Monthly Archives: January 2012

Costa Concordia

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I have to ask: what was the ship doing so near that particular shore?  But apparently it’s not an unusual thing.

Last August Sergio Ortelli wrote an email in which he thanked a friend and captain with the ocean carrier Costa for passing close by the island of Giglio. Ortelli, the mayor of the tiny Italian island, praised the captain for providing an “unequalled spectacle,” that had become an “indispensable tradition.”

Be sure you check out the map of the Captain’s maneuver that accompanies the Spiegel Online International article at the link.

The following imagery also is from Spiegel Online International, some from the above link, and some from here.

 

 

An Example of Centrally Managed “Capitalism”

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In the People’s Republic of China, reports The Wall Street Journal, the urban population has, for the first time in Chinese history, now exceeded the rural population.  This situation serves as a backdrop for some of the problems in China’s centrally managed economy.

One problem involves access of the newly migrated people to public services in their new cities—accesses their already resident neighbors have.  It seems Chinese can only have access to public services in the towns and villages they’ve just left, because that’s where their families have been registered.  Under China’s household registration system—intended to rationmanage access to such services so as to prevent their being overwhelmed—only registered households can avail themselves of the public’s weal.

More importantly, such property rights as a Chinese citizen might have, have gone by the boards.  It seems that city—and village—managers are seizing farmers’ land that lies on the margins of the rapidly growing cities, and on the edges of the just departed villages, too.  In fact, farmers on the outskirts often are willy-nilly uprooted and moved into apartment complexes so their land, including the old homestead, can be consolidated into larger tracts.  Bigger farmers know better how to run the farmland, after all, and more lucratively, developers can take the land out of production and turn it into shopping malls and luxury homes for the growing populations of middle class and wealthy.  Just to rub salt into the farmers’ wounds, the urban leadership pays the farmers a token for their land (it’s not an outright confiscation), and then charges market rates as they flip the land to developers, pocketing the difference—ostensibly for the town or city budget.

The Chinese government seems powerless to stop this.  The local central managers insist they need the income from their land flips to “maintain growth, service debt and top up their budgets.”  Further, pressure to continue the practice will continue: Beijing intends to build an additional 36 million units of affordable “social housing” just in the next 5 years.  Those buildings have to sit somewhere.  And this doesn’t consider the ordinary housing building that will occur for those who don’t need “social housing,” or all the building for all the supporting infrastructure—schools, shopping malls, government buildings, roads and streets, and the like—that will go up along with all that housing construction.

Hmm….

Recess Appointments and Trust

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President Obama has, in the past, criticized President Bush’s alleged tendency to push Constitutional limits in seeking to expand Executive Branch power.

Now we come to some “recess” appointments, made because Republicans allegedly were blocking Senate confirmation.  Michael McConnell, writing for Advancing a Free Society, offers some insight.

First, the present set of appointments (to the CFPB and to the NLRB) were made while the Senate was in session through a series of pro forma, short sessions, ostensibly for the purpose of blocking recess appointments.  The use of pro forma sessions for this purpose was a tactic devised in 2007 by Senate Majority Leader Harry Reid (D, NV) and then-Senator Barack Obama (D, IL) specifically to prevent Bush from making recess appointments.

Second, ex-University of Chicago Constitutional Law Professor Barack Obama appears to have acted without legal advice other than his own: even his own Office of Legal Counsel, the body intended to advise presidents ahead of time on the legality of an action (and note that this is advice; OLC opinions are not law and are not binding), didn’t issue their opinion justifying Obama’s appointments until two days after the appointments had been made.  McConnell is more generous than I, suggesting that “presumably it reflects the advice given to the President in advance.”  I have my doubts.

Third, there are a number of legal arguments that suggest that Obama’s appointments are, in fact, unconstitutional, all centering on the fact that, as Reid and Senator Obama understood in 2007, the Senate actually has to be in recess before recess appointments can be made.  McConnell offers the following.

Obama and his pet OLC insist that since the Senate had announced an intention of conducting no business during its pro forma sessions, it was, in fact in recess.  Never mind that Obama signed into law at least two pieces of legislation that had been passed during those sessions, including the infamous payroll tax reduction extension.  This is old news.  McConnell offers new insight, though:

It is hard to see why the Senate’s stated intention not to do business takes legal and constitutional precedence over its manifest ability to do so.

McConnell goes on:

[T]he Opinion creates an implausible distinction between the legal efficacy of pro forma sessions for various constitutional purposes. According to the Opinion, a pro forma session is not sufficient to interrupt a recess for purposes of the Recess Appointments Clause, but it is sufficient to satisfy the constitutional command that neither branch adjourn for more than three days without the consent of the other  and that Congress convene on January 3 unless a law has provided for a different day…. Why a pro forma session would count for some purposes and not others is a mystery.

And there are other, longer-standing demonstrations of the illegitimacy of these appointments.  For one thing, the NLRB “nominees” hadn’t even been proposed to the Senate until two days prior to their previously announced, well publicized, ordinary holiday break, which the Senate then voluntarily gave up in order to remain in (pro forma) session.  The only one who was blocking Senate confirmation here was the President.

Also, we get the strange concept that the President can decide for himself when the Senate (or, by extension, the Congress) is in session, the Senate (or the Congress) not being competent to make that determination for itself.  Certainly, the President can adjourn both houses when they cannot agree between themselves on adjournment and ask him for help.  Certainly, the President can call the Congress into session to deal with emergencies.  Deciding that they actually have convened—or not—seems a bit of an expansion of Executive Branch power.

Where’s the love?  Where’s the trust?  Hmm….

The New Bipartisanship

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Here it is, in black and white.  First we have Senate Majority Leader harry Reid (D, NV) advising his Republican opposition that they must “leave Tea Party ‘extremism’ behind and ‘learn what legislation is all about.’ ”  Reid goes on to insist that

Legislation is an art of working together, building consensus, compromise. And I hope that the Tea Party doesn’t have the influence in this next year that they had in the previous year[.]

and

I don’t think…anyone can question or they should question our having reached out to Republicans[.]

Of course, he’s silent on the House-passed budget that he’s refused to let see the Senate floor for debate for more than a year.  And he has nothing to say about any of the 20-something jobs-related House-passed bills that he’s similarly actively blocking.  Who’s refusing to talk?

Then we have this from President Obama:

…recess appointments last week of Richard Cordray at the Consumer Financial Protection Bureau and three new members of the National Labor Relations Board—even though the Senate was not in recess….

Obama’s own Assistant Attorney General Virginia Seitz knows these are unconstitutional:

The question is a novel one, and the substantial arguments on each side create some litigation risk for such appointments[.]

Obama made the appointments were made, anyway.

Finally, there’s this from one of the Progressives’ party organs:

‘Why Are Obama’s Critics So Dumb?’

together with this image from Newsweek‘s own proud tweet:

Clearly, the American people are extremists who don’t know they’re supposed to compromise and accept the Progressives’ every wish, and if one side can’t get its way, they’ll just ignore the law and go ahead, anyway.  Oh, and we’re all just dumb, so our views don’t matter, anyway.  Which sort of renders unimportant all us extremists: we don’t know what we’re doing.

Government Intervention Gone Awry

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Peter Suderman, writing for Reason, suggests that Obamacare, far from being the cost saver the Progressives insist it to be, actually is a cost increaser.  It seems that Obamacare is inflating health benefit costs at a sharply more rapid pace than was the rate of increase before Obamacare’s ram-through.  According to a series of Kaiser Foundation annual surveys of employee health benefits, in 2008, the cost increase for employer-provided family health benefits was 5%.  In 2009, the cost increase was 5% again, and in 2010—the year Obamacare was passed before anyone was allowed to know what was in it—the cost increase was only 3%.  But in 2011, that cost increase was 9%.  And it’s going to get worse.

This is reminiscent of another government intervention into our health care system: the creation of Medicare.  Under the Johnson administration, Medicare (and Medicaid) were established as interventions in the market for medical services because government Knew Better then, too, how markets should work.  Far from reducing costs, though, these programs also made the situation worse.  In the year before Medicare was passed, the cost of a hospital bed was rising at 5% per year—three percentage points above the overall rate of inflation for that year.  By the fifth year following Medicare’s enactment, the cost of that same hospital bed was rising at 8% per year, a 60% increase in the rate of inflation for that bed, against a baseline, still, of just 4% overall inflation—the relative cost of a bed had doubled.  Further, the combined “advantage” of Medicare and Medicaid, through 2001, accounted for fully 25% of the inflation in the overall cost of medical care.  The tax exempt status of employer-provided medical coverage (another “boon” for the individual), accounted for another 33% of the inflation in total medical services cost: these two government interventions were responsible for nearly 60% of the inflation in the cost of medical care.

Medicare premiums themselves have risen rapidly since the inception of the program.  1965’s $3 per month premium had risen to $94.60 in 2011.  If the premiums had only risen with general inflation, they would be in the $14-$15 per month range today.  Additionally, the doctor and hospital reimbursement rates—those Medicare-approved amounts—are too low to allow the doctors and hospitals involved to recover their costs.  As a result, these health service providers are driven increasingly to refuse Medicare patients altogether.  Despite this, Medicare participation is mandatory: Americans must purchase Medicare, whether they want it or not, even in the face of this dwindling service, and this artificially elevated demand for a decreasing supply also contributes heavily to cost increases.

Mandatory participation in Medicare has not achieved the goal claimed for it: an overall reduction in the cost of health services.  It is, though, succeeding in reducing the availability of medical services generally.

And so it is with Obamacare.  New mandates—the Individual Mandate, requirements that insurance companies cover people’s health condition, regardless of risk and at government mandated price ranges—increase demand.  Although there are those price controls, the regulations will drive insurers increasingly out of an increasingly unprofitable market, and this will drive costs upward in the form of inaccessibility of health services and long waits.  Further, Obamacare’s tax hikes will be passed on to consumers.  There are those price controls, but as we saw with the Nixon price controls, ways will be found around them.

Rest assured, also, the quality of care will fall through the floor, too.  There’s another Obamacare regulation: medical loss ratios, whose values are mandated under Obamacare, require insurers to spend a high percentage of their premium revenue on federally defined clinical services (Government-mandated, not market-driven, and so not necessarily wanted by us), and this is at the direct expense of R&D.  And of course health insurers are interested in research—not only in how to better provide insurance products to customers (there are profits to be made in offering better products and doing so more efficiently, and without those profits, the search for more and better won’t occur), but also in medicine itself.  Medical research is part of that search for profit: more, and more efficiently provided, medical services also are profitable, as is a long-lived, healthy customer base.  Only now there’ll be less money available for that research.

Once again, we’re stuck with an artificially elevated demand for dwindling supplies, and this time supplies of decreasing quality as well as quantity.