Monday, December 23, 2013

Lawless Administration: PT ???

I've seen this story[] in various places (that link is AoSHQ) and I think most are missing something.  Burying the lede, if you will.  Everything I've seen has focused on the fecklessness of the President, or on the "purely symbolic" gesture or whatever.

I want to focus on something else here:

"WH: Pres Obama's staff signed him up in person thru DC exchange. POTUS wasn't present, but involved"

That, right there, is an admission of insurance fraud.  When you purchase an insurance policy, YOU must purchase the policy.  Some "staff" can't purchase it for you, any more than a secretary could sign a contract for her boss.  If "Obama's staff signed him up" they had to positively identify themselves as him.  They would have been challenged on this and asked, "Are you the person applying for insurance" (well, they would except for the part where they're members of the Mob Presidency).

Now, I don't know about you, but if I admitted to insurance fraud, I'd go to jail.  Of course, I'd also go to jail for a host of other things SCOAMT has done- there's a reason we call it the Lawless Administration.

So when you hear people "ooh" and "aah" over the fact that King Barackenhenan I lowered himself like a serf and "signed up for ObamaCare," make sure you point out that he is guilty of a crime that would send them to jail.

By his own admission.

Friday, December 13, 2013

The Monarchy Moment

When is the moment that men looked up and realized they had a king?  At what point did tribes- until then living freely (if, in many places, violently) suddenly realize that one man literally had the power to decree their deaths?  Because America is getting close to that moment.

Barackahanen I has been acting especially Imperial over the last several weeks, and no one with power to do so is saying "boo" about it.  It seems he modifies the written law of ObamaCare on a near-daily basis, fitting whatever whim he has that day.  Now he is "encouraging" Insurance Providers to allow people who get insurance through the exchanges to carry their insurance until sometime in January without payment.  That is, that they would have insurance coverage starting Jan 1, but would not pay for siad coverage until sometime later in January.

And the King hath spoken.

How does the King respond to those who question his policies?  By using the power of the State to intimidate them into silence.

This is an incredibly dangerous moment for America.  Either someone with some amount of power will oppose Barackahanen I, or we will all become serfs answering to the King and his Vassals.  If the President can merely decree law, and if he can modify private contracts, and if he can use the State to silence anyone who would criticize him, then we no longer live in a Republic, but we are ruled by a Despot.

h/t. Ace of Spades

Ben, it's because they DO think it's good policy.

Oh, and they DO think we're idiots.

Several days ago (by the time you're reading this) Ben Domenech went on a Twitter rant slamming GOP Leadership (especially Speaker Boehner) for "lying" to Conservatives.  That is, Ben's position is that the budget deal is good politics but bad policy, the leadership knows this (and agrees), and that the GOP reaction to Conservatives (who know that it's bad policy, and are dubious about the politics part) should have been to "tell the truth," and say, "Yes, we know it's bad policy, we're totally doing it for the politics.  Don't call us sell-outs and we won't call you idiots."

Let me, by way of rebuttal, provide a re-phrasing of Occam's Razor.  Put simply- the answer which assumes the fewest things not already in evidence is usually the correct one.  The let me suggest an answer- they do think we're idiots and they think this plan is good policy.

Now, let's judge them both against Occam's Razor.

Ben's answer assumes the following-

  • the deal is bad policy
  • the deal is good politically
  • the Republicans know both of the above
  • the Republicans are simply "lashing out" at Conservatives in response (pre-sponse?) to being called "sell-outs."

Of those, only one fact is actually in evidence- that the deal is bad policy.  Everything else is asserted but not proven.

My answer assumes the following-

  • the deal is bad policy
  • Republicans think it is good policy
  • Republicans think Conservatives are idiots.

All of my assertions have proof to back them up.  They are all in evidence.  The first is evident by the fact it increases both spending and taxes.  The second two are evident by the words that GOP Leadership are using.

So which is more likely?

It is no secret that a large number of Republicans in Washington both resent and fear the Conservative Grassroots.  Mitch McConnell uses harsher language against the Senate Conservatives Fund than he ever has against the President.  Ted Cruz has been pilloried as much by Republicans as by Democrats.  One miserable old troll in the Senate even called the TEA Parties "hobbits" (though- I'll take that one.  The Hobbits won in the end).

It is similarly no secret that the GOP Leadership loves them some spending.  None of them complained when Medicare D was passed.  They have never once asked for actual cuts to any government program.  Whenever Conservative Grassroots ask for something to be cut, they're among the first to tell us we're crazy, it can never happen, etc., etc.

Now, Occam's Razor only says that the answer which assumes the fewest facts not in evidence is the most likely answer- it doesn't make any guarantees.  So it's possible that Ben is right and I am wrong.  The fact is that it doesn't matter.  Leadership that detests- or even pretends to detest- its base is not "leadership" at all and should be replaced.

But... but... Shut Down!!!!

Oh.  My.  Lord.

Not this again.  Apparently the reason Republicans are caving on the budget talks is they're afraid the Government will shut down again.  Well, guess what geniuses, it might.  Guess what else?  Too bad.

First off, despite what the MFM and inside-the-Beltway types believe, the shutdown earlier this year did not actually hurt Republicans.  Here in Middle America, most people were for it.  Secondly, there's no reason you can't parley this into being the Democrats fault.  Yes, it might be hard, but so what?  You can even do it by sounding more reasonable than they do.

Now, for those who don't know, the issue is (once again) the debt ceiling.  OMG, if we don't raise the debt ceiling we can't pay our bills!!

Let's not discuss the absurdity of that statement.  Maybe I'll get to it in a future post.  Let's just look at just one possible Republican tactic.  I call it "raising the debt ceiling."

Look, I'm as fire-breathing as the next Ultra-Con, and I don't like raising the debt ceiling.  However, as a practical matter, ObamaCare is going down in flames, and we really don't want anything to give the President cover on that.  We don't want him to be able to distract the public from the train-wreck that is ObamaCare.

So, we say this:  "Alright, we'll raise the debt ceiling by 2 Trillion dollars.  That should last us at least one more full year."  And that's it.  No discussing budgetary matters ("that's settled law") no fee increases, nothing.  Republicans should simply say, "You're right, it would be irresponsible not to pay our debts, we'll agree to increase the debt ceiling by 2 Trillion dollars."

Then, when Chrissy Matthews spews the Democrat talking points of "you want to shut down government!" a simple rejoinder of, "Chris, we've agreed to raise the debt limit with no other preconditions.  So how is that wanting to shut down the government?"  What, really, can the Democrats say?  "But we want to increase spending?"  "But Democrats won't vote for that?"  It will become quite clear to everyone that it is the Democrats agitating for a shutdown because they don't like sequester- not Republicans.

Okay, fine, we can't ask for more budget cuts.  I don't like that, but I can accept it.  That doesn't mean we have to agree to budget increases.  The budget is set for FY2014 and FY2015- by sequester.  So the only reason to "shut down" the government is over the debt limit.  So let's take that off the table.  At the very least we can turn it around so that anyone with half a brain (I know this excepts most Democrats, but they weren't going to be on our side anyway) will understand that it is the Democrats "shutting down" the government, not Republicans, which would take away most, if not all, of any "cover" they would hope to gain.

Wait. "Compromise" IS a Bad Word

Compromise: a change that makes something worse and that is not done for a good reason

So, Paul Ryan has agreed to sell out Conservatives because Democrats might say mean things about Republicans.  Again.  The "compromise" bill to which Mr. Ryan agreed will increase discressionary spending for FY 2014 from the ~970 Billion that was written into the 2011 Budget Act by about 300 Billion dollars (to approximately 1,025 Billion).  FY 2015 spending would go up from there.

We are told that this is a "compromise" between House Republicans and Senate Democrats.  See, Democrats wanted to spend All The Money, so anything less than that is a win, right?  Wrong.  Even after the sequester cuts (which could have been avoided by Democrats negotiating in good faith), our debt has still grown.  When your out-go is higher than your income you have a problem, and the politicians in Washington, DC refuse to address the problem.

As pointed out on the PowerLine blog, the sequester itself was a "compromise."  So why must it now be the Republican's starting position?  Shouldn't Republicans honestly contend for what their constituents want- a balanced budget?  Had Mr. Ryan started from that position, we might have had a "compromise" that was an actual "meeting in the middle."  Had Mr. Ryan, or any Republican, really, been able to articulate why even sequester level spending is still too high, perhaps the new "compromise" would have been to lower spending again.

Instead, by using sequester as the starting point, the new plan increases spending and taxes.

But that, perhaps, is the worst part.  You see, the plan not only increases taxes, but it hides them.  No politician in his right mind would vote to increase the income tax rate.  Despite what the MFM would have you believe, we're still muddling along in a financial quagmire.  We might not meet the technical definition of a Recession, but for many families, a Recession is still their reality.

But rather than decrease spending, Washington Politicians want to increase spending.  Mr. Ryan, having run as a Budget Hawk, can't do that without somehow being able to say he's "decreasing the deficit" and obvious tax increases are off the table, so what can he do?  Hike "fees."  There is also some talk of decreasing Federal Employee pensions but a) I'll believe that when I see it and b) the numbers talked about there are inconsequential in relation to the size of the budget.

Some will claim that by raising "fees" Mssrs. Ryan and Murray are giving people a way to avoid taxes.  Aren't fees a "usage tax?"  Well yes, and then again no.  For one thing, Mssrs. Ryan and Murray don't want you to forego the activities they will now be taxing a higher rate.  They want you to do more of those things (which is counter-intuitive and, frankly, stupid, but whatever).  For another, the things they've chosen are activities it is hard to avoid.

Certainly I can choose to drive on vacation instead of fly, but what about a business traveler?  I have known and worked with a fair number of people who lived and worked 3 weeks out of every 4 in Illinois, and the other week in Texas.  If they had to drive instead of fly, that would be a huge cost to them and the company.  So they'll suck up the extra fee.  So will many families on vacation (who really wants to spend 4 days of a 7 day vacation in a car?).

Indeed this is a "compromise," but not in the way Mr. Ryan would have you believe.  This is a cave, a capitulation.  It is a complete forfeiture of Fiscally Conservative principle.  Spending does not need to increase faster (remember, even the sequester was a cut in the rate of growth, not a "cut" as you and I understand it).  Spending needs to decrease.  Failing that, it certainly needs to increase yet slower than it is.

But the Republicans are afraid Democrats and the Media (BIRM) will say mean things about them.  So of course their first and only option is to sell out Conservatives.  Again.

Thursday, December 12, 2013

Adverse Selection v Moral Hazard

Winner: Moral Hazard.

What the heck am I talking about?  ObamaCare.  Specifically, we're discussing the fact that ObamaCare requires that the young and healthy make up a significant portion of enrollees.  For ObamaCare to "succeed" in any sense of the word (right now, it's failing in every sense of the word), young, healthy people must sign up in droves, paying much higher premiums for much worse coverage than they could have gotten just a year ago.  Those who already had insurance will often look at the new numbers and say, "never mind."  Those who didn't already have coverage are not suddenly going to think it's a great idea to pay yet more than they'd already rejected.

The choice to do something against your own good is called "Adverse Selection."  ObamaCare relies heavily on Adverse Selection by Millennials.

On the other hand, we have "Moral Hazard."  Moral Hazard is a situation in which one makes different decisions based on the "rules" in order to gain the maximum benefit at the minimum cost.  In the world of D&D we call this "min-maxing."  With ObamaCare the idea looks like this- insurance companies cannot reject me because of any health reason, and preexisting conditions must be covered.  Given the high premiums for substandard benefits compared to the low level of "punishment" that is the Penalty (or Tax, if you're CJ John Roberts) for non-compliance with the individual mandate, it makes far more sense to go without insurance and the penalty.  If you *do* happen to get sick (in a way that costs more than your premium and deductible combined) then you can sign up for insurance at that time and, poof, you're covered.

This is a no brainer.  Why would a healthy Millennial buy insurance through the exchanges?  Pay higher prices for less coverage just so some geriatric patient in Walla Walla can afford their meds?  Obviously the people who wrote this law don't understand human nature (except they do- more on that in a minute).  Oh, certainly some will buy.  Some will think it's a "hedge against disaster" (but, by the current rules, it's not).  Some will think it's "the moral thing to do" (really?  I'm morally obligated to buy insurance so some other guy's insurance will be cheaper?  Wouldn't it be cheaper for me just to send him 50 bucks a month?)  But the vast majority will look at their ever-diminishing buying-power (thanks ObamaNomics!) and make the practical decision to forego insurance.

If this were a boxing match, Moral Hazard would win in 1.2 seconds.  Or would be ejected for hitting below the belt.  One or the other.

Now, previously I stated that the people who wrote ObamaCare don't understand human nature.  That was what we call "dramatic license" or "a lie."  Of course they understand human nature.  In fact, they're counting on it.  Remember what Obama himself said- ObamaCare would be "a first step" to single payer.

Never forget that is their end goal.  They PLAN for ObamaCare to fail.  They want Medicaid overloaded so that the states can't cope.  They want private companies that sell through the exchanges to go under.  They want everything to collapse so that the American People will yell "Save Us!!!!" and then they can implement single payer.

In response, we have two options.  The first is to try to overcome human nature and go all-in on ObamaCare.  Make it work despite itself.  The problems with that plan don't even bear investigating, but let's just say they're myriad.

The second option is to make sure everyone knows that A) ObamaCare is a complete failure, B) Democrats own it completely, and C) that it is those same Democrats who will come in with "single payer" to make it all better.  That is, we have to expose the ploy now, not wait until Democrats are already calling for single payer.  Just as we called out all of the flaws in ObamaCare starting 3 years ago, now we ALSO have to call out their next move.

Conservatives (and coincidentally Republicans) have a lot of credibility on this right now.  Everyone knows Conservatives were saying exactly what has happened would happen.  Even the MFM has to admit it- albeit in terms of "they sabotaged the law!!!!"- so when Conservatives are challenged about single payer being the next step, it should be fairly easy to rejoin, "Just like we were wrong about you not being able to keep your plan or your doctor?  Just like we were wrong about premiums going up and benefits going down?"

If we don't use that credibility now- if we don't establish it as firm fact- then the Democrats will win on the issue.  Single Payer- and all its nightmarish horror- will become law in the United States of America.  Possibly in my lifetime.

Monday, December 9, 2013

Why "Income Inequality" Is Important

I know that the SCOAMT would like to change the subject from ObamaCare to "the minimum wage."  He thinks that's a better option for him.  Heck, maybe it is.  But I find myself drawn to point out something that might be obvious to some, but certainly isn't to others: they're the same discussion.

Remember, the putative "point" of ObamaCare was to "bend the cost curve down" and "make health care more affordable."  Indeed, the very name of the actual bill says so: "The Affordable Care Act."  And what, exactly, is the point of that if not to address that great bogeyman of the Left- Income Inequality?

Which means that any discussion of the minimum wage by Democrats is based on the same foundation as their discussions about "universal health care," or "welfare," or any number of other things.  And they're all based on a faulty understanding of money.

For some reason- perhaps laziness, perhaps malfeasance, perhaps true ignorance- Democrats continue to insist that all of these things are the same: money and currency, and cost and value.  This is hogwash.

Money is not the same as currency- else the exchange of currency would be a static thing.  If money were the same as currency, a British Pound would always be worth exactly 1.2 US Dollars (or whatever exchange rate).  Instead, we find that currency exchanges fluctuate, now 1 pound is worth 1.2 dollars, now it's worth 1.3, now it's worth 1.1.  Obviously there is something other than the currency which is actually being exchanged here.

Cost is not the same as value.  If it were, the economy could not grow at all.  All exchanges would be either detrimental to one party or, at best, they would be neutral.  If cost were the same as value, then either I (as the seller of some thing) must over-charge to see a profit, or I must under-charge (thus incurring a loss), or I must charge exactly my cost (thus seeing no benefit from the sale).

It is important to note that most liberals know all of this.  Just listen to them discussing the economy.  At one moment they'll tell you "the economy is not a zero sum game" and the very next they'll say, "but it acts like it."  They'll say, "such-and-such adds value to what-have-you" and then they'll decry "profiteering" (as though selling things for profit were akin to being a pirate).

Yet, they act as though they believe these things they obviously know not to be true.  Raising the minimum wage only makes sense if money and currency are the same thing.  Price controls (which are what ObamaCare amounts to) only work if cost is the same thing as value.  "Income Inequality" is only a bad thing if money is the same thing as currency and cost is the same as value.

Since neither of those things is true, then "Income Inequality" cannot be a bad thing.  Indeed, it is a good thing.  That "Income Inequality" is one of the major drivers of any market economy- even one as fettered by regulation and red-tape as ours.  People on the bottom seek to rise to the top.  Thus (if they know the truth that money != currency and cost != value), they seek to become more valuable to their employer (or their customers) while also obtaining more capital (that is: money).  Those who succeed are made "richer" those who fail are made "poorer."

I am not going to engage in a defense of capitalism's record on charity.  Such defenses have already been made, and only the willfully ignorant believe that capitalism does not care for the poor better than socialism.

However, I will point out that the fact that those who fail to become more valuable are made poorer is a driver in the economy.

They are a driver in that the poor still need things.  Thus capitalists seek ways to serve those needs- providing low-cost alternatives to higher-cost goods.  Since the rich didn't get that way by wasting money, they often *also* seize on these lower-cost alternatives, further enriching society in general.

They are a driver in that, absent some perverse incentive, the poor are encouraged by their very "poor-ness" (virtually no one in the USA is "in poverty") to become more valuable.  As they strive to become more valuable, more value is added to the economy, and everyone (including the "poor") benefit.

They are a driver in that, being currently less valuable than others, they can provide low-cost services.  A fry-guy job at QuickyBurger for $7.50/hr is better than no job for $0.00/hr.  By providing those low cost services, the "poor" make services cheaper than they otherwise would be AND make themselves more valuable.

Considered another way- what if there were no "income inequality?"  What if, as the Democrats claim to dream, suddenly the fry-guy at QuickyBurger is making the same as a Personal Banker at MegaBank Corp, who is making the same as a software developer for MegaSoft Industries.

Well then, what personal value is it for someone to put forth the effort to become a banker or a software developer?  Being a fry-guy isn't the most rewarding career, but it's certainly much easier with far less stress (in general) than being a banker or a software developer.  Why pay for certifications or go to school for 4+ years when doing so will have no benefit?  I mean, I can pay several hundred to a couple thousand dollars for classes and certification (to tens of thousands of dollars for a college degree), but then I'm making the same amount as the fry-guy.  What's the point?

For there to be software developers and bankers and electricians and so forth to have any incentive to learn those trades, there must be some value to them.  That is, there must be the promise of more income than they'd get as the fry-guy.  In short, the "challenge" to "remove income inequality" is the quest to destroy an economy- to make an "economy" full of fry-guys and empty of bankers, software developers, and electricians.

Friday, December 6, 2013

This? Again?

So Liberals, fresh off the stunning success of ObamaCare, are now agitating for an increase in the minimum wage to "fix" the economy.

Any Conservative can spout off the talking points:

  • The REAL Minimum Wage is Zero!
  • Raising the Minimum Wage increases unemployment!
  • Raising the Minimum Wage leads to inflation!

And so forth.

But let's get past the talking points for a moment, and actually think about *why* raising the minimum wage is a bad idea.  Sure, the real minimum wage really is zero.  Sure, it really does increas unemployment (or, at least, slows hiring).  Sure, it really does lead to inflation (through increased costs, rather than through increased money supply).

But one of those is a tautology, and the other two are effects.  Instead, let's consider some foundational ideas.  Those things are true, but so (at least on the surface) are the liberal's talking points.  So let's look at the real world.

That is, let's look again at what "money" and "wages" really are.

First off- money.  I've pointed out before that those ones and zeros in your bank account are not money.  Neither are those dollars or coins in your pocket.  The latter is "currency" which is merely an abstraction of money.  The former is an abstraction even of currency.

Money, at its base, is the representation of the value of capital.  Sometimes that capital is "real" (that is- stuff or land), sometimes it is "labor" (that is- a person actually doing something).  Nevertheless, "money" is essentially an abstraction of "I'd like to trade this half-pound of apples for that loaf of bread."

Wages, then, is money- that abstraction- given in exchange for labor.  That means- however much currency is exchanged, you are only giving someone the value of their labor.  Now, market distortions (such as a "minimum wage") can mess with that to some extent and for a time.  Ultimately, however, money is like water- it will find its level.

So let's consider what "raising the minimum wage" really does.  It states, arbitrarily, that the currency representation of the value of the labor of the fry-guy at QuickyBurger is now $10.00/hr.  Will that make the fry-guy at QuickyBurger able to buy more stuff?  Over the short-term, it will.  Over the long term, the value of a fry-guy is the value of a fry-guy, and that value is not enough to be a bread-winning career.  So the Economy (that gigantic, chaotic abstraction) will eventually find it's equilibrium, and the fry-guy at QuickyBurger will be in the same place he was before.  Sure, gas will cost $15/gal, and the "value menu" will be the "$5.00 value menu," but ultimately he'll be where he was before- needing roommates to have an apartment and not being able to afford most of the "finer things" in life.

Now, how do I know this to be true?  Because I've lived it.  Most of us have.  When I was a kid, minimum wage was $5.15/hr.  Someone working a minimum wage job could just about afford a cheap car payment, gas, and some minor bills (say, a credit card).  That was about it.  Today, someone making $7.50/hr can afford... a cheap car payment, gas, and some minor bills.  That's about it.  So if we raise the minimum wage to $10.00/hr, then in a couple of years, someone making $10.00/hr will be able to afford a cheap car payment, gas, and some minor bills.

On the other hand, when I was a kid, someone making $7.50 an hour could afford a cheap car payment, gas, some minor bills, and could go in with one or two other people and afford a decent apartment.  Now, someone making $10.00/hr can afford a cheap car payment, gas, some minor bills, and can go in with one or two other people and afford a decent apartment.

Now, even cold-hearted capitalists like me will admit that someone making minimum wage can't support themselves, let alone a family.  The difference is that capitalists (cold-hearted or otherwise) also recognize that the kind of work for which you get paid minimum wage is not the kind of work you should be doing for a career.  It doesn't have the value of a job that you could have for a career.

My first job was a minimum wage, part-time job at a pizza joint while I was in high school.  My second job (starting right as I got out of high school) paid slightly better (about $6.50/hr, IIRC) as a bank teller.  Obviously, "bank teller" provided more value than "pizza joint bus boy."  My next job was making $10.00/hr.  And, with a few exceptions due to Life Happening, that has been my progression.  Now as a 30-something with a wife, two kids, two cars, two dogs, and a mortgage, I'm making enough money that my wife works only because she wants to (and part-time, at that).  It took effort, it took hustle, and it took gumption, but I did it.

I couldn't have done it without those early jobs.  They taught me things- from showing up on time (and even early), to how to deal with coworkers I didn't like, to how to argue with a boss and win.

So rather than focusing on the wage which won't change however we represent it in currency, let's focus on the actual problem- people holding entry-level jobs who are trying to make them be careers.  That is something we can fix, and we don't need legislation to do it.  All that we need to fix that is education, and I'm not even talking about public schools here.

But, of course, that won't happen.  It won't happen because the Democrats can't let it.  One of the biggest weapons in their arsenal is that they supposedly care for "the poor" more than Republicans.  If they admitted that Republicans have been right this entire time and that raising the minimum wage doesn't actually help (and really harms) lower income workers, they'd lose that weapon.  And Democrats don't care about the poor.  The only care about how the poor vote.

Consider it this way- if you really cared for the poor, wouldn't you do everything you could to raise them up and make them better- so that they could support themselves without your help?  So what do you call it when you're doing everything you can to make them believe that they're incapable of taking care of themselves and that you're the only one who can protect them?