Sunday, July 29, 2012

"A Useful Idiot"

This is worth a read, if you like bending your head around big numbers.  The takeaway - the people in this country are spending an absurd amount of money on "healthcare".  The questions:  What does "healthcare" mean in this context?  Where is the money coming from and why do we spend so much?  

My answer:  "Healthcare" means keeping sick people alive a long time by the use of drugs, without having any idea how to prevent or cure disease.  Nor are there any studies planned which would provide the answer for how to prevent/cure disease - even though nearly everyone agrees these diseases are "lifestyle related."  

The money comes from you, and we spend so much because we're stinking rich, and secondarily, because the government's interventions have created mal-incentives which have, in the words of Michael Porter, broken the value stream between the provision of health care and the consumers/purchasers of health care.

The author of the piece displays the normal confusion about what science is, and about how to understand what could make us healthy, and about the value of the opinions of experts (he loves to appeal to authority whenever convenient).  He shows a naive trust in government to come up with solutions - and completely ignores all the ways the government caused the problems that he points to.  He writes as if he believes he's smart and well enough informed on these topics to offer important insight.  "Not so much."  He is, literally, a useful idiot.

His analysis of economics is to real economics what most football predictions are to truth, and this one comment - "Dean Ornish, the San Francisco-based doctor who probably knows more about diet and heart disease than anyone" - proves he's utterly uninformed as regards health, diet and science.  Or, perhaps it proves he's writing to an audience that is not interested in genuine inquiry.  In short, he's an editorialist not a person to be taken seriously for analysis.

But aside from my temptation to hold him in "contempt of knowledge" for those and other sins of ignorance, he makes one very important point - we divert an immense amount of human effort into keeping sick Americans alive.  The dollar value on that effort is in the trillions.   Here are the stakes: 

For the first time in history, lifestyle diseases like diabetes, heart disease, some cancers and others kill more people than communicable ones.  Treating these diseases - and futile attempts to "cure" them - costs a fortune, more than one-seventh of our GDP.

Those are potent facts.  The author links to this article, for these numbers:
In 2008, the country spent $2.3 trillion on medical care, or 16.2 percent of gross domestic product and $7,681 per person.

His story is riddled with the ridiculous, like this appeal to an authority which is as responsible for the growth of lifestyle disease as any:

This isn't just me talking. In a recent issue of the magazine Circulation, the American Heart Association editorial board stated flatly that costs in the U.S. from cardiovascular disease - the leading cause of death here and in much of the rest of the world - will triple by 2030, to more than $800 billion annually
Well, it's not him just talking, it's a editorial board - of an organization with a track record of ignoring the holes in their advocacy of health solutions, and for making many dollars for endorsements of the food industry.  Heck, opinions from editorial boards, that's scary and convincing wouldn't you say?  Perhaps I'd be more convinced if the AHA had been funding a true test of what diet is best for prevention of the diseases of civilization. Instead the AHA put both feet into the "fat makes you sick" non-science.  The AHA is a joke, and gives every appearance of being an industry mouthpiece, existing primarily to raise funds through the licensing of their logo, with little evidence they are helping a single living soul.

The author employs results from epidemiological studies to represent things they can't possibly represent:
The INTERHEART study of 30,000 men and women in 52 countries showed that at least 90 percent of heart disease is lifestyle related; a European study of more than 23,000 Germans showed that people with healthier lifestyles had an 81 percent lower risk.
Those "studies" didn't show any such thing - they can't since the science has not even determined what "healthier lifestyles" are.  If science HAD made that determination, epidemiological studies still couldn't show what causes what.  That's not to say that I doubt the results, the larger point to me is this is an author who cites faux science and then says "let's just give this problem to the US government to solve."  Seems to me that since the US government is a top purveyor of faux science that solution could be problematic.

The crux of the article:
But the trillion-dollar question is, "How do we get people to eat that way?"
I don't have an easy answer; no one does. But it for sure will take an investment: it's a situation in which you must spend money to make or save money. (Yes, taxes will go up, but whose taxes?) Some number of billions of dollars - something in the rounding error area - should be spent on research to figure out exactly how to turn this ship around. (The NIH, which pegs obesity-related costs at about $150 billion, just announced a new billion-dollar investment. Good, but not enough.)

I'm amazed anyone lets anyone get away with saying "investment" as regards the government taking your money and spending to burnish the credentials of one politician or another.  It's black humor of the higher order.  Picture a highwayman holding you up saying "Look, this is an investment, I'm going to use this money to make me look good in the eyes of others, you can feel good about giving me your money!"   

As to the NIH (to their credit, the NIH did refuse to lie and say that there was proof of the "fat will kill you" conjecture) has proved to be incompetent in even determining what a healthy diet is; they spent a billion and came away with nothing in 30 years of trying.  Now they are supposed to skip that step and dive into figuring out how to get us to eat according to this author's strongly held belief about diet and health?  Before the NIH could viewed with credulity, how about they get their business into one sock and fund legitimate tests to determine what factors result in the diseases of civilization?
Again the author appeals to authority (count me skeptical about the "experts"):  Experts without vested interests in the status quo come to much the same conclusion: Only a massive public health effort can save both our health and our budget.

Perhaps these are the experts that have us eating 11 servings of grains per day, low fat milk, and advising the use of industrially produced polyunsaturated oils - none of which has been tested via intervention study to prove they are "healthy", or even tolerable.  But lets say for a moment they are what he portends them to be - if I have ten experts and you have 11 and they disagree about exactly how the government should take your money and "invest" it to save the world - what do you think will be done?  Correct.  Whatever the politicians think has the best chance of making them look good.  

Recap to this point:  the government which encouraged us to stop eating fat based on faux-science, and encouraged us to eat sugar and fructose, and who's agriculture wing makes it expensive and sometimes criminal to eat grass fed animals but pays union "inspectors" to watch while animals are mass slaughtered, is the only possible agent to fix the world wide problem of metabolic syndrome which leads to virtually all "lifestyle diseases."  These people live in Reversoworld.  The bad stuff that inevitably results from governments messing about in things that governments have no business messing in, creates all the justification needed for more messing about.  Perversely, after the government made us sick peddling agricultural products which have no proven "healthy" quality, they now spend our money - waste our money? - to pay for our "health care."  This is painting oneself into a spending corner on a scale only a government could accomplish.  
One last bone to pick - the author counts each "lifestyle disease" separately - cost of treating high blood pressure, cardiovascular disease, diabetes, gout, diverticulitis, many cancers, etc.  But even though he sees, and the experts he believes so faithfully in see, the nutrition-as-one-cause-of-lifestyle disease, they can't seem to put two and two together to think of these disease states as a spectrum of results caused by one problem.  They see them as discrete disease states caused by discrete lifestyle factors.  Hypertension - oh that's exercise, salt intake and obesity related.  Diabetes - results from obesity and eating too much fat.  Cardiovascular disease - too much saturated fat and inactivity.  Short version - people eat too much and move too little, resulting in obesity, which causes diabetes and other stuff.  They believe this wholeheartedly, seemingly unquestioningly, despite what should be a glaring fault - it is not proved.  And given that, it would seem that step one would be to fund the tests which would convincingly yield causality in this chain of conjecture.  
Here's what I think and this is what I see - when you treat people for glycemic control by restricting the type and quantity of carbohydrates - with specific attention to industrially produced polyunsaturated oils and all highly dense carbohydrates - all of the other outcomes are affected.  Obesity and abdominal circumference is affected.  Fasting lipids (best markers for CVD available) change for the better.  High blood pressure resolves for most.  Gout treatment is not required.  All of the short term markers for health can be manipulated with one intervention - carbohydrate restriction.  Intervention experiments out to one year support these observations, and these tests have been repeated and the results confirmed.  The author and his experts ignore this significant science.  It would be just fine with me if they keep their hands off of government efforts to make people "eat better."
Side note for econ geeks:
I don't know if he means to do it or not, but he also points out how meaningless it can be to say "private sector spending" versus "public sector spending."  
Of this $2.3 trillion, the federal government spent $817 billion, while state and local governments spent $290 billion. The tax exclusion for employer-provided health insurance amounted to about $250 billion in lost federal revenue — which is, effectively, a government subsidy for health care. Add up all of these sources, and you get about $1.35 trillion of health spending done by the public sector and slightly less than $1 trillion done by the private sector.

In other words, some health care spending results after government takes it away from taxpayers at gun point, and spends the money on someone.  Other health care spending results due to government incentives to avoid taxes by accepting very expensive "insurance" (pre-paid service plans which are call insurance) in lieu of taxable benefits.  The other half of health care spending comes out of the pocket of the customers who get the benefit of a doctor's care at the time of payment.  Where does all the money come from?  You and me, either via the government's coercive extraction via taxation, or via insurance we choose based on distortions in the "insurance" markets.  What would this system look like without the influence of a government which is influencing nearly every part of the US health care process?  It's hard to say but it wouldn't look anything like the one we have.  Given that government's influence is pervasive in this process, I'm at a loss why anyone would assume that more government is the cure.  But the author is in that camp of the naive few who seem to think the problem with US health care is that there's not enough government coercion being thrown around.  

Economics can show how wealth is created - when human energy is expended transforming copper into electrical power lines, or plastic and other raw materials into coffee makers, or bricks, or shingles, or automobiles, the result can be a product which has more value than the raw materials that were put into the end product.  Generally, a successful product is one which allows human being more free time to do as they choose, while spending less time on food, water and shelter.  Wealth is, in this model, the ability to spend time on something aside from satisfying your basic needs for continued life.  

What this means for "health care" is it creates value in a variety of ways; illness prevented, minimized and/or cured, allows a person to produce wealth.  Money poured into "health care" can produce more wealth by creating new technology (drugs, diagnostic machines, knowledge, application of knowledge via delivery process, training of medical staff), as well as by making sick folks well or preventing illness.  In other words, there is spending on outcomes and spending on capacity which eventually improves outcomes.  You can buy as much healthcare today for $100 as you could in 1970.  The difference now is that there is more health care you can buy, because the system has created a lot of "wealth".  Arguably, it's been the wrong kind of wealth.  The wealth we needed was to know how to avoid the diseases of civilization - determining why aboriginals exposed to civilization degenerate in health until they are as unwell as we are - and instead, we've been sorting out how to survive (but not how to avoid or thrive through these diseases).  Perversely, much evidence suggests the "knowledge" advocated by the government has compounded the diseases of civilization.  
In short, as the author suggests, most of the money spent on "health care" needn't have been spent, and need not be spent in the future.  The stakes are momentous - and that's understatement.  The military points out that the biggest national security threat the US faces is the insolvency of the government via medicaid.  The President has stated, more or less, that medicare is the sum total of our budgetary problems.  The math as of a few years ago was pretty telling - barring some massive increase in US economic growth, by 2042 the government will have enough to pay for medicare and the national debt payments only - no defense, no salaries for government employees, no nuttin' but health care for old folks and the payments on our debt.  Long before then, we enter the death spiral of scared investors needing higher interest rates to make giving us their money seem smart - how long do you think we could survive that.  

US government has, by intruding into healthcare and diet, created the possibility of it's own demise.  Our government has become a black hole of productivity.

For now, I'll restrain myself from addressing all the mal-incentives created by subsidizing and enabling patients to pay for meds that sustain their lives to some degree while allowing them to ignore the root cause of their disease.

Monday, July 23, 2012

Classic Quote: Nikoley

"People are bad so we need government made up of People are bad so we need government made up of ...."  and so one.

Sunday, July 22, 2012

What Is A Right?

For example, many Americans believe that our rights derive from God or from the very nature of being human. As Paul Ryan put it in a discussion of Obamacare this month, folks of his political persuasion don't believe that the people have the power to make up new rights; rights come from God and nature. These same Americans also generally believe that our rights are those delineated in the Declaration of Independence and the constitution, including a non-infringeable individual right to bear arms. And yet, clearly, people in most law-governed democracies other than the United States, countries like Britain, Canada, France, Israel, the Netherlands and Japan, do not have an individual right to bear arms. How, then, can the right to bear arms as enshrined in the constitution derive from God, or from the very nature of being human? Is this a special sort of right, one that can be created by the people via government if they so choose? If so, then what stops the people, through their government, from creating other sorts of new rights, like a right to education, or a right to health insurance?

Fundamental misunderstandings of rights about.  I can't have a right to health care because that requires money and time and expertise - I can't have the right to the money that is yours, the time that is a doctor's, or the expertise of medical professionals.  

The "right" to bear arms is quite simply an acknowledgement that the state exists to guarantee rights, and the People being armed is the primary way the People have to ensure that it does not step outside of that role.  Certainly, there's no one or no state entity which is entitled to remove a thing from me which I own.  The right to keep and bear arms is enshrined in the Constitution because everyone who can think knows - the first step to enslaving a group is disarming them.  

The "right" to education is the same as saying you have a right to someone else's money and time.  The right to bear arms is the simple re-expression of the perspective that the state exists to serve the individual, not vice versa.  

This, folks, should be child's play.

"Official Truth"

Interesting discussion of the concept of "official truth" by David Friedman, in this case applied to food/diet/health and AGW.

From Tbone Burnett's "The Wild Truth":
"i get the feeling that as soon as something appears in the paper it ceases to be true"


Over a decade has passed since Portugal changed its philosophy from labeling drug users as criminals to labeling them as people affected by a disease. This time lapse has allowed statistics to develop and in time, has made Portugal an example to follow. 

The resulting effect: a drastic reduction in addicts, with Portuguese officials and reports highlighting that this number, at 100,000 before the new policy was enacted, has been halved in the following ten years. Portugal's drug usage rates are now among the lowest of EU member states.

Fascinating, absolutely fascinating.

Climate was HOTTER

A new study measuring temperatures over the past two millennia has concluded that in fact the temperatures seen in the last decade are far from being the hottest in history.
A large team of scientists making a comprehensive study of data from tree rings say that in fact global temperatures have been on a falling trend for the past 2,000 years and they have often been noticeably higher than they are today - despite the absence of any significant amounts of human-released carbon dioxide in the atmosphere back then.
"We found that previous estimates of historical temperatures during the Roman era and the Middle Ages were too low," says Professor-Doktor Jan Esper of the Johannes Gutenberg-Universit├Ąt Mainz, one of the scientists leading the study.

The point of science is to attempt to determine truth by designing experiments that would disprove a theory/hypothesis/conjecture.  The AGW science of today only rarely allows itself to aim for that outcome.

The conclusion:
According to the scientists' new paper, published in hefty climate journal Nature Climate Change, the cooling effect of orbital shifting on the climate has been up to four times as powerful as anthropogenic (human-caused) warming pressures. 

And this is one of the questions that current climate science cannot answer, and will not be able to answer for some time.  And that question is - what is causing changes in climate?  The only scientifically valid way to answer the question is with climate models which demonstrate predictive power and sufficient accuracy.  These do not exist.

The other question that climate science cannot answer is - will "we" be better off with warming or not?  They guess - they do not know.

Saturday, July 21, 2012

Mr. President: It's the Property Rights

But, just for the record, I did "invest in roads and bridges," and so did you. In fact, every dime in those roads and bridges comes from taxpayers, because government doesn't have any money except for what it takes from the citizenry. And the more successful you are, the more you pay for those roads and bridges.
So here's a breaking-news alert for President Nuance: We small-government guys are in favor of roads. Hard as it may be to credit, roads predated Big Government. Which came first, the chicken crossing the road or the Egg Regulatory Agency? That's an easy one: Halfway through the first millennium B.C., the nomadic Yuezhi of Central Asia had well-traveled trading routes for getting nephrite jade from the Tarim Basin to their customers at the Chinese court, more than 2,500 miles away. On the other hand, the Yuezhi did not have a federal contraceptive mandate or a Bloombergian enforcement regime for carbonated beverages at concession stands at the rest area two days out of Khotan, so that probably explains why they're not in the G7 today.

Don't Want Help Screwing This Up

Last week, with the Fourth of July looming, I was able to get a quick CT scan to rule out appendicitis for one patient, and an ultrasound of the legs to quickly diagnose a blood clot for another. Tests like these - ordered solely on the basis of my medical intuition - may not be possible in a few years. Since in both cases the symptoms weren't "textbook," I would probably have had to appeal to some Kafkaesque committee, wasting precious time; in an extreme instance, this could even cost a patient his or her life.

The doctors have screwed up medical care pretty well via their "drug deals" with the insurance industry, government, the cartel on medical licensing, and the monopoly on medical training.  They clearly do not want more "help" from elitist government health care bureaucracy - and who could blame them ...

Clarifying the Argument

Anyone who wants to study the tricks of propaganda rhetoric has a rich source of examples in the statements of President Barack Obama. On Monday, July 9th, for example, he said that Republicans "believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth."

Let us begin with the word "spend." Is the government "spending" money on people whenever it does not tax them as much as it can? Such convoluted reasoning would never pass muster if the mainstream media were not so determined to see no evil, hear no evil and speak no evil when it comes to Barack Obama.

Ironically, actual spending by the Obama administration for the benefit of its political allies, such as the teachers' unions, is not called spending but "investment." You can say anything if you have your own private language.

But let's go back to the notion of "spending" money on "the wealthiest Americans." The people he is talking about are not the wealthiest Americans. Income is not wealth -- and the whole tax controversy is about income taxes. Wealth is what you have accumulated, and wealth is not taxed, except when you die and the government collects an inheritance tax from your heirs.

People over 65 years of age have far more wealth than people in their thirties and forties -- but lower incomes. If Obama wants to talk about raising income taxes, let him talk about it, but claiming that he wants to tax "the wealthiest Americans" is a lie and an emotional distraction for propaganda purposes.

The really big lie -- and one that no amount of hard evidence or logic seems to make a dent in -- is that those who oppose raising taxes on higher incomes simply want people with higher incomes to have more money, in hopes that some of their prosperity will "trickle down" to the rest of the people.

Some years ago, a challenge was issued in this column to name any economist, outside of an insane asylum, who had ever said any such thing. Not one example has yet been received, whether among economists or anyone else. Someone is always claiming that somebody else said it, but no one has ever been able to name and quote that somebody else.

Once we have put aside the lies and the convoluted use of words, what are we left with? Not much.

There are few who can say these things with the clarity of Dr. Sowell.


Emanuel responded that crimes such as burglary, armed robbery and theft are down 10%. This is true, but it's small comfort to the parents of Heaven Sutton, 7, who was killed as she tried to dodge bullets fired from the guns of gangbangers. She was selling snow cones at the time.

Heaven didn't get quite the attention of Trayvon Martin, the Florida teenager killed by neighborhood watch member George Zimmerman. When perceived racism can be invoked as a cause of death, headlines blare. When it happens in a city beset by liberalism's failures, crickets chirp.

There's an easily observable human characteristic of ignoring the chronic peril and over-reacting to the novel peril.  Crazy.  I'd bet cars, poisons and pools kill more kids than virtually anything - where's the outrage?  What about kid deaths due to alcohol?  Second hand smoke?  Obesity driven by junk food?  We are physiologically unable to keep perspective.

Negative Unintended Consequences

If not, the cost of government-mandated insurance could simply lead those businesses employing 57.9 percent of Oklahomans to drop employee coverage and take the tax hit as the cheaper option. Those workers would then be required to get coverage through either Medicaid or a health exchange. Oklahoma may not expand its Medicaid program, so scratch that idea. As we've noted, Medicaid expansion would likely divert money from schools and roads.

The federal government will provide worker subsidies, but only if you buy a policy through a state exchange, not one established by the federal government. But Oklahoma officials may not set up a state exchange. And if they do, Oklahomans will be paying federal taxes to pay themselves subsidies, which makes as much sense as anything else in Obamacare.

Read more:

Nuff said.  This won't be pretty.

No Dueling, Less Civilized?

Interesting story, well told.

Would society be more polite if this custom were carried on today?  I believe that might be the case, even if the villain were not always the one to take the bullet.

The Healthcare Myths

Myth #1:  Healthcare prices have soared in the recent past
Myth #2:  The pre-ObamaCare system was ‘insurance’
Myth #3: Stopping insurance companies from charging based on pre-existing conditions is the one good part of ObamaCare
Myth #4: Healthcare costs are very high in the United States compared to socialized countries

Myth #5: if a bunch of smart people thought it over, they could figure out a way to get maximal health care to anyone who needs it and we'd all be better off; if only they could just get control of things and run it down to the last detail ...

Obamacare just doubles down on stupid; it stops none of the above, and just adds more governmentium, a toxic substance known to create unintended negative eventualities.

"Obamacare will devastate Wisconsin."

The good news is that responsible budgeting has put our state in a fairly unique position: Nearly 91 percent of Wisconsin residents have health insurance. According to the latest nationally available data, only three states have higher rates of coverage.

The bad news is that, from a practical standpoint, Obamacare will devastate Wisconsin. An actuarial study commissioned by my predecessor, a Democrat, and completed last year found that if Obamacare is implemented in Wisconsin:

● 100,000 people will be dropped by their employer-sponsored health insurance;

●59 percent of people who buy their own health insurance will experience an average premium increase of 31 percent;

●150,000 people will stop buying health insurance in the private sector and will instead become dependent on the government and taxpayers;

●Between 2014 and 2019, Obamacare could cost Wisconsin taxpayers $1.12 billion; after all federal aid and tax credits are applied, the state's portion of the bill will be $433 million; and

●Approximately 122,000 parents, caretakers and pregnant women with an income of more than 133 percent of the federal poverty level will no longer be eligible for Medicaid.

Interesting stats - do you believe him? I don't think anyone can even guess what the impact of the implementation of Obamacare will be, but we know from past example of centralized government that the negative unintended consequences will be significant.

Unequal Behavior Drives Inequality

But striking changes in family structure have also broadened income gaps and posed new barriers to upward mobility. College-educated Americans like the Faulkners are increasingly likely to marry one another, compounding their growing advantages in pay. Less-educated women like Ms. Schairer, who left college without finishing her degree, are growing less likely to marry at all, raising children on pinched paychecks that come in ones, not twos.

Estimates vary widely, but scholars have said that changes in marriage patterns - as opposed to changes in individual earnings - may account for as much as 40 percent of the growth in certain measures of inequality. Long a nation of economic extremes, the United States is also becoming a society of family haves and family have-nots, with marriage and its rewards evermore confined to the fortunate classes.

Inequality - a justification for tyranny if I've ever seen one.  Who doesn't already know that people who make better choices, have more choices?


Interesting points about the Canadian brand of "hardheaded socialism."  Wonder why their pols can reel in their system but so many other nation's pols cannot?

Now We Get The Truth

Mr Danne added: 'His unfortunate remarks over the weekend show an utter lack of understanding and appreciation for the people who take a huge personal risk and work endless hours to start a business and create jobs.'

President Obama said in a speech at the weekend that governments and not individuals create jobs, telling entrepreneurs: 'If you've got a business - you didn't build that. Somebody else made that happen.'
He added: 'You didn't get there on your own. I'm always struck by people who think, well, it must be because I was just so smart.'
Read more:

I'm glad he said it because it's been apparent this is how he thinks.  The POTUS seems not to get what wealth is, where it comes from, and why he and other pols can use the productivity generated by others, and auction it off to pad their political resume.

Lots of smart people "fail", many hard working people do not wind up with successful businesses that employ hundreds or thousands and bring valued products to market.  That comment is so irrelevant it is stunning to consider.

Murray: "Un-American"

There’s a standard way for Americans to celebrate accomplishment. First, we call an individual onto the stage and say what great things that person has done. Then that person gives a thank-you speech that begins “I couldn’t have done this without…” and a list of people who helped along the way. That’s the way we’ve always done it. Everyone knows we all get help in life (and sometimes just get lucky). But we have always started with the individual and then worked out. It is not part of the American mindset to begin with the collective and admonish individuals for thinking too highly of their contribution.

I like the author's dispassionate but very precise analysis of the President's apparent thoughts.

This Will Only Hurt For A Little While

The highest barrier to a new economic boom is the defeatism of those seeking to manage the west's decline. Millions of Europeans and Americans alike are now enduring the painful consequences of empty promises becoming broken promises, after politicians pushed government spending and debt to unsustainable levels and spread cronyism instead of entrepreneurial dynamism.

Who couldn't recognize this in the efforts of the past few years?  Paying off needed elements drastically over-rode any other motive.  This is how socialism works.

Tuesday, July 17, 2012

You Can Bank on the Cafe say what needs to be said, concisely, and clearly. 
Cafe Hayek — where orders emerge

I cannot say what I think about the President's thoughts but they anger me.  His logic:
1.  We force you to live with the poor quality products governments "provide" (provide with the money taken from the citizens at gunpoint) because we have more guns that you do, Mr. Citizen
2.  We moralize that you are a participant in some contract - the social contract - that you have never seen, nor consented to
3.  We celebrate the "accomplishments" of collectivism (going to the moon - was that really good?  I'd like to see the cost/benefit analysis. Was the moon thing something "we" accomplished?  If so, that's because our relatively high levels of liberty financed the effort.), and assume it wouldn't have been done better without the coercive force of the government. 

In other words, government is a self licking ice cream cone.  We force you to do it our way, we justify the choice by invoking a non-existent contract, and we use the result to justify more use of force. 

No thanks, Mr. President, I'll pass on that template for the future.  (expletives deleted)

Public Sector Collective Bargaining - Hurts All

Walker's solution is the only way to regain sanity in public sector unions.  The hangover from prior unsustainable contracts is hurting everyone - except the politicians and union leaders that made the deals.

"In San Jose, where the average cost of employing a city worker, including benefits, has soared to an extraordinary $142,000 annually, Mayor Chuck Reed had to fight long and hard for a ballot measure to reduce pension costs that was passed by voters in June. In the three years before the vote, the city had to lay off about 2,000 employees and cut back on parks, libraries and other services.
In Stockton, which declared bankruptcy in June, for every dollar the city spent on salaries, it spent another dollar on employee benefits. Facing unsustainable employee costs and an intransigent police union that was demanding the city pay retired officers about $300,000 for unused sick and vacation time, Stockton cut a quarter of its public safety forces and still couldn't meet its obligations.
No wonder that state and local government employment slumped nearly 6% in California from the beginning of 2009 through the close of 2011. That's nearly double the rate of decline among state and municipal workers nationwide in the same period.",0,5879241.story

And it's not just in Cali:
Last year, New York City taxpayers put nearly $2.1 billion into the cops’ $24.7 billion pension fund to pay for future benefits — up from more than four-fold from the 1999-2000 average. (Cops’ own contributions are $207 million, but they pay only 9 percent of the total.)
If pension costs for cops had “only” doubled in a decade, we’d have an extra $1 billion a year — enough to hire at least 5,000 cops.
One problem is that the pension fund isn’t earning the magical returns expected of it. It’s supposed to generate 8 percent returns a year — but has managed just 5.76 percent annually over a decade."

Read more:

Monday, July 16, 2012

Inequality - "Totally Bogus Dude"

Conservatives argue that in an increasingly mobile world, high tax rates run ever more risk of driving businesses and jobs overseas. The central role of entrepreneurship is advancing economic growth, they note, and since most new ventures fail, the returns on successful ventures have to be very large if entrepreneurship is to flourish. They take umbrage at the suggestion that there is something wrong with success on a grand scale. And they worry that policy measures taken to directly combat inequality will have perverse side effects.
Both sides make good points. While I support moves to make the tax system more progressive, the reality is that inequality is likely to continue to rise, even with all that can responsibly be done to increase tax burdens on those with high incomes and redistribute the proceeds. Measures such as allowing unions to organize without undue reprisals and enhancing shareholders’ role in setting executive pay are desirable. But they are unlikely to even hold at bay the trend toward increasing inequality.

This guy is smart enough to run Harvard University but his analysis is too lame for words.
-Exactly how does inequality of outcome hurt anyone?  In my book, when the bottom of the ladder is wealthier than it was - by a long shot - from the generation before, that's good.  I can't figure out a single way that inequality of outcome is either preventable or desirable.  Nevermind the fact that all the inequality folks are talking about resulted at the same time as massive amounts of government intervention into ... everything.  How could anyone even pretend that government intervention is the cure? 
-Allowing unions to organize more easily?  Unions are the weapons of inequality!!  The point of a union is to prevent those outside the union from being able to compete with those inside the union.  High union wages price out low skilled wage earners.  Unions are to inequality what the sun is to global warming.  Nevermind the fact that unions quite clearly render US corporations uncompetitive in the market place, with perhaps only the US's bizarre business taxes causing more harm.

Nor should we continue to permit tax-planning techniques that are de facto tax cuts only for those with millions of dollars of income and tens of millions in wealth.
This one is a real beauty.  It's a perfect example of both hubris and unbelievable naive thinking.  "We" don't set tax policy - politicians set tax policy and their priority in doing so is to ensure they favor those who will re-elect them.  It will have little or nothing to do with the right or wrong of it.  Nevermind the absurdity of saying "we should not permit" people to keep the money and property they earned (keeping in mind the life energy they spent to get the money).  If we can talk about what we can and cannot permit, how about we not permit politicians to take our lives, our liberty and out pursuit of hapiness ... oh yes, already tried that.  Scope of that failure increasing daily.

Friday, July 13, 2012


H. L. Mencken, Newspaper Columnist, "In Defense of Women" (1920), quoted in the August, 1999, Reader's Digest article "What's Wrong With Global Warming?" by Dennis T. Avery:
"The whole aim of practical politics is to keep the populace alarmed -- and hence clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary."

Thursday, July 12, 2012

H.L. Mencken Quotes

"The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is sort of an advance auction sale of stolen goods." [H. L. Mencken]

Wednesday, July 11, 2012

It's the Spending

Progressives say: If you're so worried about the deficit, raise taxes! But it's a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That's only a third of this year's deficit.

Amazingly, we could grow our way out of debt if Congress simply froze spending at today's levels. That would balance the budget by 2017. If spending growth were limited to just 2 percent per year, the budget would balance by 2020!
But the politicians won't do even that.

Classic Quote: Mencken

A national political campaign is better than the best circus ever heard of, with a mass baptism and a couple of hangings thrown in.
H. L. Mencken


Friday, July 6, 2012

IJ’s reaction to today’s Obamacare opinion

Thankful for IJ.

Institute for Justice Comments on ACA Decision
Arlington, Va.—In upholding the Affordable Care Act in a 5-4 decision today, the U.S. Supreme Court has authorized the most significant expansion of federal power since the New Deal.  Before now, Congress had never asserted—and the Supreme Court had never authorized—the constitutional authority to require individuals to engage in economic transactions against their will.  In approving this unprecedented assertion of congressional authority, the Supreme Court has abdicated its responsibility to enforce constitutional limits on government power.  Today's decision represents the culmination of decades of reflexive deference to other branches of government and a stark failure of judicial engagement.
This failure is all the more inexplicable and troubling because, at the same time that the Court vastly expanded Congress' taxing power, a majority of justices recognized limits on Congress' power under both the Commerce Clause and the spending power.  The portion of the decision upholding the individual mandate as a valid exercise of the taxing power is breathtaking in its scope and opens a Pandora's box of potential regulations in the guise of taxes.  The Court held that although Congress lacks any specific textual authority to force people to buy health insurance, it may use its taxing power to coerce them to do so.  The implications of that holding are profound.
"Today the Supreme Court extended its deeply misguided theory that allows Congress to use its authority to collect taxes for the general welfare to pursue ends and exercise powers not granted by the Constitution," said Chip Mellor, president and general counsel of the Institute for Justice.  Mellor continued, "The seeds of today's decision were sown during the New Deal, when the Supreme Court largely withdrew from its role as an independent check on federal power.  Despite Chief Justice Robert's attempt to minimize potential for the tax power to be used even more coercively in the future, his assurances do not bind future Congresses.  The prospect of using the newly enhanced taxing authority to coerce individuals will be too seductive to resist."
Institute for Justice Senior Attorney and Director of the Institute's Center for Judicial Engagement Clark Neily explained, "Today's decision upholding the Affordable Care Act represents a failure of judicial engagement and a glaring example of judicial abdication.  In his majority opinion, Chief Justice Roberts uses an ordinary power to achieve an extraordinary result:  conferring upon Congress the power to radically transform the national healthcare system and micromanage individual choices within that system in a manner that destroys the very concept of enumerated powers.  In transforming the garden-variety power to raise revenue into a plenary power to conscript individuals and override their personal choices, the Supreme Court has failed in its most basic duty to engage the facts of each case and fully enforce constitutional limits on government power."
The Court's abdication on the issue of the taxing authority stands in stark contrast to the holdings on the Commerce Clause and spending power.  A majority of the justices—Chief Justice Roberts and the dissenting justices—agreed that the individual mandate exceeded the power under the Commerce Clause and that Congress could not force people to engage in unwanted commercial transactions.  The majority decision also found the ACA violated Congress' power under the spending power, which was a decision that surprised many because the Court has always interpreted that power expansively.  These decisions showed true judicial engagement, as advocated in the Institute for Justice's friend of the court brief:  "Reflexively deferring to Congress' enactment of the individual mandate is an abdication of the judicial duty owed to the American people to enforce and support the Constitution.  If courts cannot find and articulate meaningful limits on the federal government's enumerated powers, the entire constitutional architecture collapses."  These words were echoed in Chief Justice Roberts' explanation of his rejection of the commerce power as authorizing the individual mandate:  "Our deference in matters of policy cannot, however, become abdication in matters of law. . . .  And there can be no question that it is the responsibility of this Court to enforce the limits on federal power by striking down acts of Congress that transgress those limits."
Although the Court is beginning to recognize the importance of judicial engagement, in this case it failed to act upon that recognition.  Sadly, today's decision is in keeping with other decisions of the Roberts Court, which has so far struck down laws at a substantially slower rate than earlier courts according to a New York Times analysis.  And a 2011 Institute for Justice report, titled Government Unchecked, found that, in general, charges of rampant "activism"—defined as striking down laws—are wildly overblown.  The IJ report, drawing on similar data to the Times' and other analyses, found the proportion of federal and state laws struck down by the Supreme Court to be miniscule:  less than two-thirds of one percent of federal laws passed and less than one-twentieth of one percent of state laws passed.  Today's decision upholding the Affordable Care Act represents an extreme manifestation of this persistent deference towards other branches of government. 
"The culprit here is the Supreme Court's reflexive deference to Congress and the unwarranted presumption of constitutionality that courts grant to most legislation," Mellor said.  "For America to enjoy the fruits of the constitutionally limited government the Framers envisioned, courts must get back in the business of judging the constitutionality of government action, instead of finding some way—any way—to uphold it, as the Supreme Court did today."

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A Drop In The Bucket, A Puff Against a Turbine Blade

A simple bit of math shows that even with the rapid expansion that solar-energy and wind-energy capacity have had in the past few years, those two sources cannot even meet incremental global demand for electricity, much less make a dent in the world's overall demand for hydrocarbons. Between 1985 and 2011, global electricity generation increased by about 450 terawatt-hours per year. That's the equivalent of adding about one Brazil (which used 485 terawatt-hours of electricity in 2010) to the electricity sector every year. And the International Energy Agency expects global electricity use to continue growing by about one Brazil per year through 2035.

How much solar capacity would be needed to produce 450 terawatt-hours? Well, Germany has more installed solar-energy capacity than any other country, with some 25,000 megawatts of installed photovoltaic panels. In 2011, those panels produced 18 terawatt-hours of electricity. Thus, just to keep pace with the growth in global electricity demand, the world would have to install about 25 times as much photovoltaic capacity as Germany's total installed base, and it would have to do so again every year.

The scale problem is equally obvious when it comes to wind.

The power density of wind energy is roughly two watts per square meter, or about five megawatts per square mile. That means that by the end of 2011, the U.S. had covered a land area of about 9,400 square miles, just slightly smaller than the state of Maryland, with wind turbines. Therefore, to keep up with the growth in global electricity demand by using wind energy alone, the global wind industry will need to cover a land area of some 35,000 square miles - about the size of Indiana - with wind turbines. And it will have to do so every year from now through 2035.

That metric's still hard to grasp, so let me put it another way: In order to merely keep up with the growth of global electricity use, the wind industry would have to cover 96 square miles every day with wind turbines. That's an area about the size of four Manhattans.

Ghost of Governments Future

In any case, Snyder's $137 million credit line will allow the city to
finish its fiscal year till July, when new tax revenues will start
coming in. But within a few months, Detroit will run out this money. And
when it does, absent radical reforms in the interim, Snyder will have to
decide whether to continue bankrolling Detroit's profligacy, engineer a
state takeover or let it go into bankruptcy, precisely the options he
faces now. Since the first two are not viable, it would have been a
blessing for him if Crittendon's lawsuit had killed the consent
agreement and expedited the third. The more time Detroit loses in
renegotiating union contracts, the more it runs up its legacy tab, the
more draconian the cuts that would have to be imposed and the harder it
will be to avoid Greece-style riots.

Many cities across the country are facing unsustainable legacy costs.
But Detroit is uniquely impervious to political solutions because the
ratio of its public moochers to private producers is far higher than
others. There are too few Detroiters with a vested interest in fixing
the city and too many with a vested interest in sucking it dry. Only
bankruptcy will convince them that there is nothing more to be milked.

There purely logical outcome of public sector unions. For whom doth the
bell toll? Socialized governments the bell tolls for thee.

Incentives Matter

In the current mishmash of fox watching the hen house crony capitalism, the incentive to mess around with banks and rates and such is far greater than the political class would need in order to avoid being influenced by the bad incentives.  If folks are insulated from consequences by government intervention, of course there will be mal-incentives.

You Mean ... Just Like WWII?

Lastly, American economic weakness undercuts U.S. leadership abroad.
Other countries sense our weakness and wonder about our purported
decline. If this perception becomes more widespread, and the case that
we are in decline becomes more persuasive, countries will begin to take
actions that reflect their skepticism about America's future. Allies and
friends will doubt our commitment and may pursue nuclear weapons for
their own security, for example; adversaries will sense opportunity and
be less restrained in throwing around their weight in their own
neighborhoods. The crucial Persian Gulf and Western Pacific regions will
likely become less stable. Major war will become more likely.

When running for president last time, Obama eloquently articulated big
foreign policy visions: healing America's breach with the Muslim world,
controlling global climate change, dramatically curbing global poverty
through development aid, moving toward a world free of nuclear weapons.
These were, and remain, worthy if elusive goals. However, for Obama or
his successor, there is now a much more urgent big-picture issue:
restoring U.S. economic strength. Nothing else is really possible if
that fundamental prerequisite to effective foreign policy is not

As America become more fiscally hamstrung by entitlements and other spending absurdities, we will be come less relevant on the world stage.  Maybe not a bad thing, but hardly what most Americans wish for.

FDR Was Right

America's school year (about 180 days) is one of the shortest in the industrial world, and while middle-class children may leaven their summers with strolls through the Louvre, less privileged children experience "summer learning loss." Remediation requires the first few weeks of the fall term, which effectively further shortens the school year. And Chicago's school day is the shortest of any large US district.

The CTU wants a pay raise - 30 percent - proportional to Emanuel's 90-minute increase in the school day and 10-day increase in the school year. He has canceled a 4 percent raise and offers only 2 percent. He says benefits the CTU has won - e.g., many teachers pay nothing toward generous pensions they can collect at age 60 - could in just three years force property taxes up 150 percent and require classes with 55 students.

Read more:

To counter demands for wage hikes from city workers in the 1990s, Stockton offered to extend their health insurance in retirement past age 65 - a benefit they embraced and assumed to be rock solid until the insolvent city's officials put it on the chopping block in a bankruptcy plan last week.

"It was a balancing act," said Dwane Milnes, Stockton's city manager at the time. "The unions wanted retiree medical ... We said if you want to continue your medical for current employees and retirees, you'll have to do it through wage containment."

FDR was right and these cases are hurting everyone involved - except the long gone politicians and politicians called union leaders, who made these rotten deals.


So if not a clarifying debtpocalypse, what might the future look like on either side of the Atlantic? I'm guessing much like on either side of the Pacific.

In one corner stands Japan, now contemplating a third consecutive "lost decade." The once unstoppable economic powerhouse has been mired in a mild, post-bubble economic malaise for an entire generation, as successive bank bailouts and stimuli failed to jump-start meaningful growth. It's still a pleasant place to live, particularly if you're old, but every year people's sights just get set a little lower. American President Barack Obama, despite explicitly warning against creating another "lost decade," has nonetheless pursued many of the same policies, and produced an economic track record as bad as any modern president's.

But I think the more likely scenario is the one being played out in California: dreary, internecine battles over a shrinking revenue pie, while potholes deepen, libraries close, population stagnates, and lousy
political results of all types-unemployment, deficits, even government itself-receive the apologetic prefix of "structural." The kind of place where the largest municipal bankruptcy in the nation's history is
greeted with a lecture by the state's largest newspaper to avoid "finger-pointing."

Sure, California (like Japan, and Europe) will always be a comparatively nice place to live. But as long as the rich world keeps reacting to its predictable calamities with evasion, can-kicking, and ever-creative bouts of muddling through, the best-case scenario will be a slow erosion of the very dynamism that made us rich enough to get away with mistakes.
This is not the 21st century we signed up for.

Governments are doing such a fine job of handling other peoples' money, what could possibly go wrong with Obamacare.

Did I say it was NOT a tax? My bad.

During the 2009 debate over the health care law, President Obama insisted that the "shared responsibility payment" assessed on Americans who fail to obtain government-approved medical coverage is not a tax. "I absolutely reject that notion," he told ABC's George Stephanopoulos that September. "For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase."

After the law was enacted and challenged in court, the Obama administration changed its tune, arguing that the mandate is a legitimate exercise of the power to "lay and collect taxes." That claim, which no court accepted until last week, contradicted the language of the statute and statements by members of Congress.

Wednesday, July 4, 2012


LIberty - the state of living in which one is able to choose their actions free of coercion.  In the declaration of independence, the purpose of government is clearly identified:

We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their CREATOR with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness. — That to secure these Rights, Governments are instituted among Men

From The Detroit News:

A good read for a momentous day in the history of liberty.

Almost every American knows the traditional story of July Fourth—the soaring idealism of the Declaration of Independence, the Continental Congress's grim pledge to defy the world's most powerful nation with their lives, their fortunes and their sacred honor. But what else about revolutionary America might help us feel closer to those founders in their tricornered hats, fancy waistcoats and tight knee-breeches?
Those Americans, it turns out, had the highest per capita income in the civilized world of their time. They also paid the lowest taxes—and they were determined to keep it that way.