Futures and Options

Just another town along the road.

Sunday, March 28, 2010

Denying Reality

To paraphrase a line I picked up from another blogger, “It’s no major feat to ignore reality and pretend that laws can be erected to change any situation,” and we’re seeing more of this insipid parlor trick in the recent wailing and gnashing of teeth by House Democrats (led by the ever-delusional Henry Waxman) in response to Wall Street’s recent multi-billion dollar writedowns.  Waxman and his cronies are apparently aghast that Wall Street has the incredible temerity to follow SEC regulations which require that all companies immediately restate earnings to reflect changes to the present value of long-term liabilities, which includes tax liabilities.

I guess accounting irregularities are OK as long as those irregularities hide the government’s lies.

posted by Zenmervolt at 17:25  

Monday, March 22, 2010

10 Things Every American Should Know About Health Care Reform

MoveOn.org, bastion of unbiased information, has put together a list of , “10 Things Every American Should Know About Health Care Reform“.  As expected, this “information” is effectively an advertisement and it is quite deliberately misleading.  Let’s go through the list point by point.

The claim:

1. Once reform is fully implemented, over 95% of Americans will have health insurance coverage, including 32 million who are currently uninsured.

The reality:

Currently, only 15% of the US population is uninsured (46 million uninsured individuals per the 2007 Census Bureau data and a current US population of 307 million).  If we only count persons who are legal US Citizens (this includes both native-born citizens and naturalized citizens), then only 12% are uninsured (80% of uninsured are US citizens, so 80% multiplied by 15% gives us 12%).  This paints a very different picture as we begin to see that this bill will spend trillions of dollars over the next decade but will only improve the number of insured by 7% to 10%.  That’s not a lot of juice for the amount of squeezing being done.  In addition, we must also account for the fact that large numbers of currently non-covered individuals are either children who would be covered under their parents’ existing insurance but whose parents have neglected to register them, or young professionals who choose to opt-out of employer-paid health care because they do not believe it is necessary to have coverage.  The net result when such factors are accounted for is that the bill exists to benefit only about 4% to 8% of the total population.

The claim:

2. Health insurance companies will no longer be allowed to deny people coverage because of preexisting conditions—or to drop coverage when people become sick.

The reality:

By eliminating the right of a business to deny coverage to people who are guaranteed to cost more than they pay in premiums the bill effectively mandates that prices increase across the board.  Let’s use a perfect analogy to illustrate why this is so.  Imagine if the exact same thing were required for car insurance companies.  In such a world, you could buy a wrecked car and then file a claim to make the insurance company pay for repairs despite the damage being preexisting.  Obviously premiums would increase significantly.  Perhaps you think that this simply means that insurance for persons who require more care will only be more expensive to those particular people, but this is not so as the bill regulates an insurance company’s ability to recoup costs from clients who are very expensive to insure.  The only way for insurance companies to guard against such losses will be to increase everyone’s premium, regardless of your risk level.

The claim:

3. Just like members of Congress, individuals and small businesses who can’t afford to purchase insurance on their own will be able to pool together and choose from a variety of competing plans with lower premiums.

The reality:

This is already a reality.  In fact, the company for which I currently work is part of such a pool.  To claim that this is a benefit of the Obama bill is disingenuous at best and downright deceitful at worst.  MoveOn.org is simply exploiting voter ignorance for political gain.  They know that most Americans are not sufficiently familiar with current regulations to understand that such pools of small businesses already exist and so they are dishonestly touting such pools as benefits of the Obama bill.

The claim:

4. Reform will cut the federal budget deficit by $138 billion over the next ten years, and a whopping $1.2 trillion in the following ten years.

The reality:

Once again we are into territory that is either disingenuous or deliberately deceitful.  As with claim #3, MoveOn.org is exploiting voter ignorance for their own political ends.  On the surface, this looks good, until one realizes that “deficit” is not synonymous with “debt”.  The federal budget deficit is a yearly number that represents how much money is being borrowed to run the government for that particular year.  The federal debt is the total amount of money that the government still needs to pay back from all previous years combined.  It is possible to reduce the deficit without there being any corresponding reduction in total debt at all, and this is all that is actually being claimed.  In fact, because there are no claims that the deficit will be eliminated, MoveOn.org is effectively admitting that overall debt will continue to grow even after the supposed $1.2 trillion in deficit reduction.  There is also the deliberately misleading wording where it appears at first glace that the $1.2 trillion in deficit reduction will occur in 10 years, even though the reality is that this deficit reduction comes in the 10 years after the first ten years where the reduction is only $138 billion.  This means that the supposed $1.2 trillion in deficit reduction occurs in 20 years, not 10.  Long story short, this claim actually admits that the Obama bill will spend more money than it saves over the next 20 years.

The claim:

5. Health care will be more affordable for families and small businesses thanks to new tax credits, subsidies, and other assistance—paid for largely by taxing insurance companies, drug companies, and the very wealthiest Americans.

The reality:

When business are taxed, they inevitably pass those costs on to the consumers. Any benefit in tax credits to consumers will be counterbalanced by increases in premiums, especially given that claim number 2 essentially guarantees that premiums will increase across the board. This also contains the hidden premise that it is acceptable to levy large taxes on “the very wealthiest Americans” even though such taxes amount to punishment for success.  This claim is nothing more than an appeal to those who are bitter over the success of others and who wish to lay claim to the fruits of other people’s success.

The claim:

6. Seniors on Medicare will pay less for their prescription drugs because the legislation closes the “donut hole” gap in existing coverage.

The reality:

This claim assumes that there are no other variables, such as increases in the costs of drugs due to pharmaceutical companies needing to recoup the punitive taxes that this bill would impose.  Additionally, the Medicare Part D coverage gap (the “donut hole”) is a legitimate and intended design feature of Medicare Part D coverage that was designed to discourage the tendency of some physicians to prescribe drugs with less discrimination than might otherwise occur.  The maximum cost that a senior may incur while in this gap is $4,250.25, or about $360/month.  Less than a car payment for many people.  Additionally, there are already programs for low-income seniors so that they are not affected by the Part D coverage gap.

The claim:

7. By reducing health care costs for employers, reform will create or save more than 2.5 million jobs over the next decade.

The reality:

Interestingly, this is the only claim for which MoveOn.org has no source listed, which suggests that it’s, well, just a wee bit made-up. It is also a claim that economists understand is effectively impossible to track or measure in any real-world scenario.  The fact that there is absolutely no way to ever verify or disprove this claim makes it fantastically useful propaganda, but also makes it worthless as a legitimate statement of the benefits of the Obama bill.

The claim:

8. Medicaid will be expanded to offer health insurance coverage to an additional 16 million low-income people.

The reality:

Admitting that a mismanaged program which is swimming in red ink will be expanded is not the best way to sell the Obama bill.

The claim:

9. Instead of losing coverage after they leave home or graduate from college, young adults will be able to remain on their families’ insurance plans until age 26.

The reality:

Many, perhaps even most, plans currently have similar allowances. For example, I could have stayed on my parents’ insurance until I was 24, a full two years _after_ graduating from college and being hired into my first job with benefits.  Had I remained in school, I would have been able to stay on my parents’ insurance even longer.  MoveOn.org is yet again taking advantage of voter ignorance for their own political gain.  MoveOn.org is fully expecting that most people will lack the familiarity with their current insurance plans to know that this sort of feature is already offered on many plans.  As I said before when responding to claim number 3, to claim that this is a benefit of the Obama bill is disingenuous at best and downright deceitful at worst.

The claim:

10. Community health centers would receive an additional $11 billion, doubling the number of patients who can be treated regardless of their insurance or ability to pay.

The reality:

Increasing funds to community health centers is a great thing in theory, but it doesn’t change the fact that we cannot afford the current level of spending, much less a doubling of it.

So, there you have it.  10 things that every American should know about health care reform and the actual truth behind each one.

posted by Zenmervolt at 17:57  

Friday, October 9, 2009

Breaking News: Nobel Committee is now a Political Action Committee

This morning, the Nobel Committee proved to the world that it has no legitimate interest in awarding the Peace Prize based on concrete accomplishments and has instead chosen to use the prize as a tool for political manipulation.  Let me be clear:  Alfred Nobel’s vision was that the Peace Prize would be awarded for concrete accomplishments, not for vague intentions or political popularity and by using the Peace Prize as a political tool the Nobel Committee has reduced itself to just another political action committee and the Prize to nothing more than a political tool.

That a president who is currently presiding over two wars and who is seriously considering sending an additional 40,000 troops into battle in Afghanistan can be awarded a prize for peace is shameful and those who cannot see this obvious absurdity are blinded by the same ideological biases as the Nobel Committee.

posted by Zenmervolt at 10:19  

Thursday, July 9, 2009

Australian Town Enacts Pointless Feel-Good Law

The rural Australian town of Bundanoon, an otherwise unremarkable bedroom community for Sydney, made a desperate grab for news headlines today by supposedly banning the sale of bottled water within the town’s boundaries.

While ostensibly enacted to combat what the town feels to be a waste of resources (in bottling and shipping water that is more efficiently delivered straight from the tap), it should be clear to any thinking person that the ban’s true motivation is simply good, old-fashioned, selfish NIMBY-ism.  A few years ago, a bottled water suppler proposed to build a water extraction plant near the town and, like all good bedroom communities fearful of industrial developments harming their presious property values, Bundanoon has resisted the proposal tooth and nail.  The supplier’s proposal is still fighting Bundanoon’s obstructionist legal challenges and the passage of this new law ultimately represents little more than petulance on Bundanoon’s part.

The fact that this “ban” is ultimately a mere “feel-good” measure is patently obvious to anyone who reads far enough to see that it carries no penalty whatsoever for non-compliance.  That’s right boys and girls, compliance with this so-called “ban” is entirely optional.  The same people who got on a moral high-horse about the inefficiencies and wastefulness of bottled water have, in their woefully misguided zeal, gone through the inefficient and wasteful process of creating an unenforceable law when the same outcome could have been obtained more efficiently simply by going door-to-door and asking the businesses to stop carrying bottled water.

Well done lads.  You’ve wasted everyone’s time and spent taxpayer dollars to do something that could have been done for free in less time.  *golf-clap*

posted by Zenmervolt at 07:14  

Sunday, June 28, 2009

Soft Despotism, Democracy’s Drift

The New Criterion has a lively review by Mark Steyn of Paul Rahe’s book Soft Despotism, Democracy’s Drift. The central idea of the article (and presumably the book, although I haven’t read it) is summed up by this two-hundred-year-old passage from Tocqueville, who was musing on ways in which a free republic could, on its own, collapse into a despotic state, quite apart from the coercion of a nineteenth-century-style despotic monarch:

I see an innumerable crowd of like and equal men who revolve on themselves without repose, procuring the small and vulgar pleasures with which they fill their souls.

Over these is elevated an immense, tutelary power, which takes sole charge of assuring their enjoyment and of watching over their fate. It is absolute, attentive to detail, regular, provident, and gentle. It would resemble the paternal power if, like that power, it had as its object to prepare men for manhood, but it seeks, to the contrary, to keep them irrevocably fixed in childhood … it provides for their security, foresees and supplies their needs, guides them in their principal affairs…

The sovereign extends its arms about the society as a whole; it covers its surface with a network of petty regulations—complicated, minute, and uniform—through which even the most original minds and the most vigorous souls know not how to make their way… it does not break wills; it softens them, bends them, and directs them; rarely does it force one to act, but it constantly opposes itself to one’s acting on one’s own … it does not tyrannize, it gets in the way: it curtails, it enervates, it extinguishes, it stupefies, and finally reduces each nation to being nothing more than a herd of timid and industrious animals, of which the government is the shepherd.

Sound familiar? The problem is that the transformation to “soft despotism” occurs stealthily, perhaps imperceptibly. The key to retarding its creep, according to Steyn and Rahe, is the vitality of the institutions that traditionally served as intermediaries between the individuals and the sovereign state: family, church, school board, township, county, and the like. These are the institutions that are on the ground, that are actually capable of observing and responding to the problems of individuals and communities, and in which individuals can feel genuinely invested. But that ideal is increasingly forgotten as the federal government assumes greater and greater responsibility for our everyday lives.

Steyn offers this current anecdote in support of Rahe’s thesis:

Today, the animating principles of the American idea are entirely absent from public discourse. To the new Administration, American exceptionalism means an exceptional effort to harness an exceptionally big government in the cause of exceptionally massive spending. The can-do spirit means Ty’Sheoma Bethea can do with some government money: A high-school student in Dillon, South Carolina, Miss Bethea wrote to the President to ask him to do something about the peeling paint in her classroom. He read the letter out approvingly in a televised address to Congress. Imagine if Miss Bethea gets her way, and the national bureaucracy in Washington becomes responsible for grade- school paint jobs from Maine to Hawaii. What size of government would be required for such a project? And is it compatible with a constitutional republic?

Can you imagine a schoolgirl in 1793 sending a letter to George Washington asking the federal government to please do something about the leaky roof on her local schoolhouse? And can you imagine President Washington actually inviting said schoolgirl to come to Philadelphia and sit behind him as he read her letter during an address to Congress in an attempt to shame them into sending a check to Dillon, South Carolina (as Obama did with Ms. Bethea)? We have been sliding down this slope for a long time; perhaps the slippage has accelerated enough during this new administration that people will finally notice.

posted by Strix nebulosa at 10:43  

Sunday, June 28, 2009

The Relationship Between Economic and Cultural Liberalism

…”liberalism” used here in the modern-day sense. Please watch this fascinating discussion between Peter Robinson and Charles Kesler. All five parts of the interview are worth viewing, but I found this segment particularly enlightening. Kesler’s thesis is that the progressive notion of economic rights that came alive under Wilson and especially FDR had the effect of liberating citizens from what were formerly considered core virtues — what we today call “family values” — which were largely indispensable in exercising one’s economic freedoms (providing for yourself and your family). Indispensable, that is, until the government took it upon itself to provide those basic economic necessities to everyone. With old-fashioned individual virtue no longer a prerequisite for economic survival, individuals were free to explore beyond the bounds of traditional morality. In short, the New Deal made the Sexual Revolution possible.

As Kesler acknowledges, some of the evolution of traditional “family values” is attributable to changes in the overall economy that made it more conducive for women to earn a living.  But the Sixties, he argues, went far beyond mere recognition and acceptance of changing economic realities; the progressive movement at its core was an outright repudiation of traditional morality, made possible by the creation of the welfare state.  Much to think about there.

I suspect that libertarian-minded readers might disagree with this analysis, as it posits a definite link between traditional morality and economic freedom.  But I would note that Kesler’s worldview does not require a government-imposed morality (which libertarians find repugnant).  Rather, traditional morality was and is a tool to cope with economic realities when those realities are not taken care of by the government.  So government need not impose moral virtue; it need only keep its nose out of individuals’ economic business, and individuals will turn to virtue of their own accord.  The perversion of progressivism is that it removes the need to deal with economic reality, and so we find traditional virtues cast aside as no longer necessary to survival.

Incidentally, I find the Uncommon Knowledge series to be one of the best things on the web. Robinson doesn’t try to hide his conservatism, but he nevertheless elicits some challenging and enlightening commentary from his always impressive guests. Never a waste of time to watch his interviews.

posted by Strix nebulosa at 10:42  

Thursday, June 18, 2009

Well, it’s definitely a change, and I certainly believe it…

At the beginning of this month when the US Government effectively bought a controlling interest in General Motors, Obama had this to say:

What we are not doing, what I have no interest in doing, is running GM.  They, and not the government, will call the shots and make the decisions about how to turn this company around.

Unless, of course, calling those shots and making those decisions means they need to close a plant within a prominent Democrat’s district.  It seems that Barney Frank (D-Mass.) has “convinced” General Motors to delay the closure of GM’s plant in Norton, Mass.  Nevermind that this is precisely the sort of thing that Obama promised us would never happen.

Overall though, I really don’t see how this can possibly go wrong.  I mean, it’s not as though this sets a precedent for using GM as a means of administering pork-barrel projects to a congressman’s home district at the detriment of the remainder of the country.  And it’s certainly not as though a politician would ever ignore the larger picture if doing so could enlarge his own piece of the pie.

Oh…  This is the real world, isn’t it.  Yeah, we’re screwed.

posted by Zenmervolt at 10:53  

Wednesday, June 17, 2009

Another choice quote from Sotomayor

H/T to Discriminations for bringing this to my attention.

I already explored some reasons for criticizing Sotomayor in a previous post, but it looks like we have a couple more gems from from someone who is nominated for one of the most mentally-demanding positions in the world.  In describing her experiences in college, Sotomayor said in a 1996 speech at Princeton:

When my first mid-term paper came back to me my first semester, I found out that my Latina background had created difficulties in my writing that I needed to overcome. For example, in Spanish, we do not have adjectives. A noun is described with a preposition, a cotton shirt in Spanish is a shirt of cotton, una camisa de agodon [sic], no agondon [sic] camisa.

Now, I’ll admit to not knowing enough Spanish to even ask where the bathroom is, but I still know enough to understand that even when the construction is, “a shirt of cotton”, the word “cotton” remains an adjective, whether in English or in Spanish.  To be sure, the point which Sotomayor is attempting to make, that differences in standard grammatical construction between two languages represent additional challenges beyond mere vocabulary for people who learn a second language, remains reasonably valid.  However, Sotomayor’s method of expressing this point can only be described, charitably, as “inartful”.

In a delightful case of sabotaging her own point, Sotomayor had earlier said:

Most people never go back to basic principles of grammar after their first six years in elementary school. Each time I see a split infinitive, an inconsistent tense structure or the unnecessary use of the passive voice, I blister.

Personally, I bristle when someone mangles a common idiom.  Furthermore, style guides frequently caution against being excessively prescriptive with regard to split infinitives as there are often cases where a split infinitive is superior, both in clarity and grace, to it’s ostensibly grammatical counterpart.  As if that weren’t enough, her distaste for the passive voice is likewise misplaced; in legal or technical writing it is often desirable, if not strictly “necessary”, to omit reference to an agent that is performing the described action.

As before, the point which Sotomayor was attempting to make stands reasonably valid.  Clear and concise writing (which is generally achieved through mindful consideration of proper grammatical style) is vitally important to effective communication.  However, we once again see an example of how Sotomayor’s own writing falls short of being clear and effective.

I recognize that grammatical errors are part and parcel to the human condition and I do not expect that anyone will always be completely without error in his or her speech; however, the examples above are such as should have been well proofed and I do not believe it to be at all unreasonable to expect that Sotomayor would understand that Spanish does indeed have adjectives and that the proper English idiom is “bristle”, not “blister”.  A person who is being considered for a seat on the US Supreme Court simply should not produce writing that suffers from such elemental flaws.

posted by Zenmervolt at 07:54  

Tuesday, June 16, 2009

Wait, you mean it costs money to give stuff away?

From the Associated Press via Yahoo!

Jolted by cost estimates as high as $1.6 trillion, Senate Democrats agreed Tuesday to scale back planned subsidies for the uninsured and sought concessions totaling hundreds of billions of dollars from private industry to defray the cost of sweeping health care legislation.

Apparently Senate Democrats have forgotten that goods and services actually have to be paid for.  They must have also missed the fact that the country is already bleeding money with record deficits.

Then again, given the ratio of what is paid for to what is going to be financed through deficit spending, maybe they’ve simply decided to exercise the same level of fiscal restraint as their constituents did before this whole mess started.

Several officials said the Congressional Budget Office had issued a cost estimate of $1.6 trillion, with only about $560 billion paid for.

Just put that $1.1 trillion on the credit card and worry about it later.  What’s the worst that could happen?

posted by Zenmervolt at 16:33  

Monday, June 15, 2009

Reinventing Capitalism

Seen the new “GM reinvention” commercials? Leaner, greener, faster, smarter? Struck me as a bit creepy how closely that mantra matched the Left’s monolithic vision of the automobile industry. Almost seems as if the commercial could have been paid for by the Democrats in Washington.

Waaaaitttt a second….

posted by Strix nebulosa at 16:24  
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In ignorantia confidenter praegredi.