“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place” — Frédéric Bastiat in “The Law.”
If you haven’t read “The Law” yet, you can download it here for free. It is one of the most marvelous works of economics and philosophy.
It’s frustrating when popular TV economists perpetuate economic myths that have been thoroughly debunked. Last week, Becky Quick, host of CNBC’s “On the Money”, interviewed Bethany McLean, Contributing Editor over at Vanity Fair. They discussed the subject of equal pay for women; unfortunately, they both asserted that women only earn 77% of pay that men do, a charge that is simply untrue, but endlessly repeated.
Factors such as education paths, child bearing choices, hours worked, and job risk are not always equal for men and women. Taking these items into consideration, the gender wage gap shrinks almost entirely, with likely no more than a 5% variance. This is also supported by the simple economic reality that if women actually did make 23% less than men in wage costs, businesses would almost entirely hire women as a means to minimize labor costs and maximize profits. Since this does not actually happen, it is obvious that the 23% wage disparity is merely a distortion perpetuated by the Left, and most notably by the White House.
It’s one thing for partisan politicians to spew such nonsense, but for an economics reporter to peddle it as well is absolutely irritating and reckless. She should know better.
The great Walter Williams released a new video yesterday on the role that profit plays in the free market. Do yourself a favor and take 5 minutes to learn how important profits and losses really are.
“Is profit a dirty word? Would the world be better off without them? Or are profits progressive — the only thing that can move potatoes from Idaho to Manhattan and medicine from America to Africa? Professor and economist Walter Williams explains.”
If NYC ever survives a mayor as economically ignorant as Bill de Blasio, it will be nothing short of a miracle. Not only has he been committed to “combating income inequality” by advocating raising taxes on the wealthy, now he also is pushing for a minimum wage hike to more than $13/hour as a means to bolster the economy.
De Blasio recently announced, “It’s time for New York City businesses to take bold action—not only because hardworking New Yorkers deserve a path to the middle class and an opportunity to stay in the middle class—but because giving them that opportunity would do so much to help our economy.”
His brilliant plan is to raise the wages past $13/hour in 2016, and then indexing it to inflation over the next 3 years so that the minimum wage will be $15/hour by 2019. The current wage is $8.75/hour, which will be $9.00 as of January 1, 2016. Where does de Blasio think that extra $4/hour is going to come from? He told the business owners that it’s time do “do your part”.
Unfortunately for the workers of NYC, they have a mayor who doesn’t understand that raising the minimum wage adversely affects those whom the wage hikes purport to help, especially the poorest in NYC. Less persons would be employed at $13/hour and $15/hour than if the minimum wage had not been hiked at all. Put it another way, many would see their hourly wages drop to $0/hour. That is not “opportunity”. That is unmitigated disaster.
This year is the first year for which proof of health insurance, or payment of the “shared responsibility” tax/fee/penalty, is required to be accounted for on one’s tax return. But what happens when a person does not meet the income threshold to actually have to file their taxes?
The Weekly Standard points out that a conundrum exists for the poor. Under Obamacare rules, the economically disadvantaged,
“can get an income-based exemption if ‘you don’t have to file a tax return because your income is below the level that requires you to file.’ Sounds simple enough, right? Until further investigation reveals that this exemption is claimed directly on the tax return. That’s right – the tax return you’re not required to file.”
So the fate of those who are uninsured and also do not file? If they do not claim their exemption, they will be on the hook for the “shared responsibility” payment and “are likely to get hit with an unexpected tax bill later on.” That is sloppy at best and egregious at worst.
Obamacare purports to help those who, economically, are the least among us. The law provides financial help to purchase healthcare for the poor, or a path of exemption for those who cannot afford healthcare or the uninsured penalty. Yet it fails to provide a mechanism of compliance for those who among us who are too poor to pay taxes and the penalty. In this regard, Obamacare falls short of its most basic goals — and will wreak tax havoc in the future for those poorest ensnared by this deficiency.
Ben Bernanke debuted his new gig today, that of a writer on the “Ben Bernanke Blog”. Though he is not in charge of the Fed anymore, nevertheless he proved that he is still trying to stay relevant by continuing to be an old shill for the President.
The most ridiculous point Bernanke tried to defend was the strategy of keeping “rates low to encourage borrowing and spending and strengthen their economies.” But as Fed Chairman he knew that companies really weren’t borrowing at all and that banks were simultaneously reluctant to lend. However it was not because of the down economy — as he would have you think — but of other meddling, mitigating factors like stifling regulations, Dodd-Frank, unrelenting business bashing by President, and the constant threat of higher taxes. And because these circumstances are still widely pervasive, we have yet to see any real economic recovery.
The fact of the matter is during his tenure as the Fed Chairman, Ben Bernanke remained absolutely silent about the egregious anti-business environment. He was (and continues to be) a mouthpiece for this Administration instead of as a leader of an independent Fed.
March 23, 2010: Obamacare was signed into law by President Obama. How have we fared since then? Sally Pipes over at NYDailyNews gives a good overview of how Obamacare has failed to live up to its expectations.
“Obamacare turns five years old today. But there’s little to celebrate.
When he signed his signature piece of legislation into law, President Obama guaranteed lower health-care costs, universal coverage and higher-quality care. Americans wouldn’t have to change their doctors if they didn’t want to. Five years later, the health law has failed to fulfill those grandiose promises.
“In the Obama administration,” candidate Obama boasted in 2008, “we’ll lower premiums by up to $2,500 for a typical family in a year.”
Not quite. A recent report from the National Bureau of Economic Research examined the non-group marketplace, where families and individuals who don’t get coverage through work shop for insurance. The report concluded that 2014 premiums were 24.4% higher than they would have been without Obamacare.
On Obamacare’s third birthday, the White House reassured Americans the law would protect vulnerable patient populations from increases in drug prices.
“Preventing them from being charged more because of a pre-existing condition or getting fewer benefits like mental health services or prescription drugs,” was a key purpose of the law, explained the White House.
Instead, drug costs for these patients have skyrocketed. The majority of health plans on the exchanges have shifted costs for expensive medications onto patients.
In 2015, more than 40% of all “silver” exchange plans — the most commonly purchased — are charging patients 30% or more of the total cost of their specialty drugs. Only 27% of silver plans did so last year.
Part of the problem is that Obamacare has quashed competition.
The president promised in 2013 that “this law means more choice, more competition, lower costs for millions of Americans.” But that hasn’t turned out to be true. According to the Heritage Foundation, the number of insurers selling to individual consumers in the exchanges this year is 21.5% less than the number on the market in 2013 — the year before the law took effect.
The Government Accountability Office reports that insurers have left the market in droves. In 2013, 1,232 carriers offered insurance coverage in the individual market. By 2015, that number had shrunk to 310.
A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration.
As competition in the exchanges declines, so does quality — just like Obama inadvertently predicted in 2013, when he said: “without competition, the price of insurance goes up and the quality goes down.”
Consumers who purchase insurance on the law’s exchanges have fewer options than they had pre-Obamacare. McKinsey & Co. noted that roughly two-thirds of the hospital networks available on the exchanges were either “narrow” or “ultra-narrow.” That means that these insurance plans refuse to partner with at least 30% of the area’s hospitals. Other plans exclude more than 70%.
Patients may also have fewer doctors to pick from. More than 60% of doctors plan to retire earlier than anticipated — by 2016 or sooner, according to Deloitte. The Physicians Foundation reported in the fall that nearly half of the 20,000 doctors who responded to their survey — especially those with more experience — considered Obamacare’s reforms a failure.
The Obama administration claims the health-care law has been a success because millions have gained insurance coverage. But that coverage is worthless if they can’t find a doctor or hospital who will see them.
Further, as many as 89% of the Americans who signed up for Obamacare when the exchanges opened in 2013 already had insurance. In other words, many exchange enrollees simply switched from one plan to another.
And the law is set to cover far fewer people than initially promised. In March 2011, the Congressional Budget Office forecast that 34 million uninsured would gain insurance thanks to Obamacare by 2021. But this month, the agency revised that estimate to 25 million obtaining coverage by 2025.
Covering those people isn’t cheap. This month, the CBO estimated the law’s 10-year cost will reach $1.2 trillion — a far cry from the President’s initial promise of $940 billion.
So much for President Obama’s five-year-old declaration that he would not sign a plan that “adds one dime to our deficits — either now or in the future.”
Time and again, Obama has been proven wrong about what his health law would accomplish. Quality hasn’t improved, and costs continue to grow out of control. So far at least, that’s Obamacare’s legacy.”
Jeffery Anderson over at The Weekly Standard took a peek at Obamacare’s initial projected enrollment numbers and compared them to the current actual figures. What he found was that Obamacare is not as widely successful as the rosy Congressional Budget Office (CBO) estimates from 2010.
“Given that Obamacare’s supporters like to take the Congressional Budget Office’s overly optimistic scoring of the president’s signature legislation as gospel, it’s fun to look at how poorly Obamacare is actually doing in relation to earlier CBO projections. When the Democrats rammed Obamacare through Congress in 2010 without a single Republican vote, the CBO said that the unpopular overhaul would lead to a net increase of 26 million people with health insurance by 2015 (15 million through Medicaid plus 13 million through the Obamacare exchanges minus 2 million who would otherwise have had private insurance but wouldn’t because of Obamacare).
Fast-forwarding five years, the CBO now says that Obamacare’s tally for 2015 will actually be a net increase of just 17 million people (10 million through Medicaid plus 11 million through the Obamacare exchanges minus 4 million who would otherwise have had private insurance but won’t, or don’t, because of Obamacare).
In other words, Obamacare is now slated to hit only 65 percent of the CBO’s original coverage projection for 2015.
Obamacare’s under-publicized failure on this key point is attributable to a variety of factors, including but not limited to the following: People aren’t thrilled with Obamacare-compliant insurance’s high cost and limited doctor networks, and some would even rather pay a fine for refusing to buy such insurance than pay its premiums; the Supreme Court ruled that part of Obamacare was unconstitutional, thereby giving states more freedom not to help expand it; and HealthCare.gov has been more reminiscent of DMV.org than of Expedia.com.
In addition (and just as the CBO originally projected), the bulk of Obamacare’s net coverage gains are coming from dumping people into Medicaid (59 percent of the current projected net increase in 2015), not from getting people enrolled in private insurance (41 percent). Of course, President Obama rarely if ever talks about that aspect of Obamacare — but Republicans should.”
Desperate to get more people enrolled too, the Obama Administration announced last month another “special enrollment period” around tax time this year, to allow those who found out they have to pay a penalty/tax/fee instead of having insurance in 2014, the opportunity to not make the “mistake” again.
Those who opted not to have insurance in 2014 are fined $95, or 1% of their income, whichever is greater, which they pay when then file their 2014 taxes this year. In 2015, the fine increases to $325 or 2% of income. Enrollment in the special enrollment period has been lackluster so far.
The Administration just doesn’t seem to get that many people still don’t think Obamacare to be such a great piece of legislation, and certainly aren’t tripping over themselves to purchase an Obamacare plan.
In Obama’s Keystone recent veto message to Congress, our President cited the ongoing State Department review as the basis for his decision. He stated, “And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest — including our security, safety, and environment — it has earned my veto.”
How incredibly obnoxious and incompetent is the President to say that after SIX years, the State Department has failed to complete its review. Nothing else at all needs to be said as to why the economy is still deplorable. The Keystone saga encapsulates the entire failure of the “shovel ready jobs” schtick, if it takes six years and counting for the federal government to make a decision on one pipeline project.
CPAs know all the good jokes…
