Tag Archives: markets

The Health Care Choice

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The Wall Street Journal has the right of it, and it’s a stark one for the Republican Party and for us Americans.  The House and the Senate bills for getting rid of Obamacare and replacing it with something better are far from perfect, but they are significant improvements over the Obamacare assault on Americans’ access to health care, and on individual liberty and responsibility.  Further, the House plan has always been billed as the first part of a three-part effort at complete repeal and replacement; it’s never been claimed to be a final answer.  And the Senate bill on offer is not one, either.  Senate Republicans are well aware of this.

However, posturing Republican Senators from both the Conservative (or so they claim) and the middle regions of the party, no better than the openly kickback-demanding Progressive-Democrats of 2009 Congress infamy, are standing in the way of any progress at all.

Here’s the choice, then, with which these persons are faced: doing the deal and passing an improvement over the disaster that is Obamacare, with its growing loss of access even to health coverage plans, much less actual health care, and coming back next year for further improvement, or inflicting the continued failure of Obamacare on Americans foolish enough to have trusted these guys.

Here’s the collateral damage from failure that would be inevitable from making the wrong choice and the avoidance of which was a major motivation for electing Donald Trump: loss of control of the Senate to the Progressive-Democratic Party, and with that, loss of the Supreme Court for generations, if not permanently.  Justices Anthony Kennedy, Ruth Bader Ginsburg, and Stephen Breyer all are likely to retire in the next three years.  Justice Clarence Thomas may well, also.  The Progressive-Democrats will block conservative, textualist Justice nominations, for whom the Constitution actually matters as the supreme Law of the Land, and will get confirmed—one way or another—three (or four) Justices in the Ginsburg (“the Constitution is a living document that lives through judicial rulings rather than Art V”) or Thurgood Marshall (“I rule and let the law catch up”) mold.  This would be an even worse disaster to our Republic and to our liberty than continuance of Obamacare, which only threatens our fiscal weal.

Medicaid-Receiving Companies Object to the Senate Bill

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The Senate is proposing an overhaul of Obamacare and an improvement to the health coverage providing industry, and one of those improvements is a rollback of the Obamacare expansion of Medicaid and an eventual capping of Federal funds transfers to the States’ Medicaid programs.  There are objections to this.

The primary objections are from insurers and hospitals, et al., who get a significant fraction of their income from the guarantees of Medicaid payments; they don’t want to have to compete in the open market.  They prefer the supposed safety of that guaranteed income, paltry though it is, especially compared to the income available from a free market, and they don’t care what that “safety” costs those who must pay for it.

The States themselves, for instance, in addition to financing their own Medicaid programs, are required to contribute to other States’ Medicaid programs through those Federal tax transfers, and by extension they’re forced to contribute to other States’ spending decisions generally.

Let Medicaid be the State-run program it was intended to be. Keeping the monies that would otherwise be transferred to other States would both leave more money for funding a State’s own program and force each State to become more fiscally responsible, instead of exercising a claim on other States’ money.  That fiscal responsibility also will contribute to the rising prosperity of freer market.

And let the health care providers and coverage providers compete for income from that much larger market.

Obstructionism

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…for the sake of obstructionism.  And now the Progressive-Democrats in the Senate are getting blatant about it.  They don’t want to help reform the health care coverage disaster of the last eight years, so to block Republican and Conservative efforts at reform, these Progressive-Democrats have decided to block everything in the Senate.  Here’s Senator Chris Murphy (D, CT) o the overall attitude:

What more could we do—hold Republican Senators by the arms to stop them from getting to the chamber?  I think we’ll use every tool at our disposal.

Senate Minority Leader Chuck Schumer (D, NY) even arranged to force cancelation of all committee meetings last Monday, regardless of the subject or purpose of those meetings.  No business was allowed to be conducted—all to block health care coverage reform.

Meanwhile, these Progressive-Democrats are ignoring the millions of Americans who are about to lose all coverage as coverage provider after coverage provider leave the Obamacare markets and withdraw from the ObamaMarts in the States.  Iowa, for instance, is about to lose all providers of individual plans—every single one of them—and no Iowa citizen will have access to market coverage.

This blanket obstructionism while the health coverage industry burns stinks, it’s damaging to Americans who need or want health care insurance, and it’s destructive of our democracy.

Saudi Oil Embargo Against the US?

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Saudi Arabia is cutting its oil exports to the US for the express purpose of directing our use of our own oil to Saudi purposes—to make us use up our existing “excess” supplies.

Saudi Arabia is slashing its US oil exports to a near three-decade low for this time of the year, intensifying its efforts to reduce a global supply glut that has been pummeling crude prices.

Not just the global gut—our supply in particular.  Saudi Arabian Oil Co is cutting its exports to the US to the lowest level since the late ’80s.  Saudi Aramco is cutting its exports to us to the lowest level since 2009, the end-game of the Panic of 2008.

[S]ome analysts say these reductions in Saudi exports to the US could be a step toward ensuring that OPEC’s cuts have the intended effect of reducing bloated inventories of oil around the world, and particularly in the US.

[Emphasis added.]

This is a prickly ally; however, the embargo (which is what this amounts to, even if not intended and even if not complete) will have little deleterious effect on us, and it’s likely to backfire on the Saudis and their OPEC compatriots.  The reduced sales, whether to us or to the world generally, only opens the world market to us: we’ll increase our market share, to the benefit of our economy.  Furthermore, we can handle lower prices than can the OPEC members and their oil allies (vis., Russia and Iran), producing profitably at those lower prices; that encourages our continued production even as the Saudis and OPEC try to manipulate price with their doomed-to-fail attempt to manipulate supply.

And the American consumer, far from the more serious embargoes of the last century, will benefit from the largely unaffected supply and the lower prices of oil (and of natural gas, which aside from being inherently cheaper also is under price pressure to the extent that oil and gas are substitutes for each other), both directly and through the ripple of those lower prices throughout our economy.

Currency Valuations and Economic Growth

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There’s an interesting piece in The Wall Street Journal that looks at the economic theory that suggests that a nation’s devaluing currency, by making its exports cheaper, would spur domestic production and so economic growth.  As the article says, Great Britain is offering a real-time experiment that tests that theory.

In that experiment, the pound has lost value in the exchange markets to a significant degree, but exports—and the British economy—have not expanded as much as was expected by some under the theory.  This “failure” of the theory is being blamed on globalization.  For example,

Chemicals made at Chemoxy International Ltd’s factory in Middlesbrough are worth about 20% more in the export market after last June’s fall in sterling, given the beefed-up value of the currencies used to buy those goods overseas. Higher costs for imported materials, however, all but erased that advantage.

And

Car maker Aston Martin, which exports 80% of its vehicles…. Before Brexit, when the pound traded at $1.50, sports cars sold in New York for $150,000 would bring home £100,000. With the pound now at $1.27, such sales bring an extra £18,000. But over half the car’s components must be bought from abroad, blunting the effect.

In fact, though, the theory tying a domestic economy’s prosperity to changes in that nation’s currency exchange rate never looked at exports and imports in isolation from each other; the two, along with the overall domestic economy, have been understood to be tightly intertwined all along.  It’s just that the expansion of globalization over the last generation, or so, have increased the influence of exchange rate impacts on imports to a large degree.

The outcome of globalization—so long as free market principles dominate international trade activity—is a long-run loss of the ability to manipulate exchange rates for nationalistic purposes.  Short-term effects can remain powerful, though, and such manipulations cannot be ignored to good effect.