new dog old trick

ObamaCare Legislative Follies

Watching the slow-motion train wreck that is ObamaCare has been instructive regarding the state of our republic in the early 21st century. And what it tells us is not good. How in the world can we be at the point where supposedly there is an agreement in the Senate on health-care reform when there isn't actually a bill to read, and the CBO hasn't scored it, so nobody actually knows what's in it or what it will cost, and yet supposedly 60 Senators have signed up to vote for it? The world's greatest legislative body in action? Only in bizarro-land.

Washington D.C. is broke folks. And only we can throw the bums out. All of 'em. Democrats and Republicans. Elephants and Donkeys. Start over. This has been building for over a decade but the time has come to break the iron triangle of Big Government - Crony Capitalism - Main-stream Media/Academia.

Anyway, here's the article I was reading this morning as I was catching up on my blog reading after a week on the road that prompted this little rant... The Health Care Bill No One Can See.

Two-thirds of a year into our intense national debate, and it’s pretty amazing that there are no details for the public to read, analyze, or debate on health care reform.

So without a real bill, senators have been reduced to shadowboxing over the complex 2,000-page bill that doesn’t exist. The process is such a non-process that it has produced a surreal environment.

and more from the article...

After eight years of screaming about President Bush’s secrecy, it is interesting that the mainstream media is largely mum about the legislative abuse now underway.

Even in small town city councils, most bills have to be read three times and public meetings convened before a bill becomes law. This principle has died on the national scale.

For PJTV, I tried to pin down where the secret Democratic Senate meetings were being held on health care. They turned out to be a movable feast. Some were announced; many never were. No one knows who sat in what meetings and on what topics.

We don’t know how AARP fared in influencing details of the bill. Or how SEIU shaped the bill. Or what Big Pharma was promised for its endorsement of an early Obama plan.

Citizens cannot see who authored which provisions, who won big federal favors, or who will get new privileges in the Brave New World of Big Brother delivering health care.

No one knows … yet.

A penchant for secrecy is a style of governing that is well known in many authoritarian countries. We don’t have to stretch our imagination to see these governing styles on display in Iran, China, Venezuela, Cuba, and North Korea.

Thankfully America isn’t Venezuela. And Obama has not become Hugo Chavez.

I suspect the face of authoritarianism here may arrive with more benign faces. It may emerge with subtle velvet hands like those used by regulators out of the European Union’s faceless bureaucracy. There, regulations are hatched in private among elites, then paternalistically dispensed to their citizens. The EU model is driven by an impenetrable bureaucracy that has little accountability, protects special groups, and informs the public in a genteel way about what it is they can and cannot do.

This may be more in tune with the Obama administration and so-called “progressives.” As they stand in awe over Europe for its many “superior” ways, they may be looking at a neo-European governing style as a role model.

Rather than assume their penchant for secrecy with the health care bill is an aberration, this could become their governing norm.

  

Why can't we do health care reform right?

I generally prefer to stay away from political issues on my weblog. But I think I'm going to start making an exception to that on Saturday and/or Sunday and use those days to dip my toes into the waters of public policy debate and political opinion. I'll try to keep Monday through Friday focused on my normal fare of business and entrepreneurship discussions. Not that some of these political issues don't have major implications for entrepreneurship in the U.S.

The hottest current political issue is the debate over improving or reforming healthcare in the U.S. I certainly agree that there are aspects of our current system that need to be improved. In fact, as a self-employed person who is also a cancer survivor, I'm only able to obtain insurance through a "guaranteed issue" policy - the most expensive thing you can get. So I should be one of those people cheering on the Congress to pass a one of the current reform bills. On the contrary, I think both the House and Senate bills are unmitigated disasters. Bad policy, bad politics, and bad economics.

It's all been analyzed by people better equipped than me to discuss it and here are three of them. All three articles are worth reading in their entirety.

Kill the Bills. Do Health Reform Right. by Charles Krauthammer:

Insuring the uninsured is a moral imperative. The problem is that the Democrats have chosen the worst possible method — a $1 trillion new entitlement of stupefying arbitrariness and inefficiency.

The United States has the best health care in the world — but because of its inefficiencies, also the most expensive. The fundamental problem with the 2,074-page Senate health-care bill (as with its 2,014-page House counterpart) is that it wildly compounds the complexity by adding hundreds of new provisions, regulations, mandates, committees, and other arbitrary bureaucratic inventions.
    
Worse, they are packed into a monstrous package without any regard to each other. The only thing linking these changes — such as the 118 new boards, commissions, and programs — is political expediency. Each must be able to garner just enough votes to pass. There is not even a pretense of a unifying vision or conceptual harmony.

The result is an overregulated, overbureaucratized system of surpassing arbitrariness and inefficiency.

...

The bill is irredeemable. It should not only be defeated. It should be immolated, its ashes scattered over the Senate swimming pool.
    
Then do health care the right way — one reform at a time, each simple and simplifying, aimed at reducing complexity, arbitrariness, and inefficiency.

...

The better choice is targeted measures that attack the inefficiencies of the current system one by one — tort reform, interstate purchasing. and taxing employee benefits. It would take 20 pages to write such a bill, not 2,000 — and provide the funds to cover the uninsured without wrecking both U.S. health care and the U.S. Treasury.

We Pay Them to Lie to Us. by John Stossel:

I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.

The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"

To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year.

...

I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.

Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.

I'll point out that there are CEOs in prison for accounting shenanigans of significantly less magnitude, and that harmed a whole lot fewer people, than are going to be impacted by the fiscal dishonesty and malpractice in the current healthcare bills.

Finally this from the CATO Institute folks: ObamaCare's Cost Could Top $6 Trillion by Michael Cannon.

Congressional Democrats are using several budget gimmicks to disguise the cost of their health care overhaul, claiming the House and Senate bills would cost only (!) about $1 trillion over 10 years. Now that critics have begun to correct for those budget gimmicks, supporters of ObamaCare are firing back.

One gimmick makes the new entitlement spending appear smaller by not opening the spigot until late in the official 10-year budget window (2010–2019). Correcting for that gimmick in the Senate version, Sen. Judd Gregg (R-NH) estimates, “When all this new spending occurs” — i.e., from 2014 through 2023 — “this bill will cost $2.5 trillion over that ten-year period.”

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance. When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax. When the government then hands that $10,000 to private insurers, the CBO counts that as government spending. But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending. That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan. And it hides maybe 60 percent of the legislation’s total costs. When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

Here’s where things get really ugly. TPMDC’s Brian Beutler calls “the” $2.5-trillion cost estimate a “doozy” of a “hysterical Republican whopper.” Not only is he incorrect, he doesn’t seem to realize that Gregg and I are correcting for different budget gimmicks; it’s just a coincidence that we happened to reach the same number.

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion. That’s not a precise estimate. It’s just far closer to the truth than President Obama and congressional Democrats want the debate to be.

Beutler and other supporters of ObamaCare can react to this news in two ways. They can continue to deny the enormous cost of the legislation they support. Or they can question how President Obama’s health plan came to be so blessedly expensive, and how (and by whom) they were duped into thinking it wasn’t.

Extreme Bootstrapping

This article makes it sound more like social bootstrapping, in keeping with the current hot meme of "social everything". But I love the concept of Extreme Bootstrapping. And "food equity" is even better! Hmm, here in Nashville, I wonder if "BBQ and Beer Equity" is the way to go?

Unemployment statistics, entrepreneurship, and economic recovery

We're all aware to some degree or other that unemployment is now somewhat over 10%. We also understand to some degree that 10% is a lot of unemployed people - 1 out of 10 of us is out of work. But, as this article outlines, the real number that we should be focusing on indicates that closer to 1 in 5 people is really in need of a job.

The difference between 1 in 10 and 1 in 5 is the difference between the U-3 rate and the U-6 rate. U-3 measures the number of people out of a job and actively searching for a new one. That's the statistic that was at 10.2% for October. It's also the number generally cited by any news reports on unemployment. Arguably the more critical number relative to the health of the economy is the U-6 rate, which clocked in at 17.5% in October. U-6 is the statistic that includes everyone counted in U-3 plus "discouraged" workers (i.e. those who don't have a job and have stopped actively looking for a new one) plus those who are only working part-time but want full-time work and others who are underemployed. The number of people that an expanding economy must absorb back into the work force is represented much better by the U-6 rate than the U-3 rate. And even U-6 doesn't reflect the new workers that are being generated every year by new cohorts of high school and college graduates coming into the workforce for the first time.

The sheer magnitude of the U-6 number is one of the reasons that many are concerned that any recovery may be "jobless" or seem that way for quite a long time. We've got to add back an awful lot of jobs before we start to absorb all those people in the 7.3% of the workforce above and beyond the 10.2% U-3 number.

Anyone who as been paying attention to recent postings here (all 2 of you) also know that recent research shows that the vast majority of net new jobs in the U.S. economy over the past 20 or more years have been generated by young (not just small, but relatively new) companies. Unless something is happening to totally change that fact - and to my knowledge nobody thinks that something that fundamental is changing in the economy - that means that the companies that are going to hire most of the unemployed and underemployed are companies that were started within the past five years or will be started in the next two or three years. And with startup activity apparently down over the last year or so - and with attitudes and policies in Washington that are in many cases hostile to young and small business - it becomes even more difficult to see how the U-6 number comes down significantly or rapidly over the next few years.