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The official blog of the National Center for Public Policy Research, covering news, current events and public policy from a conservative, free-market and pro-Constitution perspective.

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Wednesday
Aug202014

Government Health Care Rewards Failure

Today I have a new National Policy Analysis up entitled “Government Health Care Rewards Failure.”  A version has also been published at Rare

In it I examine recent events at the ObamaCare exchanges in Maryland and Massachusetts and the waiting list scandal at the Dept. of Veterans Affairs.  The article notes that “[u]nless powerful political interests are harmed by [government] failure, government employees often face no penalties for incompetence or misdeeds. In fact, sometimes incompetence or failure is rewarded.”

Consider just the case of the Massachusetts exchange.  Known as the Massachusetts Health Connector. It enrolled about 31,700 people by April—only about 13 percent of its 250,000 goal.  Although it was clear to many working at the Connector that they wouldn’t be able to meet the Oct. 1, 2013 launch date, the CEO of the Connector, Jean Yang, failed to inform the Connector’s board of directors about it.

Was Jean Yang fired? Is that a rhetorical question?  Yang still has her job, do the people who work just below her. Apparently, she is so pleased with their performance that she recently gave out raises of $10,000 or more to 11 of the 53 workers at the Connector. 

The message she sends is one of “screw up and we’ll give you more money.”  She, of course, defended the action, saying the raises were “needed to retain valued employees and improve performance going forward.” Which leads to the question what kind of value does she put on her employees if the exhange doesn’t work properly?

Read it all here.

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On a related note, Jillian Kay Melchior at National Review reports on one Jacqueline Middleton who has been indicted by the U.S. Attorney for the Northern District of Ohio for “awarding publicly funded contracts in exchange for kickbacks, home-renovation work, and other pay-offs.”

Middleton was CEO of the non-profit Council of Economic Opportunities of Greater Cleveland (CEOGC) from 1993 until last April.  CEOGC received over $600 million in taxpayer funds from 1999 to 2012 despite numerous news articles exposing her misdeeds.

Melchior ends her article noting that “as Middleton awaits trial, taxpayers would be justified in asking why state and federal officials repeatedly dished out taxpayer money to CEOGC, given the repeated and disturbing reports about misuse of funds and other misconduct.”

For starters, most of those employees are civil service, so they can’t be fired for giving out grants.  In fact, they may have faced heat at work had they blow the whistle on Middleton, especially if she was politically connected.

As Melchior’s story suggests, that was probably the case: The late “Ohio representative Stephanie Tubbs Jones — who received $775 in campaign donations from Middleton between 2005 and 2006 — held a press conference in support of Middleton and praised her for ‘do[ing] a commendable job’ and offering ‘dedicated service.’”

The could easily have have been a warning shot across the bow—do anything to stop Middleton and the cry of “racism” will go up (Middleton is black.)  The last thing government officials want is the NAACP, Jesse Jackson, Al Sharpton and others who profit from race hustling to show up at their doors for a protest (just ask officials in Ferguson, Missouri about that.)  In short, federal officials did nothing because politically powerful groups could have caused them no end of headaches.

Tuesday
Aug192014

Project 21's Black Conservatives Discuss Ferguson Riots on TV

With investigations underway and riots continuing in Ferguson, Missouri without an apparent end in sight, members of the National Center’s Project 21 black leadership network are all over television — providing commentary for a media that is fascinated with the story of racial unrest that Project 21 members say is due to a lack of facts and exacerbated by the intense media attention the riots are receiving.

Project 21 member Joe Hicks disputed the portrayal of Ferguson police as “inherently racist.”  On CNN on 8/19/14, he pointing out that any “illegal police behavior has to be stopped,” but also noted that FBI statistics show there are a disproportionate amount of crimes committed by black Americans — and that gang and drug-related activities that are unfortunately more prevalent in black communities do draw police interest.

Joe said an overall problem in Ferguson (and everywhere) right now is that “we need to have the facts,” and there are too many people pronouncing judgment in the matter “without the benefit of any real facts.”  This, he added, applies to those who would assert a racial conspiracy existing within the Ferguson Police Department without knowing facts such as how many minorities did apply to become officers and how many qualified.

Over at the Fox News Channel, Project 21 member Wayne Dupree critiqued the media performance regarding Ferguson coverage on “Fox and Friends” on 8/19/14.

In particular, Wayne was asked about a Don Lemon interview on CNN in which Lemon told the parents of Michael Brown that the entire world was behind them and they should come to him personally “if either of you need anything.”  Wayne said this was an example of Lemon “playing to the emotion of the viewers” and “becoming a part of the story.”  This, he pointed out, “is not helping the situation.”

Project 21 member Alveda King, the niece of Dr. Martin Luther King, Jr., appeared earlier in the Fox News Channel programming day on the “Fox and Friends First” program.

Talking about President Obama’s apparent willingness to not chose sides in this police-community crisis and to call for calm, Alveda said what Obama said on this occasion was “saying what needs to be said… for justice to prevail.”  On the 8/19/14 edition of the program, Alevda said the “no justice, no peace” sloganeering so prevalent in Ferguson should be abandoned in favor of “pray[ing] for peace.”  She added that “we must have peace in the process.”

Responding to a reported claim by Al Sharpton that the public reaction to the death of Michael Brown is a “defining moment” in American history, Wayne Dupree told host Rick Amato it might be a “defining moment in his history” but that Sharpton needs to be called out for his “lack of working for a solution.”  Sharpton, Wayne said, is simply going for an “emotional response” that can only serve to enhance Sharpton’s own reputation rather than bring about any positive outcome for Ferguson, Missouri in particular or black America in general.

On the 8/18/14 edition of “The Rick Amato Show” on the One America News Network, Wayne said the police “need to protect themselves” in the face of violence that may be directed against them during nightly rioting in Ferguson.  He added that he was always taught to respect authority figures such as police officers — being told that respect would be shown toward him as a result.  “If the police tells me to move to the side,” he noted, “I’m moving to the side.”

Wayne also said there is an inherent problem in the Ferguson standoff in that the media is helping to make problems fester as “false stories… incite and make people crazy.”  He suggested the community would be well-served by getting most or all of the media out of town.

Tuesday
Aug192014

Nanny State Sodium Suggestions Could Actually Harm People

Consumer rejection of allegedly healthier French fries at Burger King and new medical findings that a low sodium diet may be as unhealthy as high sodium diet created what Sun News host Brian Lilley called a “bad week for food police.”  Jeff Stier, director of the National Center for Public Policy Research’s Risk Analysis Division, pointed out that the old maxim of everything in moderation is turning out to be true.  Stier added that the “levels that most of us are consuming don’t harm us” already — despite “government guidelines… pushing for not low, but very low levels” of sodium and that businesses feel pressured to comply through the threat of future regulation.

Commenting on how the campaigns to further-regulate individual behavior often lacks a sound scientific grounding while appearing on the 8/15/14 edition of “Byline” program on Canada’s Sun News network, Stier said:

I think it exposes the fact that the food police, the nanny state, the people who want to use government control to tell us how to live, don’t really care about the science.  They’re driven by this neo-puritanical ideological agenda, and they stick with it even when the science goes the other way.

Tuesday
Aug192014

Slate's Emily Bazelon Misleads In Order To Hype Racism

One of the unstated assumptions among leftist intellectuals is that absent racism, different racial groups would have roughly equal outcomes.  If statistics show that different racial groups have different outcomes, then racism must be afoot.

That was the assumpton that Emily Bazelon’s brought to her article on why she doesn’t like to call the police, especially on black people.  Consider this passage:

The divide opens early in life: Black kids are far more likely to be suspended, expelled, and funneled into the juvenile justice system than nonblack kids. Again, the disparity can’t be explained by their behavior: It reflects the heavy hand of systemic bias.

The link leads to a Washington Post article on a 2012 U.S. Dept. of Education Civil Rights Survey showing that black students were disciplined more often than other racial groups.  For example:

In a more focused analysis of school systems with more than 50,000 students enrolled, the data showed that African American students represented 24 percent of enrollment but 35 percent of arrests. White students accounted for 31 percent of enrollment and 21 percent of arrests. For Hispanic students, there was less of a disparity in arrests. They accounted for 34 percent of enrollment and 37 percent of arrests.

Yet the data from the survey does not reveal whether the different outcomes stem from student behavior or some “systemic bias.”  It doesn’t show how many times students from various racial groups misbehaved—only the number of times they received some form of discipline for it.  Bazelon assumes that students of all racial groups misbehave at equal rates and that unequal rates of discipline must reflect systemic bias—presumably the racism of the white officials who run those schools given the tone of the rest of her article.

But the Post article actually throws some cold water on that theory which Bazelon might have noticed but for her ideological blinders:

Beyond police contact, the data show persisting disparities in out-of-school suspension. African Americans were more than 3½ times as likely to be suspended or expelled as white students, the data showed.

Black males stood out, with 20 percent being suspended from school during the 2009-10 school year. By comparison, 7 percent of white males, 9 percent of Hispanic males and 3 percent of Asian American males were removed from school for disciplinary offenses. (Italics added.)

So, let’s see if you buy this theory:  The white racism that is systemic in the school system discriminates heavily against blacks, treats Hispanics only slightly worse that whites, and treats Asians the best of all.

Here’s another theory: The school system is actually run by racist Asians who, of course, treat Asians the best but for some reason have a disproportionate animus toward blacks.

And here’s a theory that’s a great deal more plausible:  Students from different racial groups have not been misbehaving equally.

Digging down into the Dept. of Education data a bit reveals some other holes in the Bazelon’s “equality of misbehaving” assumption.  Take, for example, Curie Metropolitan High School in Chicago.  Below is the enrollment and discipline data of that school broken down by race from the Dept. of Education’s website:

 

Notice that with the exception of expulsions—of which there were only five—the pattern repeats itself.  Black students are suspended at a rate higher relative to their rate of enrollment, while other races are suspended at rates similar to or below their rate of enrollment.

The reason I chose Curie Metropolitan High School is that systemic racism doesn’t seem to explain these results. At the time these data were taken in 2009-2010, Curie’s principal, Phillip C. Perry, was black, as was the CEO of Chicago Public Schools, Ron Huberman.  

Economist Thomas Sowell has long pointed out that it is almost impossible to find different racial groups with equal outcomes.  The norm through history is one of different groups having very different outcomes.  But don’t expect the political left to acknowledge this any time soon.  

CORRECTION: While Ron Huberman has a dark complexion he is not an African-American.  He is, in fact, the son of Holocaust survivors.  Sorry for the error.

Monday
Aug182014

More Comments from Project 21 Members About Ferguson Rioting

This morning, Project 21 member Christopher Arps had this to say about the current situation in Ferguson, Missouri in the wake of the shooting of Michael Brown:

Governor Nixon calls in the National Guard as the narrative falls apart that Michael Brown was fleeing while shot in the back, turned around and was fatally shot while his hands were up while surrendering.

Over the weekend, Chris, a St. Louis area native who has previously commented for Project 21 on the violence in the St. Louis suburb, was regularly posting about unfolding events on Facebook.  Among them were these observations:

Angry crowds and the cover of night is just not a good mix.  Is protesting at night more forceful and compelling than protesting during the day?

Complete chaos in Ferguson right now — before the curfew begins.  Tear gas has been deployed and gunshots have been reported (not police) one gunshot victim.  [Al] Sharpton comes to town and gives a fiery speech, and rioting starts earlier than in previous nights.  Coincidence?

People just aren’t thinking rationally in this Ferguson case.

How much sense does it make to do a rushed investigation, [possibly] indict and arrest the officer and then have him acquitted at trial a year later because it was a rushed and shoddy investigation.  And then folks will be crying that black people can’t get justice in America!

This not an ordinary case of one person shooting an unarmed man.  This is a police officer who is given a reasonable assumption under the law to use his weapon if he thinks he needs to.  Let the investigation play out.  Rushing this will not get “justice” for Michael Brown.

 Watching this press conference and the reaction from the crowd towards the institution of the curfew is like watching a bad “Twilight Zone” episode.

People are rioting and looting in the streets, thus creating an unsafe situation for the residents and police.  But people are claiming their constitutional right to assemble is being infringed.  In extraordinary circumstances, constitutional rights can be infringed to keep the general order.  They have a choice to make between still being able to protest until all hours of the night — and inviting the thugs and hooligans to run rampant — or respecting the curfew and protesting during the times allowed and letting peace and order be restored to Ferguson.

Chris also had this to say about critics of the police tactics used in dealing with the crisis in Ferguson:

This “militarization of police” red herring that Rand Paul and others are advancing on the right and left is really getting under my skin.

What Senator Paul and others aren’t telling us is that the “militarization” happened after 9/11 when cities and police departments wanted this equipment in the face of terrorist threats in this country.

It wasn’t to prepare for a police state, it was to help protect us and keep order in the wake of another 9/11-style attack.  This spreading of paranoia by so-called leaders is really irresponsible, in my opinion.

Additionally, Project 21 member Stacy Washington, who hosts a Saturday night radio show on WFTK-St. Louis, and was interviewed on WLS-Chicago as well as other shows nationwide throughout the week for Project 21, reported a deluge of nasty post-show messages on her Twitter account in response to her comments.  She wrote:

Massive amounts of hatred on twitter tonight.  Just no words for the ugliness.  No dissenting views are allowed.

She also reported on other people being “villif[ied]… for having an opposing opinion” regarding Ferguson-related issues.

Also on her Facebook page, Stacy reported the following Ferguson businesses are among those “damaged or destroyed” so far by looters: QuikTrip, Firestone, Kmart, Radio Shack, T-Mobile, Cricket, Walgreens, Dollar General, Family Dollar, Taco Bell, AutoZone, GNC, Boost Mobile, CityTrends, Ross Fashions, Sam’s Meat, Ferguson Liquor, Sprint, Prime Sole, Shoe Carnival, AT&T and King David Fashions.

Saturday
Aug162014

Raising taxes on certain foods, drinks does little to fight obesity

In an op-ed in Saturday’s Houston Chronicle, I challenge the claims being used to justify a wave of soda taxes rolling across Latin America. I also explain how this could impact the potential for taxes in the United States.

HoustonChronicleOutlookLogoW

What do Latin American governments do when they realize they are spending more money than they have? In part, they raise taxes on the poor in the name of fighting obesity by taxing food and beverages. That’s only the beginning of the ugliness.

In April, in a piece for the Daily Caller, I detailed how Mayor Bloomberg’s junk-science food police have gone national. It turns out, though, that they’ve actually gone international. In the Houston Chronicle, I explain what happened:

It started last year in Mexico, where former New York City Mayor Michael Bloomberg spent a controversial $10 million of his own money to influence the outcome of a proposed tax on sugar-sweetened beverages and high-calorie foods. The billionaire’s own advocacy group now admits that the money was used, in part, to fund scientists to produce research that would support the taxes, according to both the Associated Press and the Bloomberg Philanthropies webpage. This type of outcome-oriented research may get the job done in terms of advancing a political agenda, but it won’t address obesity.

In fact, a simple economic reality explains why these tax schemes won’t do any good.

A recent article in the American Journal of Agricultural Economics explains consumer behavior in the face of such taxes. Lead author Chen Zhen explained, “Consumers can simply substitute a taxed high calorie for an untaxed one.” Reduced consumption of certain foods does not necessarily cause a reduction in obesity.

If Michael Bloomberg gets his way, the Latin American soda taxes will be used to justify soda taxes in the United States —even if they don’t reduce obesity.

In fact, Bloomberg food police ally Marion Nestle, food policy and nutrition professor at New York University told Politico last month that, “If the taxes are shown to reduce consumption - and I’m hoping studies are under way - I’d say it’s game over.” The taxes will be adopted across the United States even if the Bloomberg-funded Mexican tax has an impact only on consumption, but not obesity.

The piece continues,

Now, after enactment last year of a peso-per-liter soda tax in Mexico, the fad is spreading to other nations of Latin America. Chilean president Michelle Bachelet is enacting a soda tax as part of a wider set of measures targeting foods she doesn’t want her citizens to eat. So is Argentina, as it teeters on the brink of its second debt default in 13 years. In Brazil, where officials increased taxes on sodas, beer and energy drinks by 19 percent to 23 percent over the past two years, revenue-starved officials sought a further tax hike timed to bilk thirsty soccer fans from around the world. At the last minute, the World Cup taxes were given a time out until the fall.

Clearly, the science to support these taxes as a serious anti-obesity tool hasn’t yet been established, despite Bloomberg’s millions. So why was the tax adopted?

Rather simply, it is Sutton’s Law. The “law” is named after the infamous American bank robber Willie Sutton, who was incorrectly credited with answering a reporter who asked him why he robs banks by saying, “That’s where the money is.”

GirlwithCokeSodaChipsCroppedW

According to Christopher Wilson, an associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars, “Traditionally, 30 to 40 percent of the budget came from oil exports, and that has been declining. That has made for a strong imperative to increase tax collection, which is extraordinarily low as a portion of GDP, and that is the driving force behind fiscal reform,” Wilson told the magazine, Governing, in reference to the food and soda tax. Mexicans spend money on high-calorie food and soda, so Willie Sutton would have taxed it, too.

The problem is, taxes on sugar-sweetened beverages and so-called “junk-foods” have a disproportionate impact on the poor. To Bloomberg, whom nobody could accuse of being poor, this isn’t a bug, it’s a feature. Since there’s a high-rate of obesity among lower socio-economic groups, a sin tax that hits poor people the hardest is right on target.

But there’s more to it than money. Even proponents of the taxes concede they aren’t a silver bullet. Throughout Latin America, advocates are pushing a full menu of laws an regulations aimed at soda and food. At the top of the food police wish-list is a restriction on the advertising of foods they don’t want people to eat. Instead of following the science, proponents of advertising restrictions attempt to advance their cause in a way that makes Bloomberg’s attempt to purchase science look honorable by comparison. Activists in Canada, the United States and Chile are suggesting that advertising to kids is akin to molesting children.

Assistant Professor at the University of Ottawa Dr. Yoni Freedhoff says it most delicately, “We need to stop allowing the food industry to target our most vulnerable and precious population, our children.” New York’s Meme Roth, founder of “National Action Against Obesity” is less subtle in evoking thoughts of child molestation by referring to food advertising to children as “predatory” and arguing that we shouldn’t let food company executives have a “relationship with our kids.”

But it took the chairman of the Committee on Health of the Chilean Senate to put innuendo aside and make the allegation Freedhoff and Roth were too polite to directly state. Senator Guido Girardi, told La Nacion that (as translated by Google), “Chile has companies that are the pedophiles of the 21st century, because they abuse children by labeling fatty and sugary food as healthy.”

In their zeal to advance an unpopular agenda, it’s the food police who have become the real creeps. Advocates who want to fight obesity have their hearts in the right place. But that shouldn’t free them from being held to legitimate science and common standards of decency. With a little less emotionally manipulative rhetoric and a bit more nonpartisan science, we could come together and address obesity in a constructive way.

Thursday
Aug142014

The Missouri Legislature Should Override Governor Nixon's E-cigarette Veto

Tobaccocigarettee cigDPCW

Now that the comment period for the Food and Drug Administration’s proposed “deeming regulations” has closed, attention is shifting back to state and local legislative approaches to e-cigarettes. (See our comments to FDA.)

While federal regulations ultimately have supremacy, state and local governments around the country are considering e-cigarette policies such as how to tax them, local usage bans, and bans on sales to minors. Two of these issues are now playing out in a fascinating way in Missouri, where Governor Jay Nixon has vetoed a bill that should be seen as a model for how to properly regulate these products at the state level.

The challenge of how to regulate e-cigarettes at any level of government is about getting the right balance between considerations such as product safety and protecting youth, versus the risk of a regulatory scheme which would have the effect of discouraging adult smokers from switching to these dramatically less harmful  products.

Mitch Zeller, the FDA’s chief tobacco regulator summed up his approach in a recent interview with the Robert Wood Johnson Foundation. He said, 

 … if at the end of the day people are smoking for the nicotine, but dying from the tar, then there’s an opportunity for FDA to come up with what I’ve been calling a comprehensive nicotine regulatory policy that is agency-wide and that is keyed to something that we call the continuum of risk: that there are different nicotine containing and nicotine delivering products that pose different levels of risk to the individual.”

Zeller hit the nail on the head about how to think about reaching the right balance, with the continuum of risk in mind:

 Right now the overwhelming majority of people seeking nicotine are getting it from the deadliest and most toxic delivery system, and that’s the conventional cigarette. But if there is a continuum of risk and there are less harmful ways to get nicotine, and FDA is in the business of regulating virtually all of those products, then I think there’s an extraordinary public health opportunity for the agency to embrace some of these principles and to figure out how to incorporate it into regulatory policies.”

 In Missouri, the legislature codified Zeller’s well-reasoned strategy by banning the sales of e-cigarettes to minors, and, simply enough, defining e-cigarettes as vapor products. Such a definition would have the effect of ensuring that e-cigarettes are not inappropriately taxed and regulated as tobacco products, at least  not without deliberation of the legislature. The bi-partisan bill garnered 127 votes in the house, with only 19 votes in opposition. It was approved 27-4 in the senate.

Yet last month, under pressure from a shrinking number of activist groups who deny the potential public health benefits of e-cigarettes, Governor Jay Nixon vetoed this common-sense approach.

  The governor’s veto message feebly attempted to justify his action, but doesn’t even pass the laugh test. He writes,

First, Missouri law should not limit the regulation of products derived from tobacco that contain a highly addictive chemical and carcinogenic, noxious chemicals. Not unlike traditional tobacco cigarettes, these products may carry significant health risks to users and others through direct and secondhand inhalation in a manner not unlike traditional tobacco cigarettes.” 

It is as if the governor thumbed his nose at the FDA’s Mitch Zeller, who cautioned against this unlimited regulatory approach to e-cigarettes. But Nixon goes further. He awkwardly manages, twice in one sentence, to equate non-combustible tobacco-free e-cigarettes with actual cigarettes. That’s exactly the opposite approach called for by Zeller. 

Governor Nixon’s veto message continues, 

Second, … Senate Bill No. 841 would harm the health of Missourians because it would contravene and undermine more comprehensive proposed federal regulation.”  

Governor Nixon should know better. State law cannot “contravene” federal regulations, even if legislators wanted to. Federal regulations have supremacy. More importantly, the bill passed by the legislature would do nothing to “undermine” proposed federal regulations.  

Let’s put aside the fact that the comment period for the FDA’s proposed rule closed only last week and the agency must review and take into account a reported 81,881 comments, some of which exceed 100 pages, before any final regulation is developed. No state law could contravene or undermine regulations that haven’t been finalized yet. The bottom line is that the governor and the activists who pressured him to veto the bill admit that they want to regulate and tax e-cigarettes like tobacco products such as cigarettes. 

Those moves are not only unsupported by the science, but would violate the very essence of the regulatory approach the FDA seeks to pursue, as Mitch Zeller described it. The FDA recognizes that there is a “continuum of risk: that there are different nicotine containing and nicotine delivering products that pose different levels of risk to the individual.” Those products should be regulated differently. Governor Nixon, however, goes out of his way to equate, rather than differentiate the products.

Ironically, if the governor gets his way and the legislature does not override the veto, minors in Missouri would be permitted to purchase e-cigarettes from unscrupulous sellers. What’s worse, the table would be set to for bureaucrats in the governor’s office to undermine the will of an overwhelming majority of members of both parties in both houses of the legislature, as well as the strategy sought by the FDA, by regulating and taxing e-cigarettes as if they were cigarettes. 

Indeed, if the veto is allowed to stand, it would contravene the very principle central to the FDA’s planned approach to the regulation of e-cigarettes as outlined by Mr. Zeller. 

The legislature should act swiftly to overturn the governor’s misguided veto.  

Thursday
Aug142014

Project 21’s Kevin Martin on the Violence in Ferguson, Missouri

“There is no justification” for the nightly rioting erupting in Ferguson, Missouri after a police shooting there killed 18-year-old Michael Brown, said Kevin Martin, a member of the Project 21 black leadership network.  On the 8/13/14 edition of “The Rick Amato Show” on the One America News Network, Kevin condemned the violence and praised the “courageous” calls for calm amidst the chaos by Brown’s parents.

Asked about the leftist narrative that American society creates a condition where blacks do not feel they can trust the police, Kevin responded that there are many people reserving judgment because of a lack of information about what happened, but that this cannot justify the actions of “career criminals” who have descended upon Ferguson to cause trouble and commit crimes of opportunity.

Kevin’s interview was cut short by technical problems in the One America studios, so he subsequently provided this additional comment about Brown case and the violence in Ferguson:

I mourn for Michael Brown just as any other parent would when a child is killed under these questionable circumstances and with conflicting accounts.

But I would be remiss if I did not condemn the actions of the looters who have descending upon Ferguson — not seeking justice for Michael Brown or to mourn him, but to spread lawless chaos with selfish intent.  It puts the whole community at risk.

Simply put, how does stealing wheel rims from a local business or looting and burning a QuikTrip market honor the memory of Michael Brown?  I join with the Brown family and others in condemning the lawless violence that has engulfed a community that is already on edge.

Wednesday
Aug132014

Project 21's Arps Dispels Myths About Missouri Riots

Ferguson, Missouri has never been a place of simmering racial animus said Project 21 member Christopher Arps, a resident of the St. Louis area who is familiar with the town now in the national spotlight.  Speaking about the police shooting there that took the life of resident Michael Brown — an action that sparked riots and looting in the majority-black suburb and brought national attention to it — Arps explained that a lot of the problems in Ferguson currently stem from a lack of information and an abuse of a tragic situation by opportunists.

On the 8/12/14 edition of “Real News” on Glenn Beck’s The Blaze TV network, Arps told host Tara Setmayer (also a Project 21 member) that there are “certain areas” in the largely middle-class community where there is a problem with crime and gang activity and where community-police relations are strained as a result.  Ferguson as a whole and the St. Louis area, however, are not places he considers to be plagued by racial problems.

Arps also pointed out that the majority of those arrested for looting and rioting in the wake of the Brown shooting do not appear to be local residents.  This gives credence to the suggestion that most of the mayhem and damage that has occurred in the wake of the shooting is by the hand of outsiders seeking to commit crimes of opportunity.  He added that the situation is made increasingly tense by an overall “lack of information” that allows for idle speculation that has lead to extremist elements portraying the shooting as an execution.

Wednesday
Aug132014

Health Care Odds & Ends: Leaving The ObamaCare Exchanges

1. Down 44%? My former colleague at Investor’s Business Daily, Jed Graham, reports that new evidence on exchange enrollment “could require quite a come-down from those lofty claims” of 8 million enrollees in the ObamaCare exchanges.

Aetna, the nation’s third-largest health insurer, “had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to ‘just over 500,000’ by the end of the year.”

That would be a drop of 44 percent.  At that rate the ObamaCare exchanges would drop from 8 million down to 4.6 million enrollees.  

Yet not every insurer expects to see such a dramatic drop. “Cigna said that it expects its individual market customers, including more than 100,000 in the exchanges, to ‘move from 300,000 down to 280,000 in that range,” Graham reports.  That’s a drop of 6.7 percent.

But attrition is not the only reason for decline in exchange enrollment…

2. Can They Prove Their Citizenship Status?  Will They Have To?  The Daily Caller reports that the Centers for Medicare and Medicaid Services “sent letters notifying 310,000 customers who have failed to fix errors in their citizenship or immigration data that their coverage will be terminated Sept. 30 if they don’t submit proof by Sept. 5.”  

So, let’s say that half of those, 155,000, are unable to prove citizenship, reducing exchange enrollment from 8 million to 7,845,000.  Then, let’s assume that attrition is at about the halfway point between 44 percent and 6.7 percent, which is about 25 percent.  That would drop enrollment down to about 5.9 million, quite a ways from 8 million.

As for the death spiral, we can’t know what effect this will have since we have no data on the age or health status of those who are leaving the exchange.  However, those who are dropping coverage because they have stopped paying their premium are probably disproportionately young, which is not a good sign for avoid a death spiral. But that’s a rough guess and at this point we can’t know with any confidence.

Final point:  I have my doubts that those 310,000 will have to prove citizenship.  What would prevent President Obama from issuing an executive order giving them a waiver?  The law, of course, but as we have seen that means little to this president.  So don’t be too surprised if, at the end of August, President Obama “finds a way” to let those people stay on the ObamaCare exchanges.

Sunday
Aug102014

Why I'm Obsessed with Salon's Obsession with Obsession

obsessed lady

I wonder at how often Salon.com uses certain words, such as "obsession" and "wingnut." Today I looked. 41,900 times for "obsession," 7,830 for "wingnut."

Some of the things we wingnuts are "obsessed" by: the medical device tax, Dinesh D'Souza, exaggerating, Obama phones, school-for-cash (whatever that is), socialism, Kenya (in two ways), food stamps, abortions at 20 weeks, Obama's TelePrompTer (obsessing over which, Salon says, might be "racist"), inflation, national parks, voter fraud, John Kerry's gaffes, austerity, ACORN (Salon says it is unconstitutional to be obsessed by ACORN, so I like to call ACORN a tax), ObamaCare (this is actually true), and repealing ObamaCare, also true, not to mention pending.

We did relax on one issue. Salon said we had an "obsession" with crime last August, but on August 8 of this year it said we had given up Nixon's "obsession" with law and order, which raises the question of whether we ever really were obsessed with it, or Salon just confused us with Nixon. Or maybe Salon just likes publishing big pictures of Nixon. Because, you know, Nixon was a Republican and he tried to use the IRS for political purposes.

I admit to a certain confusion because Salon also says we wingnuts are obsessed with "policing women's sex lives." Law and disorder?

Not that only wingnuts are obsessives. All of America has both a wedding dress "obsession" and a cannabalism "obsession." (Be careful at wedding reception buffets.) We Americans also are obsessed with women's figure skating, because we're obsessed with watching women fall down. America also has a "celebrating moms-to-be" obsession, which started a few months after the wedding dress obsession, and a "missing white women" obsession, which makes sense to the extent that the more women you have around, the more wedding dresses, figure skaters and baby showers you will have. Americans are a very logical people.

SalonObsession081014The U.S. Navy is obsessed with whales, which makes sense: It's the best branch of the military to join if you want to see one. Big Pharma has an "attention" obsession, which was news to me but I wasn't paying attention. Four months before the last presidential election, Salon reported Mitt Romney had an "animal terrorist" obsession, by which Salon meant the Animal Liberation Front, not presidential candidates who have eaten dog meat, though the latter is more likely to be true.

Even the Salon writers have self-confessed obsessions: with swastikas and reading Mormon housewife blogs. I'd make fun of that but I don't know where to start.

Why don't you hear about all this from other parts of the news media? Perhaps the media is distracted by its "parenting Suri Cruise" obsession.

On August 7 Salon ran the headline, "America was built by obsessive compulsives." I first thought that's a compliment to wingnuts and others prone to obsessiveness, but then I reconsidered.

I'm not sure Salon approves of America.

Friday
Aug082014

NCPPR's Comments to the FDA Regarding E-Cigarette Regulations

E cigarettes DPC

Today the National Center for Public Policy Research submitted comments to the Food and Drug Administration regarding e-cigarette regulations known as "Deeming Regulations."

When the proposed rule was first published, I told the Associated Press that "the devil will be in the details."

One of those details is the fact that the FDA has stated that it does not believe congress gave the agency authority to set a unique "grandfather date" for E-cigarettes to allow them to come to market without undue regulatory burdens.

I suspect the FDA is receiving thousands of comments, many from smokers who say they've quit smoking cigarettes by using e-cigarettes instead.

The FDA acknowledges that harm reduction benefit of e-cigs. But it says, in the proposed deeming regulations that, the grandfather date it sets in the proposed rule is a problem, at least for industry and the former smokers that rely on that industry. The FDA's grandfather date creates huge regulatory burdens, but it says its hands are tied by Congress.

In my comments, I argue otherwise. I explain why the FDA should use its statutorily granted discretion in setting a grandfather date for e-cigarettes to the effective date of the proposed rule, or, at earliest, as the date the proposed rule was published.

There's a lot of legal terminology here. The bottom line is that if the FDA imposes the rule it drafted, just about all of the e-cigarettes on the market today would eventually have to come off the market because of the huge regulatory burden, and almost all innovation would be stifled. If this happens, smokers who quit smoking using these products have said that they would either buy unregulated products on the market, or simply go back to smoking cigarettes as a result of the FDA's decision.

In the comments submitted today, NCPPR explains that the proposed rule is fundamentally flawed because it misinterprets the statute in concluding that the agency does not have the statutory authority to protect public health by setting the grandfather date for substantial equivalence to a more current date than February 15, 2007.

Here is the full text of the comments:

To: FDA Center for Tobacco Products

RE: FDA, Docket No. FDA-2014-N-0189, Regulatory Information Number (RIN) 0910- AG38

Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Regulations on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products

From: Jeff Stier, Senior Fellow, National Center for Public Policy Research, Director, Risk Analysis Division

Date: August 8, 2014

I am writing on behalf of the Risk Analysis Division of the National Center for Public Policy Research, a conservative think tank.

The FDA has solicited comments on what FDA actions or regulatory approaches, if any, should be taken for proposed deemed tobacco products that are "new tobacco products" under section 910(a)(1) of the FD Act. The act, passed by congress as the Family Smoking Prevention and Tobacco Control Act, became law on June 22, 2009. The law granted the FDA regulatory authority over tobacco products.

In this submission, I will explain why the FDA should use its statutorily granted discretion in setting a grandfather date for e-cigarettes to the effective date of the proposed rule, or, at earliest, as the date the proposed rule was published.

The U.S. District court in Washington, DC has ruled that because the nicotine in e-cigarettes is derived from tobacco, the FDA has the authority to regulate them as tobacco products, even though there is no actual tobacco in them. (Sottera, Inc. v. Food & Drug Admin., 627 F.3d 891 (D.C. Cir. 2010))

However the statute did not require the FDA to regulate e-cigarettes. Instead, the Tobacco Control Act provided the FDA authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco and smokeless tobacco products. In addition, the statute separately gave the agency the authority to deem other tobacco products as tobacco products under the statute.

Congress required that the agency's implementation of the statute must, "provide new and flexible enforcement authority to ensure that there is effective oversight of the tobacco industry's efforts to develop, introduce, and promote less harmful tobacco products." [Citation]

The FDA would be failing in its statutorily-based mission to protect public health by setting the grandfather date for all newly deemed products to February 15, 2007. Specifically, there's no rational basis for applying the statute's grandfather date for products other than those for which the statute gave the agency immediate regulatory authority. The February 15, 2007 grandfather date applies to products that congress gave FDA direct regulatory authority over. It should be self-evident that the grandfather date in the statute did not apply to products that were not yet deemed as tobacco products. This is true especially regarding a class of products that had no substantially equivalent product on the market and which also have the potential to improve public health. Instead, the statute explicitly provides for flexibility in this regard, with direct language describing the bill's purpose to "to impose appropriate regulatory controls on the tobacco industry." [Citation]

The agency's attempt to incorrectly set the grandfather date for newly deemed e-cigarettes to February 15, 2007 is a failure to exercise its statutorily granted flexible enforcement authority, as well as a failure to implement the statute's call for appropriate regulatory controls. As a result of the agency's misapplication of the statute, the FDA's proposed rule would have the unintended consequence of harming public health by failing to provide effective oversight of industry's effort to develop, introduce, and promote less harmful tobacco products. Ironically, in claiming to implement the statute by adhering to the wrong grandfather date, the agency would be failing to enforce the statute and would harm public health in the process.

The statute sets forth two pathways, or on-ramps, to legally market new tobacco products. The first pathway, substantial equivalence, is the pathway where the grandfather dates comes into effect. In order to be eligible for this on-ramp, the new product must be "substantially equivalent" to a product on the market as of a specific grandfather date. For products already on the market as of the grandfather date, this on-ramp presents the lowest regulatory hurdle to bringing a product to market.

If a product is not substantially equivalent to a product on the market as of the grandfather date, or if it does not meet the other substantial equivalence requirements, the manufacturer must submit a Premarket Tobacco Application. [Citation]

The FDA's Premarket Tobacco Application guidance states that,

"Premarket Tobacco Applications must demonstrate that the new tobacco product is appropriate for the protection of the public health, which will be determined with respect to the risks and benefits to the population as a whole, including users and non-users of tobacco products, and taking into account:

The increased or decreased likelihood that existing users of tobacco products will stop using such products; and

The increased or decreased likelihood that those who do not use tobacco products will start using such products."

Congress intended the substantial equivalence standard to be lower than the premarket tobacco application so that industry would be allowed to make changes to products that did not introduce new health risks. By not developing a rationally grounded grandfather date for e-cigarettes, the deeming regulation runs the risk of stifling innovation of lower risk products that weren't even contemplated by the statute. In the proposed rule, the FDA comes close to acknowledging as much. The proposed rule addresses the concern raised by "industry" (and no doubt, by many e-cigarette consumers who quit smoking cigarettes with the help of these products), that,

"many tobacco products we are proposing to deem that are currently being sold may not be 'grandfathered' tobacco products because many were not commercially marketed or modified until after February 15, 2007. We understand that this may be particularly true in the case of e-cigarettes and similar novel products."

In addition, the FDA directly acknowledges that under the proposed rule's grandfather date, no technology-based products such as e-cigarettes would be permitted to pursue the substantial equivalence pathway available to the more harmful combustible cigarettes.

"Moreover, new products that come on the market in the future would never be grandfathered tobacco products because they would be coming on the market after February 15, 2007." [Citation]

The proposed rule then fails to acknowledge that the statute gave the FDA flexibility to apply the statute in order to protect public health. The rule states,

"We do not believe that we have the authority to alter or amend this grandfathering date, which is set by statute."

Instead, the FDA writes in the proposed rule that,

"Therefore, FDA believes most proposed deemed tobacco products would be considered new tobacco products and would be required to obtain an order from FDA prior to marketing under one of the three pathways listed in section VIII.A.6."

This interpretation is incorrect because the February 15, 2007 grandfather date applies to products that the FDA must regulate under the statute, and not to products that must first be deemed as tobacco products by the agency. To accept the FDA's tortured interpretation of the statute, one would have to believe that congress intended to set a grandfather date in the statute for products that weren't under the FDA's regulatory authority when the statute went into effect.

There is no specific language in the statute which sets a grandfather date for products not yet deemed tobacco products. In fact, the law came into effect in 2009, prior to the 2010 Sottera decision that laid the legal basis for the FDA to attempt to deem e-cigarettes as tobacco products under the statute.

In reality, the statute wisely authorized the FDA to come up with different regulations for newly deemed products. With an eye towards new products not specifically contemplated in the statute, congress granted the FDA "flexibility" to promulgate rules that protect public health. Congress also stated that the purpose of the statute is "to impose appropriate regulatory controls on the tobacco industry," as well as "to promote cessation to reduce disease risk and the social costs associated with tobacco-related diseases."

The agency's failure to exercise this discretion would have the exact opposite effect of the statute's overall goal of protecting public health by unnecessarily forcing e-cigarette manufacturers to pursue the burdensome Premarket Tobacco Application route to the market. This route is the most expensive and time consuming legal pathway to the market. If the FDA does not exercise its discretion with regard to the grandfather date, it would pervert the public health intent of the statute by allowing the substantial equivalence route for cigarettes, the most harmful form of tobacco use, while, by the agency's own admission, forcing less harmful non-combustible products to climb a much steeper on-ramp.

It should be noted that is possible that there were some vapor products on the market as of February 15, 2007, but those products did not appeal to a large number of smokers and continue to evolve significantly so as to present less harm and to be of greater appeal to smokers looking for an alternative to cigarettes. Those products bear no substantial equivalence to the products that are today helping a significant portion of smokers quit smoking.

In his interview with the Robert Wood Johnson Foundation's NewPublicHealth, the director of the FDA's Center for Tobacco Products, Mitch Zeller addresses the need for the flexible application of the authority congress granted the agency, with regard to lower risk, noncombustible products like e-cigarettes.

"The other example is if at the end of the day people are smoking for the nicotine, but dying from the tar, then there's an opportunity for FDA to come up with what I've been calling a comprehensive nicotine regulatory policy that is agency-wide and that is keyed to something that we call the continuum of risk: that there are different nicotine containing and nicotine delivering products that pose different levels of risk to the individual.

Right now the overwhelming majority of people seeking nicotine are getting it from the deadliest and most toxic delivery system, and that's the conventional cigarette. But if there is a continuum of risk and there are less harmful ways to get nicotine, and FDA is in the business of regulating virtually all of those products, then I think there's an extraordinary public health opportunity for the agency to embrace some of these principles and to figure out how to incorporate it into regulatory policies." [Citation]

One meaningful and concrete way the FDA could incorporate these principles of a continuum of risk is to use the discretion granted in the statute by setting a more current grandfather date which would include the products on the market today which are achieving the public-health results Mr. Zeller has pointed to in his numerous discussions of a comprehensive nicotine regulatory policy and a continuum of risk.

The unfounded claim in the proposed rule that suggests congress did not have the forethought to grant the agency flexibility in applying the statute, especially with regard to a grandfather date for products for which the agency was not granted immediate authority to regulate, would unnecessarily tie the agency's hands as it seeks to implement an agency-wide science-based nicotine regulatory policy that is keyed to the continuum of risk.

A February 15, 2007 grandfather date would also inadvertently give an advantage to cigarettes, by allowing them a substantial equivalence pathway, and denying that same pathway to an entire class of products that the FDA itself recognizes may present an extraordinary public health opportunity.

Friday
Aug082014

Obama Foster Plan for Illegal Kids “Ripe for Abuse”

Current plans to put many of the illegal immigrant children now being held by the government into foster care is a strategy that is “ripe for abuse.”  In an discussion with host Rick Amato on the One America News Network, Project 21 co-chairman Cherylyn Harley LeBon noted an overwhelming number of young illegals here in the United States “can’t speak English” and are “not familiar with American culture whatsoever,” and they risk being lost or abused by a foster care system that cannot be trusted to run efficiently even without having to deal with the recent influx of thousands of children coming here alone from Latin America.

In response to Amato’s story about how one of the producers of his show found information about becoming a foster parent that claimed one could become qualified in 45 days and receive $6,000 a month for fostering a child, Cherylyn said there is an inherent risk of “draw[ing] in a certain type of person doing it just for the money” and that people may lack necessary parenting skills or harbor ill intent for the welfare of a foster child.  This problem, she said, must be tackled.

One part of the solution to this problem that Cherylyn suggested on the 8/7/14 edition of “The Rick Amato Show” was for the social workers who must deal with this problem to “force the [Obama] Administration to answer those questions” about how the federal government intends to transition this wave of children safely and effectively.

Thursday
Aug072014

Barney Frank: We Know What's Best For You

Last Friday the Huffington Post reported that former Democratic Congressman Barney Frank said the Obama Administration “lied to people” when it claimed that you could keep your health insurance plan if you liked it.

While that got most of the attention, what was more insightful was Frank’s advice on how President Obama should have reacted when millions of people were losing their insurance plans late last year:

“He should have said, ‘Look, in some cases the health care plans that you’ve got are really inadequate, and in your own interests, we’re going to change them.’ … But that’s not what he said.”

That statement reflects the attitude of what economist Thomas Sowell calls “The Anointed,” intellectuals who believe they have “a mission to lead others in one way or another toward better lives.”  

It’s axiomatic among politicians and others on the left they know what is in the best interest of other people, and it is their responsiblity to use government to force it on them if necessary.  Of course, other people might have a better sense of what their own interests are since they are the ones who pay the cost if they make decisions about their interests that are wrong. That, though, never occurs to the likes of Frank.

It comes as small relief to know that Frank is no longer in Congress where he can indulge his sense of superiority by passing laws that force the rest of us to do as he see fits.  Obviously, Congress and the Obama Administration are filled with like-minded people.

Wednesday
Aug062014

Federal Reserve Policy: Robbing the Poor to Feed the Rich

Note: This post was written by NCPPR’s intern, Scott Alford.

Income inequality is poised to be the defining issue of America’s next few election cycles. Yet, few political leaders understand that one of the most influential sources of inequality originate from the contradictory central planning at the Federal Reserve. Bad Federal Reserve policies, in the long run, make the value of our money worth less and lower the standard of living for middle and lower class families.

Since its inception as the United States monetary monopoly over a hundred years ago, the Federal Reserve Banking system has attempted to stabilize the American economy through two main goals: maximizing employment and maintaining price stability. However, the means to these goals are often mutually exclusive. Maximum employment requires artificially low interest rates while price stability require modest market interest rates. But with the Great Recession of 2008, political incentives pushed the Federal Reserve Chairman Ben Bernanke toward valuing maximizing employment over price stability. Once again, economic prosperity was compromised for political expediency. 

While low interest rate policies do stimulate employment, they also raise the cost of living and devalue the wages of the middle class and poor.  To create stimulus in the economy, the Federal Reserve provides low interest rates to incentivize large banks to borrow credit which, in turn, encourages local banks to loan out more money.

Typically, creditworthy citizens—many of them wealthy—are the first to borrow this money and with it they purchase goods and services at the lower pre-inflation price.  However, by putting more money into circulation, they have “proceeded to bid up the prices of assets and resources, while everyone else has watched their purchasing power decline.”

The lower and middle classes will be the victims of the Federal Reserve’s low interest rates. These classes now have to bear the greater cost of goods like milk and bread and cell phones. This harms the poor the most for they are the ones who can least afford higher prices.  Furthermore, the wages of the middle and lower classes seldom increase fast enough to cover the increase in prices. The end result is that the Federal Reserve allows the wealthy to amass wealth at lower prices while stealing value from lower classes.

Hedge fund founder Mark Spitznagel explained the Feds “coercive redistribution has been a far more egregious source of disparity than the president’s presumption” of tax unfairness. If politicians truly desire a more just and prosperous economic system, the government should address the Federal Reserve’s low interest rates. Without reform, the Federal Reserve low interest rate policies will continue to exacerbate income equality while harming economic prosperity.

Tuesday
Aug052014

ObamaCare: Rewarding Failure Again

Apparently, the reward for failure at the Massachusetts exchange isn’t as good as the reward for failure at the Maryland exchange.  It’s better!

From the editorial page of the Fitchburg, Massachusetts Sentinel & Enterprise:

The latest example of government’s Mouseketeers Club mentality comes at the shaky Massachusetts Health Connector.

Recently, MHC executive director Jean Yang doled out raises of $10,000 or more to 11 of the agency’s 53 workers. The increases ranged from 15 percent to 24 percent, with another 3 percent on the way in the fiscal 2015 budget if the agency meets goals to successfully relaunch its balky website by November.

Yang said the salary increases are needed to retain valued employees and improve performance going forward. This action comes after the embarrassing debacle associated with the state’s rollout of its Obamacare website, which has cost taxpayers nearly $1 million in computer fixes and lawsuits and still isn’t resolved.

Massachusetts was one of the six worst ObamaCare exchanges in the nation.  The Bay State had a fairly successful exchange prior to ObamaCare, but “when it came time to rebuild the state’s existing exchange to meet Obamacare’s standards, the effort failed completely,” according to Peter Suderman at Reason.  Suderman continued, “Massachusetts hired CGI, the same contractor tasked with building the federal exchange system, to upgrade its exchange to the real-time, online application processing called for by Obamacare. But as with the federal system, technical glitches plagued the rollout from day one. By January, the state lagged further behind its original enrollment target than any other state. Just 5,428 people signed up for coverage during the first three months  of enrollment—about 0.8 percent of the state’s first year goal.”

Yang’s statement shows liberal double-think at its finest.  The raises are needed to keep valued employees.  But why are they valued if they screwed up the exchange?  And how does giving a bonus after the exchange disaster improve performance going forward?  You see, the way it works in reality is you get a bonus for a job well done—the boss is sending you the pretty simple message, “This is what you get for being productive.  And you’ll get more if you are productive in the future.”  Yang, on the other hand, seems to be saying, “Even though you screwed up, we’ll give this bonus now to encourage you to do better in the future.”  It can’t be too long before the employees there realize, “Hey, we got a bonus despite our performance!” Chances are these bonuses are written into the law and there is no way Yang can withhold them.  Not that she’d be inclined to do so anyway.

Yang wouldn’t have anywhere near the leeway to indulge such nonsense if she was in the private sector.  She’d have to worry that her customers would take their business elsewhere. But she has the luxury of knowing that the taxpayers will be providing the money year after year.  In fact, just about everyone in government has that luxury.

That’s why failure can be rewarded—and why government-run health care won’t work.

Monday
Aug042014

ObamaCare: Rewarding Failure

So, what happens when you botch an ObamaCare exchange?  You get a very soft landing.  From the Baltimore Sun:

Dr. Joshua M. Sharfstein said Wednesday he plans to leave his post as secretary of the state Department of Health and Mental Hygiene, where he drew criticism for the botched rollout of the state’s health insurance exchange website.

Sharfstein, a trained pediatrician who has spent his career in public service, will join the Johns Hopkins Bloomberg School of Public Health as an associate dean in January as the O’Malley administration ends.

As you probably know, Maryland’s Health Benefit Exchange was one of the worst in the nation, second perhaps only to Oregon.  And what price does Sharfstein pay for getting things wrong?  None, other than possibly a few sleepless nights in the last year.

In fact, he’s getting a cushy academic job that will come with a big salary and lots of perks by his dint of having been Secretary of the Dept. of Health.  He’s reaping a big pay day despite his failure.

This is a big reason why government-run health won’t work and, eventually, is headed for disaster.  The people who run it pay no cost for being wrong and, if they hold a high enough position in the government, when they leave they will be rewarded no matter how badly they failed.  As Thomas Sowell says, “It is hard to imagine a more stupid or more dangerous way of making decisions.”

Friday
Aug012014

ObamaCare's $11 Billion Bailout (At Least)

That the Obama Administration has been a bevy of crony capitalism is well established, and ObamaCare is no exception.  A recent report from the House Committee on Government Oversight and Reform exposes the rather cozy relationship between various White House advisors, especially uber-advisor Valerie Jarrett, and the CEOs of large insurance companies and how both sides benefitted from expanding the bailout for insurers.  For a good summary on that, go here.

I just want to take a moment to examine how much the insurance industry bailout will cost taxpayers this year. There are three bailout provisions in ObamaCare: the risk corridors, risk adjustments, and reinsurance.

ObamaCare’s risk corridors are a temporary program that is supposed to help insurers mitigate the enormous amount of risk inherent in the ObamaCare exchanges.  Under this program, an insurer in the exchange whose costs make a profit share some of those profits with insurers who incur losses. The problem occurs if there are not enough insurers who are “winners” to help fund the “losers.”  If there are many more losers than winners, the federal government the taxpayers step in and pay the costs of the losers.  And that looks to be a very real problem.  The committee report states that the insurers “expect Risk Corridor payments of about $725 million directly from taxpayers in 2014.” However, not all insures gave the committee estimate on what they expected from the risk corridors. “Extrapolating these estimates for the entire population enrolled in ObamaCare-compliant exchange plans means that taxpayers may be on the hook for upwards of $1 billion in 2014 alone.”

The risk adjustment programs takes money from insurers with healthier pools of customers and gives it to insurers with sicker pools.  The problem occurs if there are not enough insurers with healthy pools to cover those with sick pools.  In that case, the taxpayers step in to help the insurers with sicker pools.  (Notice a pattern?) The reports states, “As of May 2014, the companies surveyed by the Committee expect net payments through the Risk Adjustment program of about $346 million.”

Finally, ObamaCare’s reinsurance program is “funded by a fee on nearly all people with health insurance [and] subsidizes expensive medical claims of individuals enrolled in ObamaCare-compliant plans. The amount of the Reinsurance program bailout was set by statute and equals $10 billion in 2014, $6 billion in 2015, and $4 billion in 2016.” Here’s betting that the government finds a way to spend that entire $10 billion.

By my math that is about $11.3 billion.  But this is only August.  This could easily reach $12 billion by the end of the year.

Friday
Aug012014

Jobless Report the Newest Bad Economic News for Obama ("About Those Jobs Numbers" for July)

Unemployment is up again.

It’s the first Friday of the month, and that means the government released the unemployment numbers for the previous month.

Earlier in the week, it was all smiles for the Obama Administration as the U.S. Department of Commerce announced a four-percent growth in the gross domestic product in the second quarter of the year — a big change from losing over two percent in the first quarter.

But then came the news of poor homeownership rates, the stock market’s dive and now poor unemployment numbers.

The nation’s official unemployment rate went up again to 6.2 percent.  The workforce participation rate is barely changed and the 209,000 jobs that were created came in below estimates.

Derryck Green, a member of the National Center’s Project 21 black leadership network who regularly comments on the monthly jobless numbers and the state of the economic recovery under Barack Obama’s leadership, certainly did not see cause for celebration earlier in the week and sees the potential for continued misery ahead.  Except for President Obama, of course, as he and his family have a luxury vacation on the calendar.

Here is Green’s regular “About Those Job Numbers” analysis as related to the July jobless numbers:

Bad jobs numbers for the month of July continue to reflect a slow-moving economy.  And the week had started so promising for President Obama.

As he heads off to a luxury getaway in August, Obama might want to take the time off to rethink some plans he reportedly has to brand himself as an economic miracleworker.

To start, the first quarter’s economic contraction was revised yet again.  A previous revision showed that the economy contracted 2.9 percent.  The latest revision, released this week by the U.S. Department of Commerce, says that the first-quarter gross domestic product actually declined at a 2.1 percent rate, which — though revised modestly upward — is still no cause for celebration.  Preliminary estimates of second-quarter GDP growth is estimated to be around four percent, based on the strength of consumer and business spending.  That gives many economists and investors hope that the economy will continue to grow near this pace for the remainder of the year.

As has been seen, the GDP could be revised in the coming months, and time will tell to what extent this revision will be up or down.

As for job additions, the economy performed well below expectations.  The private firm ADP reported the economy added 218,000 jobs in July, down from 288,000 the previous month.  Many of these jobs were created in the retail industry.

There were hopes that the government would report 227,000 jobs were created.  On August 1, however, the federal Bureau of Labor Statistics said that 209,000 jobs were added to the economy in July.  The number of people suffering in part-time jobs because that’s all they can find remains around 7.5 million.  Part-time jobs now account for over 18 percent of the jobs in the economy, according to the BLS.

The unemployment rate has begun to rise again.  In July it rose by a tenth of a percentage point to 6.2 percent.  The alternative U-6 unemployment rate — the rate that includes all of the underemployed and discouraged workers that is often considered the true unemployment rate by financial experts — is also up a tenth of a point to 12.2 percent.

In particular, the unemployment rate for blacks increased to 11.4 percent from 10.4 percent in June.  Black teenage unemployment skyrocketed more than a point to now rest at 34.9 percent.  The known unemployment rate for Latinos, a demographic superficially growing in importance, saw their unemployment rate hold steady at 7.8 percent.

For some mildly good news, the overall workforce participation rate edged up ever-so-slightly by a tenth of a percent to 62.9 percent.

While there was some celebration about the GDP gains earlier in the week, anemic job creation and the rise in unemployment as well as the uneasiness of the stock market may make those in the Obama Administration want to check themselves.  There are 9.7 million people who remain unemployed, and 65,000 more people this past month (for a total of 741,000) who are reported to be so despondent that they have taken themselves out of the workforce completely.

There are other economic indicators that also signify the depths to which the economy has fallen.

For example, according to a study reported by the New York Times, the median household worth is $56, 335.  That’s down 36 percent from where it was in 2003, when the median household worth was $87,992.

Families are making less as a result of wage stagnation but they’re also spending more because the costs of goods and services continue to increase.  The effects of inflation are similar to taxes, especially when wages are unable to keep pace with inflation.

With those stagnant wages not keeping up with inflation, it may be of little wonder that homeownership has decreased to its lowest level in almost 20 years.  The Commerce Department notes that only 64.7 percent of homes are owner-occupied.  This number is projected to continue its decline.  Why?  One reason is that many would-be, first-time homebuyers are unable to find jobs with requisite salaries that would allow them to purchase a home.  Tighter lending restrictions by banks and decreased wages of those who have jobs also make it difficult for people to purchase homes.

Additionally, more and more Millenials find themselves still living with their parents because there aren’t enough full-time jobs being created to keep pace with demand.  Therefore, millions of people are forced to delay the process of buying homes.

Those who do own homes aren’t faring any better.  According to real estate firm Zillow, roughly 37 percent of mortgage holders owe more than their homes are worth.

Furthermore, more than a third of all Americans have some form of debt in collections.  As most are aware, collections negatively affect credit scores, which in turn result in higher interest rates that cost consumers more money when and if they’re granted additional loans and other lines of credit.  This is another sign that millions of people are still struggling to gain a sense of economic stability.  This creates yet another strain on the economy.

With this continuing economic paralysis, millions of Americans unable or at least pessimistic about finding work, an actual unemployment rate some experts suggest is closer to 18 percent, wage stagnation and increasing inflation and decreasing homeownership, President Obama has decided that he’s now — NOW — going to focus on the economy.

Obama intends to attach his presidential legacy to the growing economy?  I thought his legacy was Obamacare?

Regardless of what Obama says right now, I’m sure this economic focus won’t commence until after his two-week vacation at a lavish $12-million dollar estate belonging of a donor in Martha’s Vineyard.  Not bad for the one-percenter, I mean, the president who claims to be for the poor and against income inequality.

Not bad at all.

To his credit, the President needs a vacation.  After all, it’s extremely hard work verbally condemning and issuing empty threats to Russian President Vladimir Putin, antagonizing the Israelis as they fight Hamas terrorists, ignoring Iran’s pursuit of nuclear weapons and minimizing the atrocities and refusing to recognize the pure evil of ISIS terrorists in Iraq.

It’s hard work not taking responsibility for encouraging tens of thousands of disease-carrying immigrants from Central America to come here illegally.  And it’s especially hard work going to high-priced fundraisers in New York and Los Angeles — particularly while the world burns. 

Thursday
Jul312014

New “Food Czar” Part of Ongoing Obama Divisiveness

Justin Danhof, director of the National Center’s Free Enterprise Project, said there is “nothing that the Obama Administration can’t make political — even our favorite steak and potatoes.”

Calling her the Obama White House’s new “food czar,” Danhof criticized the past activities of Angela Tagtow — the newly-appointed head of the U.S. Department of Agriculture’s Center for Nutrition Policy — and noted that it gives the impression that she will likely want to spend more government time and taxpayer money focusing on faddish environmental activism in the form of promoting low-carbon foods, urban gardening and cheering on nanny-state soda bans rather than relying upon time-honored and sound science-based nutritional guidelines.

Host Rick Amato, on the 7/30/14 edition of “The Rick Amato Show” on the One America Network, said that this appointment is yet another example of Barack Obama seeking to divide Americans through issues involving race, sex and wealth, among other things.  Danhof added that Obama seems to make everything political, and that any blame for what Tagtow might do — including the possibility of any promotion of national dietary standards similar to Michelle Obama’s unpopular school lunch guidelines — begins and ends with the President.

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