The AP is reporting that President Obama is “looking at any way to create jobs”. That’s interesting. He must not be looking very hard. Or maybe he really is looking, but managed to get something in his eye. Or maybe he’s faking it. Never waste a crisis, you know. It’d be hard to imagine that Americans would be too eager to shift complete control of their lives to the federal government if unemployment was not at 10% and the housing market hadn’t collapsed. That’s got to be it, then. He’s not really interested in finding any way to create jobs because as long as we’re all unemployed, we’ll continue to be led around like sheep. That’s why all of Obama’s “fixes” all smell funny. His fingers are too deep in all of them.

Here’s more from the AP:

SPRINGFIELD, Va. (AP) – Standing at the site of a highway project funded by his massive economic stimulus plan, President Barack Obama said Wednesday he is committed to exploring all avenues to create jobs.

“Middle-class Americans are the ones who built this country,” Obama said. “They deserve leaders in Washington who are willing to work as hard as they work.”

[ . . . ]

Despite the stimulus, the national unemployment rate stands at 9.8 percent. Economists have said unemployment could continue to rise.

First—Obama is certainly not committed to “exploring all avenues to create jobs”. That’s just a lie. Note that the AP isn’t quoting Obama directly for that little nugget. If Obama were willing to explore “all” avenues, he’d think about tax cuts for small businesses. Tax cuts, after all, will permit these businesses to keep more of the money they earn…which they would of course use to…hire people. With less money left after taxes, businesses are not too motivated to employ more people.

Second—However nice it sounds to your populist disciples, America wasn’t built by Middle Class people. Not if the word “built” means anything, that is. Sure, they’re the ones that may have wielded the hammers and populated the plants, but these people were uniformly employees—hired by rich people with ideas to move technology forward. The Rockefellers, Carnegies, Vanderbilts and Fords which dot our history are the ones that “built” America. Not by themselves, of course, but without their entrepreneurial spirit and capital, America doesn’t become industrialized and that’s just a fact. It’s a hard fact for the left to acknowledge, however, and it’s the reason why they see “tax cuts for the rich” as “unfairly” lining the pockets of those in least need of the extra money. The fact is that one of the primary functions in our society of rich corporations is that they hire the rest of us. They enable us all to have health insurance. To save for our retirements and the education of our children. Without rich people who make things and hire people, we’d all be poor. So unless Mr. Obama is exploring ways to incentivize rich people to hire more of us so we can make more stuff, he’s spinning his wheels. Every second he talks about taxing corporations to death, he’s making it more and more likely that unemployment will continue to rise and the recession will continue to grow. Spending billions of TAXPAYER dollars to hire people doesn’t do the trick, either. Tax dollars must first come from someone who earned that money. It is not in itself the product of any growth. That’s why this Stimulus is just a gigantic shell game. Borrowing from Peter to pay Paul, if you will. Eventually the bills become due. Eventually, we’ll understand that shifting money around like this without creating any new growth is a dead end.

Which brings us to that last bit of the article. Incredulously, the AP admits that “despite the stimulus” unemployment is at 9.8%! As if the stimulus would lead to any other result except higher unemployment. This is shocking? When you take money away from rich people, they have nothing left to hire new people and make new things. They contract. It’s no surprise (to anyone except the AP, that is) that economists are saying that unemployment “could” continue to rise. High taxes work as disincentives for corporations and big business to hire people and make things. THe higher taxes go, the less things are made. The less people are hired. The longer unemployment lasts.

If one lone Republican supporting your socialist bill indicates “bipartisan” support, then Max Baucus and the Democrats got that yesterday as the first hurdle to a government takeover of our insurance industry was cleared.

Here’s Liberal in Republican clothing Olympia Snowe ruminating on whether a “public option” might be the thing to fix “what’s wrong” with accessibility to health care in this country:

“I think the government would have a disproportionate advantage” in the event of a government-run option, the Maine Republican said in a nationally broadcast interview. Snowe said “at the same time, I want to make sure the insurance industry performs, and that’s why we eliminate many egregious practices.“

Egregious practices, you say? Sounds serious. You’d think the AP would get right to telling us what those practices might be and why they’re so egregious. The AP of course doesn’t do that. We have to wait until paragraph 17 to find out what “egregious practices” this new bill is aiming to fix, which to me is strange. Burying them so deep in the story leads me to believe that they’re really afterthoughts. That the reason to support this bill that the AP really wants you to take away has nothing to do with the egregious practices at all, but has everything to do (as did Obama’s Nobel Peace Prize ‘victory’ last week) with…rooting for Obama (and maybe also re-making America into a socialist trough). See for yourself. Tell me if these “egregious practices” are really all that bad:

The measures would bar insurance companies from denying coverage on the basis of pre-existing medical conditions and for the first time limit their ability to charge higher premiums on the basis of age or family size.

Think about that. We’re about to embark on trillions of dollars of government spending over the next couple of decades at least because we don’t like the fact that insurers price their products differently depending on the risk they’re assuming.

Imagine you’re a skydiver with a bad heart. You’re attempting to set the new world record by Scotch-taping yourself to a 1968 VW Bus and parachuting out of a B-1 Bomber. Over the grand canyon. While on fire. You go to your local insurer and attempt to buy insurance. Would you reasonably expect to be charged the same for your policy as a healthy 25 year old non-smoking female Olympic swimmer? Would you really?

Insurance is NOT the same thing as “FREE CARE”. Too many people think it is and it’s this misconception that is driving this debate into the dirt. Insurance companies don’t have to offer you insurance in exchange for money. This (for now) is a free society. They could just as easily go make hot dogs or mow lawns. Instead, through their own free will, they have (thankfully) decided to offer a service to cautious people. In exchange for a monthly sum (called a premium), they’ll promise to pay you a set amount of money in the event that some event happens. As I’ve said in the past, it is a bet. You’re betting that the thing will happen and they’re betting that it won’t. Your death for example. Life insurance. You’re betting Prudential that you will die within the next 30 years. They’re betting you won’t. They’re so confident you won’t die that they’re willing to pay you a lump sum of a million dollars if you end up dying. And all that bet will cost you will be a monthly premium payment.

How big should that premium payment be? Let’s go back to our sky-diver. How big should his monthly premium be? How likely is it that he’ll be right and end up dying? Pretty likely, right? So of Prudential is going to pay him that million dollars for dying in the next 30 years, they’re going to require that the monthly premium be high, right? Higher at least than the 25 year old non-smoking female Olympic swimmer. She’s not likely to die at all. Their promise to pay that million dollars is then a safe bet.

People with pre-existing conditions, who are extremely likely to require care,  are by economic necessity going to be priced higher than people without those condition. Remember, it’s all about managing risk. Betting.  If insurers charged people with pre-existing conditions as if they were healthy, then when it came time to pay out benefits, insurers would take a huge loss. Multiplied over millions of policies, it wouldn’t be long before insurers went out of business.

This would be bad.

For everyone.

The same thing with premiums which “discriminate” by charging higher premiums to older people or to people with larger families. Whenever a party becomes “more likely” to receive a benefit, an insurance company must manage that risk by charging more. Low risk people mean low premiums. High risk means high premiums. All these “egregious practices” which have motivated the left to overhaul our entire insurance industry, are all founded upon basic economic principles. These insurance companies aren’t evil. Their practices aren’t “egregious”. They offer us ALL protection against unforeseen events and the current witch hunt against them is criminal.

Let’s get back to that word for a minute. “Unforeseen”. Health insurance, unlike life insurance, deals in things which are foreseeable, right? We know we want to go to the doctor twice a year and to get “routine” bloodwork done. We want  “regular” breast and prostate exams. Remember our sky-diver? His death was “foreseeable” in the life-insurance context, which means his premiums were adjusted up. Not much of a bet when it’s very likely you’re going to lose. To manage that (high) risk of loss, you charge a higher cost to the insured to play the game. Same with the sort of “regular” care most people want in the health-insurance context. If you’re telling your insurer up front that you’re going to DEFINITELY be making claims MULTIPLE TIMES a year to cover exams, shots, etc., then how can your policy be ANYTHING except EXPENSIVE?

This is what people on the Left just do not seem to understand, or if they do, they do a good job of concealing to perhaps realize their underlying objectives of a socialist government in general.

And this should all seem very familiar to you. This should all seem like deja-vu. There was a time when the government thought that more people should receive loans to buy houses too. Remember what happened there? Despite the basic economic principle that people should be given loans based on the likelihood of their ability to pay, the government forced lenders to lend to high risk people, then subsidized those loans and guaranteed them with Sallie Mae and Freddie Mac. What happened there? Do you remember? Look at the headlines if you’re unclear. Unemployment at 10%. No money to be found. Credit dried up. Housing market plummeting.

And we go blithely on pretending that THIS TIME the government knows what it’s doing and that THIS TIME they’ll get it right. Forcing insurers to make economically unsound decisions to insure high risk people at low premiums and then have the government guarantee those bad policies with tax dollars is ITSELF an “egregious practice”. Do we have to wait until it all blows up AGAIN before we realize it was a bad idea?

And this of course is not to say that high risk people should not receive care. That’s dumb. Of course they should receive care and of course they should be able to purchase some type of policy that insures the costs associated with that care. It’s just that government until now has stood in the way of private insurers working together to solve this problem via competitive markets. It is ILLEGAL for example to purchase policies across state lines and to buy policies that do not contain state-mandated things like prostate screening for women or breast exams for men. Because states require that all policies contain provisions for insurers to pay for these things, the costs of those policies (as we’ve seen above) rise unnecessarily. Astronomically. How about a sick person in NY being able to buy a stripped down policy covering only his immediate requirements via the internet from an insurer in California? He can’t. It’s illegal to do so.

That’s where health care “reform” should start. That it’s not, is all you need to know about Olympia Snowe and her “egregious practices”. Reform is not “reform” because someone tells you it is. Break it down. Look it over. When you do so, if it seems like it’s only really an excuse for another expansion of government, you know you’ve hit on something. You’ve hit on exactly why nobody on the left gets too into specifics when they talk about “what’s wrong” with the current system.

Someone named Noam N. Levey penned this wonderful little bit of misinformation in today’s LA Times:

Imagine the debate over healthcare legislation on Capitol Hill as a tussle among three friends out for dinner.

All three have been struggling to pay their bills lately. When the check arrives, they try to figure out how to divide it. The problem is no one can really afford the meal. And if one manages to pay less, the other two will go home even deeper in the hole.

That is the dilemma facing President Obama and his congressional allies as they try to develop healthcare legislation that can unite liberal and conservative Democrats and make it to the president’s desk by the end of the year.

“It is all a question of balancing,” said Ken Thorpe, a healthcare economist at Emory University who has advised congressional Democrats working on healthcare bills.

Think of our three friends as consumers, businesses and government, the three major groups that pay for healthcare in America.

The check is the nation’s healthcare tab, which now tops $2.5 trillion a year.

via Splitting healthcare tab is a balancing act — latimes.com.

Does Mr. Levey not realize that “government” pays for nothing? Every dollar spent by government must first come from a “consumer” or a “business” that created it in the first place.

Some might ask (and they’d be right in asking) why government needs to place itself in between citizens and their health care at all. Wouldn’t it all be more efficient to permit citizens and businesses who create their dollars to pay it directly to the insurance companies themselves? Wouldn’t it make sense to permit interstate competition between health insurance companies? Wouldn’t that competition (like competition between potato chip and motor oil companies) result in more choices for the consumers? Lower prices? Better quality? And wouldn’t it also make sense to permit consumers to purchase insurance against whatever type of contingencies they wish? Shouldn’t a healthy 22 year old male be free to insure against ONLY catastrophic occurrences? Why is he instead required to obtain and pay for a policy insuring things he doesn’t need?

Ah…and now we get to the reason for government. The reason that the government insists on insinuating itself between citizens and their health care is that without the government, the millions and millions of people who feel that they are entitled to FREE health care and who exist like CHILDREN within the soft fluffy womb of Big Government Insulation would be out of luck.

I’m not talking about people who despite their best efforts find themselves temporarily in need of assistance. I’m also not talking about the old, the young, the truly poor, the incapacitated. These people should be helped by the government and the government should be able to collect a little bit of money from the hundreds of millions of us who have some in order to help those who absolutely cannot help themselves.

But there are ALREADY government programs like that. Tremendously wasteful and inefficient ones, I grant you, but systems currently being funded that help the young (SCHIP), the old (MEDICARE) and the poor (MEDICAID). Not to mention social security.

Why isn’t “health care reform” focusing on fixing EXISTING programs to more effectively help those who are already eligible to receive that help?

Because that misses the point, doesn’t it? The object of the current Obama-liberal reform packages is to insure that the producers in this country are screwed to the highest possible degree so that those who are content to recline in the padded lap of government may do so from cradle to grave.

That’s why the various free market approaches that I outline above won’t be seriously entertained by any liberal. Because just as the Stimulus wasn’t created to stimulate anything except the liberal base, so too is health care ‘reform’ not intended to reform anything except capitalism.

The cure for capitalism is a heavy dose of socialism….and that’s just what Obama is planning to deliver.

If recent polls are any indicator though, these plans may be crumbling. Which of course is a good thing, despite what great thinkers like Noam N. Levey believe. The more Obama and his liberal cabal open their mouths to scold Americans on health care ‘reform’, the more we learn of his socialist mischief and the more sick and tired we become of his Presidency.

This chart from Rasmussen says it all:

Keep talking, Mr. President. Keep talking.

Sometimes, when you’re arguing back and forth on a topic for too long, it’s easy to sort of lose focus on what all the hub bub is about and it’s worth taking just a few moments to step back and put your hands on the arguments once again.

Health Care reform. Or is it Health Insurance reform? All we seem to know is that some powerful Americans (namely, the President and his fellow travellers in Congress) are pissed off that a condition exists in this country whereby becoming sick can be very costly.

“We should not be forced into bankruptcy by our health care bills!” they say, and “We should not be denied coverage for any reason!”

Does that about cover it?

I think a good way to get back to square one here is to look at the term “insurance”….since the companies who give us these policies (in exchange for money) seem to be bearing the brunt of a lot of rage these days. Evil profiteers, you know. Filthy lucre.

The purpose of an insurance policy is to protect yourself against damages likely to be sustained by the occurrence or non-occurrence of a particular event (or set of events). For example…let’s just say you run a flower-selling operation out of your backyard. In order to grow flowers, you need for it to rain. If you’re a forward thinking individual, you may want to consider purchasing an insurance policy that will pay you the cost of losing a particular crop of roses in the event that you lose that crop because it didn’t rain. Since you’d normally sell that crop for say $2,000 and the cost (in terms of time and money) to replace a lost crop would be say another $1,000, it wouldn’t be unreasonable for you to take out a $3,000 policy against it not raining. If it doesn’t rain AND such non-rain causes you to lose your crop, then the insurance company will give you $3,000. Not bad. But what does a policy like that cost you?

Suffice to say, there are very smart people currently being paid A LOT of money to determine at what cost insurance policies should be sold. I’m not one of those people, but I did stay in a Holiday Inn Express last night, so I’ll take a crack at it. You’re obviously not going to want to pay $3,000 for that policy, right? Since that’s the amount you’d benefit if it didn’t rain, it would make better sense at that point to just save your $3,000 in a bank and hope that it doesn’t rain.

In order to entice you to purchase a policy, an insurance company has therefore got to offer it to you for less money than the total benefit of the policy, right? Insurance companies also have to consider the likelihood of the thing being insured against. If the event is likely, then your policy will cost more money. If it isn’t likely, the policy will be cheaper.

Why is that?

This is the great equalizer as far as the current debate about health care goes. If an insurance company is promising to pay not only you but thousands of other rose-growers in the area $3,000 apiece if a drought occurs which ruins crops, it will NEED to know how likely it is that the event itself will happen. If you live in the Sahara desert, then the likelihood of them paying out is near 100%. It never rains there and therefore, it’s very likely that a drought will ruin your crop. And since they’d have to charge you less than $3,000 for the policy to begin with (see above), they’d LOSE money on every policy. In a free market economy, there would be no market for these types of policies. People would save their money and pay for damages out of their own pockets, or better yet, choose another profession. The risk of losing their entire crops without insurance would be enough for them to take up boat-making instead.

Let’s say instead of the Sahara, you lived in a Costa Rican rain forest. What’s the likelihood of a drought coming there and destroying your rose crops? Near zero, right? So how much do you think that policy would cost? Pennies. Insurance companies would be very competitive in this market, right? Offering you insurance against events that are practically guaranteed never to happen means they can price their policies very modestly. Then the rose-grower would have to decide—if the event is NEVER going to happen, is it worth insuring against? Probably, because you never know, but we’re talking nominal fees here.

So what have we learned? If you want to insure against things that are practically GUARANTEED to happen, you’ll find that policy (if indeed anyone will offer it) to be very expensive. If you want to insure against things that are practically guaranteed NOT to happen, you’ll find that policy to be very cheap.

Of course the crucible of this little experiment anticipates a free market without government interfering with the natural allocation of resources through pricing. Which brings me to my next point.

Why is health insurance so expensive?

Simply, health insurance is so expensive because insurance companies are being forced (through individual mandates of both the states and the federal government) to cover things they would ordinarily find to be too risky. Not only that, but you and I are forced to buy these policies, covering things we don’t even need. Why is this happening? Because government, in its infinite wisdom, decided once again that it knew more about markets than the private businesses engaging in those markets themselves. Does the Community Reinvestment Act ring a bell? This of course was the government’s ill fated attempt (*cough* RECESSION *cough* HOUSING BUBBLE *cough*) to ‘guarantee’ that poor people with poor credit be afforded the opportunity to receive a mortgage…regardless of their ability to repay loans. You see, the government thought that because poor people with poor credit (gasp!) weren’t receiving loans for HUNDREDS of THOUSANDS of dollars….banks were therefore not only EVIL but RACIST to boot (because anyone’s a racist, don’t you know, who doesn’t loan money to people who can’t repay). The government acted on a supposition that EVERYONE regardless of credit rating had a RIGHT to OWN a HOUSE. That right eventually translated into a recession that we’re still enduring today.

The current government project is to create a RIGHT for everyone to receive FREE HEALTH CARE….and then to destroy the INSURANCE industry to realize that “right”. The result will be the ruination of the insurance industry (and subsequently, the level of care accessible to all Americans) similar to the ruination of the financial industry.

Insurance, as we saw above, is not set up to be a guarantor of free stuff. Insurance is RISK MANAGEMENT. The more you require insurance companies to cover EVERYTHING (and not just unlikely, but costly events), the more expensive those policies will end up becoming. We’re asking our insurance companies to provide more and more coverage for more and more things, but asking the PRICE of that coverage to go DOWN?

It’s illogical and irrational. If you want to say that the government (and doctors) should be in the business of giving away free stuff, then say it. But don’t pretend that this is an INSURANCE issue…since any reasonable person knows that INSURANCE is not about guarantees. It’s about a safety net. This major disconnect is causing immense confusion in the current debate.

Imagine this in terms of car insurance. Imagine that we wanted every single expense associated with our cars to be covered under an insurance policy. That means gas fillups, tolls, tickets, regular maintenance, oil change, car washes, etc. What do you think that sort of policy would cost?

Astronomical, right? As well it should be because we’d be transforming our policy from one of “risk” to one of “guarantee”. In other words, we’re no longer insuring against the occurrence of an unlikely event, but insuring against the occurrence of very likely events. Events so likely, they’re guaranteed. Will our cars be “healthier” if we had all this stuff covered under our “insurance”? Sure. But at what cost?

We’re currently in the “at what cost” stage of the debate in health insurance. Everyone wants to be covered against drought in the Sahara desert, and insurance is just not set up to make that a cost-effective policy.

We need to remove “insurance” from this debate and clear the air. This is about the government guaranteeing that everyone be issued “free stuff”, to be paid for by people who are already paying too much relative to the value received. It’s nonsense, and it’s time we all realized it.

There’s a trick play in baseball where the first baseman pretends to throw the ball back to the pitcher after a pickoff attempt, but instead, he actually holds on to it. He hides it in his glove. The idea is to get the runner on first to bite on the ruse and wander off the bag again…thinking the ball is back with the pitcher. When he does that (sucker!) the first baseman reveals the ball, puts the tag on the duped runner, and everyone has a good laugh. Except the runner. And his manager, maybe.

So how to get a gullible and benighted public to wander off the bag on health care? No serious person would want a socialized system when presented with the facts, so you’ve got to trick it somehow and pretend you’re doing one thing while actually doing another.

Bobby Jindal breaks it down:

The left in Washington has concluded that honesty will not yield its desired policy result. So it resorts to a fundamentally dishonest approach to reform. I say this because the marketing of the Democrats’ plans as presented in the House of Representatives and endorsed heartily by President Obama rests on three falsehoods.

First, Mr. Obama doggedly promises that if you like your (private) health-care coverage now, you can keep it. That promise is hollow, because the Democrats’ reforms are designed to push an ever-increasing number of Americans into a government-run health-care plan.

If a so-called public option is part of health-care reform, the Lewin Group study estimates over 100 million Americans may leave private plans for government-run health care. Any government plan will benefit from taxpayer subsidies and be able to operate at a financial loss—competing unfairly in the marketplace until private plans are driven out of business. The government plan will become so large that it will set, rather than negotiate, prices. This will inevitably lead to monopoly, with a resulting threat to the quality of our health care.

Second, the Democrats disingenuously argue their reforms will not diminish the quality of our health care even as government involvement in the delivery of that health care increases massively. For all of us who have seen the Federal Emergency Management Agency’s response to hurricanes, this contention is laughable on its face. When government bureaucracies drive the delivery of services—in this case inserting themselves between health-care providers and their patients—quality degradation will surely come. House Democrats seem willing to accept that problem to achieve their philosophical aim—the long-term removal of for-profit entities from the health-care landscape.

Third, Mr. Obama’s rhetoric paints a picture of a massive new benefit that will actually cost average Americans less than what they pay today. The Democrats want middle-class taxpayers to believe they won’t feel the pinch of this initiative, even as their employers are assessed massive new taxes. They might as well try to argue that up is down. The analysis of the Democrats’ proposal by the Congressional Budget Office shows that it will not reduce government spending on health care, and that it will substantially increase the federal deficit—and this despite all the tax increases.

via Bobby Jindal’s Bipartisan Health-Care Reform – WSJ.com.

Of course read the whole thing.

Vote no on Socialism.

We’ve all seen the infomercials. The hucksters claiming that their extra special product “won’t last” or that their “supplies are limited” They tell us that their offer is only available “for a limited time” and as an extra incentive to get us to open our wallets, tell us that the “first 100 callers” get a free tote bag. They’re appealing to that base instinct within us not to be left behind and to avoid future teeth gnashing at having missed the greatest thing ever to have happened to mankind.

The thing is, if you stop to think about it, if the product were really that valuable, these salesmen would make it available FOREVER wouldn’t they? What thing of value is there in the world that is not available to you RIGHT NOW? Are there any? Bread, water, milk, an apartment, a lawnmower, hand towels, toilet tissue, nasal spray. Whatever. Nobody needs to create false demand for these things by hyping the uncertainty of supply.

It’s the truly worthless things that you have to worry about. These are the things that nobody wants, but which salesmen convince you are invaluable due to the supposed fleetingness of their availability. We buy these things not out of need but out of fear of “missing out” and regretting it later. It’s a scam.

It is in the spirit of these hucksters and the worthless products they connive us into purchasing that I bring you (who else?) the President of our great nation. Barack “Shifty” Obama.

Seems he convinced our legislature a bit ago that unless we “acted now!” that our entire economy would be up in smoke. Remember now, any real solution of value will stand the test of time and be as valuable after everyone’s digested its contents as before. Acting now won’t make a dog turd into a gold nugget, even though Shifty may want you to believe it to be so.

This from today’s Washington Post:

YOU MAY RECALL President Obama urging Congress to pass the stimulus bill immediately because the economy so desperately needed money. The massive recovery bill was passed, and, recently, a few “green shoots” have been popping up — indicating that, perhaps, the worst may be over. Is it a result of the stimulus? Tough to say, but, given the amount of money that has actually gone out the door, probably not.

Government agencies have thus far spent $29 billion of the $787 billion stimulus package, and less than that has gone out in tax cuts. What has been spent has mostly gone to Medicaid and unemployment insurance — real “shovel-ready” programs in that they are already in place. It is true that just knowing that money has been authorized ($88 billion so far) can allow projects to get started and jobs to be created. Nonetheless, of the $20 billion approved for spending so far for the Education Department, for instance, 97.2 percent remains unspent. Of the $10 billion approved for the Transportation Department, a full 99.7 percent is still left to be spent.

The challenge of getting government money out the door fast is one reason that some economists challenge the value of Keynesian stimulus policies. By the time checks are being written, they argue, an economic recovery is often underway. The result can be an inflationary waste of money.

So let’s walk through this one together.

When left alone, thriving economies like ours have a tendency to correct themselves. I know this. You know this. Obama certainly knows this. Only Obama’s got a problem. He was elected on the crest of a populist “gimme mine” and “soak the rich” platform. He’s got buckets full of special interest groups like unions, environmentalists, the poor, and generally any of a long list of groups that produce nothing in our economy except grievances. They take what you and I make. So what does he do? Instead of getting out of the way and permitting the economy to recover from the (government induced) trauma of the housing/credit crisis, he uses the crisis as an excuse to pay off his constituency.

$787 billion is authorized by Congress to be spent even though nobody outside of kindergarten seriously believes it will actually be in anyone’s hands before the economy rights itself of its own accord, or that it will help the economy in any meaningful sense. Obama doesn’t care. The stimulus package is a payoff. It’s retribution. It’s redistribution. It’s purpose isn’t to help the economy at all. It’s only purpose is to help Obama.

And we can see from the results that Obama knew exactly what he was doing. Of the total amount authorized to be spent, only 2.5% of that actually has been spent 3 months later.

Yet we had to “act now”. We couldn’t delay one minute. Supplies were limited after all.

Had we taken the time to think about this, we’d have seen that it was nothing more than a play by Obama to use the recession as an excuse to drench his pet projects and those of the liberal democrat legislature with our hard earned money. The economy would always fix itself. But to fix his political base, Obama demanded the stimulus.

Sure, lots of people got rich off the stimulus. Too bad you and I aren’t among them.

OK.

Imagine you own a business. Your object of course is to produce lots of quality stuff that people want to buy at prices that will permit you to make a profit. This profit will permit you to keep making these things, and keep selling them to people who want to buy them. If you were breaking even on these sales or losing money, there’d be little incentive to be productive. You’d cut back. You’d hire less. You’d make and sell less.

Quick, what is your overhead?

Among other things like rent and raw materials, 2 significant “costs” will be employee salaries and taxes. These are 2 expenses that you have to subtract from the gross price received from the goods you sell in order to determine your profit. The higher these expenses are, the less profit you make. The less profit you make, the less likely you are to continue producing. The less productive you are, the more likely you are to layoff workers.

So.

What do the highest unemployment states in the nation have in common?

High taxes and high union membership.

Jim Lindgren at the Volokh Conspiracy has the details.

The six states with the highest unemployment rates are:

• 12.6% Michigan
• 12.1% Oregon
• 11.4% South Carolina
• 11.2% California
• 10.8% North Carolina
• 10.5% Rhode Island

In the six states with the highest unemployment rates, the average top state income tax bracket is 8.05%. All but Michigan have marginal tax rates of at least 7% (and Michigan has a very high unionization rate).

[ . . . ]

Further, union representation averages 14.1% in the six high unemployment states, with a median of 17.4%. All but the Carolinas are among the most unionized states in the nation (and the Carolinas have relatively high marginal income tax rates of 7% and 7.75%).

Putting this together, 3 of the 6 states with the highest unemployment (California, Oregon, and Rhode Island) have both high marginal income tax rates and high union representation. Michigan has high unionization but moderate marginal income tax rates, and the Carolinas have high marginal income taxes, but low unionization rates.

[ . . . ]

As with so many of the reforms contemplated in the budget passed a few weeks ago, we can’t know that they will be counter-productive, but the stated goals and the means to achieve those goals do seem to point in opposite directions.

Fascinating.

When you increase the percentage of a business’s profits that go to the government in the form of taxes, and you federally mandate that businesses must negotiate CBA’s with unions that result in their paying their workers more than their productivity is worth, you’re eroding the profitability of those businesses.

And unprofitable businesses, as we all should know by now, tend to lay off workers.

Why is this so hard?

In case you haven’t seen this yet, please take a look now because my blood is boiling and I can’t hold it in anymore:

Lots going on here so let’s take them one by one.

First, isn’t she supposed to be a reporter? For any of you holding out hope that CNN (substitute MSNBC, NBC, CBS, ABC, the AP, Reuters, the New York Times or any other so-called news gathering agency at work today) is a legitimate, objective resource from which you can glean the facts of what’s going on in the world today, I ask that you please please think again. What’s the first thing you learned in elementary school when your teachers attempted to give you a broad base about what journalists do and how they do it? Who. What. Where. When. Why. Not why YOU think things happened or who YOU think is responsible. The “object” is to find out what “actually” happened. If anyone cared about what YOU thought about it or what others’ OPINIONS are about what happened, they’d turn to the editorial page or to a talk show where it is the express PURPOSE to give opnion. The express purpose of a REPORTER is to interview WITNESSES, uncover facts, and to explain to the viewer or listener (who’s not ON the scene and is relying on your OBJECTIVITY) what is going on, who’s doing it, and why. Susan Roesgen (and her employer, CNN) are frauds in that they advertise themselves as objective reporters, gain access to events based on that assumption, and then proceed to vomit their opinions on an unsuspecting public. What is “objective” news reporter Susan Roesgen doing asking this witness “Do you realize that you’re eligible for a $400 rebate?”? First of all, is he even eligible for that? I know I’m not and millions of other hard working Americans (too hard working apparently!) aren’t either. I’d bet assclown Susan Roesgen isn’t even eligible for that rebate. Second, it’s irrelevant. What does his eligibility for a tax rebate have to do with this man’s account of what’s going on at the Chicago protest and why he’s there? Third, even if it were relevant, this is not the forum for that type of question! This is a news gathering exercise. It is not an opinion piece on the Op-ed page of the Times. The more Americans watch these so-called “news” programs and come away with the impression that what they’re hearing is actually what’s “going on”, the deeper we sink into a national information emergency. We can’t be free in the dark.

Second, assuming for a second that this despicable person, Susan Roesgen was actually talented or popular enough to one day be named the host of her own talk show, and this gentleman and his little right wing extremist 2 year old daughter were sitting on a couch opposite her, the question she asked him was beyond ridiculous. As her puerile, imbecilic logic goes, anyone who is eligible for a $400 tax rebate (or lives in a state, she goes on to vomit, which has received billions from Lord Obama) ought to LOVE government and be GRATEFUL for its loving kindness. They certainly shouldn’t be out protesting it. In fact, the problem that this man sees with government out of control is THE FACT that he IS eligible for the rebate and his state HAS TAKEN these billions. Where, pray tell, does this incompetent fool Susan Roesgen think the government gets the money to handout in the first place? Taxpayers themselves. Does she not know this? Did she used to know but has now forgotten? Incredible. This man and his daughter and hundreds of thousands of like-minded private citizens throughout the country attended Tea Parties on 4/15 precisely because the government was taking money from some of its citizens and giving it to others. They were protesting the fact that in order to feed Obama’s deficits over the next 10 years, the government will have to raise taxes on its most productive earners. They were protesting the fact that Obama has promised to let the Bush tax cuts expire in 2010 which will be an IMMEDIATE increase in taxes for millions without being labeled a “tax hike”. They were protesting this, and the fact that  the top 50% of earners in this nation pay 97% of all taxes.

What the child Susan Roesgen doesn’t realize is that a person’s money is his property. The government gets it by passing laws to confiscate it. The money isn’t the government’s. It’s the property of private citizens that the government must first take. When the government wastes that money and then demands more and more of it from its citizens, it is an entirely appropriate exercise for those citizens to call foul.

This is what everyone was protesting at those Tea Parties. Yes, we elect people to go to Washington, and yes, they pass the laws that result in the spending of all this money, so yes, we have authorized this, but NO, this is not true “representation”. No candidate runs on a platform of “elect me and I’ll spend your money”. If he did, he’d not get elected.  That so many have been elected and then go on to spend recklessly while raising our taxes to fund their extravagance (cf. Obama himself) is what the Tea Party movement is all about. We the people are presented in these elections with candidates who spray  mealy-mouthed platitudes which never get examined because our press (yes YOU, Susan Roesgen) are incompetent elitists who are glad to abet the election of people who will expand the welfare state.

The Tea Party movement is about saying “ENOUGH” to the status quo of government, as exemplified most recently in the extraordinary overreach by the Obama administration to blanket our economy in a socialist haze and choke off  what’s left of our dynamic, free-market system. It is not party driven, though it is full of the sentiment of Libertarian and Conservative ideologies that (as of now) have resided in the Republican party. That needn’t last forever. To the extent that the Republican party embraces this movement (Michael Steele was denied permission to speak in Chicago), they’ll find support from the movement.

If CNN was really interested in the “who, what, where, when and why” of the Tea Parties, they’d have sent a reporter to find out instead of the execrable Susan Roesgen.

So stop watching them.

Excellent piece by Peter Leeson over at the Washington Times this past Friday.

When ineffective producers fail, resources committed to producing goods we value less are freed for producing goods we value more. Polaroid’s failure released resources for the production of digital cameras; Commodore Computers’ failure released resources for the production of IBM computers; and Chi Chi’s restaurant’s failure released resources for, well, the production of food that tastes good. Who better to sacrifice the resources required to expand production of the things we want than producers of the things we don’t?

Read the whole thing.

So simple it’s scary, though. Smith-Corona used to be the worldwide leader in typewriter sales. Eventually, the advent of the personal computer caused them to lose sales and eventually face bankruptcy. What if the federal government had stepped in and begun subsidizing Smith-Corona? Comical, right? Smith-Corona of course was “permitted” to fail by a free market system that no longer desired to buy its products. All those people hired by them and all the money spent by them to produce typewriters were released, on their bankruptcy, into the free market, where they were reapportioned and re-directed to the places where they were needed the most—computers.

Why weren’t the banks and insurance companies and big auto companies “permitted to fail”? If they reorganized, wouldn’t there have been thousands of smaller private companies swarming in to snap up the resources that they were using toward failing ventures to redirect them to successful ones? When companies are artificially propped up by government to survive in a world which no longer permits them to support themselves, they become zombies…feeding on the flesh (and taxes) of the living, unable to die. Death is the best thing for them, and we should get out of the way.

I recommend Thomas Sowell’s Basic Economics for further reading on this.

Ever wonder why the Obama Administration, the Pelosi House and the Reid Senate don’t just step out of the way and let Citi, AIG, Goldman Sachs, Morgan Stanley, etc. all just file for Chapter 11 reorganization like any other company would have had to do?

I’ve wondered the same thing.