● Obamacar-nage: We’ve been saying all along that Obamacare will kill jobs. Now there’s some interesting proof in the form of a poll. The poll was commissioned by a law firm and it was conducted by Gallup. They surveyed 603 small business owners and found this:
● 41% said they have frozen hiring to avoid Obamacare.This is rather interesting, especially the first two points. If half of small businesses have either frozen hiring or laid people off, that’s a horrible sign for any sort of economic improvement. Small business accounts for two-thirds of all new jobs over the past couple decades. Interestingly, this has some “experts” shocked as they figured small business would happily take a bullet to solve Obama’s problem... ha ha. Others are still stupidly holding out hope that “education” can change minds. Propaganda is fun, but it doesn’t work when people can see the bottom line.
● 19% said they have laid off employees to avoid Obamacare.
● 48% think Obamacare will hurt their bottom lines. Only 9% think Obamacare will be good for their business.
● 55% think Obamacare will lead to higher costs. Only 5% think it will lead to lower costs.
● 52% think Obamacare will lead to a reduction in the quality of healthcare. Only 13% expect an improvement.
● Obamacare Lies: Last week, the Centers for Medicare and Medicaid Services boasted that insurance premiums fell nearly $4 billion last year, which they called "savings" and which they attributed to the Obamacare requirement that insurers spend at least 80% of their revenue on providing medical services. Well, not quite.
Someone asked the industry lobbyist, America's Health Insurance Plan, about this and the response was that they had no idea where the Centers for Medicare and Medicaid got their data because the industry didn't give it to them. Moreover, they noted that most insurers were already well above the 80/20 requirement, so the requirement isn't likely to have done anything in any event. In the end, they weren't sure why premiums would have gone down. I can tell you why though. When Obama first announced his plans to destroy our medical system, there were 43 million uninsured. Now there are 49 million. That means somewhere around six million people lost their insurance since Obama deigned to bless us with "universal coverage." Call me crazy, but I'm thinking those six million people no longer paying health insurance premiums is probably what caused the overall amount paid in premiums to drop by $4 billion.
● Economists Are Liberals? A lot of people seem to think that economists are conservatives. I’m not sure why people think this, but it’s not true. According to a 2008 survey of the American Economic Association:
● 49% of members were registered Democrats and only 17% were registered Republicans.In a 2003 study of 1,000 economists, only 8% supported free-market principles.
● 60% supported Obama.
● China Breaking: I’ve said several times that China has serious problems and will probably never overtake the US economically. Their demographics are against them, as their population is aging ultra-fast, and China's population will start shrinking dramatically soon. Similarly, their costs of doing business have been rising so fast that they are no longer competitive. They’ve lost manual labor work to Bangladesh and apparently it now makes more sense to open most new factories in the US rather than China. Making things worse, China appears to have slipped into recession and their growth is well below the level people have generally assumed they need to maintain social stability. Indeed, there is also a question of whether they ever actually had the growth they claimed. Everyone knows official statistics in China are fantasy, so people have been estimating growth based on electricity consumption figures. Now it turns out that China knew this and has been faking that data as well. Some people think China is only growing at 4% compared to the 9% they have been claiming.
Historically speaking, when you look at the other Asian tigers, each of whom burned out, China is following the same pattern – fast growth as they move people from the peasantry into the working class, followed by stagnation once they run out of peasants and as wages rise. If China's growth is in single digits, then they're pretty far along that curve. To put it simply, history tells us that China has peaked.
Now their last gasp appears to be a plan to move more people to the cities. Right now 1/2 of the population lives in cities. They want to increase this to 2/3. To do that, they are moving the equivalent of the entire population of the US into cities they are only now building. The plan is to get them all relocated by 2030. This sounds like a disaster in the making as it sounds unlikely there will be jobs for these people in those cities. Be thankful that for all of our problems, we are nothing like China.
54 comments:
these are great nuggets, Andrew, particularly the data showing 60% economist support for the "O"
Thanks Jed! That's a shocking number, isn't it? It explains why economics is so messed up, that's for sure!
I'm thinking that the misconception about economists could be turned to conservatives' favor. I'm just not sure how. It is 2 in the morning.
Economists like scientists people assume they are logical and by the numbers. The reality they just as human as the rest of us.
As far as Obama care goes. Just another Dem program to keep themselves in power forever. While of course helping their supporters. I'm sure the level of individual care will be right in line with your voting record.
I don't think China has ever the powerhouse people claim. Sure they built up a huge manufacturing base, but at what cost. People so easily forget the Soviets, they were always boasting how great they were. Meanwhile people were waiting in endless lines and eating their shoes. At least China has an agriculture base, but the Communists always lie about how great things are. Same goes for China, their economy is just as much a basket case as Europe's.
Andrew.....No scandal updates?! How boring and passe' these topics are. Obamacare? So 4 years ago..... Economists? Always looked at them as a glorified social science. No wonder they tend left. Remember "5 Year Plans?!"
China? Heard they just built there FIRST aircraft carrier. Wonder what Zero would do if they started a shooting war in Korea to divert attention and put themselves on a war production footing like we did in the 40's.
I've always wondered which economists "theories" turned out accurately, or, if like communism, they have never been fully implemented. For example, the Laffer Curve, where by lowering tax rates you increase tax revenue to the gov't. Always liked Milton Friedman.....
tryanmax, It's 5:42 AM here, so I know the feeling... one of the joys of having dogs who haven't evolved enough yet that they can let themselves out. :(
I have no idea how to use that fact against the left.
Max, China is a country that like the Soviets built a reputation that they really didn't deserve.
Yes, they have a huge military, but they aren't sophisticated. Now they've bought some more sophisticated weapons, but they still have no real way to use them in an aggressive (rather than defensive) manner.
Yes, they have a strong economy, but it was founded on cheap labor making junk for other countries. They've never captured high end manufacturing, which remains in the US and Europe, they remain a low-tech economy, and they are deathly dependent on government cash.
Yes, they have social order, but they lack the foundation to make their society stable -- like property rights and a functioning court system. Instead, they depend on favors, bribery, and remnants of political terror. But as their middle class grows, those things becomes annoyances rather than a means of control.
Yes, they are a huge country, but their demographics are possibly the worst in the world. I've seen estimates that they will peak at around 1.5 billion people and then fall to 750 million within 50 years from now. Think about the shock to their economy of that.
Yes, they've bought some followers worldwide (especially in Africa) but they have shown almost no ability to influence world events.
Yes, they have less debt than we do, but ironically, they bought all of our debt so they are just as vulnerable to our debt crises as we are.
Every generation, Americans start running around screaming about the new rising power who will overtake us... it won't happen. It was the Nazis in the 1930s and 1940, the commies in the 1950-1960, Japan in the 1970-1980, the Asian tigers in the 1990s, China in the 1990s-2000s. It will be India next. Each time, they proved to be a flash in the pan who was sclerotic underneath.
Patriot, Somehow Obama avoided having any scandals this week. LOL!
What amazes me about liberal economists, like Paul Krugman, is how fundamentally wrong they are about human nature. They really think that people will act against their own interests to support liberal ideas like Obamacare. They live in static worlds where people are like chess pieces who can be put exactly where you want them without they moving and without unintended consequences. Etc. It's the kind of ignorance that should have been disprove to them on the playground in third grade... yet they premise their careers on it.
Nice nuggets. The only people benefiting from Obamacare are Republicans. Its is going to hurt Democrats until it is put out of America's misery.
China's relocation plan sounds like The Great Leap Forward Part II. You'd think they would have learned.
Thanks Anthony! Agreed on both counts. Obamacare is a like an open soar that will keep hurting the Democrats time and again until they finally kill it off. It's going to take the blame for everything that is wrong with the system from hereon out.
I had a similar thought about the Great Leap Forward Part II. Up to now, all the people who have moved to the cities have done so because they wanted to find the opportunities the cities offered. But now it sounds like they are simply moving people for the sake of moving them and I don't think they're going to have much for these people to do once they get there to support themselves. And if they think they have problems now, just wait until they have 200 million unemployed people living in cities they never wanted to move to. This is a recipe for disaster.
***BREAKING NEWS***
The SC just struck down Section 4 of the Voter's Right Act - "the provision of the landmark civil rights law that designates which parts of the country must have changes to their voting laws cleared by the federal government or in federal court."
They did not make any determination on Section 5 which mandates that the states designated in Section 4 must obtain federal approval for any changes in their voting laws. Therefore, no states designated, no approval needed.
Bev, Interesting and thanks for the update!
I'm going to talk about their affirmative action ruling tomorrow, which goes a LOT further than people seem to think.
This VRA decision is a great thing which goes a long way toward ending the presumption of racism in the South and I think will ultimately start to kill off the race industry.
P.S. Who knows? Perhaps at some point we really will have a color-blind government? :)
Andrew, Bev, I'm listening to reaction to that decision on NPR. Their guest from Heritage did a good job pointing out that the VRA decision does not strike down the law, only requires it to be based on current information. Their counter-opinion panelist described this as the greatest rollback of civil rights in America since the last one!
Andrew - Sadly liberal/progressive/race-baiters see this as just the opposite. But then again, if they can't play the race card and must compete on merit alone, they may see how they have been wrong they have been to choose form over substance.
tryanmax and Bev, I'm not at all surprised by their reaction. This is really bad for their industry. It wipes out their ability to keep selling the idea of perpetual racism during each election cycle.
Right now, every time we get near an election, their fellow travelers at DOJ invade these states with their presumption (under the law) that those states are full of racists. DOJ uses that to make the states prove they aren't acting like racists this time. Meanwhile, the baiters go on television and decry the state of racist America and point to how these evil states need to kiss DOJ's ring as proof that racism is alive and well.
Now there will be no presumption of racism and the burden will shift. That means DOJ will need to prove racism, which they can't do. That means they will slowly stop this game. No game... no television appearances... no rallying cry for fundraising where the baiters can all lament how racist the South remains.
Out of sight, out of mind.
That's how the industry dies.
P.S. This is the sort of thing that doesn't happen over night, but I would bet you that over the next 5-10 years, you see this whole issue fade away.
In the next year though, I would expect the race industry will push hard to milk as much benefit from this as they can before the spigot finally dries up.
Andrew, that's really close to how their race-baiter panelist put it. He likened the VRA to a parole sentence. Clearly, the underlying assumption is that racism leaves a perpetual stain.
I just heard the biggest piece of schlock reporting ever! The report started by saying that that charter schools don't perform any better than standard public schools. They went on to say (through severely minced words) that a new report says charter schools don't perform better enough.
I don't have much of an opinion on charter schools, but I have very strong opinions on bad reporting.
tryanmax, That's how it works. Under the law generally, the person alleging discrimination needs to prove evidence of an intent to discriminate. But not in this case...
What this provision did was identify certain states which were presumed to be racist and therefore the burden was presumed met against them. That means DOJ didn't need to prove a racist intent. Instead, the burden shifted to the state to disprove a racist intent.
That meant that every time one of these states did something to their election laws, DOJ would swoop in, would automatically get their law stopped. Then they would demand concessions if the state wanted their law to go into effect since there was no way the state could disprove racist intent.
Meanwhile, the race baiters would go on television and use the fact that DOJ had been able to stop the law as proof that the state was still racist and they would use that to stir up anger... and money.
Basically, it was a rigged game. The law presumes them racist and then the baiters use the fact that DOJ could "win" the case as proof that the state was still racist.
That will end now.
tryanmax, I haven't seen the study, but you have to look very carefully at claims like that. Charter schools come in many flavors. Sometimes, they are good. Sometimes they are really in name only and otherwise are just public schools. Sometimes, they are out in fringe land. So you really have to look at what they are comparing.
Also, as always with education you need to look at how they are rating them. They always throw in false data like "teacher salary" to give them room to manipulate the data. Remember my article on how they manipulated the one study to actually list some of the worst schools as the best? LINK
On the charter schools, I'm just responding to the difference b/w saying, "A new study shows that charter schools suck." vs. "A new study shows that charter schools are okay."
Unless it was a very strange study, it must have concluded one or the other, but the reporter stated it both ways. I have no idea what the actual report says or even how to find it.
Right, I noticed that in your comment. That's nonsense, but it's typical spin for liberals. In fact, you see that all the time where one group is held to a higher standard. Thus, even though they are still better than another, they can be called "worse" because they were "supposed to be better." It's false reasoning, but it's common.
Andrew - That is exactly what happened in the 2012 election cycle. The post-census redistricting showed lost districts in Blue States (NY and CA) and gained districts in Red States including Texas. The DOJ made it nearly impossible to settle on the new districts in Texas until it was almost too late. For no reason other reason except Holder could. Obama still lost Texas by a fairly wide margin, however this will make it harder for the Dems to realize their dream of gerrymandering the state back to a Dem majority for 2016.
Bev, That's exactly what they do in every southern state -- DOJ basically gets to run their election laws. And the division of DOJ that does it is packed with hardcore liberals and race baiters. This change should end that.
As an aside, if I remember correctly, didn't the Republicans ultimately win their map in Texas?
The Supreme Court decision will allow the previously covered states to engage in the same gerrymandering as the other 41 states, but I don't think it will do much to end the legal war/debate.
The black vote has been at least 85% Democratic since the CRA. Democrats have every incentive to increase black voter registration/turnout and Republicans have every motivation to do the opposite.
Of course, Republicans aren't motivated by racial antipathy (both parties have no problem with blacks as long as they toe the party line) but pragmatism. Of course, Democrats have every incentive to portray politics as usual as racially motivated.
Its worth noting that Florida and Ohio (possibly more states than that) have seen courts involved in the election process and neither of them needs pre-clearance.
Still, this should benefit Republicans because it levels the playing field, allowing a group of Republican leaning states to do the same things other states do to preserve party dominance.
The bit about economists doesn't surprise me much. In the introduction to his The Road to Serfdom, Hayek made a very telling point: Basically, arguing against central planning ran contrary to his personal interests as an economist, since under such a system his services would be in even higher demand, a point many of his liberal colleagues emphasized when debating him. Explains a lot, really.
Andrew, I vaguely remember that a decade ago when I was in high school, there was some loose talk about an India-China alliance that would make them the next superpower. As is so often the case, it's impressive-looking on paper, not so much when you check the fine print.
Anthony, I think this hurts the cause of the race industry for the simple reason that the easy victories are now gone.
From now on, if they want to stop a state law, they actually need to prove that the state law violates individual rights under the Constitution. That can happen, but it's rare. That compares to the present state of things where ALL laws passed by these states are presumed non-starters because of racist intent and need to be negotiated with DOJ.
The difference is this. When they sue Ohio, 99 times out of 100, they lose. And the 1 time they win is usually something odd that isn't race-based. Thus, the cry of racism has a near 0% success rate against Ohio. By comparison, every time Arkansas or Alabama change a law, the law gets frozen and everyone talks about how racist the states are and they point to the fact they need to under the control of DOJ because of it. Essentially, the cry of racism has a 100% success rate. That ends now. So Arkansas becomes more like Ohio. And that means there are fewer instances where the race crowd can whip people into a frenzy and claim that they are right because the federal government is winning.
Ultimately, this will defuse the issue a great deal. It may not with blacks, but it will with others (like women and Hispanics) who don't sympathize with blacks but couldn't help but notice that these states always seemed to be getting declared racist in court. Now the only proof for them will be that black groups claim disenfranchisement they can't prove in court.
Essentially, I think it pulls the racism issue further out of the mainstream and isolates it more in the black community.
Andrew,
I don't think that whether or not something can be proved in court does much to color perceptions of an issue. Visceral anecdotal evidence counts for a lot and there's always an idiot out there who people can cite (to prove they were right on pretty much any issue).
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http://www.dispatch.com/content/stories/local/2012/08/19/fight-over-poll-hours-isnt-just-political.html
“I guess I really actually feel we shouldn’t contort the voting process to accommodate the urban — read African-American — voter-turnout machine,” said Doug Preisse, chairman of the county Republican Party and elections board member who voted against weekend hours, in an email to The Dispatch. “Let’s be fair and reasonable.”
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However, I think that among Hispanics, defusing will come about through immigration reform (parties don't seek to bar before whose votes they have a hope of winning) and a new tone.
T-Rav, In the article I read about the economists, they made that very point -- they have an incentive to be liberal because it makes them more important.
I remember the China-India thing. Unfortunately for them, they are angry competitors -- they even had a war sometime back. All in all, I think China is peaking right now and I think India will never peak because they are just too dysfunctional. Once again, the US will reign supreme. Our country really is unique in many ways and the things that make us unique give us major advantages in all things economic.
Anthony, I think there are two different audience to consider. Blacks will continue to be upset. They will be told about every stupid comment and their leaders will continue to use that to scapegoat their failure to improve conditions for blacks. So little will change there. But I'm not counting on the GOP needing to win blacks. The GOP needs to win everyone else.
And in that regard, don't underestimate the significance of the difference between an ideologue screaming about racism versus seeing on the news that a state is under DOJ supervision because their laws were found to be racially-motivated -- especially for people who only casually pay attention to current affairs and who accept the idea that authority is right.
Average people ignore the ideologue, but they don't ignore what appears to be a legal conclusion about a state being racist. But now, because of this ruling, those legal rulings will all but vanish. So to average people, all they will see is the ideologue and they will ignore them. That means average people will tune out the issue and minds will slowly change.
"In a 2003 study of 1,000 economists, only 8% supported free-market principles."
I knew a few of them. Always talking about market failure, never about government failure. Of course, economists are in the business of advocating policies.
In a free market economy, we need them to collect statistics. But if they can find market failures everywhere, why, we need economists to go on talk shows and advise politicians on how to fix them! And fix them. And fix them.
El Gordo, That's exactly right. In a free market economy, they collect statistic to help investors and the such. In a state-run economy, they become the tools used to control the population.
And yeah, it's always a "market failure" whenever the government messes up the market.
Andrew,
I agree about multiple audiences and the GOP not needing to win blacks, but I still believe that the court of public opinion isn't heavily swayed by legal decisions. To twist an old adage, public opinion is its own court.
*Shrugs* But we seem to be agreeing about what will happen, just disagreeing about why it will happen.
I believe immigration reform and a new tone will matter more to voters than states getting out from under VRA (which clearly hasn't stopped Republicans from winning), and that the voters it will matter most to are Hispanics, Asians and whites, not blacks.
Anthony, I agree with that. I think the VRA issue will help, but it's maybe 5% of the problem and it depends on what the Republicans in those states do with it. If they go nuts, it will get worse. But if they stay rational, then this little chunk of the problem goes away.
But the real change will come from immigration reform and a new tone. That should make a HUGE difference unless conservatives continue their tantrum too much longer.
Interestingly, the hourly news reports have already shied away from stories about how horrible the SCOTUS decision is for blacks. Instead, they are saying it's Hispanics that will suffer. First of all, I don't buy it. Furthermore, if blacks don't have to worry anymore, then the VRA has served its purpose.
It's also interesting b/c the shift basically tosses aside Ginsberg's dissent, which is little more than an insistence that blacks are still discriminated against b/c Ruthie says so.
I think the basic underlying issue between Repubs and Dems is that Dems look at people as a member of a group. That's why they are so quick to label......."Southerners, Blacks, Whites, Hispanics, Evangelicals,...etc." Because Repubs tend to look at people as individuals and "Americans" there policies tend not to have a built in constituency so NO ONE identifies with there views. Example, if you agree with a Republican issue you are a "......."
If you disagree, you are a "......." One would be a negative affiliation the other a member of a particularly named group. One pejorative, the other a group label.
We all know this, it just is quite frustrating going through life labelled as one of the most racist, homophobic, misogynistic haters ever. While those that disagree with our stance are noble, put-upon members of a victim group.
I think I just lit a fuse on fb re the VRA. My lib cousin (yeah, that one) reposted MoveOn's "shame-shame" for the SCOTUS decision and I responded "Hallelujah". I also followed up with "or at least a step in the right direction... most of the Voting Rights Act is out-dated, unevenly and unfairly applied, and used as a boogeyman." But I figure she'll either totally ignore me, passive-aggressively ignore me (post bunches of more shame-shame without actually responding to my comment), or explode all over me...
rlaWTX, Wear a hazmat suit just in case she explodes all over you! :)
What's ironic is that I'll bet you she doesn't even know why she thinks this is a bad thing.
tryanmax, I think the MSM has decided that blacks are played out politically... so arguing about this being bad for Hispanics is a way to try to latch onto a new group.
Patriot, I try not to take it personally, seeing as how the people making the charge are hate-filled retarded hypocrites. It's kind of like being called stupid by a booger-eating ten year old... hard to take it seriously.
Andrew, I have to agree on Obamacare. I’ve already been to a couple seminars and had private presentations by a payroll service company on the law, and education is not the problem. The reality is that the law is still not written because, 1) there are not final regulations; 2) DHHS has way too much authority to waive, intervene, penalize, and reinterpret, without any external oversight; 3) no one really knows how the law will inter-operate with the tax code; 4) the Patient Advisory Board is unelected, uncontrollable, and unaccountable, yet has authority over life and death decisions; 5) the DHHS, the IRS, the DOL, and the SSA are all required to interact with each other flawlessly for the law to work, which is about as likely to happen as Michael Moore is to avoid a donut.
The payroll service’s solution (if you can call it that) is to offer their services as a PEO, a professional employment organization, to small businesses. It’s not a bad idea in that you get economies of scale for insurance, because your employees become part of a larger pool with employees from other businesses, and the PEO bites the bullet on all the penalties that I guarantee will occur automatically under this law. The general compliance costs of Obamacare are going to be ridiculous, given that employers have additional wage and insurance reporting requirements to DHHS under the law, plus new hire reporting, and this is regardless of the size of the employer. Yet although the PEO sounds like a helpful stopgap solution, this particular payroll service is specifically rejecting companies that have a higher preponderance of employees with health risks, because they want to keep the overall insurance premiums low for all of the companies participating.
How many companies do they reject, you ask?
60%.
Does that sound like a law that lets you keep your insurance, if you like it? And who gets rejected? Oh, that’s right, those businesses with employees who are older, in riskier occupations, or in communities that demographically show higher health risks. In other words, those populations who have trouble getting health insurance right now.
And better yet, our existing insurance premiums will rise between 20% to 100% in the next year, based on this payroll service’s estimation. Group plans will tend to fare better, but those with individual policies are completely and utterly screwed.
Nothing is clear about the law. The mandate isn’t clear as to how it’s applied and who will (or can collect). The exchanges haven’t been successfully established. The application process for the exchanges is complicated, and probably nigh on impossible to complete without assistance for many of those who actually need the federal insurance. We are going to be required to provide proof of insurance with our tax returns, which means many more people will have to file tax returns who didn’t have to file before; another useless cost to the impoverished that this law was supposed to help.
I know that if I’m being educated by payroll companies and the like, they’re also out there educating all sorts of other businesses. The DHHS can beg the NFL and NBA to endorse Obamacrap all it likes, but the companies mentioned in the Gallup poll aren't going to be convinced by any Gatorade-slurping athletes that everything is going to be hunky-dory.
A final note on the liberalism of economists: macroeconomics is not a science. Macroeconomics is a philosophy, and Marx and Engels envisioned communism as a methodology for enshrining philosophers (who toe the line) as part of the well-paid, well-connected government elite. To do so, those economists must promote and propagandize government action by reverse engineering an appropriate economic rationale. This is why we can look at any random Nobel-prize winning Krugman column and say, “Dear God what bullshit,” and move on.
Andrew,
I suspect the media is focusing on Hispanics because they are the ball in play.
Anyway, some white Democrat thought it would be a good idea to call Clarence Thomas an Uncle Tom on twitter. He has both apologized and stated that he said nothing racist. I doubt there will be much of a backlash
wahsatchmo,
"Dear God what bullshit" is exactly what I think whenever I read anything by Krugman. I actually find myself wondering if Krugman isn't in reality a genius who is just have a lot of fun with the morons around him by trying to write stuff that is so stupid no one can buy it and then watching to see who buys it.
Everything you say about Obamacare is correct. It's a bureaucratic nightmare that is only half-baked at this point and which is going to exacerbate all the the worst parts of our system. Everyone is going to get hurt, but the poor, the middle class, and small business will be hurt the most.
I suspect that, in the end, everyone will pay more, more people will get inferior care, and I think you're going to see a lot of people lose their insurance. It wouldn't surprise me if ten million more people end up uninsured than before they started. It will be interesting to see them explain that.
At the same time, job growth will continue to suffer and I expect that a lot of people will find themselves with severely reduced hours and benefits all around. This is a great time to trim other costs, after all.
That's an interesting thing you mention about them creating a PEO. That's going to distort the heck out of the labor market, that's for sure.
Anthony, I agree. I think Hispanics have become the media "go-to" minority since the became the largest minority group in the early 2000s. I've even noticed that blacks are vanishing from sitcoms and being replaced by Hispanics. I guess diversity only extends to one minority at a time?
As for the liberal, I doubt there will be a backlash because liberals never hold liberals accountable for their actions... only their intentions. And clearly, his intentions in saying something hateful and racist were to make a statement about how evil racism is... when other people act that way.
Andrew, another "feature" about the law is that since insurance can't really preclude coverage based on pre-existing conditions anymore, they will rely on demographics to effectively do so. In other words, if your business is in a state with a lot of retirees on Medicare, that fact will increase your insurance premiums for your young, healthy employees even though that elderly populace isn't participating the private insurance market.
I'm not sure if it was possible to write the law any worse than they did, other than to mandate mass abortions based on racial preferences. Which they may well yet do, so I shouldn't give them any more ideas.
wahsatchmo, I know. I look at this thing and I just shake my head that they basically did it wrong at every single turn. It's a level of incompetence that is staggering. It really is like they got every single decision wrong throughout this process.
On excluding the sick, I've seen a lot too about them trying to dump spouses because they cost more, about them trying to squeeze out older workers, trying to squeeze out sick workers, and laying on the punishments for things like smoking and being overweight. This thing is going to be brutal to American workers.
Fortunately, the Democrats will be taking the blame for everything that goes wrong and then some -- everyone who feels they got shorted in the process (basically everyone except some people on Medicaid) will blame the Democrats.
Vox Day linked to a Reason interview with Nassim Taleb, who is briefly questioned about Krugman.
As he says, "All these economists, risk is not their thing." Other People's Money. Government backstops.
When businesses envision leverage in regard to debt, they see their assets as a stick. This stick can lift, say, a 100 lb rock. They go to their bank to get a loan based on the fact that their stick can lift the 100 lb rock, and they need to move a particular rock. The bank says, "Fine, but you can only use the money to lift an 80 lb rock or less. Otherwise we'll take your damn stick that can move a 100 lb rock."
That's risk.
The financial sector doesn't have risk. They only have to maintain a relatively small percentage of assets to lever an enormous amount of obligations (investor deposits), expressly by regulation. They hold a stick that can lift 20 lbs, yet borrow enough money to move 100 lbs rocks. It's the exact opposite of how general businesses must utilize their leverage, and the financial sector only serves as a gatekeeper to the market, while skimming fees from transactions and investment yield off other people's capital.
Plus, as the MF Global situation has now established, the money you deposited in your bank is not your money. It's the bank's money, and it's an unsecured promise to you to pay you back.
The financial sector doesn't care if it loses its 20 lb stick. They borrowed enough to move 100 lb rocks in the first place, and they can use Other People's Money to repay secured creditors. Plus the government (assisted in reasoning by great thinkers like Krugman) has shown its interest in never letting another bank fail.
I think you're right, Krugman is not actually an economist. He's a performance artist in the vein of Andy Kaufman.
PS: I should update my analogy: banks have become so recalcitrant to lending to businesses that they no longer look at what the stick can lift (the value of assets), they only look to whether the stick is polished annually (the cash flow of the business). They're not wrong, necessarily, but has been no such revision to the financial sector's borrowing tests.
wahsatchmo, A performance artist! LOL! So true.
I like your bank analogy. I think something has really gone wrong with the banking model now that the "investment banks" have been allowed to eat depositor banks. From what I can see, they are using money that was meant to be held relatively safely and which is guaranteed by Uncle Sam to engage in wild trading activity while weaseling themselves into IPOs and M&A activity. If things go right, they get super rich on fees and the payoffs from their trading risks, riches they pass out to their partners and principals. If things go wrong, we bail them out while they still pay their partners and principals. At the same time, they've stopped lending to "the little people" because we aren't worth the time to them.
So basically, the banking system barely exists the way it has been envisioned for 1500 years now, with people putting their money somewhere safe, where they can get it back or take out loans for smart risks or homes. Instead, these things have become risk-free slot machines for multinational hangers-on.
China has all the problems you mention but your view is too narrow. Yes, parts of China may be stuck in third world mode forever. Yes, they mostly make cheap stuff for other countries. But first, it doesn´t take all of China. What it takes is the equivalent of a couple more Taiwans to clean our clock. And they will inevitably have that.
Second, at least they can make stuff. It counts. Modern manfacturing is not just "metal bashing", it is a very complex and sophisticated art. It is a core competence which you lose if your factories are overseas - or if you don´t even own them, which is what US CEOs seem to prefer. This is true of cars or machine tools or ships but even more so of the most typically "American" products like an iPhone or Kindle. We couldn´t build an iphone or Kindle in the US if our lives depended on it. If we tried, WE would be the ones putting together hightech components for which we do not have the technological and industrial base anymore.
I would not want us to be China (and if I ever meet Thomas Friedman in a dark alley he will find out about it) but we are far too complacent. We must do better and China´s relative failure will not help us.
El Gordo, LOL! That's exactly why Friedman avoids dark alleys! ;P
From everything I've read, the US mainly does high end manufacture, and China does not. And keep in mind that while a lot of people want to write off the US as a manufacturer, that's simply not true. We are neck and neck with China despite our higher costs. And like I said, the word is that rising wages in China have given the US the competitive edge for new factories. Times are changing.
I work for a small manufacturer in the scientific industry (chemical analysis and such) and following a brief panic in 08, we've been hiring steadily ever since. We've also acquired two companies in that time and signed more contracts with the bigger manufacturers than I can remember. From what I understand, our experience is a smaller scale of what the big boys are experiencing. But here's the catch: we don't make a single thing you would ever buy for yourself and would probably never
even hear of except maybe in a lump of jargon on CSI. Short version: China is making a lot of cheap things that you've heard of. The US is making the things that make the things, (and QC test the things, and maintain the things, and clean up after the things).
tryanmax, That's exactly right. The US makes high end things and things that make things -- like robotics. We don't make the cheap stuff (like shirts and shoes) because our cost of labor is still too high.
That said, we do make much more than you think. We make German and Japanese cars in several southern states. We even make some appliances. Roper appliances are part of Whirlpool and they are the identical machine made in the US instead of Mexico... with much higher quality.
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