Archive for November 2009

CMS Report on the Health Care Bill

Megan McArdle has a great post on the CMS post. Bascially, there is no magic bullet to cut medical costs.  Benefits are going to get cut and costs are going to go up.

I really don't need the report to tell me this.   Here is the common sense answer -- before this administration embarked on the health care fiasco, we all pretty mich knew that Medicaire and Medicaid bankrupt and was going to blow a huge hole (McArdle's term) in the budget.  So, since this bill at its heart is really just an expansion of Medicaire/Medicaid to cover more people, how can we expect it to do anything but blow an even bigger hole in the budget.

By the way, years ago I wrote: care is not like failed Great Society housing programs.  In those housing programs, only the poor got crappy government housing "” the rest of us kept what we had.  Universal health care is different, because it will effectively be like forcing everyone to move into the housing projects.

Now that we know what is in the actual bills, I stand by this prediction.  Here is the poll question I would still like to see:

Would you support a system of government-run universal health care that guaranteed health care access for all Americans, but would result in you personally getting inferior care than you get today in terms of longer wait times, more limited doctor choices, and with a higher probabilities of the government denying you certain procedures or medicines you have access to today.

And We'll Never Know What We Are Missing

Perhaps the scariest potential effect of the proposed health care bills is the negative effect they likely will have on innovation.  And if we adopt the bill, we will never know what we have lost.  Unlike budgets, which with near certainty will become overdrawn quickly, we will never be able to point to the health care innovation we didn't have.

I want to quote liberally from a Ronald Bailey post, but I encourage you to read the whole thing:

Yet, the elements of market competition that still manage to survive have had the salubrious effect of driving medical innovation and improving patient health outcomes. A new study by the free market Cato Institute, "Bending the Productivity Curve: Why America Leads the World in Medical Innovation" reports:

...In three of the four general categories of innovation examined in this paper "” basic science, diagnostics, and therapeutics "” the United States has contributed more than any other country, and in some cases, more than all other countries combined. In the last category, business models, we lack the data to say whether the United States has been more or less innovative than other nations; innovation in this area appears weak across nations....

...Harvard University economist Kenneth Rogoff observed:

"[I]f all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt."

In my column, "2005 Medical Care Forever," I suggested this thought experiment:

...what if the United States had nationalized its health care system in 1960? That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels. The private sector and governments would not now be spending so much more money on health care. There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth. Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago....

As Rogoff suggests, the nationalized health care systems extolled by progressives have been living off the innovations developed by the "only country without a universal health care system." I wonder how Americans would vote if they were asked if they would be happy freezing medical care at 2005 levels forever?

The Core Regulatory Question

Megan McArdle has two posts here and here on consumer credit and payday loans.  My chief takeaway is that the majority generally benefits from the availability of diverse (though sometimes expensive) forms of consumer credit, while a minority are tragically and very visibly worse off.  The question seems to boil down to whether regulation should be crafted that relatively invisibly makes the majority worse off but visibly helps a minority.  This same question exists with programs from trade protectionism (where job losses due to foreign trade are more visible than the broader well-being of consumers and customer industries) to health care (where it looks like a lot of people will have worse health care to help a few people with visibly tragic stories). In all these cases are elites who are more than willing to opine that smart people like themselves should be allowed to force their "superior" decision-making on others.

The other thing I found intersting was her discussion of the Dave Ramsey anti-debt formula.  She imagines a Ramsey-ite world with a high savings rate.  But its a weird world with with lots of capital formation but little actual capital use.  My gut feel is that it is almost certainly a poorer world, given how much technology and new wealth is created by entrepeneurship.  While I am sure some do it, few great entrepeneurs created success without debt.

One thing neither post discusses is the role of loansharking and illegal forms of credit.  The need for credit strikes me to be at least as strong as the need to gamble or get illegal drugs.  If getting credit becomes illegal, then people will go underground for their credit, with almost certainly more dire consequences than over-paying a payday loan company.

A Compensation Philosophy that is Coming Soon to Doctors

From the Boston Herald via Radly Balko:

Grinchlike union bosses are blocking at least 200 of Boston's best teachers from pocketing bonuses for their classroom heroics in a puzzling move that gets a failing grade from education experts.

The Boston Teachers Union staunchly opposes a performance bonus plan for top teachers - launched at the John D. O'Bryant School in 2008 and funded by the Bill and Melinda Gates and Exxon Mobil foundations - insisting the dough be divvied up among all of a school's teachers, good and bad.

Wherein It Turns Out I Am Not Loyal to the US

Unfortunately don't have the time to comment much on this absurd comment, but I am not sure it is even deserving of comment

Andy Stern, president of one of the nations biggest labor unions, said today that America is failing, and many entrepreneurs arent loyal to the U.S.

I think the country is in a mess, Stern, president of the 2.1 million-member Service Employees International Union, said at the Wall Street Journal CEO Council, a conference in Washington. I think America is failing.

Stern, the most frequent guest to the White House this year, said the U.S. economy has created a system in which the entrepreneurial class is not loyal to America. Its not wrong for the government to distribute wealth to people who need it, and labor unions can help the country do that, Stern said.

The New Gold Standard in Zero-Tolerance Insanity

From Great Britain, which really seems to be losing its mind of late, via Daniel Mitchell of Cato

A former soldier who handed a discarded shotgun in to police faces at least five years imprisonment for "doing his duty". Paul Clarke, 27, was found guilty of possessing a firearm at Guildford Crown Court on Tuesday "“ after finding the gun and handing it personally to police officers on March 20 this year. The jury took 20 minutes to make its conviction, and Mr Clarke now faces a minimum of five year's imprisonment for handing in the weapon. In a statement read out in court, Mr Clarke said: "I didn't think for one moment I would be arrested."

"¦ The court heard how Mr Clarke was on the balcony of his home in Nailsworth Crescent, Merstham, when he spotted a black bin liner at the bottom of his garden. In his statement, he said: "I took it indoors and inside found a shorn-off shotgun and two cartridges. "I didn't know what to do, so the next morning I rang the Chief Superintendent, Adrian Harper, and asked if I could pop in and see him. "At the police station, I took the gun out of the bag and placed it on the table so it was pointing towards the wall." Mr Clarke was then arrested immediately for possession of a firearm at Reigate police station, and taken to the cells.

"¦ Prosecuting, Brian Stalk, explained to the jury that possession of a firearm was a "strict liability" charge "“ therefore Mr Clarke's allegedly honest intent was irrelevant. Just by having the gun in his possession he was guilty of the charge, and has no defence in law against it, he added.

"¦ Judge Christopher Critchlow said: "This is an unusual case, but in law there is no dispute that Mr Clarke has no defence to this charge. "The intention of anybody possessing a firearm is irrelevant."

An Example Bureaucratic Hassle

Last week I wrote:

I had an employee in a truck towing a pontoon boat from a marina we operate in Alabama to a marina we operate in California.  Apparently, we have grossly violated the law because to haul our boat from our own facility in one state to our own facility in another requires that we register as an interstate motor carrier and put DOT numbers on all of our vehicles.  Just great.  Who wants to bet that this will be an enormous and expensive hassle?

I dumped the compliance task on my Chief Operating Officer, who routinely deals with a lot of really irritating compliance issues without complaining.  He sent me this email this morning:

I've now left at least 5 recorded messages for USDOT employees, and spoken to 3 of them. I almost have my arms around this compliance issue. This was a very cruel assignment...will never forget this

The Corporate State, Illustrated

Couldn't have illustrated the new corporate state that Obama is building better than this -- at state where large corporations, unions, and government officials conspire to use government power to enrich their contituencies to the detriment of smaller businesses, consumers, and taxpayers.  WSJ via Tad DeHaven:

The government has taken on a giant role in the U.S. economy over the past year, penetrating further into the private sector than anytime since the 1930s. Some companies are treating the government's growing reach "” and ample purse "” as a giant opportunity, and are tailoring their strategies accordingly. For GE, once a symbol of boom-time capitalism, the changed landscape has left it trawling for government dollars on four continents.

"˜The government has moved in next door, and it ain't leaving,' Mr. [GE CEO Jeffrey] Immelt said at the International Economic Forum of the Americas in Montreal in June. "You could fight it if you want, but society wants change. And government is not going away.'

A close look at GE's campaign to harvest stimulus money shows Mr. Immelt to be its driving force"¦ Inside GE, he pushed his managers hard to devise plans for capturing government money.

By January, Mr. Immelt had become a leading corporate voice in favor of the $787 billion stimulus bill, supporting it in op-ed pieces and speeches. Reporters who called the Obama administration for information on renewable-energy provisions in the legislation were directed to GE.

When the stimulus package was rolled out, Mr. Immelt instructed executives leading the company's major business units "to put together swat teams to get stimulus money, and [identify] who to fire if they don't get the money," says a person who heard him issue the instructions.

In February, a few days after President Obama signed the stimulus plan, GE lawyers, lobbyists and executives crowded into a conference room at GE's Washington office to figure out how to parlay billions of dollars in spending provisions into GE contracts. Staffers from coal, renewable-energy, health-care and other business units broke into small groups to figure out "how to help companies" "” its customers, in particular "” "get those funds," according to one person who attended.

From Henry Payne, in an article on the auto industry:

The Left likes having Big Industry straw men to bash whenever their socialist plans run aground, but the fact is, Big Industry is embracing the U.S.'s leftward lurch. Better to secure your place at the Rentseekers Roundtable, to lock out new competition and guarantee a never-ending stream of government welfare.

Where's Coyote

On the road this week in Southern California.

Freaking Hilarious Take on Krugman

Steven Landsburg via Mark Perry

It's always impressive to see one person excel in two widely disparate activities: a first-rate mathematician who's also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side. But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he's been awarded a column at the New York Times).

It's a dazzling performance. Time after time, Krugman leaves me wide-eyed with wonder at how much economics he has to forget to write those columns.

Movie Editing Software Recommendation

For years I have used Adobe Premier Elements v. 3.0 to edit my videos because it worked OK and probably more importantly came in a package with Adobe Photoshop Elements (which is a very good tool, except for the organizer which I don't like).  But I have a PC with a 64-bit operating system and a quad core CPU for which this older software is not optimized -- the old 3.0 was running painfully slowly even on my new computer.   So I downloaded a trial edition of Premier Elements 7 and was horrified at how buggy and unstable it was, without adding any real functionality that I wanted over the old 3.0 edition.  So I then downloaded the brand new v 8.0 and found it if anything even worse.  In retrospect, I could have seen this in the reviews for both products on Amazon.

I have a general rule of thumb that one bad version generation happens, but two in a row means it is time for a change  (the exception to this being Quickbooks, which has had about 4 versions in a row where each is worse than the last, but there is really not a good alternative for me right now).

For video editing, I eventually landed on the oddly named Sony Vegas Movie Studio, v9.0.  I am extremely happy.  It works a lot like Elements used to but is rock solid stable.  I have been working with a 90-minute HD video for 2 days straight without a reboot and it has had no problems and is fast and has all the functionality I could want.  Not for casual applications probably, but I really like it.  I don't usually write posts like this, but this piece of software almost never makes it into the magazine reviews or comparisons at sites like PC Magazine or CNET.  Not sure why, but its an excellent program.  Thanks to the Amazon community, whose reviews again helped me make a good decision.

Postscript: I have never been wildly impressed with Adobe programming and their most recent iteration of Photoshop Elements really worries me as the organizer seems to be badly bugged.  Their programs have always been pigs -- the only way they could get a tolerable load time for Elements was to break the program into four parts and start up with a menu that lets one choose one part or the other.   I know they did this to fight the classic Adobe load time problem (used to have it in spades with Acrobat reader) but I think they have broken something in the process.    You know Adobe programs are a pig when I get impatient for them to load from the new Intel SSD, which generally serves up programs lightening fast.

Wow, I Have Never Been Able To Play the "Oppressed Minority" Card Before

I have been having a 6-month run in with a Hawaiian bank over a land loan.  Today I finally yelled at a supervisor, without really thinking about what I was saying, that it seemed like their bank was systematically given their mainland customers the shaft.  Lo and behold, in 20 seconds I had a complete resolution.  What I have been missing all these years as a white male!

All Our Shower Heads In My House Have Been Hacked

The first thing I do when I buy a shower head is make sure that the design has a flow restrictor ring (put in to comply with US law) that can be removed.  First thing I do after I buy a shower head is remove the ring.

If they want me to use less water, then raise the price beyond the ridiculously low prices we have now, prices that clearly do not match supply with demand.  It is not we consumers in Arizona that are draining Lake Powell, it is politicians who price water below any kind of reasonable supply/demand clearing price to gain some incremental love at the ballot box  (also, politicians prefer command and control legislation of the shower head variety to allowing the price mechanism to work automatically).  More here.

Sucking the Oxygen Out of the Environmental Movement

I often conclude my presentations on climate that conservationists will likely look back in 10-20 years on the global warming hysteria as the worst thing that has ever happened to the environmental movement.  While we focus 110% of our attention on a trace, naturally occurring atmospheric gas that our bodies exhale and plants need to live, here is what we are not focusing on.

All the problems in these pictures are ones we demonstrably know how to solve while still allowing for the economic growth that is pulling a billion Asians our of poverty.  The same cannot be said for our current ability to eliminate CO2, and therefore most combustion, without imploding our economy.

Stupid Government Indignity of the Day

I had an employee in a truck towing a pontoon boat from a marina we operate in Alabama to a marina we operate in California.  Apparently, we have grossly violated the law because to haul our boat from our own facility in one state to our own facility in another requires that we register as an interstate motor carrier and put DOT numbers on all of our vehicles.  Just great.  Who wants to bet that this will be an enormous and expensive hassle?

Update: Credit where it is due:  The application online was totally arcane (and of course the help link and instructions links were broken) but the guy at the DOT help line was remarkably helpful and walked me through it.  It was pretty clear that a lot of folks who casually transport their private property across state lines gets swept up in this net, and they actually were prepared to be helpful.  I did have to laugh when the very first screen of the application process was to get my credit card number - I think this clarifies the reason for this licensing process.

Our Rights are Threatened by All These New Rights

I have shared before the main problem with all these new fake "rights"  (e.g. right to healthcare, right to a job, etc.).  Our original Constitutional rights were merely checks on government - they said the government could not pass laws to prevent us from doing certain things or invade our homes without some sort of due process, etc.  But these new rights require that some previously free individual be coerced into providing money or labor or both to supply others with these new rights.    I often use the desert island test - if you can't have the right alone on a desert island, its not a right.

But what I had not realized until recently is that many of these new fake rights also share in common a level of compulsion on the beneficiary  (not just the payer and provider).  For example, you have the right to bear arms and engage in free speech, but you are not required to own a gun or speak in public.   But you will be required to use, and pay for, your new "right" to health care, at the threat of a term in prison.   In this light, its doubly perverse to call something like health care a "right."  How can something which government uses compulsion on the payers, the providers, and the users be associated with so clean and moral a notion as a "right."  Freedom of religion is a right.  Health care is a want.

I got to thinking about this even more with "the right to a job at a fair wage," embodied in such laws as the Fair Labor Standards Act.  Proponents of such a right would consider it a victory that employers have been compelled to not pay less than $7.25 an hour for labor.   But the beneficiary is the subject of compulsion as well.  This law also means that I cannot sell my labor at less than $7.25, even if I am willing (even eager) to do so.    This means that if my choices are to sell my labor at $6.00 or for nothing, the government compels me to be unemployed.  My son is 16 and would like a retail job, preferably around books this summer.  Having real job experience and customer contact experience, for him at his age, is worth enough that he would likely work for free.  But he can't work for free, because the Fair Labor Standards Act only allows compensation to be valued in monetary terms - non-monetary benefits like skills improvements don't count.  So, given the economy, my son will likely not work next summer.  All for his own good, of course.

Pretzel Logic

This is an amazing contortion:

According to Phil Klein of the American Spectator, Christina Romer, head of President Obama's Council of Economic Advisers, had this to say today about the Senate's proposed excise tax on high-end health insurance policies:

"Part of the idea of how that is going to work is precisely because it does empower consumers. It empowers each of us to have an employer-sponsored plan to call our HR office and say, "˜Would you negotiate harder? Would you think about (whether this) is the most efficient plan out there, because I don't want my plan paying an excise tax.' So I think that's something that is very much empowering consumers."

Good Snow Out West This Winter?

Maybe, thanks to a resurgent El Nino.

Wherein I Find Phoenix Is Not The Most Liveable City

How, in a benevolent universe, can it be that Phoenix does not have a team in this league?  More here via Carlos Miller.

Good News at the TSA

Via Popehat:

The new rules, issued in September and October, tell officers "screening may not be conducted to detect evidence of crimes unrelated to transportation security" and that large amounts of cash don't qualify as suspicious for purposes of safety.

NFL players - its safe now to carry your Whizzinator.

Was I Wrong, Or Did Something Change?

On any number of occasions from October through February, I predicted that this recession would top out at perhaps 9% unemployment at the most, and would probably not be as bad as the recession of the early 1980's.  My logic was that we had a mortgage-driven banking crisis, but that the crisis was perhaps not as bad as that of the late 1980's and that many fundamentals (e.g. interest rates) were looking way better in this recession than in the early 1980's.  I honestly thought that Bush and Obama Treasury and Fed officials were declaring the sky was falling more from the danger to their beloved former employers on Wall Street than due to any economic fundamentals.

Well, obviously I was wrong.  Unemployment has topped 10% and could be headed higher.

So the question is, do I accept that others saw something I did not, or do I crack open the self-serving excuses.  Well, at the danger that this will fall into the latter category (I will leave that to readers to decide) I do think some things have changed since late last year that have contributed to worsening the economy.

Businesses are reluctant to invest when the returns on their investment are wildly unpredictable, particularly when future income changes are more driven by changing acts of Congress rather than fluctuations in the market.   Over the last year the Congress and Administration have:

  • Printed trillions of dollars of new money, raising the risk of future inflation
  • Borrowed trillions of dollars, sucking capital out of private lending markets
  • Run up deficits that pretty much guarantee future tax increases
  • Toyed with health care bills that will substantially increase the cost of labor
  • Toyed with climate bills that will substantially increase the cost of fuel and electricity
  • Demagogued industries with average to below-average profitability for making obscene profits that must be reduced (e.g. health insurance companies who make 3-4% of sales)
  • Taken over whole industries (autos, banks) and run them to the benefit of favored political constituencies, even when it violates the law (e.g. trashing for secured creditors of auto companies in favor of the UAW).
  • Demonstrated a disdain for money-making by imposing populist compensation limits on executives of out-of-favor companies and industries.
  • Spent money in the stimulus mainly to add government jobs, every one of which is generally focused on making my life running a business harder.  If you do not understand or believe this, you have not run a business that employs people.
  • Shown a general philosophic hostility towards markets and capitalism

I am sure this is just a subset (Louis Woodhill has more in this vein here), but these all have negative effects on investment.  My company for one has backed out of several planned expansions this winter for four reasons:

  1. Half of my costs are labor, and I don't know how much Congress is going to increase my labor costs.  Current health care bills will increase it at least 8% -- given that my typical margin in 5-8% of sales, a government action that increases half my costs by 8% is worrisome.  Worse, my smaller competitors will not bear this expense under certain versions of the legislation.
  2. My second highest expense is fuel and electricity.  I have no idea right now how much Congress may raise these expenses.
  3. Capital for small businesses is gone.  I can get secured equipment financing, but that is it.
  4. Assuming I make any money from these investments, I have no idea how much I will be able to keep.  I would not be surprised at all if Obama pushes my marginal rates over 50% -- and investments in my business are just too much work and risk to keep less than half if I make any money.

I used to work as for several years in St. Louis as VP of Planning for Emerson Electric.  I worked for a guy named Chuck Knight, who could be a real pain in the *ss to work for, but was a) brilliant and b) always willing to speak his mind without the typical filters a lot of other executives apply.  It appears that his successor Dave Farr, who I also knew at Emerson, is following in this tradition:

Emerson Electric Co. Chief Executive Officer David Farr said the U.S. government is hurting manufacturers with regulation and taxes and his company will continue to focus on growth overseas."Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing," Farr said today in Chicago at a Baird Industrial Outlook conference. "Cap and trade, medical reform, labor rules."...

Companies will create jobs in India and China, "places where people want the products and where the governments welcome you to actually do something," Farr said.

The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983. Emerson, which Farr said employs about 125,000 people worldwide, has eliminated more than 20,000 jobs since the end of 2008 to lower expenses.

"What do you think I am going to do?" Farr asked. "I'm not going to hire anybody in the United States. I'm moving. They are doing everything possible to destroy jobs."

Politicians in both parties are generally clueless about this kind of thing, because very few of them have ever run a business or even even been in a real business position other than as lawyer or lobbyist.  Just look at how George McGovern feels now that he has run a business.

But the Obama administration is almost scary clueless.  In defending their promotion of a good business environment, they cite the most hostile item on their agenda:

"This administration has made a significant commitment to U.S. manufacturing, including reforming the country's health insurance system to bring down costs and make American companies more competitive globally," Griffis said.

Not. One. Single. Clue.

Actually, I think the Obama administration may believe this, which just accentuates their preference for a corporate state wherein "business friendly" means support for the top 20-30 corporations in the country.   In the context of a few old-line corporations with politically powerful unions, health care reform is helpful in that it dumps a bunch of the corporation's commitments to present and past workers onto the taxpayers.  But these are not the companies that grow the economy -- they are just the ones with out-sized power in political elections.

What Global Warming Alarmism is All About

From a press release from the Environmental News Network that landed in my inbox:

It's Time to Re-think Economic Growth for Advanced Nations

LONDON - In Prosperity Without Growth: Economics for a Finite Planet, published by Earthscan this week, Professor Tim Jackson raises fundamental questions about the economics needed to tackle climate change. Jackson argues that, faced with the limits imposed by carbon sinks and the scale of "˜de-carbonization' of the world's economy required to stay within them, continued economic growth in the already affluent world does not offer the solution; it represents the problem....

there is a strong case for the developed nations to make room for growth in poorer countries. It is in these poorer countries that growth really does make a difference. In richer countries the returns on further growth appear much more limited; for example subjective well-being diminishes rapidly at higher income levels."

Assuming that such thinking is not just a crass excuse for totalitarian control, it represents an enormous failure of imagination.  The author cannot imagine what benefits increased wealth would provide, so he assumes those benefits to be zero.  There is absolutely no reason that this same exact thinking could not have been applied in 1300 or 1750 or 1900.    Fortunately it was not.

Wonder where the communists went when their philosophy was shown to be bankrupt?  Wonder where the anti-globalization folks went after they looted in Seattle.  Look no further than the global warming movement.  The author suggests, among other things:

  • support for "˜ecological' enterprise "“ resource efficient, community-based activities that offer meaningful employment and deliver low-carbon goods and services
  • clear restraints on unbridled consumerism
  • the protection of public spaces and a renewed vision of social goods
  • investment in the capabilities for people have to participate in society in less materialistic ways

Just say no to ecological Marxism.

Yes, It's a Tax

Obama continues to deny that the health insurance mandate which is backed with a penalty to be collected by the IRS is a "tax."  He says "For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase."  Three responses:

  1. Asking people to take individual responsibility for their health care expenses is not a tax.  Asking them to do so via a particular method, in this case the purchase of an insurance policy rather than, say, just paying expenses as they go, is a tax.
  2. Obama might argue that since people are getting value for the policy they have to buy, there is not net tax but just a (forced) exchange of value.  But this is the classic technocratic fault, to assume that the central planner's definition of value is the same as every individuals.  But its not.  Many folks don't get value from a policy, which is why they don't buy one today
  3. Even if Obama were right in #2, he would still be wrong given the rules embedded in this bill.  Young, healthy people will be forced to subsidize the old and those with pre-existing conditions by the rules imposed on insurance companies.  These rules effectively make it impossible to charge full cost to the old and sick, so that the young and the healthy will have to pay more.  Because the young and the healthy will not see values in policies at the prices they will be paying (given these transfers), they won't value the policy with is EXACTLY why the law has to force them to buy it.  Which is why it is a tax.

John Stoessel via Carpe Diem

Competition is a "discovery procedure," Nobel-prize-winning economist F. A. Hayek taught. Through the competitive market process, we producers and consumers constantly learn things that force us to adjust our behavior if we are to succeed. Central planners fail for two reasons:

First, knowledge about supply, demand, individual preferences and resource availability is scattered -- much of it never articulated -- throughout society. It is not concentrated in a database where a group of planners can access it.

Second, this "data" is dynamic: It changes without notice. No matter how honorable the central planners' intentions, they will fail because they cannot know the needs and wishes of 300 million different people. And if they somehow did know their needs, they wouldn't know them tomorrow.

Bernie Madoff Counts the Stimulus

Cafe Hayek has a series of articles here and here on the absurd numerical games going on to pump up the stimulus numbers (which I also offered example of here, where pay increases were considered a "job saved").

For example:

Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, a Bee review has found.

California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas "“ and in 44 other states.

In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.

That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars.

"This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."

Also here:

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

The Globe's finding is based on the federal government's just-released accounts of stimulus spending at the end of October. It lists the nearly $4 billion in stimulus awards made to an array of Massachusetts government agencies, universities, hospitals, private businesses, and nonprofit organizations, and notes how many jobs each created or saved.

But in interviews with recipients, the Globe found that several openly acknowledged creating far fewer jobs than they have been credited for.

One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was "almost nothing.'' Bridgewater has submitted a correction, but it is not yet reflected in the report.

It is becoming clearer and clearer that the vast majority of "jobs saved" were in government, and in effect the stimulus merely had the effect of bailing out state governments that were able to use stimulus money to put off their budget reckonings.

The Murder Weapon Is Covered With His Wife's Fingerprints -- We Better Arrest the Butler

I am a bit late to this but from Arnold Kling:

The further into this crisis we go, the greater the share of subprime loans and mortgage losses are turning out to be located at Freddie and Fannie. Even one year ago, if you had asked me, I would have told you to expect at least 2/3 of the losses to be at companies like Citi and Bear, with less than 1/3 at Freddie and Fannie. It now looks quite different. Conservatively, 3/4 of taxpayers losses will be at Freddie and Fannie. Perhaps as much as 90 percent of taxpayer losses will be there.

Given the large role of Freddie and Fannie, it makes sense for politicians to create as large a diversion as possible. Hence, the brouhaha over bonuses at bailed-out banks.

Incidentally, the debate over the "public option" in health reform also can be viewed as an exercise in symbolic politics and diversion. The point is to divert attention away from the bankruptcy of Medicare.