The Health Spending Myth

The runaway healthcare spending myth is a great example of how the free market works when the consumer responds to the economic factors that are presented to him. Healthcare spending was spiraling at significant rates in the late 90’s and reached a peak in 2002. Most people believed that it was the only industry that violated the supply/demand theory and rationalized that since most consumers had health insurance provided by their employer, who paid the lion’s share of the premium, rising prices had no effect on demand. Also, there was no real competition in the classical sense since results were measured in near term rather than long term outcomes.

Finally, the free market kicked-in when employers realized the growing impact of this cost on their bottom line. They started to increase the employee’s portion of the premium, they offered consumer-oriented health plan options to employees,and the concept of health savings plans started to become more popular with younger and healthier people who opted for high deductable plans with lower premiums. Prevention became the health motto as holistic and integrative medicine became more popular. The golden age of wonder drugs in the 80’s and 90’s was giving way to generic alternatives as patents expired and these medications became more affordable and available over-the-counter.

We were seeing the transfer of economic responsibility for healthcare evolve from corporate and government bureaucrats to the consumer – and sure enough healthcare is starting to resemble the free market where the consumer dictates price, competition, and value. As the illustration shows healthcare spending is now growing at a rate that resembles the inflation rate. This refutes the claim we hear from this Administration that we now need Obamacare or national healthcare “to stop this out-of-control healthcare system”. In fact, that data show that costs will actually climb as a result of Obamacare, care will be worse (particularly for the elderly), and the consumer will lose control of his healthcare destiny.

The fact of the matter is the price of food, gasoline, and the basic staples is what’s skyrocketing with this inept blend of academics and inexperienced bureaucrats who never read a profit-and-loss statement or even worked for a living, are now calling the shots. Instead, this President spends $1.0 trillion on his convoluted healthcare plan, and steals $500 billion from Medicare to pay for it which puts us in the hands of commissions and panels to decide the care we get.

I’m not implying that our healthcare system is fixed, we certainly need reform, but the fact is that this decade-long trend line shows us the way toward good policy decisions in the future. If we can uncouple health insurance from employment, allow the consumer to purchase his own mix of coverage in a competitive market across state lines, we will accelerate this evolution in healthcare costs and make it a system that provides affordable care for all segments of our society.

The Manufacturing Decline Myth

Several things continue to happen that cause me to believe that this administration has no idea how business works. By this I mean that they believe government manipulation of business is necessary and that the free market is not reliable. One major mistake is forcing the so-called “green energy” initiative on us before it is ready or economically viable. The initiative is driven by the fraudulent concept of global warming, which presumably is caused from the use of fossil or carbon-based fuels. Rather than permit the free market to work, this President forces the adoption of alternative energy, by supporting subsidies, tax breaks, government loans, which really inhibits the development of this technology and raises the cost of energy across the board.

In a free market new technology replaces old when it becomes cost competitive which will drive demand once the public realizes it is more efficient or makes their life better. When you artificially make new technology appear to be commercial you actually slow its development. This is the case in the auto industry as the government has forced the development of the electric car at a price that is not competitive with conventional technology and still has many unresolved safety and technology issues.

The impression that America doesn’t make things anymore is a myth. The U.S. economy has grown by almost seven fold since 1947 and the manufacturing sector has grown at the same rate, however, the service sector has spurted over this period and manufacturing is a smaller portion of the overall GDP. America’s global manufacturing share has remained at 22% since 1970, more than any other nation, even with the rapid development of Japan, Korea, and China over the period.

What makes us a competitive global manufacturer is our productivity which unfortunately is offset by the corporate tax burden on our manufacturing community which is the highest in the world. The real manufacturing crisis is in jobs, our output per manufacturing worker was $35k in 1947, and today it is an astonishing $150k. Manufacturing productivity has increased 103% since the late 1980’s and is double that of all other sectors in the larger business economy. This is realized in the economy by lower prices for manufactured items which makes this sector appear to be shrinking.

Do you think this may also have anything to do with the decline of unions in the manufacturing sector over this period? You bet it does! As well as the quality push, computer technology, and plant modernization, while the government continues to add on more regulations, increased taxes, more loopholes. This is why I have a problem with Mr. Santorum who like Mr. Obama this week, says we can help manufacturing with more government “incentives” and tax breaks. We can do without that kind of help; we need the free market to work. Mr. Romney knows that and needs to inject that into the debate.

Green Energy Has a Potent Rival

I hate to say I told you so but on June 27th, 2011 I posted an article on “gas fracking”, a growing, efficient, and cost effective drilling and fracturing technique to release the gigantic reserves of natural gas trapped in shale rock. The U.S. has more shale gas reserves than anyone on earth, including the Mid-East, which gives us a chance to reach our, heretofore, seemingly unreachable goal of energy independence.

My Prediction Came True

In that post I said that this administration will attempt to slow or eliminate this chance because they are hell-bent on so- called “green” energy and are against the continued use of oil and gas. The fact is natural gas is actually more “green” than many of the so-called green energy options!

Well, just as I predicted the Obama-appointed leadership of the EPA just released a report that “fracking” many have contaminated drinking water in Pavillion, Wyoming. It may make for a good and scary headline but does not hold up to scientific scrutiny. It is neither definitive nor applicable to anywhere else but Pavillion.

The Facts

1. The EPA acknowledged that the “dangerous” chemical in the drinking water was 2-butoxyethyl phosphate a chemical not associated with fracking fluids. In fact, it is a fire retardant associated with plastic components used in drinking water wells.
2. The “pollution” was actually found in deep water monitoring wells drilled by the EPA which were located near the natural gas reservoir not the actual drinking water wells.
3. The EPA admitted that drilling chemicals detected in monitoring wells may be from old wells that were drilled many years before fracking was ever developed.
4. The fracking activity in Pavillion takes place in unusually shallow wells (1,000-1500 ft.). Most fracking occurs at 10,000 ft., far below drinking water wells. Even the EPA acknowledges this. This certainly questions the relevance of the Wyoming findings.

Why the “Greens” Are Upset

I’m not saying that our drinking water should not be protected. I think we all can agree on that. What I am saying is that this EPA’s credibility is open to inspection. It is dominated by people from this administration bent on raising the prices and limiting production of carbon-based fuels. Natural gas has a much smaller carbon footprint than coal and oil, and shale gas can price wind and solar out of the market. Solar companies are going out of business in droves. The “greens” are terrified by the specter of natural gas becoming the preferred alternative fuel even though it would mean freedom from relying on foreign sources of energy and is the best option for our economy and the job market.
This attack on our only hope for energy self-sufficiency won’t stop until we make a change in who is living in the White House after 2012. One of many reasons this election is so important!

How to Convince Obama to Quit

Recently, the Wall Street Journal had an op Ed column written by two moderate Democratic pollsters who were not very happy that the extreme left wing of the party is firmly in control, and the pollsters did not like the direction the Left is taking the country. They advocated that Obama should step down and be a one term President and pass the gauntlet to Hillary Clinton. They then proceeded to elaborate on Obama’s failed Presidency.

Of course, the premise of the article was not very feasible in the first place, but the idea that you can convince a bona fide narcissist to step-down because he is a failure, is totally wrong. The way to do it is exactly the opposite of that point of view. This was clearly illustrated this morning on the “Morning Joe” program, which I occasionally watch to get my conservative blood flowing and pressure up for the day.

Jon Meacham, an uber-liberal “historian” of sorts and author, and Mike Barnicle, a former liberal columnist for the Boston Post, were in a discussion trying to rationalize why Obama has been so ineffective thus far. “I cannot understand it, he is so eloquent, so smart and convincing”, bemoaned Meacham, “it must be that the job is not commensurate with his great gifts”. If that doesn’t get you to switch off MSNBC what will? Eloquent? Maybe, as long as he has a teleprompter, but in a debate on his feet with no notes, a resounding NO! Why, Hillary whipped his back-side in almost every debate in the 2008 Democratic primary, and who can’t beat John McCain in any debate?

So smart? Based on what? They don’t even want to tell us his grades. He was virtually kicked out of Occidental College in California and hardly anyone knew him at Columbia or Harvard. In fact, we still can’t figure out how he got into those Universities. Convincing? The polls show that less independents and young people will note for him again, 75% of the country thinks we are on the wrong track, and 66% think he is doing a poor job. Convincing?

While the Republican primary candidates have to take an anal exam on their religion, we still really don’t know Obama’s religion. He actually went to a Christian church this past Sunday, the first time since last Easter. His early education in Indonesia was in a Muslim school and we know that for almost 20 years he went to a church that promoted “black liberation theology”. Do we know his religion? I know that Perry is Protestant, Gingrich is Catholic, and Romney is Mormon, and the liberal media is concerned about this but Obama gets a free pass.

Then Meacham said, “He is stuck in an 18th century constitutional government structure and that’s why he cannot get anything done.” Well, that doesn’t seem to have bothered all of the Presidents before him! Meacham thinks we or our governments are not good enough for Obama’s great gifts, he needs to be in a world job. The world needs him. Well, you get the idea. That’s how you tell a narcissist to quit. You tell him he’s too smart for us, that his skills are best suited for a bigger job than President of the United States. How about those really productive jobs; like a University President, or Head of the UN, or the nominating committee for Nobel Prizes. Maybe, just go back to the old neighborhood with Bill Ayers and Jeremiah Wright, and be a community organizer; but I understand you weren’t very good at that, either.

Letter to the WSJ Editor That Didn’t Make It

Last Saturday, Representative Ed Markey (D-MA) wrote a letter to the Wall Street Journal (WSJ) entitled, “Clean Energy is Winning”. It was full of mistruths and half-truths which many in the public would not appreciate. I could not let him get away with this, so I wrote a letter to the editor refuting his points. Well, as of today it did not publish. Here is his letter and my retort.

His letter:
Regarding your editorial: A Better Idea for Green Jobs: (op-ed. Oct.15): Here are the facts. Employment in the U.S. solar industry has doubled in the last two years. Solar energy now employs more than 100,000 Americans, tens of thousands more that in coal mining. The wind industry employs 85,000. According to the Brookings Institutions, the clean economy now employs 2.7 million Americans, more than the fossil-fuel industry.
By comparison, Exxon-Mobil, BP, Shell, and Chevron, which made $546 billion in profits between 2005 and 2010, actually reduced their U.S. work forces by a combined 11,200 workers.
Despite rhetorical attacks, clean energy is winning. New wind projects are selling their power for as little as three cents per kilowatt-hour, cheaper than natural gas. America is currently a net exporter of solar technology. We have a renewable energy technology trade surplus with China. From 2007 to 2010, America constructed nearly 32,000 new megawatts of wind, solar and biomass electricity. That is more than three times the amount of new coal during that time. Yet the only clean-energy company that conservatives seem to be able to talk about is Solyndra.
Clean energy employs millions of Americans and provides power to millions more. Most Americans want to see their nation dominate a sector estimated to be worth $12 trillion over the next two decades.
Rep. Ed Markey (D., Mass)

My letter to the Editor:
Representative Ed Markey’s (D. Mass) letter in response to your editorial “A Better Idea for Green Jobs”, Oct. 15th once again illustrates how liberal Democrats will provide you with “facts” to make a point but don’t put the “facts” in perspective. The premise of his letter, “Clean Energy Is Winning in the U.S.”, is an extremely misleading thesis and far from the truth. The fact that the solar energy industry employs more than 100,000 Americans, slightly more than coal mining, he says, is nothing to brag about since with this administration many coal companies have been forced to shut down and new ones haven’t started as a conscious result of government regulations which makes it too expensive. He also asserts that 2.7 million people work in the “clean economy” more than what he calls the fossil-fuel industry. This is ridiculous, since more than 9 million are employed in the oil and gas industry alone. Also, he forgot to tell you that if you drive a school bus with a hybrid engine you are counted, by this administration, as working in the green energy industry. He also boosts that America is a net exporter of solar technology with a trade surplus with China. The reason is, there is no market in the U.S. because energy costs are among the lowest in the world, so solar is not competitive. Also, Mr. Markey, we will be soon hearing about many more fiascos’ like Solyandra, and if you would vote for more U.S. oil development and encourage shale-gas production, we would generate more than 1 million jobs almost instantly. You may think “clean energy” is winning, but we are losing because you are in the House of Representatives.
George Ahearn, Ph.D.
Naples, Florida

America’s Becoming a Robin Hood Republic

I heard something on the radio which really illustrates what is happening to this country, and it is quite disturbing. Apparently, Governor Cuomo of New York was a guest on the Today Show this past week and they showed a clip of his visit to a 2nd grade class in Jamaica, Queens , which is predominately an African-American neighborhood. Cuomo asked a young girl, probably a 7 year old, what she wanted to be when she grows up. She said “President”. Then he asked what would you do as President? “I would have the rich people give me their money so I could give it to the people who need it”, she said. Then Cuomo said, “What if the rich people didn’t want to give you their money?” The little girl answered, “Well then, they’re just greedy”.

I’m sure she will get an “A” from her teacher for that answer. Probably because the teacher believes that and the little girl likely heard her parents talking like that. Unless this little girl read “Robin Hood”, and I don’t think that’s required reading in the 2nd grade, where would she get that kind of a value system? When I was seven, I wanted to be a doctor, a fireman, or a baseball player, so I could make money and be successful. I knew that I had the freedom to be anything I wanted to be. I had the desire to improve myself, and the opportunity in this great country to achieve my dream, even though my family was far from rich. In addition, I had a support system, my parents, my teachers, and my friends encouraged me. That was the American culture we lived in, and that was the value system most of us had.

Is this the kind of culture we are building today? It certainly doesn’t look like America anymore and I’m beginning to be glad I’m 76, because I don’t want to live in that kind of America. I was not born in a Banana Republic, or Russia, or Sweden, where we have a state controlled government, a police state, or socialism, where the economies are stifled and you can predict what your future will be because you cannot control your destiny.

President Obama is a role model for kids, particularly black children, therefore everything he says influences their value system. This is what they hear from him….. It’s only fair to spread the money around and I get to decide what is fair, I pick the winners and the losers, I give you money and I decide who needs it.

This is tyranny, this is slavery, this is Un-American, and history tells us this will eventually end in failure and tragedy. America is a great country and no one can change us by force. The only way we can be defeated is from within. And unfortunately, we elected a President who brought in people , like him, who don’t really know or understand this country. Crony capitalism is not a substitute for a free market and fair competition. We must remove these people from our government, or else this successful 250 year experiment in democracy cannot be saved and the damage will be irreversible.

You can’t be complacent about this, it’s too important!

Now We Know the Problem – It’s Us!

Just yesterday President Obama finally gave us his scholarly analysis of the cause of our economic problems. I was eagerly waiting for this, since many economists have had conflicting views. In a radio interview in Orlando, Florida he said, “Well, we just got soft and complacent over the last two decades, and it just caught up with us”. Wow, is that deep! So we are the problem, we just got lazy and soft in the last 20 years. Boy, I’m glad it’s not him and his policies that kept this recession going.

I wonder where he’s been living for the last 20 years. Africa? Indonesia? South Chicago? What happened during those great Clinton years when we actually had a budget surplus? Those first seven years of the Bush administration, as the market boomed and corporate profits and growth was something never seen before in the free world. I guess we got soft, started giving loans to poor people just to bring them up to the status of rich people, and started thinking we could actually eradicate poverty.

We’re just too lazy to implement his economic plans, let’s get out there and get a job, “take off your bedroom slippers”, and get out there. Why should I, Mr. President? You keep giving me unemployment money and more food-stamps. And thanks for controlling those energy markets, so we can use those subsidized sources of energy, rather than that dirty oil and gas. Maybe you can manipulate the markets, so that the price of oil and gas increases and then I can change to solar, and windmills. But what’s going to happen when we can’t afford those subsidies? Like that Solandra company that was making solar panels for $6.00/ft and selling them for $3.00/ft in order to compete in the world market. I guess they were going to make it up on volume, except that the loan money you gave them ran out.

Anyway, I am glad Mr. President that you can do no wrong and the problem is us. The lazy American worker, who just built the greatest economy the world has even seen, and all of a sudden got soft, just before you got elected. What a coincidence, just your luck. I for one, hopes that your luck runs out in November, 2012.