Wednesday, November 05, 2014

The run-up to election day

The fate of the nation is in the hands of voters who’ve endured a barrage of TV ads, direct mail, blatant untruths and soaring rhetoric funded by untold millions of dollars. Such spending is to be expected when the government controls so much of our daily lives.

Most will sigh and say, “I can’t wait for this election to be over!” Yet the sun won’t set on Wednesday before the narrative shifts to the 2016 presidential election.

In races from the Court House to the State House to the U.S. House, Democrats have frantically attempted to distance themselves from Barack Obama during the last few months, and the situation has vacillated between pitiful and humorous. Now, the political environment on the Left has been downgraded to pure desperation.

Let’s adapt Jeff Foxworthy’s “you might be a redneck if…” approach (also used by Mark Alexander earlier this year to spot liberals generally) to identify panicking Democrats.

You might be a desperate Democrat running on the 2014 ballot if you claim your own constituents are racist and sexist.

Sen. Mary Landrieu (D-LA), fighting for her political life tied directly to Barack Obama’s policies, declared her opponents to be those of the South who won’t vote for women or minorities, specifically blacks. “I’ll be very, very honest with you,” said Landrieu in what’s our first clue she’s lying. “The South has not always been the friendliest place for African-Americans. It’s not always been a good place for women to present ourselves. It’s more of a conservative place.”

She later doubled down, adding, “Everyone knows this is the truth, and I will continue to speak the truth even as some would twist my words seeking political advantage.”

Bless your heart, Mary, you must’ve forgotten about Louisiana’s dynamic Democrat duo of Governor Kathleen Blanco (female) and New Orleans Mayor Ray Nagin (black), who grossly mismanaged the response to Hurricane Katrina.

You might be a desperate Democrat in 2014 if you claim Republicans believe slavery (in the sense of blacks on a plantation) still exists.

Rep. Charlie Rangel (D-NY), most renowned for tax fraud, declared Republicans to be Civil War era Confederates: “Some of them believe that slavery isn’t over and they think they won the Civil War!”

Obviously, he thinks the key to winning in New York is to insult the intellect of voters. He claims slavery still exists while ignoring the fact that it was the actions of Republicans who abolished slavery and amended the Constitution to allow voting of minorities. Unfortunately, he’s probably correct in his assumption.

You might be a desperate Democrat in 2014 if you repeat the claim that Republicans will impeach Obama if they win in November.

A chorus of the chattering Left has frequently repeated this trope over the last few months, but just last week, Senate Majority Leader Harry Reid (D-NV) fretted, “Frankly, a Republican House and Senate could go beyond shutting down the government – they could waste months of our lives on impeachment.”

Yeah, that’s right. Voters are asked to believe the guy who’s left more than 350 bills passed by the House dry-rotting on his desk as he leads the refrain sung only by the desperate Left about obstruction and impeachment.

Finally, you might be a desperate Democrat in 2014 if in Georgia, North Carolina, Maryland or insert-the-name-of-your-state you’ve seen campaign fliers referencing the unrest and violence in Ferguson, Jim Crow laws or even lynching.

It is 2014. Yet the turnout tool used by the party of the people, the Democrats, is not to address the historically high unemployment of blacks. It’s not to discuss horrific black-on-black crime or the incredibly high out-of-wedlock births spurred on by a government that rewards its citizens trapped in welfare dependence (poverty plantations, if you will). Oh, no, desperate Democrats spread fear and fuel a division that is, for the most part, conjured up by the hustlers of race who “lead” the, ahem, progressive party.

Tragically, it also might be noted: You might be viewed as a useful idiot voter who supports Democrats if you fall for such inflammatory dishonesty now synonymous with the failed policies of the Democrat Party.

As 2014 draws near its end, the Democrat Party, steered by the abysmal policies and platitudes of Barack Obama, coupled with the folly offered as a substitute for thoughtful debate, is pure symbolism over substance.

Those who employ and subscribe to such may take offense to the light-hearted Jeff Foxworthy approach. Yet our thoughts and beliefs determine our behavior. Said more academically, “Cogito ergo sum.” The Latin declaration translates, “I think, therefore, I am.”

Democrats of 2014, we now see exactly what you think and exactly what you are.



Millennials have been hit the hardest by ObamaCare's insurance premium increases, new study says

Young people who have, under the threat of a punitive tax, purchased health insurance coverage on the individual market have seen their premiums skyrocket under ObamaCare. While premiums have increased substantially for everyone, a new study shows that millennials have seen larger increases than their older counterparts:

Average insurance premiums in the sought-after 23-year-old demographic rose most dramatically, with men in that age group seeing an average 78.2 percent price increase before factoring in government subsidies, and women having their premiums rise 44.9 percent, according to a report by HealthPocket scheduled for release Wednesday.

The study, which was shared Tuesday with The Washington Times, examined average health insurance premiums before the implementation of Obamacare in 2013 and then afterward in 2014. The research focused on people of three ages — 23, 30 and 63 — using data for nonsmoking men and women with no spouses or children.

The Washington Times, which saw the study in advance, notes that premium increases for 63-year old men and women were 37.5 percent and 22.7 percent. Though increases don't account for tax credits, which offset the cost of the premiums for those individuals and families who earn less than 400 percent of the federal poverty level, the study explains that "[a]nother important consideration in the discussion of subsidized premiums is that the subsidized portion of the premium still must be paid by the government through the money it collects from the nation." In other words, the costs of ObamaCare's dramatic premium hikes have been passed onto taxpayers.

What's causing the premium hikes? HealthPocket points to new ObamaCare regulations on insurance companies, both who they must insure and benefits they're required to offer in their health plans:

The reasons for the premium increases start with the ACA’s prohibition on rejecting applicants with pre-existing conditions, which means that insurance companies must account for the additional costs of covering chronically ill or disabled people.

Another cost driver is the heightened benefit mandate. The ACA requires insurance policies to include 10 “essential health benefits,” including pediatric dental and vision care, maternity care and newborn care, even for policyholders with no children or whose children are adults.

One cost driver not mentioned by HealthPocket is ObamaCare's age-rating restrictions, which prohibit insurers from charging older people more than three times what younger policyholders pay. As well-intentioned as this policy may be, insurers just pass costs of covering older policyholders to younger enrollees.

Though the individual mandate tax will rise next year to 2 percent of annual income or $325, whichever is greater, millennials, who tend not to utilize their coverage often, are better off avoiding ObamaCare than being taken advantage of by the Obama administration.



Yellen and Pope Francis vs. Pareto

“The extent and continuing increase in inequality in the United States greatly concern me,” Fed Chairwoman Janet Yellen said last week at a conference on economic opportunity and inequality sponsored by the Federal Reserve Bank of Boston.

Vilfredo Pareto would tell Dr. Yellen to relax—inequality is and always has been a constant. Pareto is known for discovering the Pareto principle, or what most people know as the 80-20 rule. Pareto observed in 1906 that 80% of the land in Italy was owned by 20% of the population and developed the principle by observing pea pods in his garden; 20% of the pods contained 80% of the peas.

The longer you live, the more you observe Pareto’s principle play out over and over in many different contexts. 80% of revenue is provided by 20% of customers. The ratio also applies to customer complaints. I dined with the owner of a Vietnamese restaurant the other night who said that 80% of his revenue came from his noodle soups, which at most comprise 20% of his menu. My experience in the nonprofit world was that 80% of donations came from 20% of those on the mailing list.

Pareto observed that the 80/20 pattern “repeated consistently whenever he looked at data referring to different time periods or different countries,” writes Richard Koch in his book The 80/20 Principle.

So while inequality has been the norm throughout history, the new Fed chair claims that, “By some estimates, income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before then.”

She went on to say, “The distribution of wealth is even more unequal than that of income. … The wealthiest 5% of American households held 54% of all wealth reported in the 1989 survey. Their share rose to 61% in 2010 and reached 63% in 2013. By contrast, the rest of those in the top half of the wealth distribution families that in 2013 had a net worth between $81,000 and $1.9 million held 43% of wealth in 1989 and only 36% in 2013.”

So what? As Mr. Koch explains in his book (emphasis his), if 20% own 80%, “then you can reliably predict that 10 percent would have, say, 65 percent of the wealth, and 5 percent would have 50 percent. The key point is not the percentages, but the fact that the distribution of wealth across population was predictably unbalanced.”

But Yellen has fallen in with Pope Francis, who told the United Nations assembly, “As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems.”

While it doesn’t seem like it here in America, the world is becoming freer and because of that, poverty is falling.

In the article “Pope Francis, Bad Economist,” James Harrigan and Anthony Davies wrote (link in original):

Over the past two generations, while the number of people on Earth doubled, the number of people living in extreme poverty declined by 80 percent, largely as a result of increased economic freedom globally.

Today, almost all people in economically free countries can afford cures for diseases that killed the richest people only a century ago. The average person with a cell phone today has better and quicker access to more complete information than the President of the United States enjoyed just a generation ago. A plot of land that a century ago could feed one family today can feed hundreds of families.

But the leaders of the Catholic and Monetary Churches don’t care about lifting people out of poverty—it’s envy they’re engaged in. And as Helmut Schoeck showed in his book Envy: A Theory of Social Behavior:

[W]e are least capable of acting sensibly in economic and social matters when we face, or believe we face, an envious beneficiary of our decision. This is true especially when we mistakenly tell ourselves that his envy is a direct consequence of our being better off, and will necessarily wane when we pander even to unrealistic demands. The allocation of scarce resources, in any society, is rarely optimal when our decision rests on fear of other men’s envy.

The Chairwoman continued to stoke the fires of envy with more statistics. “After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.”

There is no need for Yellen’s preaching. Envy has been institutionalized in this country with the progressive income tax and inheritance taxes. As Schoeck points out, “Envy can become more easily institutionalized than, say desire or joy.” And it has.

Despite these headwinds, the serially successful and productive continue to earn and accumulate the vast share of wealth. That’s why resource investing legends Rick Rule and Doug Casey urge speculators to back entrepreneurs who have proven track records. Rule wrote on Casey Research:

A substantial body of evidence exists that it is roughly true across a variety of disciplines. In a large enough sample, this remains true within that top 20%—meaning 20% of the top 20%, or 4% of the population, contributes in excess of 60% of the utility.

The key as investors is to judge management teams by their past success. I believe this is usually much more relevant than their current exploration project.

Despite some of the highest tax rates in the world and libraries full of regulations to contend with on the national, state, and local levels, the entrepreneurial spirit overcomes, while—as expected—nonproducers hold very little wealth. “The lower half of households by wealth held just 3% of wealth in 1989 and only 1% in 2013,” Yellen told her audience. But in America, the lower half doesn’t have to stay that way and rarely does.

Pareto’s insight is that wealth will never be equal, whether under capitalism, fascism, communism, or whatever-ism. What freedom offers is the possibility to ascend from poverty to wealth with brains, hard work, and good decision making.

Pareto’s principle should not only be accepted but celebrated, and envy ridiculed, not institutionalized. Schoeck explained:

Envy’s culture-inhibiting irrationality in a society is not to be overcome by fine sentiments or altruism, but almost always by a higher level of rationality, by the recognition, for instance that more (or something different) for the few does not necessarily mean less for the others: this requires a certain capacity for calculation, a grasp of larger contexts, a longer memory; the ability, not just to compare one thing with another, but also to compare very dissimilar values in one man with those in another.

Ironically, Ms. Yellen’s zero-interest policy puts more separation between the middle class and the rich than Pareto could ever imagine. But then again, a “higher level of rationality” is severely lacking at the central bank.


There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.


For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten.

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