A Bad Deal in the Offing

The Wall Street Journal had a piece on a potential deal concerning the FCC.

We hear Majority Leader Mitch McConnell and Democrat Harry Reid are negotiating for an FCC transition in which Chairman Tom Wheeler would leave in January. GOP leaders would then reconfirm two commissioners: Democrat Jessica Rosenworcel, whose five-year term has expired; and Republican Ajit Pai, who is not up until next year and is in the mix to be the next chairman.

The WSJ suitably addressed the foolishness of the overall deal.

An Impact of Artificially Low Interest Rates?

Recall that, since shortly before the Panic of 2008, the Fed has been suppressing interest rates to artificial, and very low, rates.  I’ve written about other impacts of these government-manipulated rates.  The table below could well be an illustration of an unrolling of the failure in the insurance industry first mentioned in the linked-to article.

It seems that two of the smaller insurers in the long-term care sector of the health insurance industry are about to be liquidated, proximately because they badly miscalculated the costs involved in paying out on long-term care policies.  Gary Hughes, American Council of Life Insurers General Counsel, had this on the reasons for the failures:

Some Context For The Latest Headline Unemployment Rate

Here are some graphs, via The Wall Street Journal, that show why that headline rate of 4.6% isn’t all it’s cracked up to be.outdidelaborforce

The WSJ emphasized two points here, aside from the fact that this age group being outside the labor force has nothing to do with retirement or being in school:

First, a small but ever growing minority of 25-54-year-old men are no longer in the labor force. In the 1960s, just 2.7% of men that age were outside the labor force. As of November, it’s 11.5%.

Four Pillars of a Health Care System?

The Wall Street Journal posited this in a Wednesday op-ed.

1. Provide a path to catastrophic health insurance for all Americans.

The WSJ then supports this with old saws: being covered generally leads to better medical results, health insurance is good for the wallet, and so on.  Then they want a government solution—while they carefully avoid saying how they would pay for it:

The ObamaCare replacement should make it possible for all people to get health insurance that provides coverage for basic prevention, like vaccines, and expensive medical care that exceeds, perhaps, $5,000 for individuals.

Obstruction

With full control of Congress and the White House, Republicans have anticipated being able to repeal the law using a special budget maneuver that would allow them to get around a filibuster by Democrats in the Senate.

Yes and no.  The budget maneuver is reconciliation, and it’s usable only on budget matters.  That means that Obamacare will be defunded pretty straightforwardly, but the law itself still will be on the books—for a future Progressive-Democratic Party-controlled Congress to re-fund using the same budget reconciliation maneuver.  The law itself needs to be fully repealed, too; defunding it can only be a stop-gap measure.

Nominations for HHS and CMMS

President-Elect Donald Trump has nominated Congressman Tom Price (R, GA) to be Secretary of Health and Human Services and Seema Verma to be Administrator of HHS’ Centers for Medicare and Medicaid Services.  The two are well positioned and experienced to spearhead the effort to repeal Obamacare and replace it with a health insurance environment that actually will provide low-cost, broad-ranging health insurance in a competitive market.

Senate Democrats already are digging in their heels, though.

The incoming Senate minority leader, Chuck Schumer of New York, said he’s urging his Democratic colleagues to give Mr Price “a thorough, thorough vetting,” and said Mr Price’s Medicare proposals are tantamount to privatizing the program.

Tax Cuts and Deficits

The Wall Street Journal had a piece earlier in the week that focused on Republicans’ dismay over President-Elect Donald Trump’s tax cut plans, his infrastructure spending plans, and the deficits that would seem to result from the two.

However.

Once again, the pundit takes tax cuts (and individual spending items) in isolation. Of course, he knows better: broad spending cuts must accompany tax cuts—and isolated spending items—even dynamically, in order to achieve budget surpluses and so reductions in our debt.

The last two times Republicans reclaimed the White House from Democrats—in 1981 and 2001—they also successfully pushed for large tax cuts. Deficits nonetheless rose during their administrations.

The Courts Get Another One Right

This case involves how much Federal control over land deeded by the Feds to a State the Feds retain when they make the deed.  In the particular case, the Feds, ‘way back in 1949, deeded land to Ohio (in particular, the Muskingum Watershed Conservancy District) subject to the criteria that the land had to be used for flood control, conservation, and recreation.  Lately, Ohio began allowing fracking under the land.

Foreign Investment Risk

The People’s Republic of China seems about to illustrate one form of this risk.

The State Council, China’s cabinet, will soon announce new measures that subject many overseas deals to reviews of “strict control,” according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal.

Targeted for particular scrutiny by the pending measure are “extra-large” foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion, and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business.

Federal Green Expenditures

Watts Up With That has some ideas for budget cutting in the next administration.  Or, actually, these ideas come from Salon (!) via WUWT (never mind that cutting isn’t what Salon meant).

  • Energy Department

2017 climate-related budget: $8.5 billion

  • Interior Department

2017 climate-related budget: $1.1 billion

  • State Department

2017 climate-related budget: $984 million

  • NASA

2017 climate-related budget: $1.9 billion

  • Environmental Protection Agency

2017 climate-related budget: $1.1 billion

  • National Oceanic and Atmospheric Administration

2017 climate-related research and development: $190 million

That works out to $13.8 billion of “useless waste.”  Yes, indeedy.