Why Government Shouldn’t Try to Pick Winners

Whenever the government meddles about in any given market, trying to designate its preferred winner or outcome, it invariably fails.  Right now, the Exalted One is involved in doing just this on a number of fronts; the auto industry, the energy industry, the medical industry, the financial industry and so on.  In the auto industry, The One gives us the Chevy Volt:

Not a bad looking car.  But you can get a non-hybrid counterpart from Chevy for about $25,000 less.  Chevy had more or less mothballed the Volt until the government bought 61% of them and ordered the Volt to be brought to market.  Obama, you see, knows what we want better than we know what we want.  Prediction:  neither the Volt nor its lower-cost counterpart (the Cruze?).  See, that’s how I know it won’t sell.  I can’t even remember the name of the car.  But, because O wants to see “green” stuff (let alone the fact that there isn’t anything significantly more green about the Volt), the Volt gets built.  It’s suits his political purposes.  Sometime in November, O is going to force GM to go public and it has little to do with whether or not it makes good business sense.  It will happen because it suits O’s political purposes.

For decades, government has mucked about in the housing industry.  Mortgage interest deductions, Fannie and Freddie doing their thing with the sub-prime stuff, flood insurance and so on.  Here is proof that all this centralized planning (and that is what it is) has failed.  18 months and billions of dollars and the Moron in Chief still thinks that throwing another $50 billion or so at the economy will somehow magically cure it.  Here is an open letter to the President by Dr. Jeffrey Harding, an economics blogger that tells him exactly what the problems are and how to address them.  The blogger is right on every point.  (BTW, any time you read an econ blog you must read the accompanying comments.  They are frequently better and more informative than the original post.)  From ZeroHedge:

“Here are some guiding principles for "what works":

1. Economies can repair themselves without a lot of government help. History has proven this time and again.
2. Government interference in the repair process can hinder recovery or even make things worse.
3. Government spending is very inefficient.
4. Individuals can make better choices about what to do with their money than the government.
5. Economic growth only comes from private enterprise. The corollary of this is that government can only spend money, not make money.
6. Since government produces nothing, then real growth and real jobs can only come from private enterprise.
7. If government spending is inefficient and if economic growth comes only from the private sector, then taking vast amounts of money out of private hands and putting it into government hands will hinder growth.
8. Government spending to revive an economy has failed wherever and whenever it has been tried.
9. More legislation increases uncertainty for businesses, making them reluctant to expand (called "regime uncertainty" in economic terms).”

As noted in the comments, this viewpoint and the accompanying advice will be ignored.  It doesn’t fit with O’s worldview.

This just in and related to this post.  Austan Goolsbee is on the Prez’s Council of Economic Advisers and may be up next to replace the horribly inept Christina Romer.  This admittedly wonky piece basically sums up what I have been trying to say here.  So-called “targeted” spending or incentives don’t work, and Goolsbee based his doctoral thesis on this finding.  Now, he has to dance around his own work.  Should be fun.

Finally, here is what happens when a politician goes off the deep end when it comes to spending money based on his own preferences.  Learn about Russia’s Chess City, built in 1998 on the whim of a politician.  Why, he likes chess so everybody must like chess just as much! 

Chess City is crumbling, by the way, and largely uninhabited.  So, what color Volt are you gonna buy?

Not My Mom

Sending this to FailBlog next:

 

Thanks, Senator Hagan!

Senator Hagan:

Thank you so much for the "Carolina Connection Special Edition: Health Care Facts" newsletter that you sent out earlier this evening.  Since I wrote you several times during the debate over the Health Insurance Reform bill, I appreciate seeing an update from you.  I know that you worked hard to put this together.  Alas, I see that you have called your newsletter "...Health Care Facts" when in fact, it appears to be largely about Health Insurance.  Well, except for the flu shots.

I thought that I would provide you with some additional information that Mssrs. Emanuel and Axelrod may not have provided to you.  In fact, I have reproduced your newsletter below and you will see my responses in blue.

Carolina Connection Special Edition: Health Care Facts newsletter begins:

In March 2010, the Patient Protection and Affordable Care Act

and the Health Care and Education Reconciliation Act

became law. So much information is circulating about health care reform, and sorting through it can be overwhelming and frustrating. This newsletter will help explain what the law does and what it means for you and your family. Other useful information about health care reform can be found atwww.healthreform.gov

.

Starting in the First Six Months...

• Insurers are prohibited from dropping coverage when you get sick.  Sounds great!  How will that affect premium costs? 
• Children with preexisting conditions will not be barred from coverage.  Excellent, I'm OK with this in principle, but again, how will this affect costs?  My expectation is that the insurers will estimate the added cost of a known condition and have no choice but to price it into their policies.
• Young adults up to age 26 can stay on their parents' plans.  As a father, I appreciate the sentiment, but I would prefer that my daughter learn to provide for herself.
• No more lifetime caps on coverage.  Well, this can only drive costs up.  You just invited the whole country to an all-you-can-eat buffet.  I will make a further projection; costs will rise rapidly to extract as much revenue as possible in as short a time as possible.
• Seniors hitting the "donut hole" will receive a $250 check.  Well, OK, the whole donut hole thing was dumb, anyway.  But why a check?  Why not just close the hole?  Why add the administrative cost of cutting a check for several million people?
• Eligible small business owners can receive a tax credit to help pay for health insurance premiums. I have a better idea:  cut taxes permanently in stead of "allowing" business owners to get a credit.  To a small business, cash flow is king and you are forcing small businesses to flow the cash out up to 16 months before they get the credit back.  That's called negative cash flow.  Why not a tax cut, which would create positive cash flow?

Middle Class Families

For middle class families, reform means:

• Tax credits will be available for almost one million North Carolinians to make health insurance more affordable. Again, I would rather have a permanent tax cut, not a deferred tax credit.  Cash flow is important to families, too.
• As many as 2.3 million children in NC will no longer be denied coverage because of a preexisting condition.  Who pays for that?
• Preventive care services, including well-child visits and annual flu shots, will be available at no extra cost.  OK, I'm calling an intentional foul here.  "At no extra cost"?  How do you provide all that for 2.3 million without incurring extra cost?  Will the doctors and vaccine makers simply donate their goods and services?  Somebody, somewhere will have to pay for that.  Who do you think that will be?  I deem this an intentional foul because I think you know that but you are waiving that phrase in front of less-careful readers.  After all, 24% of Americans think that "the government has money on its own without using taxpayer money".  See column here

  for source.  You are playing those people for suckers by saying "no extra cost".

Click here

to read more about the benefits for North Carolina's hardworking families.

Seniors

For NC seniors, the new law means:

• 247,000 NC seniors in the prescription drug "donut hole" will receive a $250 check this year.  See previous.
• The donut hole will be incrementally closed over the next several years until it is completely closed by 2020.  See previous, though this will also increase cost.  Still, the donut hole was silly to begin with.
• 1.4 million NC Medicare beneficiaries will have annual wellness visits and preventive services at no extra cost.  AAARRRGGGHHHH!  There you go again!

Click here

to learn more about the benefits for North Carolina's seniors.

Small Businesses

• Over 120,235 NC small businesses are eligible for tax credits to make premiums more affordable. Businesses won't have to choose between providing insurance and cutting jobs.  Wrong.  We need permanent tax CUTS, not credits, for cash flow reasons.  Worse, these credits phase out with the 26th employee.  The marginal cost for that 26th employee will be so great, that companies will be very hesitant to get much bigger than 20-24 employees.  Here, look at this short paper

  (PDF) for an excellent summary of this effect.

Click here

to read about how the new law will support small business owners.

Health Care Reform and NC Job Growth

• By slowing the health care cost growth rate and allowing businesses to expand employment, researchers anticipate that NC will benefit from as many as 7,100 - 11,400 new jobs per year over the next ten years.  Well, that isn't very many in a state of nearly 10 million.  No less an expert than Fed chairman Ben Bernanke testifying before Congress on April 14 said that job growth will be "slack"

  for years.  And then there is this, from CNN, headlined "Say Goodbye to Full Time Jobs with Benefits"

  .

For more information about how the law improves care and reduces costs, click here

.

Hagan Accomplishments

Senator Hagan included the following provisions in the new law:

• Rural Physicians Pipeline Act to address the shortage of primary care doctors in rural communities.  Good luck, hope it works.  But since I read that many doctors are choosing to get out of the business, I wonder where we will find the doctors we will need to treat the extra 30 million people that will be put on the plan.
• Catalyst to Better Diabetes Care Act to move toward reducing the diabetes epidemic. Exercise and diet.
• Medication Therapy Management Program (MTM) to save money and help seniors better follow their medication regimens.  Sorry, don't know what this one is.  Are we going to have someone visiting people and checking on their medication regimens?  Really?
• An amendment with Republican Senators Mike Enzi (R-WY) and Orrin Hatch (R-UT) to create a regulatory pathway for generic biologics.  Token Republican mention here all the way at the very end of the newsletter.

Senator Hagan, going through this little exercise has really clarified for me something that I knew all along and it is this:  Neither you nor the rest of the Democrats in Washington gave any thought at all on how to pay for this thing.  You have unleashed the law of unintended consequences in a very big way on our country and the effects of this will be with us for decades.  Right now, Canada is looking into ways to move to a more market/consumer driven model.  Britain's health care service is spewing red ink faster than the Deepwater oil well.  The Congressional Budget Office now points out that the bill will NOT hold costs down.  I refer you to the blog of the Director of the CBO, found here.

  It would have been nice to know this before you voted for the bill, don't you think?

See you at the ballot box!

DaveyNC

Vote ‘em Out

 

Here is your list of Socialists.

Bastards.

I Blame Tom Delay

 

And, to a lesser degree, Newt Gingrich.  And W.  And Trent f’n Lott.  Damn them, it is their fault that we are about to flip socialist. 

Why these guys?  It all started with this, Delay’s “K Street Strategy”.  This is where the fiscal irresponsibilty, corruption and appearances of corruption began.  The K Street Strategy, in a nutshell, consisted of Delay twisting the arms of the K Street lobbying firms to send the vast majority of their money to Republicans and to even remove Left-leaning lobbyists from their positions and replace them with more Right-leaning types.  In return, the lobbyists and their clients got what they wanted.  It was vote-buying in it’s most bald-faced form; a scorched-earth strategy and the earth has been fucking scorched to shit right now.

This strategy led to a surfeit of money in Republican coffers and then to assholes like Ted f’n Stevens and his goddamned Bridge to Nowhere.  And it was this effect that so thoroughly discredited them as fiscal conservatives to the point that we elected a Socialist and allowed the even more Socialist Pelosi, Waxman, Markey and so on to take the reins of government.

The article linked above appeared in the Washington Post, co-written by David Maraniss and Michael Weisskopf in 1995.  They were never more prophetic than when they wrote this, emphasis added:

“Yet money is also the source of increasing tension among House Republicans that could ultimately weaken them, if not tear them apart. The conflict, in essence, is between ideology and populist reform. One wing wants to collect as much corporate money as possible to sustain and expand the revolution. Another wing fears that this will disillusion voters who brought the Republicans to power to change the traditional ways of doing business in Washington. Gingrich stands in the middle aware, people around him say, that his tenure could depend in part on his ability to resolve the conflict.”

Newt, Newt, Newt.  You blew it.  If you saw the tension here and let it go unimpeded, you laid the groundwork for yours and America’s demise.  All those Lefty nutbags back then hated you because they thought that you would ruin the country, and they were right for the wrong reason.  The country is about to take a road that it cannot return from.  The nutbags wouldn’t be orgasming today over Obama had you simply put your foot down on this activity and set the tone then that Republicans should hew to the principles of fiscal conservatism that is so important to conservative voters.  And then along came W with an allergy to the veto pen and here we are.

Folks, it’s gonna be a long, slow descent into European-style malaise.  We get to watch China, Asia and Brazil take center stage on the world now. 

Watch now, once this crap passes on Sunday, as hiring by private companies goes nowhere.  Companies have been waiting to see what would happen with this and other bills and the only conclusion they can come to now is that their costs are going to permanently and unalterably increase.  No CEO in his right mind would take on added costs in this environment.  Get ready for permanent 10 to 12% unemployment.  We won’t have jobs, but we’ll have health care.

I wonder if I can get my congressman to put provisions for nutrient ingestion in the bill?

Obama Fail

 

Or it will soon be a fail.  Again, the ego gets in the way. 

“President Obama kicks off what might be called his "Save the Senate" tour this week, heading west to campaign for two embattled Democrats trailing badly against Republican challengers - including Senate Majority Leader Harry Reid of Nevada.”

He has this unfailing belief, it seems, that his mere presence assures victory.  It didn’t work in in Virginia, New Jersey, Massachusetts or for the Chicago Olympic bid.  It won’t work for Harry Reid; Reid is so far down in the polls that he must know that he has little, if any, chance to be re-elected.  Bringing Obama out to the desert isn’t going to change that for the better, at all.

Obama will be able to raise money for Reid and Michael Bennet of Colorado, but it will almost certainly cost them votes, especially Reid.

More Loss of Privacy on the Way [NSFW] [UPDATE]

 

Many people have likely seen this image by now, if you are on the interwebs much at all (Try to ignore Janet Napoletano doing an Obama and looking down her nose at someone.  Shouldn’t be too hard to look at the x-ray image.):

Nappy-J assures us that these images do not represent an invasion of privacy.  We are about to spend a few billion to buy and install these body scanners at, apparently, every place that has ever had an airplane parked at it.  That’s a fairly revealing picture all by itself.  But look what happens to it in the hands of a geek with a copy of Photoshop:

I don’t know squat about using Photoshop (note to self: check local community college for Photoshop lessons), but according to Gizmodo, this must have taken all of about 20 seconds to do.  And of course, the instant they had done it, they launched it off into cyberspace to show their skilz. Of course, this also demonstrates how woefully incompetent Nappy-J and her crowd are when it comes to what can be done with commonly available software.

We are going about airport security all wrong.  The recent Christmas day bombing attempt was not a failure of technology, it was human error and all the tech in the world will not prevent that.  Jeez, was it Newark airport that got shut down recently because some TSA agent walked away from his post for a minute or two and some dingbat took that as a good time to kiss his girlfriend one more time?  Thousands of people were stopped, millions of dollars of cost and delays ensued as the TSA over-reacted.  That was human error and it took all of one thoughtless decision on the part of the agent for it to happen.

UPDATE:  I was right, it was Newark.  Just found this little gem from Reason TV:

Just Damn….

Look at this damn thing:


That big red bar on the far right there looks like somebody turned on a spigot.  Courtesy of SayAnythingBlog.  I’ll be charitable here and allow that $800 billion or so of that is TARP money, which I agree was necessary.  If you were looking to invest in a business and you saw the revenues take the dive that they do in 2009 while the spending goes through the roof, you would run screaming from the broker who is trying to get you to buy this pig.  Jeez, the deficit is roughly equal to all of the tax revenue.

We cannot get out from under this any time soon and Unicorn One, along with Pelosi, will blow this thing up in 2010.  I don’t care if Obama has suddenly discovered that he is using Monopoly money, this is unsustainable.

Obama on Afghanistan

 

Obama has clearly learned that actually being the man charged with making a decision is hard. It's damned easy to run around the country in a campaign and read teleprompters that tell you to call for the end of the war and another thing entirely to suddenly realize that he can't just vote "Present" any longer.

True to form, he straddled the whole thing. McChrystal asked for 40,000 troops; Obama sends him 30,000 and no doubt congratulates himself for his Solomon-like (in his mind) decision for halving the infant. It's a half-measure, calibrated to calm critics on both sides of the aisle. Eighteen months isn't enough time and he knows it, but that coincides nicely with the next Presidential election, so he tosses that number out. These are not decisions made to win the war; they are intended to buy time and relieve pressure on himself.

What a cynical, no-balls move from the President. Not that he deserved it, but the nobel committee should rescind their peace prize* award.

 

*never capitalized here ever again.

Something Doesn’t Make Sense Here

 

Have a look at this photo of Tiger Woods’ car, after his crash:

 

Photo courtesy of TMZ.com, via the Washington Post.

Tiger’s wife, Elin, supposedly bashed out the rear window with a golf club so that she could get him out.  OK, why?  Look at the driver’s side door.  No damage.  Why wouldn’t she simply open the door and pull him out?  Because she was whalin’ away on the car, that’s why!  And the story that they have told is an attempt to explain how the back window got shattered when not even the windshield in this frontal impact was damaged.  And check out the gangster dubs being sported by the billionaire.  Sorry Tiger, the photographic evidence does not support the weak story.

Unprecedentedness

Hey, if you’re going to do something that hasn’t been done before, you might as well raise the bar really high; like, doubling the previous record.  This would be the equivalent of Usain Bolt running the 100 meter race in 4.79 seconds.  President Obama has doubled the budget that even George W dumped on us.  He’s done this in just eight and a half months in office.  He’s already spent one-fifth of the total that Bill Clinton spent in his entire eight years in office.

To be fair, spending comes from Congress, though they are often acting on a President’s demands.  One of the most dangerous times for our freedom and financial safety comes when we have stupidly managed to give one party control of Congress and the White House.  We did this with W and have done it again with O and the result is ruinous.  An economy in collapse, trust in government shattered, a country ideologically split.  I told everybody I could back during the election, when it became clear that Obama would win to go ahead and vote for him but to vote Republican for Congressional and Senate seats in order to emplace a forceful opposition to Obama.  (This was pre-blog, so not on the record anywhere; you’ll just have to take my word for it.)

So now we have a leftist President handing off the heavy lifting to the even more leftist Nancy Pelosi and the dweebish Harry Reid.  Obama sets the course and Pelosi and Reid push the spending through to advance their agenda and they seem to have little to no understanding of how the real world works out here.  They are finally making noises about juicing job creation but amazingly, they think that they can do that by raising taxes and heaping the health care entitlement onto the backs of business.  If the health care bill passes, we will get to see another spike in the unemployment rate and it will be permanent this time as businesses either leave the US or retrench in such a way as to function on lower revenues and with less staff.

Callous Children.

WTF???

You really gotta wonder what goes through people's minds:




At least it's not scrambling a couple of hundred rescue personnel the way Richard Heene did.

The Smartest People in the World

God save us from these smart people.  They would tell you that they mitigated their loss and that they did a great job keeping it to only $500 million or as their CFO was quoted,  "In evaluating our liquidity position, we wanted to get some stability and some safety."  Which is the over-diploma'ed way of saying, "Jesus H. Christ, we can't pay the bills if we get tagged for this!  Quick, buy our way the hell out of the deal!"

Herd mentality took them into the swaps in the first place as the article points out that Yale and Georgetown, among others, also got caught.

These smart people are running our financial markets, our government, our media and most of our businesses.  Smart is useless if it is not coupled with both common sense and integrity; without those two things it leads us to where we are now.

And now for some full grown bastards.....

Just announced; the Dems have cleared the way to pass the health care bill via budget reconciliation.  In other words, after a summer of shouting at them and telling them we don't want it, they are going to ram it down our throats anyway.  This is not the way that a representative democracy is supposed to work.  The bastards work for us, not for themselves.

More Smart Diplomacy

If our diplomacy gets any smarter, we're gonna have global thermonuclear war.

Supposedly, the Russkies never believed that we could pull off SDI, or the "Star Wars" defense.  So why have they always been so adamant that we stop developing/deploying it?

Because they know we can do it and they can't.

Jumping the Shark, Obama-style

He did it; he just dealt his own Presidency a severe blow.

Ours is a celebrity-obsessed culture and right now, there are no bigger celebrities in the US than Barack and Michelle Obama and Oprah.  And they just failed and in so doing embarrass themselves, their city and their country.  Without question, Obama's involvement in this effort was test of his popularity on the world stage and he lost big.  Which means we lost big.  I care not one whit for the loss that Chicago has sustained, in terms of money.  I care greatly for the loss of prestige for that great city, for the loss of prestige of the Office of the President and for the loss of prestige for our country.

More to the point for Obama, this diminishes his celebrity-hood.  And it was that celebritiness that got him elected in the first place.  When the 52 percent begins to come to the realization that he ain't all that (and that is happening as I write this), his popularity will drop to Bushian levels.  At least Bush has the comfort of knowing that he held to his own moral compass.  Obama can only reflect that he has failed more often than not, especially in the international arena.  Just embarrassing for us all.

I cannot for the life of me fathom what he was doing.  He is a trained lawyer, fer cryin' out loud!  First rule of being a lawyer is never ask a question you don't know the answer to.  First rule of being President is never risk loss of face in foreign matters without already having the deal done.

We have a naive, unworldly, suit-wearing, smooth-talking, shark jumper for a President.

Never Mind how the White House spins it...

...look at how the media is already spinning it; Not Obama's Fault:

BBC News' Adam Brookes in Chicago: "The shock of Chicago's elimination was greater for the fact that it came in the first round. And greater for the fact that President Obama had taken valuable hours from his packed and tense political schedule to travel to Copenhagen. His legendary powers of persuasion will be said to have failed him, though in reality it will be Chicago's bid that failed him. Nonetheless, this is a moment which allows the president's detractors to allege waning prestige on the part of his presidency. And it will raise questions about the political advice that he is receiving."

Amazing, they just can't admit that we have an empty suit in the White House.

What the hell was He thinking?

"Chicago Out in First Round"

That's Drudge's headline as of about 30 seconds ago.  What the hell was Obama thinking?  He stood to gain almost nothing by going to Copenhagen to stump for the Olympics and had a much bigger potential for an embarassment.  Now the naive Obama has not only managed to embarrass himself, he has embarassed the office of the President and he has embarrassed the country.  By getting personally involved in this effort, he gave the IOC the chance to embarrass the US and, by golly, they took it.

Our preening, insufferably egotistical President seems to truly believe that his mere presence is enough to sway all who would dare oppose him.  From what I heard, Rio put on a spirited, upbeat presentation and Obama's was somber and downbeat and, amazingly, all about Him.

We are well and truly screwed, folks.  If you are a Bush hater and you thought Bush was a poor President, you ain't seen nothing yet.  Bush at least had the courage of his convictions.  His biggest sin was that he actually did the things that he said he was going to do.  He followed through.  Obama, on the other hand, puts on his suit, lines up his teleprompter, drops in and says a few things in that wonderful voice of his and leaves.  Not gonna be bothered with the details or the results.

I just can't wait to hear how the White House spins this utter embarrassment.