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.)
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.
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 . . .
A month ago I postulated that the President did not give into Republican demands to delay Obamacare, even when it was becoming obvious that Obamacare was not ready for rollout, because of his arrogant, personal hatred for the GOP (It’ not business; it’s strictly personal).
Jonah Goldberg offers a more damning alternative. (Hat tip: Glenn)
“Why Obama didn’t do this and why it didn’t occur to him are good questions. Hubris obviously played a role, as it does in nearly everything this White House does. But the best answer is he didn’t know how terrible things were over at HHS.”
Occam’s Razor tells us that the simplest explanation is usually right. And in this case, the simplest explanation may be that the President really didn’t know just how screwed up was the execution of his signature legislative accomplishment. That he really did think that just by passing the law that America’s health care would be better. That he thought that just by throwing $600 million at a software system was enough to guarantee success. The simplest explanation, therefore, may be that the man is just incompetent.
That is also the scariest explanation.
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.
I told you so:
“In the immediate weeks ahead, Democrats can’t cave for fear of losing votes. Meanwhile, because it would be a violation of principles that gains them no tactical, operational, or strategic advantage, Tea Party Republicans will not cave. If I had to guess, I would wager that Speaker Boehner will blink and negotiate a deal in order to preserve Republican-leaning big business groups under the GOP banner.”
It remains to be seen if the second half of my prediction comes true:
“But that in 2014 and 2016 Republicans will get crushed as the Tea Party goes rogue and that by 2020 the GOP will cease to exist.”
It’s 2,000 words, but read the whole thing.
The way the debt ceiling fight was so chronologically close to the Obamacare shutdown put the GOP at a disadvantage. Republicans got snookered by Treasury Secretary Jack Lew, who used “extraordinary measures” to extend the date of the debt ceiling debate to where it would be conflated with the Obamacare rollout. Republicans aren’t known as the “stupid party” for nothing.
Now Tea Partiers are super pissed at the GOP. GOP Elite are pissed at the Tea Party base of the party. And Obama Democrats got everything they wanted. If there was a scenario that gave Democrats any hope of taking over the House in 2014 in the face of a big Republican structural advantage, this was it.
“The political fallout from the confrontation is very real. Republicans got almost nothing out of the deal to re-open the government and raise the debt ceiling except, of course, that they lost another 10 percentage points in their favorable rating and looked less like an organized political party and more like a disorganized, confused rabble.
. . . Small donors will be disenchanted that Republican officeholders caved on both the shutdown and debt ceiling, while the larger donors, who tend to be more pragmatic, are likely to sit on their cash for fear that the GOP will do something else crazy to threaten the economy and the party’s electoral prospects.”
“Congressional Republicans will be very, very lucky if they manage to come out of the current government shutdown/debt ceiling fight with nothing. It’s more likely that, having gone to battle over the wrong issues with the wrong strategy, the Republicans will have actually lost ground, both politically and in terms of their policy objectives.”
The Nation offers an alternative view:
“Because the deal only includes minor concessions, the Beltway consensus is that it represents a resounding defeat for Republicans, who “surrendered” their original demands to defund or delay Obamacare. In the skirmish of opinion polls, that may be true, for now. But in the war of ideas, the Senate deal is but a stalemate, one made almost entirely on conservative terms. The GOP now goes into budget talks with sequestration as the new baseline, primed to demand longer-term cuts in Medicare, Medicaid and Social Security. And they still hold the gun of a US default to the nation’s head in the next debt ceiling showdown.
Surrender? Any more “victories” like this and Democrats will end up paying tribute into the GOP’s coffers.”
So too does Peter Beinart who complains that the deal locks in the sequestration cuts as the new baseline: ”If this is Republican surrender, I hope I never see Republican victory.”
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
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.
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.
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.
Republicans want a delay in Obamacare. Because of the many significant problems with the rollout of Obamacare, and because he has delayed parts of the law himself some 19 times, President Obama should want a delay in Obamacare too. One year gives Democrats an opportunity to fix systemic errors in the software, the regulations, and the law. One year gives nothing at all to the Republicans–nothing–except the opportunity to crow a little bit.
That the President can’t compromise in a way that gives him everything he wants, plus the extra time he needs, is not about business. It’s strictly personal.
UPDATE: Thanks to Glenn for the link. While you’re here, take a look around.
MORE: Allahpundit and Evan McMurray dissect Wolf Blitzer’s wonderment that it isn’t the Democrats who are the ones begging for a year’s delay.
Exit question: Do national Democrats hate the Tea Party so much that they would take all the (well-deserved) negative reaction over the Obamacare Follies rather than to give in on just the delay even while it benefits them more than Republicans in the long run?
ALSO: Thanks to Ed and Moe.