Government Goal: Increase the Cost of Basic Necessities?

Can you imagine if the government actively pursued a policy to increase the cost of food for Americans?  How about gasoline?   It sounds crazy.  Why would the U.S. government support policies intended to increase the prices of basic human needs instead of decrease them?

Despite the fact that everyone needs a place to live, if housing gets more expensive, we have decided that it is a good thing from a public policy perspective. Current programs and the media have determined that lower housing costs are bad despite the disastrous effects that the housing bubble pop had on the economy in 4 years ago.  

I would prefer that everyone have a nice, affordable place to live instead of turning this basic human necessity into a savings mechanism prone to asset bubbles.  Perhaps a better means of retirement savings would be savings accounts, stocks, or bonds?

If we truly care about the poor and raising our national standard of living, we should rethink our misguided housing policies.

Insurance = Low Cost Health Care?

We all want accessible, low cost health care.

Unfortunately, a lack of clarity about that goal has exacerbated the cost of health care in the U.S.  Recent political debate has focused on getting people insured instead of making sure that everyone has access and the costs of that care are affordable.  Insurance does NOT provide care, it is only a mechanism for paying for it.

New insurance mandates have increased the costs of obtaining care.  When we require insurance companies to pay for known, recurring expenses, like birth control, it doesn’t lower the cost, it raises it.  So now instead of paying for the service directly, we pay insurance premiums that must not only cover the cost of the service, but also the processing the claim, reimbursement expenses, and insurance company profits.  Ouch.

If the goal, on the other hand, is government (or employer) paid healthcare benefits, a contribution to a Health Savings Plan is a more cost effective solution- not expensive new insurance mandates.

A good podcast on the issue:

A good link to why we have have the best, most accessible healthcare in the world, AND so many are uninsured:


We are a country of immigrants.  Idealistic dreamers created this country.  People who have ideas and a willingness to work add to our economy and culture- making life better for all of us.  We should continue to make room for as many of these people as we can realistically assimilate.

Rand Paul’s speech at the Hispanic Chamber of Commerce captured this point of view.  Here are his money quotes:

“If you wish to work, if you wish to live and work in America, then we will find a place for you.”


“[We should] not to stop most immigrants from coming-we welcome them and in fact should seek to increase legal immigration.”


“It would also enable us to let more people in and allow us to admit we are not going to deport the millions of people who are currently here illegally.

This is where prudence, compassion and thrift all point us toward the same goal: bringing these workers out of the shadows and into being taxpaying members of society.

Imagine 12 million people who are already here coming out of the shadows to become new taxpayers.

12 million more people assimilating into society. 12 million more people being productive contributors.”

Let’s create probationary work visas, bring people out of the shadow economy, and start working diligently to educate and assimilate the latest newcomers, high skilled and low skilled alike, so that we can live true to our motto, E Pluribus Unum- Out of Many, One.

Related Links:
Rand Paul’s Speech
Text of the speech from the WSJ
Cato Institute’s Daily Podcast:  Rand Paul’s Pro-Immigration Push


I will admit that I have almost ignored sequestration, but recently I’ve had a few of my friends ask about my stance, so here it is.

I don’t believe it should amount to much.  I believe that political posturing and the associated drama and exaggeration will have the largest negative economic effects. The small reductions in bloated federal spending should NOT represent a substantial cut to the goods and services this country provides.  Why am I so dismissive?  Numbers.


The sequestration dollars specified in the Budget Control Act of 2011 represents a cut of $109B in the 2013 overall budget of $3,807 billion or about 2.86% (see White House Table S-1.) This is almost $80 billion more than the $3,729 billion 2012 Budget. The sequestration plan, proposed by the White House, specified that a large portion of the cuts would be from defense in hopes that failing to prevent military budget reductions would be politically unacceptable to House Republicans and therefore encourage them to compromise on the President’s desire to continue to expand Non-Defense Discretionary (NDD) spending.  The President’s plan failed and now he’s trying to make the stakes higher.

I don’t want to invalidate the concerns people have regarding the impacts.  Both military groups and promoters of specific social and educational programs have weighed in on how they believe they will be negatively affected including: the PTA, AAP, Public Health, and other groups. Some of the cuts will hurt, but I suspect that a lot of pain will be self inflicted for political gain.

To steal from a favorite educator, intellectual, and author of mine, Thomas Sowell:

Back in my teaching days, many years ago, one of the things I liked to ask the class to consider was this: Imagine a government agency with only two tasks: (1) building statues of Benedict Arnold and (2) providing life-saving medications to children. If this agency’s budget were cut, what would it do?

The answer, of course, is that it would cut back on the medications for children. Why? Because that would be what was most likely to get the budget cuts restored. If they cut back on building statues of Benedict Arnold, people might ask why they were building statues of Benedict Arnold in the first place.

Defense Spending Cuts Triggered by Sequestration

Defense Spending Cuts Triggered by Sequestration


When Regulation Becomes Counterproductive

Shot of San Onofre on the way to work.

San Onofre spewing radioactive steam on the way to work.

Safety crews at San Onofre decided against taking additional steps to ensure that the nuclear plant was safe in order to avoid triggering long and costly bureaucratic reviews:

When avoiding bureaucracy forces people to avoid doing common-sense things they would normally do in a non-regulated environment, has regulation gone too far?  When regulations are effectively counterproductive are they worth it?  When events like this happen, should we re-assess if the regulations are accomplishing their intended goals or making things worse?

Several additional examples in other industries to follow shortly…

True Tolerance Actually Requires Tolerance

I’ve been struck by the intolerance of the tolerance crowd.  As funny as it sounds, I believe that tolerance actually requires tolerance of views contrary to your own.  Some recent discussions and articles that I’ve read seem to suggest that an alternative definition is evolving for the word.  The new definition of tolerance implies that you must accept or adopt the currently popular viewpoint.  I think that type of extreme political correctness not only shuts down debate and hinders freedom, but limits free thinking.

I saw this quote and liked it, so I found the original article (link provided, paraphrased and emphasis added):

In an effort to legitimize their values and purposes, groups are accusing others of the sins they themselves are committing, hate and intolerance.  The demand to be tolerated has morphed into a demand to be accepted, which in turn, has resulted in a cry and demand that the rights of others be denied and that they set aside their own sets of values and associations.

While I am conflicted about the underlying issue discussed in the article, I support the premise of the argument.

On that topic, I have also been impressed by 2 recent podcasts on Econtalk.  Russ Roberts, the podcast host, often disagrees without being disagreeable.  I like his academic approach.  He demonstrates how the 1st Amendment is supposed to work and why in the marketplace of free ideas, people with truly good ideas don’t have shut down dissenting viewpoints.  I highly recommend their download.  Here they are:

    First, Russ Roberts,invited Louis Michael Seidman of Georgetown University to discuss his controversial position that the we should ignore the Constitution in designing public policy, relying instead on the merits of policy regardless of their constitutionality.
    Second, Russ interviews Cathy O’Neil, data scientist and blogger at, about her journey from Wall Street to Occupy Wall Street. She talks about her experiences on Wall Street that ultimately led her to join the Occupy Wall Street movement.

Media Malpractice

There was a time that American journalists acted as a check against abuse in government.  They were skeptical of any government administration, regardless of its party.  Sadly, journalism now seems to be more about entertainment or pushing an agenda.  I believe that we are all at risk when the media seeks to manipulate opinion instead of inform it.

Here are a couple of recent reads that illustrate this concern:

Details on the JournoList

Pat Caddell at the Accuracy in Media event  – “The Audacity of Corruption”

Post Election Summary

A couple of weeks have gone by since the election.  I’ve been disappointed as any Mitt Romney supporter would be, but it has provided some good time for thought about politics and the future of this country.  I have witnessed the gloating, the denial, the analysis and anger with interest.  Was there some election fraud?  Sure, but not enough to make a huge difference in the actual results nor change the election.  America’s end is not imminent.  I won’t be moving anywhere else.

So what happened?  The numbers tell the story.  The polarization politics played out.  Blacks, Hispanics, unmarried women, and the youth turned out in big numbers and overwhelmingly supported President Obama.  Many older, white, and religious voters stayed home.  Since it was a tight race, the demographics tipped the scales in favor of the President.

There was no sweeping mandate and little changed in the make up of congress.  Look forward to another 4 years of the same.  With identity politics proving to be more important than philosophy or policy- I expect the country will become increasingly divided.  That divide- unfortunately and unnecessarily- will be down ethnic, class, and religious boundaries.

Here’s another summary that mirrors much of my own thinking:  Root for America.

Initial Post Election Musings

I thought it would be closer.  I really did.  I know that 2 million votes difference out of 122 million is still a tight race, but I was actually confident the roles would be reversed.  That expectation was not just wishful thinking.  In several pre-election polls, Romney had taken a slight lead and had a palpable momentum.  Given that independents had been breaking heavily to Romney, it looked probable that he could capture enough swing states to win an electoral college victory in addition to the popular vote.

I was wrong.  Why?

For the same reason that Rasmussen was wrong.  Pollsters and pundits alike completely underestimated the cultural disconnect the Republican party had with minority groups and the enthusiasm gap between Obama and Romney supporters.  Minorities showed up with a passion that increased their absolute numbers, yet 10 to 16 million fewer white voters showed up despite an increase in their number.  The enthusiasm gap was among Republicans, not traditionally Democratic voters.

First, a quick note on the cultural disconnect.  Minority votes went to Obama more than 85% of the time.  That means almost 9 out of 10 minorities thought that voting for Obama would be in their best interest.  Anecdotal stories from my minority friends suggests that their respective communities really believed that Romney was going to raise taxes to pay for tax breaks for the rich, eliminate social programs that many in their community had come to rely on, deport their relatives, or flame anti-Chinese sentiment.  None of these were a platform or objective of Romney, but distortions of Romney statements provided the left the wind to stoke the flames of fear.

Though the actual results were within the margin of error of the Romney leaning polls, Rasmussen stated that they “underestimated the minority share of the electorate. In 2008, 26% of voters were non-white. We expected that to remain relatively constant. However, in 2012, 28% of voters were non-white. That was exactly the share projected by the Obama campaign. It is not clear at the moment whether minority turnout increased nationally, white turnout decreased, or if it was a combination of both. The increase in minority turnout has a significant impact on the final projections since Romney won nearly 60% of white votes while Obama won an even larger share of the minority vote.

Another factor may be related to the generation gap. It is interesting to note that the share of seniors who showed up to vote was down slightly from 2008 while the number of young voters was up slightly. Pre-election data suggested that voters over 65 were more enthusiastic about voting than they had been four years earlier so the decline bears further examination.”