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To the President of Brown University,
I read with interest your recent commitment to increasing diversity at Brown University spending $100 million over the next 5-7 years in order to hire 60 more faculty members is an immense undertaking.
You wrote, “Many of the efforts detailed in our plan are focused on faculty diversity through targeted strategies such as early identification programs, postdoctoral programs and cluster hiring. By hiring the best and the brightest from a full range of backgrounds, we’ll put Brown in a position to attract exceptional students and scholars into our applicant pools.”
This is truly fantastic. Thus, I would like to know just how many conservative and libertarian professors Brown has hired or plans to hire as part of this initiative?
You also enthusiastically and “explicitly rejected mandatory ‘diversity training’, and cite diversity as “a key element of our core mission of education and discovery” being “integral to our commitment to cultivating an intellectual environment in which a wide range of views are represented and all individuals are treated with respect.” Agreed! Without libertarian and conservative point of views, you unequivocally cannot have a full, diverse point of view for learning. You certainly cannot possibly have a wide range of views if you have twice as many Marxist-leaning professors as the rest!
Supporting the necessity for diversity in higher education as a means for open conversation, a free exchange of ideas, and mutual respect. Without belittling the need to increase representation from historically underrepresented groups, it would be rather flawed to only focus on genetic diversity, while completely ignoring the expansion of diversity in political and ideological thought.
I look forward to hearing about your diversity expansion will include those that are politically and intellectually underrepresented at such a prestigious institution of higher learning.
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Here’s another ridiculous article by “economist” Grep Ip, wondering aloud once again why the economy isn’t doing any better, and why low interest rates haven’t helped. Either he’s truly incompetent as an economist not to see the detrimental effects of government policies on businesses and the economy, or he’s playing dumb to give cover to the Obama Administration by pretending their policies aren’t harmful and looking the other way in his analysis.
Ip writes, “One of the great mysteries of the recovery is why low interest rates have done so little to lift business investment. After all, that is supposed to be one of the ways monetary policy works: A lower cost of capital makes any project more viable. But what if lower interest rates are actually hurting investment by encouraging companies to pay dividends or buyback stock instead?”
This is exactly what is happening — it’s no mystery. But he draws no substantial conclusions. If he would just come down from his ivory tower of what is “supposed to happen” under Keynesian economics, and actually observe what is happening, he might actually learn something. The fact of the matter is, Obama’s policies are destroying our business environment and eliminating the opportunity.
The burden of over-regulation, the increases in taxes, the litigation-friendly environment, the overreaching government agencies, Obamacare, unprecedented debt and more — all of these factors cause businesses to essentially pause their business strategy. Who in their right mind really would consider substantial investment in an environment that is hostile to workers, and an economy that is now seeing more businesses close instead of open? The risk is often too great. Sitting it out is a safer bet.
Not only is it not a mystery as to why low interest rates haven’t spurred growth, it’s a no-brainer. To ignore the government’s effect on business and the economy is unprofessional and incompetent. “It’s the government, stupid!”
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A few weeks ago, the Feds trotted out a statistic aimed to bolster support for the fledgling Obamacare legislation amid steep premium hikes and costly non-compliance fines. While the Obama Administration celebrated the fact that the uninsured rate was finally below 10%, in reality, this same statistic actually represents the most colossal failure of any government program in the history of this country.
In 2010, we had nearly 307 million people living in the United States, with a 16.3% uninsured rate — or a record number of 49.9 million uninsured, according to the Census Bureau. On March 20, Nancy Pelosi presented a letter to the House of Representatives showing the yearly effects of Obamacare on insurance coverage — which included estimates on the number of uninsured each year. Obamacare passed three days later.
Looking at the data that was used to persuade passage of Obamacare, the number of estimated uninsured in 2016 was projected to be less -30 million and a 95% insured rate. That means the government predicted that by now, the uninsured rate would have dropped from 16.3 down to 5% — not 9.1% which is the current statistic. Going from 16.3% to 9.1% (instead of 5% by now) means that the government hit only 63% of the projected number of uninsured. (For the sake of also considering population increases, let’s say that the government only hit about ⅔ of its target).
This is a big deal. Congress and the public were told that the intended effects of getting the number of uninsured Americans down to a low number were worth it in the long run even if it meant that rest of the population — some 257 million people who currently HAD insurance at the time — would experience some sort of disruption with their health insurance. Most of these 257 million people were relatively happy with their plans and prices but the government decided that mucking with the system for all, for the reduction of some uninsured, was worth it.
And yet, only ⅔ of the projected uninsured has gotten insurance. 28.6 million people in the population remains uninsured, when it was projected that about 20 million (down from 50 million) would be uninsured by this time. How is this a success? It’s not, of course. Financially too, this program is derelict.
Celebrating an “under 10% uninsured number” is a hollow victory, a gimmick, a ruse to hide the truth about Obamacare. This statistic is an unmitigated disaster, an admission of utter failure of a program that has encroached into the lives of every American and arguably the biggest government program failure this country has had to contend with.
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Deidre McCloskey’s recent treatise (How the West (and the rest) Got Rich) on was a thoughtful essay on the power of liberty and its impact on economics. For the most part, McCloskey did a fine job explaining classical liberalism (“worthy of a free person”) and how the Great Enrichment — our uplifting out of poverty — really came about only when man began to have the liberty to think new ideas and create them.
There was one section, however, where Ms. McCloskey was incorrect. She indicated in passing the right had championed “Social Darwinism” and put forth concepts like eugenics — but this is incorrect. The idea gained footing during the Victorian Era due to the evolutionist Herbert Spencer, and it was promoted by progressives such as Teddy Roosevelt and Woodrow Wilson in the United States. The idea that people should be left by the wayside in a “survival of the fittest” kind of mentality is particularly repugnant and certainly not one espoused by conservatives or libertarians. Conservatives and libertarians are notoriously more generous; liberals don’t take their own money and give to the poor — they take other people’s money and give to the poor.
Consider for a moment too, the idea of wealth input. When people like Bernie Sanders suggest that wealth is unfairly going to wealthier people — well, how do you determine how much should go to each person? Should it really all be the same? Is that equality? Should LeBron James get the same as the least talented player in the NBA? We should be focusing on the equality of opportunity — the quality that you put in is equal to what you get out of it.
For example, Bill Gates make tens of millions a year and he pays several people $1 million or more a year because they are worth it to him. If Gates paid only the minimum wage, other companies would snap the employees up because of their talents . Gates, in paying some of his employees large sums, has recognized their worth because they are generating whatever output was satisfactory to Gates — for example, a strong ROI for the year.
On the other hand, if minimum wage advocates insist on paying $15/hour just for the sake of paying $15/hour instead of $7.50, why should they? Why should the employer be forced to take on the extra cost if the output isn’t worth $15/hour, if they aren’t generating that kind of value? Thus, with that kind of imbalance, the employer must make changes in other areas of his business to make it work — whether it be one or more fewer job overall, price increases, etc.
If people aren’t being paid $100,000 because they are not worth it to their company of employment, that’s a part of business. But it is patently unfair to make arbitrary wage increases in the guise of “fairness.” Why is it fair to some but not others? Why are the people earning $500,000 not suddenly getting $600,000 if others making less get arbitrary wage increases? Why are they excluded? Is that fair? That is why such policies are inherently unfair. The employer should be able to determine, on his own, to pay what his employee is worth and what his employee can generate — without artificial wage policies or government coercion.
It’s difficult to own a business and stay in business when the government comes along and makes changes to how the company is allowed to be in business in the middle of the game. That is patently unfair and unequal. These types of actions stifle a business’s freedom to do business, which is why McCloskey’s era of the “Great Enrichment” is proving to be on the decline.
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As a tax practitioner, I have been following the IRS scandal since the beginning. Here’s the latest update — the list of IRS target have been released, 3 years later. From the Washington Times:
More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.
The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS.
But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.
The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit.
That total is much higher than the 298 groups the IRS‘ inspector general identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long — potentially illegal — delays, and forcing them to answer intrusive questions about their activities. Tea party and conservative groups said they was the target of unusually heavy investigations and longer delays,
Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.
“As we have identified in our filings in this case, important questions still exist regarding changes to the IRS‘ case listings that occurred after theIRS learned that the [inspector general] and congressional investigations had begun,” he said. “Based on these changes, which to date remain unexplained, a very real possibility — if not probability — exists that theIRS modified its targeting in light of the investigations, packing its own internal lists of targeted groups to support its preferred narrative, including by adding ideologically diverse groups.”
He said if that did happen, it would have “tainted” the list the IRS has now released.
The IRS declined to comment, saying its filing spoke for itself.
A series of investigations found the IRS did ask intrusive questions and did delay applications for years, in violation of policy. But so far no investigation has found any order from the White House to conduct the targeting.
‘Tea’ and ‘patriot’ groups
Sixty of the groups on the list released last month have the word “tea” in their name, 33 have “patriot,” eight refer to the Constitution, and 13 have “912” in their name — which is the monicker of a movement started by conservatives. Another 26 group names refer to “liberty,” though that list does include some groups that are not discernibly conservative in orientation.
Among the groups that appear to trend liberal are three with the word “occupy” in their name.
And then there are some surprising names, including three state or local chapters of the League of Women Voters — a group with a long history of nonprofit work.
Some of the most active and prominent tea party groups snared in the targeting aren’t on the class-action list. At least some of them opted not to be part of the joint legal action to preserve their own lawsuits.
Congressional Republicans say IRS Commissioner John Koskinen, who was brought in by President Obama to clean up the agency after the targeting scandal, has failed — and even misled Congress during the investigation. Some Republicans are even pursuing impeachment against Mr. Koskinen, accusing him of defying a subpoena for former senior IRSexecutive Lois G. Lerner’s emails by allowing computer backup tapes to be destroyed.
Even outside of impeachment, the House GOP has proposed a new round of budget cuts for the IRS, aimed at trying to deliver a message that Mr. Koskinen’s tenure has been unacceptable.
And the tax agency is still defending itself in a series of court cases. In addition to the NorCal class action case, the federal appeals court in Washington, D.C., is currently considering an appeal by tea party groups who argue the targeting is still going on.
“One thing remains clear: Continued litigation is the only way to force theIRS‘ hand in order to expose its targeting scheme that was coordinated with the help of the DOJ and other federal agencies so that we can obtain justice for those patriotic Americans who were unconstitutionally targeted by their own government,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which is representing some of the plaintiffs in the appeals case.
In yet another case, the conservative group Cause of Action has been pursuing the IRS to turn over documents the group believed would show White House officials requesting secret taxpayer information on conservatives.
But in a filing Friday, the IRS said it has conducted a final search and can’t find any evidence that the White House either asked for or received protected information.
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One of the unintended results of minimum wage theory is how the artificial wage increase affects those workers who were not recipients of the government’s generosity. The sudden jump to $13 or $15 an hour for the lower income workers does not translate into the same sort of wage increase for the middle income workers — and this act breeds contempt. Those that have worked hard and earn a decent wage see below them receive this pay increase, and they understandably now want the same kind of jump. And why shouldn’t they? Should they be able to demand the same wage treatment? Will this beget a slippery slope? Or does this expose the very reason why government should stay out of the business of picking winners and loser among workers in the private sector?
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You can count on Bernie Sanders to be consistent. He loves pointing to Sweden as the hallmark of Socialist success. But a recent compelling article in Reason magazine does an excellent job laying out the history of Sweden’s economic failures and successes, and shows how Sweden’s current approach to business and has rendered their economy more free and flourishing than the United States.
Some key points:
- Real wages in Sweden fell by around 5 percent between 1975 and 1995. Nominal wages increased, but runaway inflation devoured it.
- But in the early 1990s Sweden began to abandon its brief detour into Bernienomics. It deregulated, privatized, reduced taxes, and opened the public sector to private providers. The two decades that followed saw real wages increase by almost 70 percent.
- In the summary Fraser Institute rankings, Sweden and Denmark are more economically free than the United States when it comes to legal structure and property rights, sound money, free trade, business regulation, and credit market regulations. We don’t have the multitude of occupational licensing laws that block competition in the United States.
The article is worth reading in its entirety. If Bernie truly believes Sweden is a blueprint for success, he would do well to pay attention to the Sweden of today, and not the Sweden of 40-50 years ago, when he was coming-of-age in his Socialist beliefs. If Bernie wants America to be like Sweden — America would need a good dose of deregulation and lower taxes, exactly the opposite of what Bernie espouses for America! Perhaps then the American economy would finally begin to recover, because freer markets mean a freer economy and a freer people.
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Marketwatch is reporting dismal numbers related to economic growth in the first three months of 2016; expansion is “the slowest pace in two years as business slashed investment by the steepest amount since the Great Recession.”
GDP growth was significantly reduced as well — recording a .5% annual growth rate. The prior three quarters were 1.4%, 2% and 3.9% in the preceeding year, per quarter.
Marketwatch suggests that some economists contend this sluggishness is an anomaly and will bounce back this spring, estimating a 200,000 job growth for April numbers, which will be released on the first Friday in May. Those with this sentiment predict that “the economy will speed up to a 2.6% annual clip in the spring, typically the fastest growing quarter of the year. The same pattern occurred in both 2015 and 2014.”
On the other hand, I tend to side with economists who are a little bit leery about a robust-growth outlook. “A tepid global economic scene and a tumultuous U.S. presidential election marked by heavy anti-corporate rhetoric appears to have made business executives more cautious.”
Business investment is certainly anemic, and we’ve recently crossed the threshold of more businesses closing than opening. None of this is a sign of a healthy economy, and I doubt very much that the April numbers will be so rosy.
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The Hill has an interesting article about Obamacare, premium costs, and insurance companies. Insurers have been losing money as a result of the Obamacare set-up, and many are facing increased financial security. From the article:
Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.
“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”
While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”
In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.
Insurers have been pounding the drum about problems with ObamaCare pricing.
The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.
A report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.
“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February.
The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped.
The clearest remedy for the losses is for insurers to raise premiums, perhaps by large amounts — something Republicans have long warned would happen under the healthcare law, known as the Affordable Care Act (ACA).
“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation.
Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals, and then can either accept or reject them.
Michael Taggart, a consultant with S&P Dow Jones Indices, pointed to data from his firm showing per capita costs for insurers are spiking in the ObamaCare marketplaces.
“We made a significant change in the rules with the ACA and we’re still working through the process to see how that market stabilizes,” Taggart said at a panel on Wednesday. “Is [a death spiral] a possibility? Sure it’s a possibility. I wouldn’t attempt to put a probability on it because I think there are a lot of things going on.”
One factor helping to prevent a death spiral is ObamaCare’s tax credits, which cushion the impact of premium increases on consumers.
“What we’re likely to see is more of a market correction than any kind of death spiral,” Levitt said. “There are enough people enrolled at this point that the market is sustainable. The premiums were just too low.”
Dr. Mandy Cohen, the chief operating officer of the Centers for Medicare and Medicaid Services (CMS), said in an interview that there is “absolutely not” a risk of a death spiral or collapse in the ObamaCare marketplaces.
While acknowledging that “companies are needing to adjust” to the new system, she pointed to the 12.7 million people who signed up this year, 5 million of whom were new customers, as a sign of success.
“What brings us the most confidence about the long term stability and health of the marketplace is its growth,” Cohen said.
Another risk, should regulators reject large premium increases, is that insurers could simply decide to cut their losses and drop off the exchanges altogether.
“Given that most carriers have experienced losses in the exchanges, often large losses, it only makes sense that most exchange insurers will request significant rate increases for 2017,” said Michael Adelberg, a former CMS official under President Obama and now a consultant at FaegreBD.
“Market exits are not out of the question if an insurer is looking at consecutive years of losses and regulators are unable to approve rates that get the insurer to break-even.”
The most prominent insurer eyeing the exits is UnitedHealth, which made waves in November by saying it was considering whether to leave ObamaCare in 2017 because of financial losses. The company last week announced that it is dropping its ObamaCare plans in Arkansas and Georgia, and more states could follow.
The Department of Health and Human Services argues that the attention on UnitedHealth is overblown, given that the insurer is actually a fairly small player in the marketplaces.
It’s more important to watch what happens with Blue Cross Blue Shield plans, which are the backbone of the ObamaCare marketplaces.
There have been some rumblings of discontent from Blue Cross plans. The plan in New Mexico already dropped off the marketplace there last year after it lost money and state regulators rejected a proposed 51.6 percent premium increase. Now, Blue Cross Blue Shield of North Carolina says that it might drop out of the marketplace because of its losses.
Blue Cross of North Carolina CEO Brad Wilson said in an interview that the company had lost $400 million due to its ObamaCare business.
“We’re not alone and I think that that also is evidence to suggest that there are systemic and fundamental challenges that we all need to have a civilized conversation about,” Wilson said.
He said a key factor in the decision on whether to stay in the market next year will be whether regulators approve whatever premium increase the company ends up proposing so as to try to make up for its losses.
Asked about the risk of a death spiral, Wilson said he is not worried about that happening “tomorrow,” but has concerns if the situation does not change over time.
“There’s not going to be something magical happen that will cause this to turn around,” Wilson said. He is pressing for changes like further tightening up extra sign up periods that insurers say people use to game the system, and repealing the Health Insurance Tax, which could help lower premiums.
Dr. Cohen of CMS said that her agency is in close touch with insurers and Blue Cross Blue Shield of North Carolina in particular. But she pushed back on talk of Blue Cross of North Carolina dropping out of the marketplace, stating flatly that, “I have no concerns about them leaving the market.”
She referred to problems the company has had with its computer systems that have led to some people being enrolled in the wrong plan, along with other issues that have added to the company’s administrative costs.
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A short but informative article by the Washington Free Beacon describes how the Government Accountability Office (GAO) has calculated that within a few years, the federal government will owe more money that the sum of what is produced by the economy. That, my friends, is an egregious amount of debt.
“Gene Dodaro, the comptroller general for the Government Accountability Office, testified at the Senate Budget Committee to provide the results of its audit on the government’s financial books.
“We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”
Dodaro says that under current law, debt held by the public will hit a historic high.
“The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”
Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.
“These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”
Additionally, the audit found fault with the number of improper payments that should not have been made or were the incorrect amount. The audit found that in fiscal year 2015 there were $136.7 billion improper payments, which was up by $12 billion from the year prior.
The audit also called into question the reliability of the government’s financial statements. According to the report, if a federal entity purchases a good or service, that cost should match the revenue recorded by the federal entity that sold the good or service. The report found that this was not always the case and found hundreds of billions of dollars in differences between transactions between federal entities.
“The government-wide financial statements that the GAO audits tell us what came into the government’s coffers and what went out, what the government owns and what it owes, and if the operations are financially sustainable,” said Sen. Mike Enzi (R., Wyo.). “But can we trust the information in the statements?”
“GAO’s audit calls into question the reliability of the underlying financial data,” he said. “The sketchiness is such that GAO remains unable to even issue an audit opinion on the government’s books.”
According to the audit, these weaknesses will eventually harm the government’s ability to reliably report their assets, liabilities, and costs, and this will prevent the government from having the information to operate in an efficient and effective manner.
