Monthly Archives: June 2009

Quote Of The Day

Krugman, in 2002:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble.

Krugman said then that we needed to reinflate the bubble to save ourselves. We did, and we didn’t.

Now he says it’s time for Keynesian stimulus far bigger than what we’ve already done. He’s just as wrong as he was then.

Hat Tip: TJIC

In defense of rhetoric…

In response to Brad’s post below, he fails to point out that the Obama Administration and Congress, with its seemingly (though not literally) infinite wealth, pushed the stimulus bill through with the explicit purpose of creating jobs and even presented the public with a graph showing unemployment with and without (pg. 5) the passage of the bill. Of course, those of us here at TLP and other likeminded blogs knew that the stimulus bill would be a failure and could possibly lead to more unemployment, if not immediately then definitely over the long term.

This isn’t a corporation building a skyscraper, it is the government errantly pouring $700+ billion into the economy, ostensibly taking money away from future generations to invest and create jobs. There is a difference between actual investment, such as a private corporation expanding, and waste, which is the very definition of government spending.

The Obama Administration absurdly claims that the stimulus bill has created 150,000 jobs. They offer no evidence to back up the claim, when in fact the economy has lost around 2.8 million jobs since the beginning of the year. It’s a win-win for Obama because, as Steve Chapman recently pointed out at Reason, the administration and majority in Congress can claim that the stimulus wasn’t big enough if the economy fails to recover or he can take credit for any rebound we may see.

I’m tired of Obama pulling everything he says out of thin air with absolutely nothing to show for it. Whatever the amount spent per job, and of course the costs of raw materials are included, it’s much more substantive that anything the Obama Administration has used a talking point for pissing away our future.

Was it a rhetorical point? Absolutely. I make no apologies for it.

$3 Bazillion Spent & 3 Jobs Created. That’s A Bazillion Per Job! OMG!!

First, let me state categorically that I don’t believe government statistics. When they talk about $X Billions of dollars spent and Y00,000 numbers of jobs created, it’s clearly BS. The government rarely knows (or cares) how much of allocated money is actually spent until they’ve run out, and I think we all know that the job count is inflated in any statistically possible way to make themselves look better.

But I just can’t get over the analysis (and sorry Jason, such as this post) that simply divide the number of billions of dollars of stimulus money spent by the number of jobs to come up with a “per job” cost. In this case it was $746K “per job”.

There’s an implicit charge there, suggesting that if you spend $746K “per job”, it’s a complete and total waste of money. The charge, of course, is that the labor cost is the “per job” amount — or should be if it weren’t “squandered”.

And let’s also be clear. I’m not suggesting this money was spent well or efficiently. But that’s not the point.

Let’s say, for example, that a multinational company wants to build a skyscraper. And building that bridge required hiring a general contractor who farms work out to a bunch of subcontractors who employ in total 1,000 workers on the building. The construction cost of the building was $1 Billion. You could easily suggest that the cost of the project was $1 Million per job. But would that matter in any way, shape, or form? Not only does it not really account for the capital costs of all the equipment — cranes, trucks, tools, etc that those workers must use, it doesn’t account for the capital costs of the building materials themselves!

If I want to build a skyscraper, the vast majority of the cost is for the steel, drywall, wiring, piping, elevators, etc — materials. The cost of the workers is a slight fraction of the total. Likewise, if the government wants to build a bridge, or construct 15 miles of freeway, or engage in pretty much any other infrastructure spending, far more money will be spent on materials than on actual workers.

Now, don’t get me wrong. I am not trying to defend the stimulus. I’m not trying to defend the government’s numbers on job creation (because, of course, borrowing the money they needed to pay for the project may have crowded out actual productive enterprises that could offset those “created” jobs). But simply dividing spending by # of jobs to come up with some arbitrary (and absurdly high) “per job” cost is a cheap rhetorical device. It might sound great on Rush Limbaugh’s show or whip up outrage amongst people who don’t know better, but it certainly isn’t a serious analysis of the policy.

Obama’s disdain for free speech

According to Drudge, President Obama plans to take a bigger step closer to totalitarianism regarding the separation of the media and the state.

On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care — a move that has ignited an ethical firestorm!

Highlights on the agenda:

ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.

The network plans a primetime special — ‘Prescription for America’ — originating from the East Room, exclude opposing voices on the debate.

Of course, ABC promises to keep the coverage fair and balanced.

I sort of welcome this move, as it provides some the transparency Obama promised. If the mainstream media is to be Obama’s propaganda team, why not move their offices over to the White House?

However, Obama doesn’t treat the free speech rights of those he doesn’t like in the same manner.  Obama seems poised to sign a bill which will further erode the rights of tobacco companies to advertise:

The marketing and advertising restrictions in the tobacco law that Congress passed last week are likely to be challenged in court on free-speech grounds, but supporters of the legislation say they carefully drafted the law to comply with the First Amendment.

The law’s ban on outdoor advertising within 1,000 feet of schools and playgrounds would effectively outlaw legal advertising in many cities, critics of the prohibition said. And restricting stores and many forms of print advertising to black-and-white text, as the law specifies, would interfere with legitimate communication to adults, tobacco companies and advertising groups said in letters to Congress. [snip]

Opponents of the new strictures, including the Association of National Advertisers and the American Civil Liberties Union, predict that federal courts will throw out the new marketing restrictions. They point to a 2001 Supreme Court decision that struck down a Massachusetts rule imposing a similar ban on advertising within 1,000 feet of schools.

“Anybody looking at this in a fair way would say the effort here is not just to protect kids, which is a substantial interest of the country, but to make it virtually impossible to communicate with anybody,” said Daniel Jaffe, executive vice president of the Association of National Advertisers. “We think this creates very serious problems for the First Amendment.” [snip]

“The bill has been carefully drafted, and I am confident that the provisions will be upheld,” Rep. Henry Waxman, D-Calif., a sponsor of the legislation, said in a statement Monday.

Matthew Myers, president of the Campaign for Tobacco-Free Kids, an advocacy group that pushed for the law, said: “Frankly, the tobacco industry and the advertising industry have never heard of an advertising restriction that they thought was constitutional. In this case, great care was taken to permit black-and-white text advertising that permits them to communicate whatever truthful information they have.”

While Obama continues to destroy our economy, wreck the automobile industry and put our health care system on life support, he’s now taking swipes at the First Amendment.

Obamacare roundup

As I’m in the middle of writing an article regarding President Obama’s health care scheme, I thought I’d check around and see what other folks are saying about it.  I started with my wife, as she’s not only smarter than me, but also a practicing physician.  Obama told members of the AMA the following:

That is why I will listen to you and work with you to pursue reform that works for you. And together, if we take all these steps, we can bring spending down, bring quality up, and save hundreds of billions of dollars on health care costs while making our health care system work better for patients and doctors alike.

My wife’s response: “If Obama is truly serious about listening to doctors, this one says that he needs to leave my patients and me alone.”

Megan McArdle: “And what about the government’s infamous ability to wrestle new savings out of ‘providers’?  They are large, but they are not unlimited.  Medicaid patients find it very difficult to get doctors to take them, since the doctors tend to lose money on their care.  (I’ve heard persuasive arguments that ‘Medicaid mills’ adept at fraud are integral to providing care to the poor–without the fraud, Medicaid doesn’t reimbursements won’t cover the bill.)  Medicare patients are starting to have the same problem.”

Jason Pye:  “President Obama says that the country will go broke unless he can borrow and spend up to $2 trillion to ‘reform’ our health care system, comparing the future of the country to Government General Motors. You’re reading that right, our president claims that unless we spend more money and effectively run private insurers out of business over the course of time, the country will go bankrupt. Doesn’t make much sense, does it?”

Ronald Bailey: After parsing the numbers, it looks as though most the ‘savings’ that President Obama wants to use to finance his health care reforms are achieved by imposing price controls.

David McKalip: “In these circumstances, patients will be subject to a ‘mill’ mentality and treated like numbers that must be entered in a computer to satisfy a functionary sitting in a cubicle somewhere in Washington D.C. A better solution is to empower patients financially to pay doctors for their time. I find that when I look my patient in the eyes and spend 45 minutes with them, they are getting my best care.”

Stephen Green: “The President is promising to save money by eliminating a lot of those seemingly pointless end-of-life treatments. But that’s also going to mean an end to end-of-life profits. And, well, you can bet our life expectancy will get frozen in place as a result.”

Skip Oliva: “You can see why government-controlled health care is so appealing to the Obama regime. It’s hard to resist giving yourself even more power to decide who lives and who dies. There’s nothing more fun than playing God, right?”

NTU blog: “The only effects of nationalizing health care, it seems, would be to raise the age of a woman’s first mammogram, reduce the number of routine screenings she receives throughout her life, and delay the detection of breast cancer beyond the point of easy treatment. How do you justify jeopardizing the health of over 50 percent of the population to expand coverage to the 9 million or so that, according to The Spectator, are those truly uninsured for the long haul? Apparently women’s health doesn’t fall under the category of ‘universal coverage’.”

Ron Paul: “I started medicine when there was no Medicare and no Medicaid. And let me tell you, I don’t remember one time where I saw people out in the streets begging for medical care. Now we do. With managed care and now with socialized medicine coming, believe me, quality will go down. Costs will go up.  There will be shortages, there will be lines — and nobody is going to be happy.”

Grant Babcock: “Underlying the Obama plan is the same hubris that underlies all schemes to take decisions out of the hands of everyday people and instead entrust them to central planners: the belief that the government knows what you need better than you do.”

Robert Stacy McCain: “The MSM is asleep at the switch as Barack Obama fields ‘spontaneous’ health-care questions from . . . a former Democratic Party candidate for Congress…”

Donny Ferguson: “In a move that would have made Ken Lay proud, Democrat congressional leaders are expected to deal with the huge price tag of Barack Obama’s government takeover of health care in a unique way — ditching the estimates prepared by the non-partisan Congressional Budget Office and replacing them with the nunbers prepared by the politically-appointed White House Office of Management and Budget.”

Preston Mui: “Reality is setting in with President Obama and the Democrats: No matter how well-intended a policy is, it cannot evade the economic facts of reality.”

Michael Tanner: “But the problems with Obamacare go well beyond the Public Option, which the AMA opposes. The mandates on businesses and individuals, taxpayer subsidies, insurance regulation, and government interference in private medical decisions pose serious threats to American businesses, taxpayers, and most importantly patients. That’s bad medicine, no matter what you call it.”

Chris Moody: “Okay doctors, architects, and farmers. Your work is now my right. Feed me, house me and care for me. I don’t have to pay for it. I was born with the right to your labor.”

Steve Chapman: “There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits, or shiny gold ingots falling out of the sky. Voters emphatically prefer the latter option, so that is the one most likely to be embraced by Congress and the administration.”

Bruce McQuain: “This is not your grandfather’s America. Pay czars who arbitrarily set arbitrary pay limits based on what they ‘think’ (according to presidential spokesperson Robert Gibbs) is ‘fair’, a government appointed CEO for an auto company who admits he knows nothing about cars and the government hijacking of health care. If you’re not concerned, you’re not paying attention.”

Glenn Reynolds: “ANOTHER NATIONAL HEALTH PROGRAM THAT DOESN’T WORK: PROMISES, PROMISES: Indian health care needs unmet.

CROW AGENCY, Mont. – Ta’Shon Rain Little Light, a happy little girl who loved to dance and dress up in traditional American Indian clothes, had stopped eating and walking. She complained constantly to her mother that her stomach hurt.

When Stephanie Little Light took her daughter to the Indian Health Service clinic in this wind-swept and remote corner of Montana, they told her the 5-year-old was depressed.

Ta’Shon’s pain rapidly worsened and she visited the clinic about 10 more times over several months before her lung collapsed and she was airlifted to a children’s hospital in Denver. There she was diagnosed with terminal cancer, confirming the suspicions of family members. . . . On some reservations, the oft-quoted refrain is “don’t get sick after June,” when the federal dollars run out.

“This is what Obama wants for your family — or, at least, it’s what he’ll deliver in the end. Fix this — and Medicare — first!”

My prediction: Obama and the AMA will make make some cooing noises as they banter a bit about capping malpractice awards.  Then the AMA will give Obama a standing ovation as he creates his national insurance company.  AMA members won’t understand that they’ve been taken to the cleaners until they realize that their nurses are making more than they are.

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