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Barack Obama Archive

Thursday

14

July 2011

1

COMMENTS

Obama Lied, Health Care Died

Written by , Posted in Health Care, Welfare & Entitlements

Do you remember when then-candidate and later President Obama told that tear-jerking about his mother, who spent her last months of life battling evil Big Insurance over whether her cancer was a pre-existing condition? Yeah, I didn’t either, because I try not to listen to stump speeches full of lies, but apparently he said it…a lot. Only it wasn’t true (Hat-tip: Megan McArdle):

During his presidential campaign and subsequent battle over a health care law, Mr. Obama quieted crowds with the story of his mother’s fight with her insurer over whether her cancer was a pre-existing condition that disqualified her from coverage.

In offering the story as an argument for ending pre-existing condition exclusions by health insurers, the president left the clear impression that his mother’s fight was over health benefits for medical expenses.

But in “A Singular Woman: The Untold Story of Barack Obama’s Mother,” author Janny Scott quotes from correspondence from the president’s mother to assert that the 1995 dispute concerned a Cigna disability insurance policy and that her actual health insurer had apparently reimbursed most of her medical expenses without argument.

But really, this isn’t the big lie. The big lie is that banning disqualification over pre-existing conditions is a good thing. Even Republicans have for the most part bought into this lie, because it’s such an easy, emotional issue to demagogue. The problem is that such a ban completely destroys the entire insurance model.

What is insurance? It is a pool of people who share a common trait: they have a very low chance of incurring extremely high costs. Rather than risk being stuck in a position where they incur medical costs they cannot afford on the off chance that they suffer a tragic accident or equally expensive medial disaster, they hedge their bets and pool their resources so that they can replace their low-odds, high cost risk with a high-odds (100%, in fact!), low cost alternative. In other words, by sharing the risk they are guaranteed to pay some cost, but avoid the potential of paying the astronomical cost if they should be unlucky.

Here’s where the issue of pre-existing conditions comes in. This system only works if the initial odds of incurring a high cost are low. If the risk is high, meaning the higher costs are incurred more frequently, then there simply are not enough resources to pay the high costs. The entire model thus breaks down, putting everyone’s financial future at risk. It would be like getting homeowner’s insurance after you’ve already been robbed, and then expecting everyone else with the same policy to pay your replacement costs. I’m sure you can guess why this wouldn’t work. Though in fairness, this is the problem which Obama and the Democrats attempted to address with the individual mandate. The problem there is that it’s not only unconstitutional, but also fails to address the real issue.

Rather than destroy the entire idea of insurance by replacing it with a dysfunctional medical pre-payment system (an objective which the government has actually been working on for decades now through price-controls, mandatory coverage and community rating systems), we should look at why so much medical care is such a financial burden, and thus making insurance necessary in the first place: out-of-control-costs. The excessive medical costs stem from the fact that government has unshackled the industry from the free market, leaving now downward price pressure mechanisms. The third-party-payer system, perpetuated by government programs such as Medicare and distortionary tax policy which encourages employer provided insurance, should be solved and the market made free. The result would be lower costs and greater access. For those few who remain either too poor, or were born with an expensive ailment (which doesn’t fit into the insurance model), help could be provided within the framework of the market (through vouchers or other redistribution that doesn’t involve restructuring the industry), rather than through it’s destruction.

Unfortunately, so long as sad stories about evil insurance companies that deny Grandma coverage can win votes, politicians will have incentive to keep using them, even making them up when necessary, instead of actually solving the problems at hand.

Thursday

16

June 2011

0

COMMENTS

Obama’s Fatal Conceit

Written by , Posted in Big Government, Economics & the Economy

I, like many others, made light of the President’s recent shocking display of economic ignorance.  In an interview on NBC’s TODAY, the President claimed that productivity, the source of our prosperity, is really a “structural issue” holding back the job creating benefits of his policies. Hogwash, obviously. But what came later in the interview was perhaps even more disturbing (the transcript at the link wasn’t completely accurate so I cleaned it up):

[T]here are some structural issues with our economy, where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM; 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. So all these things have created changes in the economy and what we have to do now, and that’s what this job counsel is all about, is identifying where the jobs of the future are going to be, how do we make sure that there’s a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing into those places with the greatest opportunity.

Obama’s fundamental problem – his fatal conceit, if you will – is that he thinks we need him and his jobs counsel to figure out what the jobs of the future are going to be. We no more need this today than it was necessary for past leaders to identify the jobs of today. This is a task for the private sector, and one which only its vast network of dispersed information and decentralized decision-making is capable of determining.

What does Barack Obama know about the technologies of today, much less the future? Why does he imagine he can direct capital and resources to the right place better than investors? When has history ever shown politicians capable of doing so?

As F.A. Hayek wrote in The Fatal Conceit: The Errors of Socialism, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Barack Obama is clearly too enamored with his own intelligence to recognize how little he knows – or that any one individual or group of individuals could possibly know – about where the next economic breakthroughs will emerge, or where future resources will need to be deployed. Who even 20 years ago possibly could have imagined the range of technological innovation from which we benefit today, and the subsequent new jobs and roles it has created in the economy? There is no such person, which proves the impossibility of Obama’s desired model of central planning.

Tuesday

14

June 2011

10

COMMENTS

Ignorance on Display: Obama Blames Increases in Productivity for Bad Economy

Written by , Posted in Economics & the Economy

Why can’t people find work? It’s the ATMs, stupid!

President Obama explained to NBC News that the reason companies aren’t hiring is not because of his policies, it’s because the economy is so automated. … “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, 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.”

This is really a special kind of ignorance. It is also the product of so much focus on jobs simply as an end. If the objective s just for everyone to have jobs, you think stupid things like that if you eliminate automation more people will have work. As the apparent leader of the new regressive movement, Obama has caught on to the fact that technology allows us to do more for less work. Clearly, eliminating the technological gains of the last decade, half-century, century, or more, would mean more people working for less output. A jobs utopia!

I’m sure my learned readers see the fault in this reasoning. If it takes more labor to produce less output, then everyone has less, because there is less to go around. Once upon a time, it took a lot more labor to produce the food needed to feed the populace. In the late 18th century, more than 90% of US workers were employed in agriculture. But thanks to technological innovation, the number of workers required to produce the amount of food the population needed soon plummeted. By Obama’s reasoning, that should have been a disaster for the economy! In reality it was quite the opposite. With all that labor freed up for other purposes – and the necessary food still being produced – the economy soared, ushering in the industrial revolution.

There is no end to the productive purpose for which labor can be employed. Making current endeavors more efficient does not, as Obama claims, reduce unemployment – it merely shifts labor to new sectors, where new waysare found to make our lives better. And that, ultimately, is what work is all about.

So no, improved efficiency is not a “structural issue” in the economy; it’s a structural benefit. Structural issues are the things created by big government proponents – such as Barack Obama and his predecessors – that punish productive people for being productive (capital gains taxes, excessive regulations, highly progressive tax rates, etc. etc) and reward unproductive people (often those with particularly strong political connections).

Not that we needed any further evidence against the futility of central planning, but is there any case at all remaining when the would-be planners are this ignorant?

Sunday

24

April 2011

0

COMMENTS

Obama Blames Everyone Else on Oil Prices

Written by , Posted in Economics & the Economy, Energy and the Environment

Despite public demand for increasing domestic oil production, the current White House has sent a clear signal that the U.S. will not be increasing production into the future, despite growing demand. While simply one of many factors impacting the global price of oil, it is a factor. But rather than acknowledge that the price of oil reflects the realities of supply and demand, including anticipated changes in the future, Obama is lashing out at anyone and everyone in an attempt to distract from his failed and misguided leadership on energy.

First, he pulled out that favorite boogeyman of the economically illiterate and blamed the speculators:

“It is true that a lot of what’s driving oil prices up right now is not the lack of supply. There’s enough supply. There’s enough oil out there for world demand,” Obama said.

“The problem is … speculators and people make various bets, and they say, you know what, we think that maybe there’s a 20 percent chance that something might happen in the Middle East that might disrupt oil supply, so we’re going to bet that oil is going to go up real high. And that spikes up prices significantly.”

Yes, they do “place bets,” but it doesn’t matter to speculators whether those bets are for prices to go up or go down, for the long-term or for the short-term, so long as they are right. It is, ultimately, the fundamentals of the market that move prices, not the speculators. It makes as much sense to blame the thermometer for how hot is as it does to blame speculators for the price of oil.

Speculators play an important role by adding additional information to the market. All prices serves as signals, and the more information they can convey, the better. Businesses that rely heavily on oil don’t simply want to know that there is enough supply now. They want to know if there will be enough supply 5, 10 or 20 years from now. If the answer is ‘no’, then they can start investing in alternatives now, when there is still time to adapt. By adding their information into the market system, speculators reduce price volatility. (More on that here)

What the President ignores is that the bets being made are not simply about whether or not instability will overtake production, though that’s certainly part of it. They are also looking at the growth of demand versus the growth of supply. And in so far as the former is out pacing the latter, and is expected to continue doing so, speculators will bring this fact to light by betting on prices continuing to rise. They are, simply put, reacting to reality, not shaping it. The same cannot be said of the President, whose policies are sending a clear signal that U.S. domestic production will be curtailed, or at least not allowed to grow fast enough to match future demand.

The President is also picking on another boogeyman, those dastardly oil companies:

“Four billion dollars of your money are going to these companies at a time when they’re making record profits and you’re paying near record prices at the pump,” the president said at a Nevada town hall. “It has to stop.”

It’s not altogether clear what the President thinks “has to stop.” If he means the fact that we’re paying record prices, it would certainly be nice if it did stop, but the President’s policies are having the opposite effect. Reducing oil production relative to demand, or adopting disruptive cap-and-trade regulations, will ensure that prices continue to rise.

But if he means record profits have to stop, he’s just being demagogic. We know he would be cheering “record profits” from GM, after all. Profits simply serve to encourage more production and investment in a sector, thus providing more of what the public has voted with their wallets that they want.

In either case, the President is clearly exploiting popular ignorances in hopes of distracting from his own economic failures. But he can blame speculators, oil companies, or anyone else all he wants. If prices continue to rise, and the economy continues to struggle, he will be very vulnerable in 2012.

Tuesday

22

March 2011

3

COMMENTS

Obama's War

Written by , Posted in Foreign Affairs & Policy

So we’ve gone to war with Libya. Just like that. The President touts his international coalition, yet it is smaller than the one he and his liberal comrades criticized as meaningless in Iraq, which they falsely claimed was “unilateral.” Except unlike Iraq, there is zero strategic interest in Libya. While Saddam’s threat to the world was and remains debatable, there is no debate on Libya.  There isn’t a hint of argument that suggests Gaddafi constitutes any sort of threat against the US or the world.

What is our goal in Libya? The President has proven unable, or unwilling, to articulate one. Instead, we got this gobblegook, delivered from the President’s self-imposed exile in Chile:

The core principle that has to be upheld here is that when the entire international community, almost unanimously, says that there is a potential humanitarian crisis about to take place, that a leader who has lost his legitimacy decides to turn his military on his own people, that we can’t simply stand by with empty words, that we have to take some sort of action.

So the President’s core foreign policy principle is that violent, illegitimate dictators must face “some sort of action.” Not exactly a Monroe Doctrine. And given these criteria, why aren’t we at war in North Korea?

What will Obama do when Gaddafi digs in and rides out the missiles? What naturally follows “some sort of action?” Some other sort of action, I suppose. Or possibly some sort of backtracking.

And just who is in charge of this shindig, anyway? And, oh yea, there goes those budget cuts.

Perhaps the reason Obama seems unable to provide a strong purpose in Libya is that Libya itself isn’t really the purpose. The purpose is the revival of the Clinton-era doctrine of humanitarian intervention, which holds that the likelihood of US intervention to stop atrocities is inversely proportional to the presence of any US strategic interests. Libya, where the US has no interests and is not threatened, is thus the perfect test case for reviving this doctrine, even if the administration has to exaggerate the degree to which atrocities are actually occurring. The important thing is that Libya serve its purpose in showing that US interventionists have gotten their post-Iraq groove back.

Friday

4

March 2011

0

COMMENTS

Let's Have Honesty in Debate on Obama's Worldview

Written by , Posted in General/Misc.

Mike Huckabee is making news over some comments regarding Obama’s upbringing. While  correcting on the O’Reilly Show his original statement that Obama spent part of his formative years in Kenya, when it was actually Indonesia, Huckabee further said this:

My point, really, even about talking about him raised in a different country, actually Indonesia, not Kenya, as I do understand, again, it’s right there in the book for me to read and anybody else if they care to, but the point that I do want to make is that creates a different worldview. This is not a kid who grew up, you know, going to Boy Scout meetings and playing Little League baseball in a small town.

Critics, and when it comes to Huckabee I usually am one, have jumped all over this statement, but for typically wrong reasons. Consider this brilliant insight:

If the absence of Little League or Scout meetings is really so disconcerting to Huckabee, we wonder what he would say about Ronald Reagan, who also never participated in either of those things (“I never cared for baseball … because I was ball-shy at batting,” he once said). In fact, out of all our presidents, only George W. Bush is a former Little Leaguer, and only John F. Kennedy, Gerald Ford, Bill Clinton, and Bush were in the Boy Scouts. All of our other presidents, we guess, had an exotic, un-American upbringing, and a skewed worldview.

This is an absurd, and I can only assume, dishonest interpretation of Huckabee’s argument. That part about boy Scouts and Little League is being taken out of context, and way too literally. He was not saying that only people who do those two things are American, or have an American point of view. He was making a larger point, that Obama grew up in an environment that is atypical of the American experience, whatever that may be, and thus has a fundamentally different world view than those he governs.

Agree or disagree with the sentiment as one likes, but don’t be sophomoric and pretend like Huckabee’s sticking point is that Obama wasn’t a Boy Scout.

For my own part, I think there is some truth to Huckabee’s actual point, which is that Obama has “a different worldview,” though I disagree that his being raised overseas for a time has anything to do with it.

Obama really is disconnected from most of the country in how he views the world, much more so I think than he lets on even to his liberal followers, but the cause isn’t where he grew up, but rather who he chose to associate with throughout his life. This is a man who has spent literally his entire life insulated in a cocoon of far left radicalism, never straying far from the Bill Ayers’ and Reverend Wright’s. He never engaged his fellow Chicago professors in substantive discussion. He never explored any alternative ideologies outside Saul Alinksy radicalism. As a law professor he never published a single piece of legal scholarship, such that he might then have to encounter or defend against alternative views and criticisms. For a professor he was shockingly incurious, and it has created a bubble President, one who simply cannot comprehend the typical, or “American,” worldview of the people he governs.

Tuesday

25

January 2011

0

COMMENTS

Obama's Crony Capitalism

Written by , Posted in Big Government

The left frequently targets conservatives as friends of big business who are willing to screw the rest of the country if it helps their pals on Wall Street. Sometimes this is accurate, but it’s just as true, if not more so, on the left. You see, the real friend of Big Business is Big Government. They are like two peas in a pod.

It is precisely the power of Big Government that Big Business desires. In the private market place, the only power business has is the power of persuasion. With government, they acquire the power of force. It is almost inevitable that government initiatives aimed at certain sectors will be hijacked by the major interest in those sectors. Thus, the surest answer to protecting against the interests of Big Business is to limit the size, scope and power of government.

Tabitha Hale at FreedomWorks describes Obama’s recent appointment of GE’s Jeffrey Immelt as an example of crony capitalism:

Last week, President Obama appointed General Electric’s CEO, Jeffrey Immelt, to head his Council on Competitiveness and Jobs. An Immelt appointment is an obvious rent seeking arrangement between Big Government and Big Business. This could not have been a more clear product of a crony corporatist relationship, and it is one that has no place in government that professes to value the free market. So now, we fight it.

…Jeffrey Immelt has been unapologetic about using the government to grow his corporation. The L.A. Times reminds us that last year Immelt was quoted in the Atlantic saying that he wants GE and government to work “in concert,” claiming that it didn’t make him a “traitor” or a “bad guy”… just “practical that that’s gotta happen.”

Ben Howe also put together this excellent web ad on the topic for FreedomWorks:

Tuesday

25

January 2011

0

COMMENTS

More Government is not the Answer for Too Much Government

Written by , Posted in Big Government, Free Markets, The Nanny State & A Regulated Society

Once again confirming that this administration believes that more government is the first, best and only solution to any problem, Obama is proposing billions of dollars in new spending on an activity that ought to be left to the private sphere:

The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center to help create medicines.

The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research. Promising discoveries in illnesses like depression and Parkinson’s that once would have led to clinical trials are instead going unexplored because companies have neither the will nor the resources to undertake the effort.

The initial financing of the government’s new drug center is relatively small compared with the $45.8 billion that the industry estimates it invested in research in 2009. The cost of bringing a single drug to market can exceed $1 billion, according to some estimates, and drug companies have typically spent twice as much on marketing as on research, a business model that is increasingly suspect.

This is typically unquestioning coverage by the New York Times, as the article never once addresses alternatives to the government’s assumption that private drug makers just aren’t investing enough. Take this sentence, for instance: “The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research.” Now read it with this additional clause I’ve added: “The new effort comes as many large drug makers, unable to find enough new drugs to pay for the costs of investing in research, are paring back research.”

This addition is both accurate and clarifying, and it makes apparent a question both the administration and the New York Times fails utterly to address. Just why is it so expensive to develop drugs that many companies are concluding that it’s not worth as much effort as we might like? The reason neither wants to ask the question is because they know the answer: it’s because of too much government.

(more…)

Thursday

13

January 2011

1

COMMENTS

The Good, the Bad, and the Ugly of the Tucson "Memorial"

Written by , Posted in General/Misc.

I put memorial in quotes because I’m not sure that’s what it actually was, but more on that later. For now, I want to start with the good, because on balance I think it was a net positive from the President, even accounting for the poor logistics of the event, which I’ll get to soon enough.

The Good

The content of the President’s speech was largely unobjectionable, avoided overt politicization, and was occasionally inspiring. He did a good job with effectively chastising the leftwing blame-mongers that have utterly debased themselves, and this country, over the last several days. But while his words were good, only time will tell whether his actions match up. Unless Obama both publicly and privately works to reign in the leftwing vitriol, his words, good as they are, will remain only thus.

Obama also gave moving tribute to the heroes of the event, and also implicitly acknowledged that one does not need government training or licensure to be heroic. “These men and women remind us that heroism is found not only on the fields of battle.  They remind us that heroism does not require special training or physical strength.  Heroism is here, all around us, in the hearts of so many of our fellow citizens, just waiting to be summoned – as it was on Saturday morning.” If only his policies were equally influenced by such reasoning. People taking care of themselves and each other without government force and coercion? Imagine that!

Talking a little bit about each of the victims – who they are, how they came to be there, and what they meant to their loved ones – was also a nice touch. Continue reading for the Bad and the Ugly…

Monday

6

December 2010

0

COMMENTS

Suddenly They Don't Like Compromise

Written by , Posted in Economics & the Economy, Taxes

The news is indicating that the rumored tax compromise is now a done deal. Obama will accept that he must refrain from raising taxes in the midst of a sluggish economy, and in return Republicans will allow passage of an unprecedented third year for unemployment benefits, transforming the once temporary assistance program into a new permanent and never ending entitlement.

Some Democrats, and in particular Obama’s hard left base, are revolting.  Not being able to raise taxes is apparently where they draw their line in the sand (and to think they routinely manage to deny the label of tax and spend liberals with a straight face). It seems they really, deeply, truly wanted to take American down with the class-warfare ship.

But what I want to know is: what happened to the great benefits of compromise? For years these hard left radicals have feigned offense at the “partisan culture” of Washington that supposedly made compromise impossible. To hear them tell it, you’d have thought compromise was next only to godliness. But as soon as they are asked to do something so simple as not raise taxes when the unemployment rate is 9.8% in exchange for a massive handout and entitlement extension, they freak out.

True colors.