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:
http://www.cato.org/multimedia/daily-podcast/does-hhs-secretary-sebelius-understand-insurance

A good link to why we have have the best, most accessible healthcare in the world, AND so many are uninsured:
http://www.cato.org/sites/cato.org/files/pubs/pdf/catosletterv3n1.pdf

Immigration

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

Sequestration

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.

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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.

http://www.cato.org/blog/truth-about-sequestration

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:

http://sanjuancapistrano.patch.com/articles/documents-prove-san-onofre-nuke-officials-knew-of-safety-problems-group-says

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.
http://politicsofwork.blogspot.com/2013/02/the-intolerance-of-todays-tolerance-and.html

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:

  1. http://www.econtalk.org/archives/2013/02/seidman_on_the.html
    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.
  2. http://www.econtalk.org/archives/2013/02/cathy_oneil_on.html
    Second, Russ interviews Cathy O’Neil, data scientist and blogger at mathbabe.org, 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
http://www.politico.com/news/stories/0710/40308.html

Pat Caddell at the Accuracy in Media event  – “The Audacity of Corruption”
http://www.aim.org/video/pat-caddell-the-audacity-of-corruption/

Blog Purpose

This blog is a place for me to therapeutically vent, daringly theorize, and thoughtfully develop some of my political points of view.  If others read it and can relate- great!  If others read it and disagree, challenge me!  I love a thought-provoking, passionate, respectful debate.  I really want to develop my ideas into a set of pragmatic policies which could be articulated and promoted with confidence.

MY BIAS DISCLOSURE
I am biased just like every other person in the universe.  My bias is towards freedom, despite that fact that people abuse that wonderful gift almost constantly.  However, I try to understand and give honest consideration to other viewpoints.  As a result, my viewpoints have changed over time and I expect them to continue to evolve.

In my current state of evolution, I have chosen to call myself an “independent consequential libertarian”.   Why?  Because conservative and liberal monikers don’t accurately capture my political viewpoints.  I should also note that the Libertarian Party doesn’t accurately capture my point of view either because, in some circumstances, the consequences of unregulated freedom results in outcomes that are NOT in society’s best interest (eg externalities) AND there are dangers that require us, as good people, to be our brother’s keeper.   I have never formally belonged to any political party and have voted for Democrat, Republican, and Libertarian candidates in the past.  I must admit “consequential libertarian” was borrowed from Milton Friedman as he articulated my point of view very well and called himself one.  Here is a link to Milton’s description of the moniker: http://www.youtube.com/watch?v=0PaN9M4WwHw.

Thoughts on America’s Energy Future

Rolling blackouts, $5+ a gallon gasoline, and increasing dependence on foreign countries for our energy needs is the inevitable result of current energy policies.

I can’t say it any better than these people:

John Hofmeister

Obama Administration Shutting Down Oil and Gas Exploration in the West

http://money.cnn.com/2010/11/12/news/economy/offshore_drilling_moratorium/index.htm?iid=EL

http://money.cnn.com/2010/12/01/news/economy/gulf_drilling_ban/index.htm

Obama funds offshore drilling…in Brazil