that has most criticized Cohen.  The Huffington Post said, “Dear Washington Post:  Please fire this man.”  Esquire put Cohen in the “Newspaper Stupid Top 40.”  Paul Farhi catalogues some of the others who voice umbrage at Cohen’s remarks, including Gawker, Slate, Salon, and MSNBC.  All this “venom-spewing” as Farhi said, from ”people who should be [Cohen's] allies.”

Sadly, this is normal for the Left.  Who could forget their outrage directed toward radio host Bill Bennett when he was asked about a statistic from the then recently-published Freakonomics that said that crime has gone down because of abortion:

BENNETT: All right, well, I mean, I just don’t know. I would not argue for the pro-life position based on this, because you don’t know. I mean, it cuts both – you know, one of the arguments in this book Freakonomics that they make is that the declining crime rate, you know, they deal with this hypothesis, that one of the reasons crime is down is that abortion is up. Well –

CALLER: Well, I don’t think that statistic is accurate.

BENNETT: Well, I don’t think it is either, I don’t think it is either, because first of all, there is just too much that you don’t know. But I do know that it’s true that if you wanted to reduce crime, you could — if that were your sole purpose, you could abort every black baby in this country, and your crime rate would go down. That would be an impossible, ridiculous, and morally reprehensible thing to do, but your crime rate would go down. So these far-out, these far-reaching, extensive extrapolations are, I think, tricky.

The Leftists at Media Matters had a field day with Bennett’s comments even when their excerpts clearly exhonerated (highlighted above) him of the thought-crime of advocating the racial infanticide that they say Bennett advocated.

Bennett was engaging in the logical device known as reductio ad absurdum, whereby an argument is reduced to an absurdity so as to demonstrate the fallacy of the premise.  It just so happens that last night I mentioned to my seventh-grade son the classic reductio ad absurdum:  A Modest Proposal, wherein Jonathan Swift argues that to eliminate the surplus population of beggars, the Irish should be allowed to sell their unweaned children to be used as stew meat.

In 1729 Swift’s reader’s quickly recognized the essay as satire.  Sadly, I don’t think that American Leftists today would be able to understand the argument.  If their umbrage toward Cohen–who clearly was not advocating discrimination against biracial and gay couples—is any indicator, were Swift to write his classic today, MSNBC would surely charge him with cannibalism.

Prior to this week I could have dismissed Leftist outrage directed at Bennett as political fanaticism akin to the fanatic football fan who, even upon seeing the slow-motion replay, yells at the referee for blowing a call that he clearly called correctly.  Heretofore, I could have accepted that Bennett’s detractors understood his argument but purposefully misconstrued it so as to appeal to Low-Information Voters who might have heard only an edited version of the exchange.  Now as a result of the outrage that the Left directs against its own Richard Cohen, it is obvious that the Left isn’t trying to appeal to Low-Information Voters, but is instead made up of a large swath of Low-Intelligence Voters.

How else could one explain Obamacare?  Many of the people who are incapable of understanding Cohen’s argument are the same ones who are logically incapable of understanding that Obamacare could not work the way the President promised.  Unless you believed, as one commenter noted, that Obamacare was powered by “unicorn farts and pixie dust,” it was always completely illogical to believe that more people could get more health coverage without some people paying higher prices or being kicked off of their existing plans.

Another Cohen, Michael Cohen (I don’t know if he is a relation), buttresses that point (hat tip: David Henderson).

But, of course, this means that some Americans would not only lose their plans and access to their doctor, but in the case of particularly healthy individuals, reform could yield higher premiums. Beyond that, reforming such a huge chunk of the U.S. economy necessarily leads to often unanticipated changes for millions of Americans.

Acknowledging that reality would have been the honest thing to do. So would asking healthier and wealthier Americans to sacrifice for the greater good of ensuring every American have health-care coverage.

But doing so would have opened Obama and his democratic allies up to the charge that Obamacare would lead to widespread dislocations — and made the path to reform that much politically harder to traverse.

Indeed, this is precisely the argument that was made by Republicans  . . . 

In other words:  Everything Republicans told you about Obamacare was true, but–and these are Michael Cohen’s words–you “can’t handle the truth.”  What he didn’t say but is clearly implied and could have appended: “And we know that you are too stupid and too illogical to figure out the truth on your own.”  Logical fallacy abounds on the Left, and this Cohen actually celebrates it.

This is where the modern Left is today: at the head of an easily manipulable cadre of useful idiots.  To be sure, the Right has its share of blind adherents as well.  To some, the words “abortion” and “homosexual” are like red herrings to a dog:  they quickly distract.  But I’m hard-pressed to find so glaring an example as Obamacare to demonstrate how easy it was to dupe millions of people who should have been smart enough to know otherwise.

For years it has been fashionable in some segments of the Right to complain that America’s public schools are engaged in indoctrination instead of education.  But the Left’s slander of Richard Cohen might point at a reality far worse.  It’s not that millions of Americans have been taught the wrong things–bad lessons can be unlearned.  Much worse is the possibility that many millions of Americans have never been taught how to critically read and to logically think.  If this is true, it does not bode well for the nation’s future.

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Why is slavery wrong?

Byline: | Category: Above the Fold, Culture, Economy, Ethics, Government, Taxes & Spending | Posted at: Tuesday, 12 November 2013

Over at the Daily Beast Jamelle Bouie accuses Sarah Palin  of rhetorical overreach by recently likening the national debt to slavery.

It just so happens that the introductory chapter of a book I’ve been working on doesn’t just employ slavery as a simile, but actually asserts that a central feature of modern government is slavery.  Undoubtedly, Mr. Bouie will take umbrage at the equivalence.  But I challenge him and you to refute the assertion on logical grounds.  I look forward to critiques and encourage discussion if you dare to proceed . . .

(more…)

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Doom it by making it go forward

Byline: | Category: Above the Fold, Economy, Regulations, Taxes & Spending | Posted at: Tuesday, 22 October 2013

Remember a couple weeks ago I said that it was purely for personal reasons that the President would not compromise by asking for a one-year budget deal in exchange for giving Republicans a one-year delay in Obamacare?  Well  the President only got a 90-day budget deal and it looks like it is his side that now needs an Obamacare delay.

If Republicans really want to destroy Obamacare, they would assure the Administration that there is no chance that Congress will obstruct the President’s signature plan.

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All is proceeding as I have foretold

Byline: | Category: Above the Fold, Culture, Economy, Government, Taxes & Spending | Posted at: Wednesday, 9 October 2013

If you’re not scared off by two-thousand word essays, read this to understand why Washington, DC Democratic Mayor Vincent Gray staged a photo-op stunt to beg Senate Democrats to end the standoff over Obamacare, while the usually Republican-leaning National Chamber of Commerce pleaded with Congress to add some more headroom to the debt ceiling.

Shorter than 2,000-word version:

DC Mayors represent government workers who are the major casualties of temporary government shutdowns, while business groups represent big business, which depends on government spending fueled by even deeper debt.

UPDATE:  (Delegates representing DC too.)

ALSO:  Establishment GOP lashes out at Tea Party

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The negative multiplier effect defined

Byline: | Category: Above the Fold, Economy, Government, Taxes & Spending | Posted at: Wednesday, 9 October 2013

Economists like to talk about the multiplier effect of government spending.  The theory is that if the government spends a dollar buying products, services, or even spending it on welfare, the money is transmitted through the economy many times over when the original recipient buys things which then put extra money in the pocket of another recipient, who then buys things, and so on.

Keynesian estimators of the multiplier effect often focus on the spending and thus only predict a positive multiplier.  This, however, analyzes only one half of the equation:  ”that which is seen,” in the words of Frederic Bastiat.  That which is unseen is where the money came from. In the case of government spending, it can only come from higher taxes, meaning that someone else is unable to spend himself that which the government spent, or from higher borrowing, meaning that someone else in the future is unable to spend the amount of money borrowed plus interest.  The multiplier effect, therefore, can only be positive when viewed through the double entry accounting method, if the government spending today has a higher multiplier than the multiplier effect of private spending, whether today or in the future.  Depending on their political stripes, economists latch onto data that buttress their belief that government spending is more or less efficient than private spending.

Today comes data that point substantially in the direction of anti-Keynesians who argue that government spending is a bigger drag on the economy than if the spending decisions were to be left in private hands.

Senator Sessions Debt GDP Chart

The ranking member of the Senate Budget Committee produced this chart showing that over the last two years, the government added $2.4 trillion in debt and saw GDP increase by only $1.2 trillion.  Keep in mind that government spending is part of the equation used to calculate GDP.  So this chart implies a negative multiplier of 50%–meaning that for every government dollar spent through debt, the economy shrank 50 cents.  Even if we were to use the pre-2009 deficit of $400 billion a year as a baseline, this would mean that the extra government deficit spending of $1.6 trillion over the last two years resulted in a GDP increase of only $1.2 trillion and a negative multiplier effect of 25%.

No company in the world would borrow money if they expected a negative return on investment as this chart implies.  And yet we are told again and again that the economy will collapse if we don’t extend what is clearly counterproductive deficit spending.

MORE:  This chart dovetails nicely with John Tamny’s column from yesterday:

“First off, there’s no such thing as fiscal stimulus of the spending kind. Though it’s well known at this point, governments can only spend money they’ve first taken from the private sector. In short, governments can at best merely steal demand from certain economic sectors in order to fund generalized waste and a bigger state. There’s no economic growth to speak of, rather there’s decline.”

Read the whole thing.

UPDATE:  Thanks to John Tamny’s RealClearMarkets for the link.  While you’re here, take a look around.

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Unenforceable sovereign debt

Byline: | Category: Above the Fold, Culture, Economy, Government, Taxes & Spending | Posted at: Wednesday, 9 October 2013

To be “sovereign” means that there is no higher legal authority.  This is why, historically, sovereign debt is a bad risk:  if the sovereign doesn’t want to pay back the debt, there is no authority that can order the debt repaid.

Francis Menton briefly describes Argentina’s journeys through the United States court system as the South American company attempts to evade debt issued in New York.  The end game is near and Argentina’s lawyer told the judge what it will be:  ”We would not voluntarily obey such an order [to repay the debt].”  The Argentinians are essentially echoing Andrew Jackson’s rebuke of the Supreme Court: “They have made their decision, now let them enforce it.”

I suppose that the courts could seize whatever meager assets the broke country might have in American banks, but American courts have no real means to force Argentina to repay the debt.  What the court can do is to deny Argentina access to future New York credit markets, which causes Menton to remark:

” . . . getting cut off from credit would probably be the best thing that could ever happen to Argentina, finally forcing a reduction in its wildly bloated state sector and out-of-control crony capitalism.”

The same would be true for the United States, but I fear that we’re going to have to get a lot closer to Argentina’s miserable state of affairs before we accept it.

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The inevitable cataclysmic collision

Byline: | Category: Above the Fold, Economy, Government, Taxes & Spending | Posted at: Friday, 4 October 2013

How is it possible that both President Obama and the “Tea Party” hold an advantage in the budget standoff?  It isn’t a contradiction if you understand that one side has a tactical and operational advantage, while the other side has the long-term strategic advantage.

For the next two weeks President Obama is at a tactical disadvantage as he is sacrificing the interests of his own forces in order to secure a greater goal.  So far those most hurt by the government shutdown are government workers who are denied a paycheck.  They are, in effect, on strike.  But unlike an ordinary strike, where a union’s rank and file walk off the job and accept a temporary loss of income in exchange for a negotiating advantage to secure a bigger benefit, in this strike the workers out of work don’t want the benefit that their union’s leadership (national Democrats) want to secure.  That’s because the benefit in question is Obamacare, which no government worker wants and many actual unions have exhaustively tried to avoid. (more…)

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