Thursday, August 12, 2010
Why no author names?
As regular readers of any of my blogs will be aware, I mostly do not name the author of anything that I reproduce. That could be seen as rather crass so I thought I should take a moment to say why I do it that way. It is no particular trouble to include an author name so I obviously do have a deliberate policy of sorts there. The reasons are threefold with the first reason being the main one.
1.) I like an argument to stand on its own merits -- without regard to the prestige (or lack of it) of the author.
I do however makes something of an exception to that on GREENIE WATCH, precisely because Warmists make an issue of it. They have NO facts to support their warnings of catastrophe so rely on the wild fantasies of grant-hungry scientists to support their case. So the authority and credentials of the writer are all that they have to go on.
2.) If a reader particularly likes the article concerned it gives him/her an incentive to look up the original and see who wrote it. So that gives traffic to the originating site.
3.) Although I do of course quote well-known writers on occasion, on most occasions the authors I quote are not widely known so giving his/her name would convey nothing to most readers.
Gloom reigns over world stockmarkets as US recovery slows
WORLD markets were thrown into turmoil yesterday as investors worried that US growth - a key engine of the global economy - is coming coughing and spluttering to a halt. Investors from New York to Tokyo poured money into safer assets after the Federal Reserve warned the US recovery would be "more modest" than expected.
In an effort to bolster market confidence the central bank on Tuesday announced a return to crisis-era stimulus spending. But the policy shift was seen more like a plumb line that revealed the depths of the Fed's concerns. "Investors are now rightly questioning the strength and sustainability of the recovery," said Joseph LaVorgna, Deutsche Bank's chief US economist.
And question they did. In New York the benchmark Dow index of 30 leading companies fell around 2.5 per cent, its worst drop in nearly a month. Individual US companies shed millions of dollars in value, continuing a downward trend seen in Asian and European bourses earlier in the day. "Global equity markets were pummelled," said Sam Stovall of Standard & Poor's Equity Research, pointing to gloomy US trade data that darkened the mood further.
The US Commerce Department reported that imports to the US increased by 3 per cent in June, draining billions of dollars out of the US economy. "This is spectacularly terrible," said Ian Shepherdson of High Frequency Economics, explaining that rising imports will eat into already anemic domestic growth.
That was enough to prompt analysts to slash growth forecasts across the board. Deutsche Bank's LaVorgna predicted US growth in this quarter would be limited to three per cent, well down from the 4.6 per cent previously forecast and raising doubts that sky-high unemployment can be trimmed soon. Other economists made similar calls, slashing past estimates as well as predictions running deep into next year.
It is "bad news for real GDP growth in the US, which will be further reduced by the effects of rising imports," said Christopher Cornell of Moody's Economy.com....
In London, the Bank of England cut its economic growth forecasts, predicting gross domestic product (GDP) growth would average about three per cent over the next three years. That was lower than the previous estimate of between 3-4 per cent in May, owing partly to the impact of the Government's recent austerity budget that was aimed at slashing the public deficit.
"The onslaught of negative news prompted a worldwide sell-off," said Elizabeth Harrow of Schaeffer's Investment Research.
Health Care Continues to Wound Democrats
At the time President Barack Obama signed the health care overhaul in March, polls showed the legislation was unpopular with the American people. The White House told naysayers that public sentiment would become more favorable and turn out to be a political plus for Democrats this fall.
Democrats would “be able to campaign proudly” on the legislation, White House senior aide David Axelrod said at the time. These days, Democrats are doing it with some trepidation and, depending on their districts, at some risk.
Now, with less than three months before the November elections, the preponderance of the evidence is that the health care bill remains a political problem for Democratic candidates.
In the “zero-sum” world of politics, Republicans see the issue as a plus for GOP challengers of Democratic lawmakers who voted for the bill.
In March, when the legislation was approved, House Republican leader John Boehner pledged that the GOP would make the new law’s unpopularity a major campaign issue in the November elections. “You can only ignore the will of the people for so long and get away with it,” he said.
The public view of the health care overhaul is crucial because as the president’s job approval rating continues to inch lower, the Obama team’s strategy is to stress its accomplishments in office. Health care is obviously No. 1 on that list.
The most important sign of how that argument is playing occurred last week in Missouri, historically a pretty fair barometer of public opinion nationally.
More than 70% of voters (although heated GOP primaries made the electorate more Republican than would generally be the case) approved a ballot measure that would prohibit Missouri from requiring people to either buy health insurance or pay a fine. The Missouri measure clearly is in conflict with the federal health care overhaul that requires all Americans to have health insurance beginning in 2014.
The conventional wisdom is that the Supreme Court will eventually decide the legality of challenges to the health care overhaul, including the Missouri measure and others like it. But the expectation is that it will likely be years until that decision is forthcoming, and the unsettled issue will be a major political football in the interim.
The Missouri vote may be symbolic but it isn’t unique. About 20 states have filed suit against the federal statute, mostly targeting the health care insurance requirement and alleging it is an unconstitutional expansion of federal power. Lawmakers in Arizona, Georgia, Idaho, Louisiana and Virginia have passed laws similar to Missouri’s. In November, Arizona and Oklahoma will vote on enshrining such a ban in their state constitutions.
A Political Loser
Regardless of the eventual court decision on the federal law, the health overhaul remains a political loser in most of the country.
Poll data on the issue is somewhat mixed, and the questions pollsters ask often vary as do the samples queried. Some polls ask all adults their views, others just registered or likely voters.
Quinnipiac University’s national poll found at the end of May that 51% of registered voters disapproved of the health care overhaul and 40% approved, statistically unchanged from 53%-39% disapproval in April. Pew Research found that in July, adults disapproved of the new law 47%-35%, worse than the 44%-40% disapproval in its April survey. A CBS News July poll found that 36% approved of the law, while 49% opposed it.
A poll done last month by the Kaiser Family Foundation, which has often shown greater acceptance of the plan than many other surveys, found that voters viewed the law favorably by 50%-35%. In May, the foundation’s poll found that voters viewed it unfavorably, 44%-41%.
Nevertheless, the political attacks on those who voted for the health care overhaul and, in some states, against those who oppose challenging its existence, remain a viable political weapon.
There is, of course, still a long time until the election. But at this point, the White House predictions that the law would be a boon for Democrats in the voting booth come November looks to be more rhetoric than reality.
Economic Effects of 2011 Tax Hikes: Killing One Bird with Two Stones
Next January, tax rates will increase—even though the country remains in a recession—unless Congress takes action. The Obama Administration’s solution is to extend the 2001 and 2003 tax cuts except for families earning $250,000 and individuals earning $200,000.
But is this the right move from an economic perspective, and the right choice to promote deficit reduction? In both cases, the right answer is to extend the tax cuts for all Americans—including top earners.
In a recent article in The New York Times, Robert H. Frank claims that proponents of keeping current tax rates want to do so “because the economy needs additional stimulus.”
This conveniently, if sloppily, erects a neat straw man to knock down. Obviously, extending current tax rates won’t serve as additional stimulus. As economist Arthur Laffer explains, “As a result of higher tax rates on those people in the highest tax brackets, there will be less employment, output, sales, profits and capital gains—all leading to lower payrolls and lower total tax receipts. There will also be higher unemployment, poverty and lower incomes, all of which require more government spending. It’s a Catch-22.”
According to Laffer, the deleterious effects that President Obama’s tax increases would have on the economy will add to the fiscal obligations of the federal government.
Frank claims that increasing taxes would “generate revenue that could be used to bolster spending in a host of ways that would be useful even apart from the stimulus effects,” but in reality, this increase in revenue would not go nearly as far as he hopes. For Frank, the end game is more federal spending—not deficit reduction.
Finally, Frank claims that raising taxes on the wealthy would not affect consumption because, rather than reducing spending, higher taxes would come out of savings for top earners. But when the wealthy save, this money doesn’t disappear from the economy—rather, it is invested, which results in more employment and higher wages.
No matter how you slice it, extending tax relief is the right choice to help stabilize the economy. And even if you don’t put much faith in the incentive effects of marginal tax rates, no economic theory suggests raising taxes during a recession. To tackle deficits, lawmakers need to address their true cause: skyrocketing spending.
Medicare Trustees Issue Report Disavowed by Chief Actuary
Over the past six years, Congress has twice passed and two Presidents have signed into law major legislation affecting Medicare. President Bush signed the bill creating a new drug benefit that provided an important modernization for the program yet also significantly worsened its finances. President Obama signed “Obamacare” into law, which appeared to improve Medicare’s finances—if one assumes that the difficult programmatic changes Obamacare requires take effect.
Those assumptions are implausible, according to the Chief Actuary. In fact, for the first time ever, Medicare’s Chief Actuary felt compelled to release a detailed statement appended to the Trustees’ Report calling the assumptions “implausible” and “unreasonable.” What is left then is a report on Medicare —one of the federal government’s largest and most important programs—containing projections that the Chief Actuary suggests are “poor indicators” of its likely finances.
The Trustees’ Report came out late for 2010 due to the need to reflect the roughly 165 provisions relating to Medicare contained in the Patient Protection and Affordable Care Act, or as it is now widely known, Obamacare. According to the report, the enactment of Obamacare “improves the outlook for Medicare substantially.”
Would that it were so; however, the report then goes on to offer so many caveats to that claim as to strip it of all meaning. For example, the report quickly follows its rosy assessment of Obamacare’s effects with a discussion of how a new ruse has been constructed for Medicare similar in nature to the now infamous Sustainable Growth Rate (SGR) limiting payments to physicians. Enacted in 1997 to slow the growth of Medicare spending, Congress habitually overrides the SGR with “doc fix” legislation. The SGR experience is a clear portent of what is to come with the assumed savings from Obamacare.
Like the SGR, the new Medicare savings ruse involves formulaic downward adjustments to physician payment rates. According to Obamacare, these payment rates are to be adjusted downward to reflect economy-wide productivity gains. However, the historical record is clear, as recounted in the report: “Most categories of health care providers have not been able to improve their productivity to the same extent as the economy at large.”
The implication is that physicians are going to see payment rates steadily ratcheted down to reflect productivity gains they cannot achieve. If allowed to proceed, providers “would eventually be unwilling or unable to treat Medicare beneficiaries.” In other words, seniors relying on Medicare for their health insurance would be unable to find doctors willing to treat them.
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
Posted by JR at 8:14 PM