Wednesday, January 19, 2011

Obama still doesn't understand regulation

It’s a relief President Obama, in an Op-Ed in today's Wall Street Journal, acknowledges that the free market is “the greatest force for prosperity the world has ever known.” It certainly is.

The President now says there are some rules “that are just plain dumb” and he’s going to “remove outdated regulations that stifle job creation.” I hope he means it. But even if a president does want cutback, it won’t be easy. Managing regulatory bureaucracy is like pushing string. Regulators want to regulate. Just last year, federal bureaucrats alone added 80,000 pages of brand new rules.

It’s intuitive to believe regulation protects us and makes commerce fairer. I once believed that. But then I became a consumer reporter and I watched regulation fail. Now I know it almost always does more harm than good.

In his Op-Ed, the President praises “common sense rules” like child labor laws and “our most recent strictures against hidden fees and penalties by credit card companies.” But what he calls “common sense” has unintended consequences. Stopping credit card companies from imposing penalties on customers who pay late didn’t make those costs disappear.

Since the politicians “protected” us, credit card interest rates rose nearly 2% ... while other interest rates dropped. JPMorgan Chase simply cut off 15% of its customers. Those who want credit will now have to go to pawn shops or payday lenders that charge annual interest of more than 200%. How does that help poor people?

Child labor laws passed to protect children from dangerous factories now keep strapping teenagers out of air-conditioned offices. Labor Department rules are so onerous that businesses that could legally employ teens often don’t. Wendy's won’t even consider hiring anyone younger than 16 because the regulations require time-consuming record keeping, and carry the risk of a big fine. It's “safer” just not to hire young people. How does that help kids?

My friend Sheldon Richman, editor of The Freeman, helped convince me that almost all regulations are unnecessary. In this article, he points out that politicians always say:

“We need more regulation. When free-market advocates point out that the problems were caused by government’s systematic and deliberate weakening of market discipline in order to promote corporate profits through home ownership regardless of income or creditworthiness, the other side seems to want to say, “If we have proper regulation, we don’t need market discipline."

But chanting “regulation” and “oversight” is not a solution to anything... Even if we assume the regulatory body would be populated by honest, disinterested people (a wild assumption, we should realize by now), how would they know what to do? As noted, markets are complex beyond imagination... Sitting in an ivory tower and writing regulations for a complex market is a recipe for stagnation…



129 Million Lies About ObamaCare

“129 Million People Could Be Denied Affordable Coverage Without Health Reform” blares the title of the piece of propaganda thinly disguised as a “study” released this morning by the Department of Health and Human Services.

The purpose of the propaganda was, of course, to generate scary headlines on the eve of the House GOP’s vote to repeal ObamaCare, likely scheduled for tomorrow. The Washington Post and other media promptly granted HHS its wish.

The purpose sure wasn’t sober, high-quality research. While the title shouts that 129 million people could be denied coverage, the so-called study defines preexisting conditions to include those “that would result in an automatic denial of coverage, exclusion of the condition, or higher premiums.” But paying higher premiums is not the same as being denied coverage.

Furthermore, the preexisting conditions are taken from a list of conditions that either qualify a person for a state high-risk pool or could result in a denial of private insurance. But neither of those are the same as saying that someone will be denied private coverage. For example, Crohn’s disease is on the list for high-risk pools, but some private insurers cover it.

Ed Haislmaier, a senior research fellow at the conservative Heritage Foundation, is even harsher: “This is appalling,” he said. “This is the most mendacious piece of work I’ve seen out of there is twenty years. The most charitable thing you can say is (the Obama administration) takes credit for things this law doesn’t do. The less charitable thing is they are simply lying.”

Haislmaier points out that many of the things the study claims that ObamaCare ends were already illegal under the Health Insurance Portability and Accountability Act of 1996. For example, the study claims that prior “to the Affordable Care Act, in the vast majority of States, insurance companies in the individual and small group markets could deny coverage, charge higher premiums, and/or limit benefits to individuals based on preexisting conditions.”

Haislmaier points out that this was true only in the individual market. In the group market, HIPAA limits the denial of coverage to those with preexisting conditions to 12 to 18 months. Those who have been previously insured can get that amount reduced even further. Says Haislmaier, “They either don’t know the law or they deliberately portrayed it as something it isn’t.”

Indeed, the authors make these “unaware-of-HIPAA” errors throughout the study:

—Between 50 and 129 million non-elderly Americans have at least one preexisting condition that would threaten their access to health care and health insurance without the protections of the Affordable Care Act.

Wrong. Haislmaier reiterates that many of those people are in the group market and thus covered by HIPAA.

—In addition, workers with a preexisting condition may be less able to change jobs for fear of losing that coverage.

Wrong. Under HIPAA, if you previously had “creditable coverage,” you can switch to the plan of another employer.

—Individuals with these conditions would at least get charged a higher premium but could also have benefits carved out or be denied coverage altogether.

Wrong. Under HIPAA, an employer group can be charged higher premiums than other groups, but an employee within that group cannot be charged higher premiums than the other employees.

“It’s not like this is rocket science,” said Haislmaier. “They have people at the Center for Medicare and Medicaid Services who deal with implementing HIPAA!”

He also notes this gem in the “study”: “The new health reform law has already banned lifetime limits in private insurance and has restricted annual limits for group and new individual market plans before banning such limits in 2014.”

Haislmaier notes, “Except when they didn’t by giving waivers to everybody who had a plan with limits,” referring to the more than 100 businesses and unions that had received administration waivers from ObamaCare at the end of last year.

“Might you want to check with the front office before issuing this? So now they are claiming credit for something that, administratively, their own department has undone.”

Ultimately, this study is useless save as an indication of how desperate the Obama administration is to salvage its highly unpopular health care overhaul.



Leftist activism as machismo

One of the under-reported stories from the 1960's is a fundamental change that took place at that time in the male rite of passage. Ever since the first humans began the arduous trek from primitive tribal societies to civilized society, the male adolescent's progression to adulthood included some rite which demarcated childhood from manhood. Most of the time this rite of passage was explicitly designed to evince the young prospective man's physical prowess and courage. There is a clear line of communication from the young tribesman who was expected to kill a lion or bring down a buffalo by himself and the British aristocrat training at Sandhurst. There were always those who did not take part in such rites, but for the culture's elites, evidence of courage were considered a sine qua non to entry into adulthood.

The mass mobilizations of the last centuries allowed everyman to take part in this rite of passage. The Bands of Brothers of WWII, in the retrospective popular imagination, were the apotheosis of courage under fire, solidarity, and steadfastness.

During the Vietnam War the children of the elites, to a much greater extent than in previous wars, avoided serving. This was especially prominent in the children of the liberal elites. As with any complicated and conflictual behavior, all sorts of psychological reactions ensured.

Via the beauty of the reaction formation, the covert anxiety felt by many was transmuted into its opposite. The moral of the Vietnam War struggle, for the counter-culture,l was that the truly brave fought against the unjust, imperialistic war. However, beneath the defensive bravado, the anxiety persisted. Mark Rudd documents this in his Washington Post op-ed over the weekend:
In 1970, when I was 22 years old - the same age as Jared Loughner - I was a founder of the Weather Underground, an offshoot of the antiwar group Students for a Democratic Society. That spring, a small contingent of the Weathermen, as we were known, planned to plant three pipe bombs at a noncommissioned officers' dance at Fort Dix, N.J. Our intention was to remind our fellow Americans that our country was dropping napalm and other explosives on Vietnam, killing hundreds of thousands of civilians. I wasn't among the bombmakers, but I knew what was in the offing, and to my eternal shame, I didn't try to stop it.

I considered myself an agent of necessity in a political revolution. I'm not sure if Loughner, who seems to suffer from mental illness, can be considered an agent of anything. But I'm sure that if, as alleged, he pulled the trigger, he had convinced himself that he was doing what needed to be done.

At his age, I had thought myself into a similar corner. My willingness to endorse and engage in violence had something to do with an exaggerated sense of my own importance. I wanted to prove myself as a man - a motive exploited by all armies and terrorist groups. I wanted to be a true revolutionary like my guerrilla hero, Ernesto "Che" Guevara. I wanted the chant we used at demonstrations defending the Black Panthers to be more than just words: "The revolution has come/Time to pick up the gun!"

Mark Rudd's use of his own experience to somehow illuminate any aspect of the Tuscon shootings is curious at best. What is more interesting is that he cannot yet question his own politics:
On March 6, 1970, the Weather Underground's bombs, assembled in a New York townhouse, exploded prematurely. Ted Gold, Diana Oughton and Terry Robbins - three brilliant and passionate young people who had decided that they must become terrorists - were killed. Only by their deaths was the greater tragedy we were plotting avoided. Emotionally shattered, I dropped out of the Weather Underground but remained a fugitive until 1977.

After I turned myself in, I spent the next 25 years trying to figure out why I had made so many disastrous decisions as a young man. One of my conclusions was to pursue only nonviolent action - righteous action still, but without anger or brutality.

It was never Mark Rudd's goals that were problematic, only his means, yet once the Left determines that its goals no longer justifies its means, it is no longer a revolutionary force, but an emasculated one. If you are fighting oppressors who are tormenting the innocent and helpless, every means must be used; after all, true heroes will risk all to protect the innocent. The young Leftist must either question his assumptions or condemn himself as a coward.

Some in the modern Left believe they can attain their goals by stealth; the election of 2010 has made that problematic. At this point the Left is being repudiated throughout the Civilized world. As Walter Russell Meade has pointed out, the Social Welfare model of the last half of the 20th century has failed and we have not yet found a new model.

The great problem for the Left is that they have failed spectacularly. The Soviet Union is now a kleptocracy surviving off oil; China is a State run Corporation; Cuba can barely feed itself and its much vaunted healthcare system is a shambles for all but the well connected who can obtain western (Capitalist) medical care; Venezuela is going off a cliff despite its oil; everywhere Socialism has been tried it has failed to do anything but terrorize and consign its people to perdition.

For the new generation of Mark Rudds, who have not yet surrendered their Utopian ideology, there are few options for exhibiting their courage. They can engage in mindless violence with the anarchists; they can support the oppressed by joining the murderers fashioned in the image of those most lovely of sociopathic killers, "Che" or Yasser; or they can attempt through subterfuge to achieve an impossible dream which has already been repudiated.

The true heroes, men and women of courage, are those few willing to stand up against barbarism in defense of our way of life. This is an intolerable state of affairs.




Iran bans production of Valentine’s Day gifts: "Iran has banned the production of Valentine's Day gifts and any promotion of the day celebrating romantic love to combat what it sees as a spread of Western culture, Iranian media reported. The February 14 celebration named after a Christian saint is not officially banned but hardliners have repeatedly warned about the corruptive spread of Western values. Under Iran's Islamic law, unmarried couples are not allowed to mingle."

CA: Is Berkeley ready to pay for sex change operations?: "While the country’s cities and states are cutting employment benefits, Berkeley City Council members will decide Tuesday whether to set aside taxpayer dollars for city workers to get sex-change operations. The vote, expected this evening, would permit the city to dole out $20,000 in cash stipends from its general budget to pay for the surgeries -- even as a city auditor warns of ballooning employee benefits costs. A new City Manager's report states that the city has unfunded liabilities totaling as much as $252 million."

Do you have a “right” to a job, home or healthcare?: "Americans have always been passionate about their rights. Whether conservative or liberal, we vigorously assert and defend them when we debate national policies like health-care reform or extending unemployment benefits. Unfortunately, the concept of 'rights' is often poorly understood across the ideological spectrum. Some conflate rights with responsibilities. Others label any benefit they think people should have as a right. ... In the Founders' vision, government's sole legitimate purpose is to protect our rights."


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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)


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