Tag: Economics

MLLG Collection of Ultra-Short Posts

George Noga
Education spending before and after the lottery – Hate crimes really are political crime. Thirty reasons why Hillary lost – Participation trophies –  Americans’ New Way of Life
MLLG Collection of Ultra-Short Posts
By: George Noga – May 27, 2018

       From time to time we bale together a short stack of pithy topics that, although blog-worthy, cannot justify an entire 500-word posting; this is one of those times.

Lottery and Education: MLLG compared Florida’s per pupil spending on education before and after the lottery. The year before voters approved the lottery (1985), Florida spent $4,060 per pupil – equivalent to $8,000 in 2017.  Actual 2016-17 spending was $7,500 on a comparable basis – $500 less per student than before the lottery. This is unsurprising; anyone with a modicum of walking-around sense knew lottery money would supplant other money over time. What’s truly pitiable is that clueless teachers, who fervently bought in to this three-card monte, are still teaching our kids.

Why Hillary Lost: Hillary has proffered myriad reasons why she lost; following are a few she omitted: Marc Rich pardon, sniper fire in Bosnia, trashing Jennifer Flowers, Paula Jones, Kathleen Willey, Monica Lewinsky, calling half of America deplorable, cheating Bernie Sanders, Vince Foster, travelgate, Whitewater, cattlegate, troopergate, $15 million Chelsea condo with campaign funds, Loretta Lynch interference, accepting stolen debate questions, secret server, deleting 30,000 subpoenaed emails, destroying phones and hard drives, Benghazi, Haitian thefts, Russian uranium deal, Wikileaks, Anthony Weiner, compromising top secret data, Clinton Foundation pay for play, avoiding Michigan and Wisconsin and just being an all-around horrid person.

Self Esteem and Participation Trophys: Self esteem is unearned confidence and hence a lie. American students fed self esteem rate themselves high even though they score below average. Such students will feel good about themselves as they flip burgers while their foreign counterparts own the place. I once supported a charter school in a tough neighborhood. The students were indoctrinated in self esteem and bought into the hype as did their parents. Unfortunately, they learned nothing else; the school’s test scores tanked; the school failed and the students were even worse off than before but they had their participation trophies. Self esteem must be earned through achievement.

New American way of life: A guy with a girlfriend and 2 children receives $90,000 per year as follows. Buy a house, live with your girlfriend, don’t get married and continue to use your parents’ address. Rent to your girlfriend for $900/month paid by Section 8. Your girlfriend receives Obamacare, cell phone and utilities, $600/month food stamps and free college tuition. You each claim one child on your tax return and both claim head of household for credits of $1,800. Your girlfriend claims disability (easy) for another $1,800/month. Married couples get none of these benefits but by following this plan, as many now do, they receive $90,000/year. Is this a great country or what?

Airbnb and Uber Under Attack: Deep blue cities and states continue attacking Airbnb and Uber at the behest of their unionist paymasters. Progressives insist any two people can share a marriage but are adamantly opposed to two people sharing a ride or an apartment. Liberals likewise believe in a woman’s right to choose provided her choice is not about where to school her children, owning a gun, joining a union, buying health insurance and obviously not about sharing a ride or apartment. While Uber and Airbnb were investing in transformative technology, taxi owners were investing in politicians and morphed into powerful, politically connected, state-sponsored cartels.

Hate Crimes are Political Crimes: Millennia of conflict and confrontation were needed to purge the world of the notion that a crime against one person should be treated differently than the same crime against another person. Hate crime laws diminish the actual crime and contain different standards of justice for different victims. Whether or not a crime is a hate crime is purely a political decision which ultimately depends on whether charging a hate crime advances a certain political narrative. Hate crimes, thought crimes and hate speech are throwbacks to the middle ages and the inquisition.

Next: The second anniversary of the Pulse nightclub tragedy. Do not miss this one!

The Seen Versus the Unseen

George Noga
What we see is frequently far less important than what we don’t see. This is true
particularly for economic growth, international trade, climate change and poverty.
The Seen Versus the Unseen
By: George Noga – October 23, 2016

       Election issues, both real and fake, are viewed through the prism of what is readily seen and are juxtaposed against what is opaque or occult to most Americans. The seen versus the unseen is singularly germane for economic growth. The data Americans readily see are many years of positive economic growth and unemployment rates approaching historic lows. Looking only at what is seen, many people conclude the US economy is performing satisfactorily. But let’s look at the unseen.

     The US, in its eighth year of economic recovery, is averaging 2.0% growth in real GDP. Real economic growth since 1945 averages 3.3% and is 4.3% for the years following the prior 10 recessions. Had the US grown at the 4.3% post-recession average from 2009 onward, today real GDP would be $10,300 higher for every man, woman and child in America. The unseen 900-pound gorilla of economic growth is the $26,700 that is missing from every American household each and every year – forever. Had Obama simply achieved average results, we would be infinitely better off.

For foreign trade deals, what we can see are job losses, harm to affected industries and deleterious effects on communities impacted. The pain is visible, immediate, and concentrated, whereas the benefits are unseen, long term, opaque and diffuse. Every American household benefits $2,500 per year just from China – even if they manipulate their currency, subsidize exports and use cheap labor. The unseen benefits to Americans from foreign trade vastly outweigh short-term job losses and other impacts.

     For climate change, we see media reports of warming, melting glaciers, polar bears on ice flows, extreme weather events and receding arctic icecaps. The largely unseen is: (1) no warming for 20 years; (2) glaciers receding for the past 150 years; (3) record polar bear populations; (4) no increase globally in insurance claims for weather events; and (5) an increasing antarctic icecap which is 10 times the size of the arctic icecap. Completely unseen are the immediate benefits to humanity that could be realized if the trillions now being totally wasted on infinitesimal reductions in temperature were diverted to human needs such as disease eradication, clean water supply and nutrition.

     We are bombarded by media reports and images of poverty, homelessness and hunger although none of these conditions exist per se in America today. What we don’t see is that these conditions (which do still exist) result nearly exclusively from untreated mental illness and from a small cohort of Americans of low ability, i.e. those who struggle to fill out a simple form. These conditions, and their attendant social pathologies, are what result in poverty, hunger and homelessness. Political correctness prevents us from identifying and addressing the real underlying problems.

     We see gun violence whenever there is a shooting; we don’t see the 2.5 million times each year guns are used lawfully to prevent or to stop crime. We see that more Americans have health insurance; we don’t see the armies of under employed 29ers and 49ers and the high premiums, deductibles and co-pays. We see the spending but the debt and deficits go largely unseen. We see what is reported by the media; we don’t see many stories covered that run counter to the progressive narrative. We see what we recycle; we don’t see it going into the same landfill as all our other garbage.

What we see is often vapid and illusory and intended to beguile us into accepting progressive shibboleths and dogma. The unseen is frequently much more important.

The next post in our 2016 election series is scheduled for October 30.

Hurricane Warning!

George Noga

Hurricane season began on June 1 and provides the common thread for this post. It addresses hurricanes, climate change, price gouging and economics of storms

By: George Noga – June 5, 2016

    To observe the beginning of hurricane season, we address a trio of hurricane related topics: (1) climate change; (2) storm economics; and (3) price gouging. As you have come to expect, our analysis of these issues is not the usual pap you find elsewhere.

Hurricanes and Climate Change

    The last hurricane to hit Florida was Wilma in 2005. This 10-year hurricane-free streak dwarfs the prior record of 5 years that stood for 165 years. This is especially remarkable considering 40% of all hurricanes impact Florida. This decade of  clement weather follows dire predictions by global warmists that hurricanes would be more frequent, last longer, have stronger and more intense winds and cause more damage.

    Warmists also warned of  many more severe weather events worldwide. Munich Re, one of the world’s leading reinsurance companies, performed the first ever analysis of global weather-related losses incorporating normalization adjustments for inflation, population growth, wealth increases and other variables. Its study concluded there was “no statistically significant trend for total weather-related events in the past 20 years“.

    Let’s suppose a hurricane hits Florida. Global warmists and their media sycophants instantly will cite it as incontrovertible evidence of climate change. I hope we avoid hurricanes again in 2016; but if one should hit, brace yourself for the inevitable onslaught of self righteous prattle – but remember, it has been 165 years since there have been fewer hurricanes and weather losses are trending downward worldwide.

Hurricanes and Putative Economic Benefits

    It is a testament to economic illiteracy that this question persists in the 21st century. Yet, in the aftermath of any disaster, the media trot out this fusty canard. A reductio ad absurdum is all that is needed to give it the lie. If a mega-disaster struck destroying everything, we clearly are worse off despite any increased economic activity it may spawn in the short run. Following is an example of the relevant economic analysis.

    Postulate there is a small island with aggregate wealth of $1 million in homes and property. Economic growth is slow and some on the island are unemployed. A storm destroys the entire wealth of the island. The whole population works for one year and succeeds in rebuilding everything. Looking at statistics, GDP was $1 million, much higher than normal, and unemployment was zero. Yet the overall wealth of the island is unchanged and, in fact, is much less than it would have been without the storm.

Hurricanes and Price Gouging

    Americans accept that prices for the same product vary under different conditions. They understand why hotel rooms in small college towns cost more the weekend of a big game and why tickets for the big game cost more than a regular game. We readily accept all these things; why should it be any different following hurricanes?

    Take the case of generators. Entrepreneurs, at some peril, drive to other cities to buy generators to sell for what buyers willingly pay. Some may pay a lot if they stand to lose thousands of dollars of food stored in freezers; some just may want the convenience of electricity. Every decision and price is voluntary and non-coercive. Soon, the price of generators returns to equilibrium. With anti-gouging laws, everyone does without generators; any intrepid souls who supplied them are subject to arrest, public scorn and to pandering by economically illiterate politicians and media.

    There is no such thing as price gouging. Prices in free markets convey accurate, truthful and valuable information about the value of a good or service at a point in time. In contrast, government prices (think: rent control, rationing) always are lies. In which kind of society would you rather live – one based on voluntary cooperation of people in free markets or one based on government lies, force and coercion?

The next post on June 12th revisits the 2016 US national election.

Inequality in America III – The $15 Minimum Wage

George Noga

Advocates of the $15 minimum wage agree it is bad economics but justify their support on moral grounds. What is moral about putting poor people out of work?

By: George Noga – May 15, 2016

   The reference in the preheader is to California Governor Jerry Brown. His actual quote is: “Economically, minimum wages may not make sense but morally, socially and politically it makes sense. . . .” The previous year Brown stated raising the minimum wage would “put a lot of poor people out of work“. It seems that for progressives, creating more unemployment among the poor now has become a moral imperative.

    Governor Brown has company. As with all progressive causes, there are two groups of supporters. At the core there always are special interests, in this case labor unions. Many union contracts contain automatic built-in differentials over minimum wage. Unions also support it because it prices the poor and minorities out of the labor market, reducing competition for lower paying jobs. The second group consists of do-gooders who are both soft-hearted and soft-headed; they are, in-effect, shilling for the unions.

    Minimum wage has been a leitmotif in America since 1938 when it began at $.25 per hour. In nearly eight decades since, it has been thoroughly studied by economists and there is virtual unanimity among them that the economic effects are harmful. Economics doesn’t get more basic than when the price of anything (labor) is increased, there will be less of it. Children with lemonade stands understand this. Following are some other things you may not know about minimum wages in America.

1. Minimum wage affects less than one percent of all workers and most who earn the minimum wage do so for six months or less before receiving raises. Virtually no heads of households or full time workers earn the minimum wage.

2. The average household income for a family with someone earning the minimum wage is $50,000. Most receiving the minimum wage aren’t poor; they are spouses or teenagers living at home, like the kid who delivers pizza to buy gas for his BMW.

3. A majority of those in poverty don’t work; they need jobs, not a higher minimum wage. Raising the minimum wage makes it much harder for them to find jobs.

4. The young, poor, minorities and unskilled are disproportionately harmed by raising the minimum wage. Raising the minimum reduces the EITC (earned income tax credit) thereby negating much or all of the benefit of a higher minimum wage.

5. There is consistent and copious empirical evidence that raising the minimum is a death-knell for the poor and minorities; every time it goes up, they lose hundreds of thousands of jobs. With each increase, business has more incentive to automate or to relocate (if it is a state increase) and to put even more people out of work.

    It seems clear enough that raising the minimum wage does not reduce inequality in America; it does the opposite. Even though only one percent of workers earn the minimum, that still amounts to 1.25 million people. The last increase resulted in over 300,000 jobs lost – nearly all poor and minority. That is a recipe for more inequality.

    Progressives claim a moral imperative to raise the minimum wage, even knowing it puts poor people out of work. They do this for their own self esteem. However, the real minimum wage always is zero, zilch, nada and not what progressive kool-aid drinkers deign to make it. And zero, zilch, nada is exactly the wage many more poor people will receive with a $15 minimum wage. I have one word to describe this: immoral!

Part IV of Inequality in America – Reality versus Rhetoric – will be posted May 22.

Inequality in America Part I – Wealth and Inequality

George Noga

Is inequality of wealth beneficial or detrimental to society?

By: George Noga – May 1, 2016

    A persistent meme in America during this political season is inequality. We hear it from presidential candidates and Occupy Wall Street; it has been a liberal shibboleth for well over a decade. But what is inequality; is it good or bad; how is it measured; how much is too much; how much is too little; what is the reality versus the rhetoric?

    How much inequality exists in wealth, income, taxation and spending; is it increasing or decreasing? Does increasing the minimum wage alleviate inequality? Which government policies create or exacerbate inequality? How does inequality in America compare to Europe? What, if anything, should we do to increase or reduce inequality? We analyze these questions and more with facts and logic in this five-part series.

    Let’s begin with wealth. Socialists and Utopians want no inequality whatsoever but that has proven disastrous throughout human history. Nor is the paradigm of a few oligarchs or caudillos with great wealth amidst grinding poverty for the masses a desired model. In the real world, there is no Goldilocks point where inequality is just right. So, what, if anything, can we discern about inequality of wealth in America?

    An economic analysis of wealth in a market economy provides some lessons. It is a cardinal economic principle, and one recognized even in the former USSR, that the amount of newly created wealth is a good measure of how well an economy (or society) is serving the needs of all its people. In a capitalist economy, wealth is created by providing a product or service consumers voluntarily buy. Thus, a society minting many new millionaires is a boon to everyone – rich and poor alike – as it proves that the economy is innovating, becoming more efficient and serving people’s needs.

    Dynastic wealth often is viewed differently. Many who accept the nouveau riche rail against old money that was inherited rather than earned. Consider though, that one motivation of the person who created the wealth was to provide for his family and progeny, a universal human sentiment. If wealth was confiscated after the death of the creator, this surely would diminish the incentive to create the wealth in the first place.

    History informs that most dynastic wealth is dissipated within three generations by spreading it over more heirs and by poor stewardship. Furthermore, federal and state estate taxes take a 40% to 50% bite each generation. An additional large tranche of generational wealth is bequeathed for charitable purposes. Foundations (Ford, Hughes, Getty, Rockefeller, Gates, Templeton, et al.) have long played a key role in health, education, the arts, science and improving life for all Americans.

    The dynastic wealth remaining in tact after three generations is truly minuscule due to (1) spreading it over  an ever-expanding pool of future beneficiaries; (2) prodigal spending and poor investment decisions by heirs; (3) estate taxes every generation; and (4) charitable giving. Moreover, it continues to provide investment capital, benefiting the entire economy. Arguably, the acceptance of a modest amount of residual dynastic wealth is a small price to pay for the societal benefits of the original wealth creation.

    A logical deduction is that inequality in wealth is not only acceptable but desirable. People like Bill Gates or Steve Jobs  accrued great wealth because their efforts benefited hundreds of millions, or even billions, of people. Newly created wealth often is in proportion to the number of people benefited. Therefore, we can further deduce that even billionaires accruing great wealth (the top tenth of one percent), and the vastly increased inequality that results therefrom, is beneficial to everyone in society.

Part II  – Inequality of income, taxation and spending will be distributed May 8th.

Bottled Water and Socialism

George Noga
A simple bottle of water, available in stores for under a dollar, proves why
communism, socialism and all command economies are doomed to failure.
By: George Noga – March 27, 2016

       In the 1970s still water began to be offered for sale in the USA in single serving sizes. I knew sparkling water had been sold for some time and there was a market for bottled water in parts of the world where the tap water was not safe or of poor quality. But I thought “Who in America would pay for single serving still water when safe, good quality water runs Scott free out of faucets, water fountains and coolers?”

     I am trained in economics and like to consider myself as reasonably bright, possessing integrity and motivated to make the best possible decisions to serve my fellow man. Yet, if I were a 1970s era government planner, I would have prevented our economy’s scarce resources from being used to produce and distribute bottled water.

     I would have been dead wrong! Today, bottled water is the second largest beverage sold – ahead of both milk and beer. In 2014, 11 billion gallons ($25 billion) were sold in just the USA – equal to 34 gallons per American and this ranked the US as only 10th in the world. This was true despite its cost of around $1 for 500 milliliters which works out to $7 per gallon – nearly three times the price of gasoline.

     Education, training in economics, smarts and logic coupled with the very best of intentions would have proved incapable of discerning the preferences of my fellow citizens, the ambitions and creativity of entrepreneurs and the behavior of consumers armed with a free choice. If I had been the chief government planner in the 1970s, there would be no bottled water available for sale today in the USA.

     Yet, despite a government apparatchik being as totally wrong as I would have been about bottled water, no one ever would have known about my mistake because  no one could possibly have known what would happen with free people in a free market. And it isn’t just bottled water. There would be no copy machines or personal computers; IBM originally estimated the world market was for only 5,000 copiers and under 100 personal computers. There would be no internet as the cognoscenti of the time believed it would only be used by government and universities.

     The humble bottle of water we now take for granted proves all forms of socialism and command economies are frauds and conversely proves why free markets work.

The next post will be on April 1st; readers may think it is an April fool, but it isn’t!
MLLG

The MLLG Blog Returns for 2016 

George Noga
By: George Noga

      It’s baaacck! After taking 2015 off for reflection and discernment, the MLLG blog returns. To be sure, there are changes of which the principal ones are:

  • We have a new commercial email provider with greatly enhanced readability; with few exceptions (such as mobile devices and Roadrunner email), you will see exactly what was written in the format it was written;
  • Our website is being upgraded to contain past posts from June 2011 onward and new posts on a timely basis; there will be subject and chronological indexes as well as a section containing the best of MLLG writings. The new site should be 100% functional soon; when it is ready, we will let you know on these pages;
  • Posts are shorter – 500 words more or less – readable in 2-3 minutes;
  • Current events and opinion are emphasized; however, economic, political and human interest content continues – fact based and principled as always; and
  • Frequency is not on a set schedule but expect 3-6 posts per month.

There is no cost to receive posts via email or internet. We will not request financial support until 2017 at which time we may ask readers and supporters to make voluntary contributions. The costs of operating the blog are not onerous but are nonetheless very real. There are costs for using a commercial email service for tens of thousands of emails and for, inter alia, maintaining a domain name and website.

Why do we need another blog and what can MLLG offer that is not currently being provided elsewhere? If you stay with us for a while, you should agree that you are receiving perspectives not usually found elsewhere. The author’s background as a financial analyst, economist, CPA and high level political operative confers a special knack for combining fact, logic and insight – not to mention well over a half century as a keen observer of life in these United States and beyond.

We unabashedly approach matters from a more liberty – less government perspective but never – absolutely never – at the expense of facts or logic. We have many progressive readers who respect being presented with principled analyses, even ones contrary to their cherished beliefs. However, the MLLG blog is not intended to convert liberals – but to witness the blessings of liberty to a candid world.

      Enough explanation. The next MLLG post you will soon receive is a memoir of the days the author spent with Jeb Bush and Rand Paul. Not many bloggers have spent full days one-on-one with two 2016 presidential candidates. Other upcoming posts deal with the 2016 election, radical Islam, EPA carbon regulations, how bottled water gives the lie to socialism and a special multi-part series about guns in America. Stay tuned!

MLLG Special Posting – The VA Scandal

George Noga
By: George Noga – June 3, 2014
        The MLLG blog, usually written far in advance of distribution, has never devoted an entire post to a current, breaking news story. The Veterans Administration (“VA”) scandal is the exception because it is the perfect storm: (1) it is the poster child for public choice economics – a frequent topic of MLLG posts; (2) the VA is a sacred cow beloved by liberals; and (3) the scandal provides a stark preview of ObamaCare. Finally, the VA issue fits MLLG’s forte, placing a complex issue in perspective through fact-based and principled analysis – and all in about 1,000 words.
“The VA is a government jobs program that incidentally provides health care.”
        To be fair, the problems with the VA go way back – preceding the Omar Bradley Commission of 1955-1956. There have been 18 reports warning of the wait time problems just since 2005 – of which 70% occurred during the Obama Administration. Although Obama did not create the problems, his ineptitude and obeisance to public unions raised them to a new level. Also to be fair, the VA is not uniformly dismal and enjoys support among many vets – not altogether unsurprising from an agency that has $154 billion to dispense and which often certifies routine aging problems (heart disease) as service related and certifies maladies of dubious provenance as eligible for tax-free disability pensions.
“The real scandal is that the VA considers a 14 day wait to be very satisfactory. Throughout the private sector, wait times are measured in hours and not in days.”
        The VA problems have nothing to do with money. The VA budget has gone from $49 billion in 2001 to $154 billion in 2014. Just since 2003 the VA budget is up 106%, while the number of vets increased 30%. The government tends to throw money at the problem; but, just as with failing schools, no amount of money can ever fix the problem.
Real Causes of the VA Problems
        The cause of the VA mess is easily and fully explained by pubic choice economics which teaches that people respond to personal (not public) objectives. An illustration from the Soviet Union is instructive. Glass manufacturers in the USSR made windows too thin and they tended to break easily; they did this because they were evaluated based on the number of square feet of glass produced. To fix this problem, the erudite commissars changed the evaluations from square feet to pounds of glass produced. Thereafter, the factories began to produce uber thick windows with limited translucence.
       We can chuckle at the clueless Soviets, but the VA is no different. They were evaluated based on patient wait times and they responded in accordance with public choice theory – they rigged the system for their personal benefit. This is no different in principle from changing the thickness of glass due to different incentives. No one should be surprised. Of course, private sector workers also respond to personal incentives; however, business does a much better job of aligning personal incentives with those of the organization. Hence, it would be rare in the corporate world for endemic problems like those at the VA not to be immediately reported up the chain of command where action would be swift and where the failure to report negative information also would carry swift and strong personal disincentives.

        Following are some other more salient causes of the VA problems, although all are readily explainable by the theories of public choice economics.

  • In some VA clinics physicians see only one-eighth (12.5%) as many patients per day as in private practice. Each day the operating rooms are shut down by 3:00 PM. The VA is essentially a government jobs program that just happens to provide some health care – after patients wait 145 days and provided it is before 3:00 PM.
  • The VA is 70% unionized with over 200,000 unionized workers. Obama and the Democrats put the wellbeing of  unions above veterans. Public sector unions have hijacked the VA for their own aggrandizement.
  • Union work rules and seniority cause serious problems as, inter alia, unions have squelched outsourcing VA patients to reduce the backlog because outsourcing is a direct threat to union jobs.
  • VA scheduling software uses a DOS operating system – found only in museums – and 1990s era computers.
  • As to be expected, waste, fraud and abuse are endemic given the vast amount of funds and no accountability.
  • The wait time (Phoenix) to see a physician was 145 days from when a patient requested an appointment; much longer counting the entire process. The real scandal is that the targeted wait time (considered satisfactory) was 14 days. In much of the private sector, wait time is measured in hours, not days. In the early 1990s Kaiser Permanente had a 55 day wait but changed to same day scheduling. Within a year they reduced the wait time to one day.
Real Solutions to the VA Problems
        The near term future is as predictable as a Kabuki. First, liberals will claim the Shinseki resignation  brings closure to the problem. His resignation was forced not by Republicans but by Democrats up for reelection who desire to make precisely that argument. Second, there will be some short term patient outsourcing but it will end just as soon as the problem fades from view – the public sector unions will see to that. Third, government will throw some more money at the problem and they will claim victory. These raison d’etat actions will succeed in getting the issue off the radar screens of the toothless media watchdogs (and the public) until well after the next election.
“Worst of all, the VA is a precise microcosm and road map for ObamaCare. What is harming 25 million veterans today soon will afflict all 315 million Americans. Some, perhaps many, of us will die while waiting 145 days or more for an appointment.”

        The real solution, dear readers, will never happen. There is little or no raison d’etre to have a separate health care system for veterans; this makes no more sense than having a separate medical system for any other profession or line of work. To the limited extent veterans may need certain highly specialized care (such as for prosthetics), this could be accomplished via a small number of – preferably private – facilities. Care of veterans should be integrated into the civil health care system much the same as Medicare. At the very minimum, all acute care shoud be privatized and voucherized, with the VA maintaining only rehabilitation and long term care facilities. Following are the main takeaways:

  1. There is no logic for a separate VA health care system; it must be completely or mostly integrated into the  private economy – especially the acute care portion.
  2. The VA problems can never (and will never) be fixed because government is incapable of such fixes.
  3. Liberals and Democrats never fix anything – real fixes are not important; all that counts to them are intentions.
  4. Everything is predictable and explainable by reference to public choice economics.
       Worst of all, the VA system is a precise microcosm and road map for ObamaCare. Each and every problem identified in this post will be multiplied in spades for ObamaCare. The disaster that now is preventing veterans from getting care and, in some cases, has killed them, will be inflicted on all 315 million Americans. It is only a matter of time until ObamaCare makes all Americans wait 145 days (and likely more) to get an appointment and many will die waiting.

Inequality in America – Part 2

George Noga
By George Noga – April 23, 2014
        Our post of February 7, 2014 addressed income inequality in America between rich and poor. Since then we have been bombarded by the Obama administration and its sycophant media about income inequality between men and women. Therefore, we now focus on gender inequality and, more importantly, on who is creating inequality in America.

Income Inequality Between Men and Women

       Firstoff, this is an old issue. For over 30 years, Democrats have waived the bloody shirt of gender inequality. They resurrect the issue whenever they feel it necessary. It has been revived now for one, and only one, reason. Polls show women disinterested and less likely to vote in November. Liberals cynically believe they can get more women to vote by patronizing them with warmed over lies. That shows what they really think of women. To their consternation, it now looks like the issue is backfiring on them as more information comes to light.
       Obama asserts women earn only 77% of what men earn. That’s roughly analogous to saying women are only 77% as strong as men without making any adjustments for height, weight or physical condition, i.e. it is meaningless. It is well known and long understood that when making appropriate adjustments for: (1) level of education; (2) type of degree (engineering vs. sociology); (3) experience; (4) hours worked; and (5) level of danger (lumberjack vs. teacher), women earn on a par (96%) with men. Moreover, deaths in the workplace are 92% men.
“It is impossible to be too cynical about any claims made by Obama; he hasabsolutely no shame or compunction about lying whenever it suits him.”
       The issue  now is backfiring on Obama. It was revealed female White House staffers earn only 88% of men. Not one Democratic senator has a female chief of staff or head of communications, whereas Republican senators have several. If Obama were correct, private businesses could hire all female workforces and gain a 23% payroll cost advantage over their competitors. That this is not happening speaks volumes about the veracity of Obama’s claims. It is impossible to be too cynical about any claims made by Obama; he has absolutely no shame or compunction about lying whenever it suits him.

The Top 10 Real Sources of Income Inequality

       To the extent income inequality is increasing, the cause is none other than Obama himself. Following are the top 10 Obama policies that are making the poor even poorer.

  1. Tobacco tax increases: Taxes on tobacco, especially in states with liberal governance, have vastly increased. Smokers are in the lowest income quintiles and they have been savaged by effete progressive ideas.
  2. Opposition to free trade: The underclass benefits more than any other group from free trade. Obama, in obeisance to labor unions, has put the kibosh on new trade agreements despite giving it lip service.
  3. Higher taxes: A variety of new and increased taxes (including Obamacare) harms the poorest cohorts. Even taxes on business harm the poor by discouraging investment, lowering productivity and stunting economic growth.
  4. Unemployment: Employment is far from where it should be; this is the worst economic recovery of all time – thanks to Obama no-growth policies. The percentage of Americans working is the lowest since 1978.
  5. Minimum wage hike: Raising the minimum wage causes unemployment among the poor. If you increase the cost of anything (labor), you always get less of it – a fundamental economic truism.
  6. Energy policy: Energy takes 25% of the income of a poor household but only 10% of a high income household. The average cost of a kilowatt hour is up 39% since 2003 – the vast majority under Obama. Need I mention Keystone?
  7. Monetary policy: Due to Obama’s horrendous spending, debt and deficits, interest rates are kept low, savaging the savings of poor elderly Americans. The little guy can get only a fraction of 1% on his money instead of the 5% that should be normal. If a retired couple has only $25,000 in savings, this costs them $100 per month.
  8. Tepid economic growth: Hyper regulation and enormous uncertainty about future taxes and regulations have cast a pall over economic growth. Companies are not expanding or hiring – again harming the poorest among us.
  9. Obamacare: Health care costs are rising along with taxes to fund it. The poorest Americans bear the brunt – not just economically – but due to doctor shortages, rationing and death panels. The legions of 49ers and 29ers are growing!
  10. School choice/charters: Teachers union wars against choice and charters condemn the poor to inferior educations and hence much lower paying jobs. They are killing poor children educationally solely to pay back unions.
       The level of hype and downright lies about inequality is unprecedented. The liberals are circling the wagons. Believe it or not, we are being told that (non existent) manmade global warming now causes greater inequality. The IMF is putting income inequality on the top of its agenda for aid to poor countries. It is good to recall the words of Milton Friedman: “A society that puts equality of outcome ahead of freedom will end up with neither equality nor freedom“. The next time you hear about inequality in America, remember that the blame lies at the foot of one Barack Hussein Obama.

Obama Agonistes: Boneheaded Economics

George Noga
By: George Noga – Substantially Updated April 8, 2014
 
        Milton Friedman once asked a foreign government official why workers building a canal were using shovels instead of excavating equipment. The official proudly responded “to create more jobs of course”. Friedman’s classic retort was: “Then why not use spoons instead of shovels?” Most who hear this story viscerally comprehend the foolishness of the government official – except President Obama. He and his minions have said things every bit as wacky as saving jobs with shovels instead of bulldozers.
“Obama’s solipsism and narcissism shield him from his economic illiteracy
and give him delusions of adequacy. He is not unlike a blissfully ignorant child incessantly toying with the economic dials that control the real world.”
        Obama linked technology to job losses: “A lot of businesses have learned to become much more efficient with a lot fewer workers. . . . when you go to a bank and use an ATM machine you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” Even Economics 101 students  recognize ATMs and kiosks as progress, as greater productivity, as the sine qua non of a higher standard of living and as an unalloyed blessing. Becoming more efficient and productive, doing more with less, produces the cornucopia of goods and services that makes America the envy of the planet. That our president misunderstands this reinforces the image of a child fiddling with the economic dials.
        Obama, Biden and Pelosi have touted unemployment benefits as an economic panacea. They all have stated that unemployment benefits create jobs faster than any other initiative and they have the double benefit of putting money in the pockets of the jobless who then spend the money on consumption to create yet more jobs. Please Mr. President, can we have even higher unemployment so that we can create even more jobs? As far back as Adam Smith (1776) it was well understood that production, not consumption, is what makes us rich.
       The USSR had enormous pent-up consumption but there were no goods to buy. John Stuart Mill debunked the consumption myth best: “the man who steals money from a shop, provided he expends it all again in the same shop, is a benefactor to the tradesman whom he robs, and that the same operation, repeated sufficiently often, would make the tradesman a fortune.” Obama has said that government created jobs will lead to stronger economic growth. He again has it bass-ackwards; economic growth must precede job creation. Obama is ignorant of fundamental economic truths known for at least 250 years. It is hard to dispell the image of a toddler in diapers playing at economics. A toddler is shielded by his age and lack of education; Obama is shielded by his solipsism, narcissism and an equally ignorant sycophant media.
       Obama is harming the very people he passionately asserts he wants to protect, i.e. the downtrodden. He claims his spending binge is for social welfare and health care. Yet, he is condemning the current and future underclass to a much more hardscrabble life. America’s GDP growth already has slowed to European levels and over time the poorer among us will be infinitely worse off than they would have been with higher economic growth. Of course by then few will care or remember – no less understand, who was responsible.
“Obama’s failure to grasp the depth of his economic ignorance is wholly consistent with that of a solipsist and narcissistwho believes only the self exists and who is preoccupied with only his feelings and is egotistically self-absorbed.”
        Obama Agonistes’ slavish ideological dogma and economic illiteracy are leading us all into a netherworld. The president’s people gleefully depict political adversaries throwing grandma over a cliff. Obama is throwing all of us (including his supporters) over the cliff – and all for a failed socialist chimera. Obama’s failure to grasp the depth of his economic ignorance is consistent with the behavior of a solipsist and a narcissist who believes only the self exists, who is preoccupied with only his feelings and who is egotistically self-absorbed.