Monthly Archives: February 2014

Misallocation of Resources

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…driven by Big Government.

JP Morgan Chase & Co said Tuesday it will cut more jobs at bank branches and its mortgage unit this year than previously planned, as the largest US lender adjusts to slowing home-loan demand and customers’ growing preference to bank online.

That’s one aspect of the restructuring.  JPM says they’ll lose some 8,000 employees from its branches and its mortgage unit.  However, they’re looking to increase their “controls staff” by some 3,000.  A company’s controls staff are the folks dedicated to ensuring company compliance with government laws and regulations, as well as with its own internal rules.

Are the two related?  Not directly, although burgeoning Federal rules are hampering the housing industry and mortgage lending, generally.  Yet the fact remains,

The new figures show…a continued buildup in the bank’s staffing levels dedicated to dealing with regulators and legal issues.

An increase of 3,000 for its controls staff out of a total company employment of some 260,000 (net of those cuts) might not seem like much, but its Controls section is much smaller, and this is a significant (re)allocation of its employment emphasis.

The problem is, compliance isn’t productivity.  Compliance employees don’t increase the amount of product—or improve competition for product sales—in an economy.  All they can do is cost money to appease government.

Annals of Obamacare Lies

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Health and Human Services Secretary Kathleen Sebelius is spouting more of them.  And with a straight face, too; it’s like she actually believes what she’s saying.  Which would be even worse.

There is absolutely no evidence and every economist will tell you this, that there is any job loss related to the Affordable Care Act.

Leaving aside the well-documented instances of reduced hours, delayed (or canceled) hiring, canceled plant expansions, and so on that are occurring as a direct result of Obamacare, Sebelius is having a negative impact on jobs with her own Departmental edicts.  She’s already ordered, for instance, the Obamacare-maximum allowed cuts to funding for home health care services.

The cuts were deep enough that officials offered a damaging prediction of the impact saying, it was estimated that approximately 40% of providers would have negative margins.

In fact, those cuts put in jeopardy 498,000 jobs of home health care workers who work just for that 40% of firms that will be forced into the red—the kind of home health workers who allow Yvonne Wightman, 98, to avoid expensive hospital or nursing home stays by getting care at home.

But it’s all good: now Ms Wightman has that lowered-cost Obamacare Plan to cover those stays.  Oh, wait….

“Pass the Bill…”

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“…in order to see what’s in it….”

Here’s another of those tidbits that’s in it that Pelosi and her gang chose not to know about before passing Obamacare:

Tucked deep in the Affordable Care Act is language requiring all restaurants with at least 20 locations to list nutritional information alongside each and every item on their menu.

Sit-down restaurant chains, with their menus now required to be cluttered with “nutrition” information instead of letting their patrons see a readable menu—because Big Government knows better—are also faced, unfortunately, with a rapid-fire alteration of their menus as this “nutrition” information gets frequently “updated:” recall how rapidly the USDA’s food pyramid has been changing over the last several years.

Those places have it easy, though.  Consider the walk-/drive-in places, like hamburger joints and pizza houses, where the customer gets to mix and match from among “each and every item” to form a custom meal to buy.  As Peter Doocy put it at the above link:

Take Domino’s.  There are 34 million different pizza combinations available at the chain, when all crusts and cheeses and toppings are factored in.

Now imagine walking into a Domino’s and navigating a menu board with 34 million different options on it.

And in Domino’s case (and most pizza houses, come to that),

90% of their business comes in over the phone or online.  And none of those people ever set foot in the store, where the menu board would be.

Think about the advertising brochures Domino’s might have to send out to potential callers that included this information.  Think about how many pages on their Web site would be needed to carry this information.

Think about an utterly mendacious law that needs to be repealed, even if its replacement is the status quo ante.

Defense Cut “Drivers”

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Here are a couple of types of spending increases that will appear in upcoming Federal budgets:

[A] CBO report finds that mandatory spending, which includes Social Security, Medicare, and Medicaid, is projected to rise $85 billion, or 4%….

And

Interest on the debt is worse.  It is projected to increase 14% per year, almost quadrupling in dollar terms between 2014 and 2024.

DoD Secretary Chuck Hagel’s proposed budget cuts Defense spending by $75 billion over the next two years.

The “mandatory” spending problem could be cured over those same two years, with a proper reform package.

From $416 billion in interest payments in 2013, that 14% increase for 2014 comes to $58 billion; for 2015, the first year of President Barack Obama’s budget proposal (which includes that “mandatory” spending and Hagel’s cuts in the Defense budget), that interest payment increase comes to $65 billion.

Our debt debacle, with its required interest payments, will take considerably longer than two years to redress, and that puts a premium on getting started now on the necessary spending cuts.  This is made even more difficult, though, by the enormous size of our debt coupled with the national survival need to preserve our military capacity.

But the Democrats won’t allow entitlement reform in any direction except expansion—and more spending.  And they refuse to take our debt seriously, demanding ever more (non-defense) spending, and not just for the “mandatory” stuff.  Go figure.

Are We Retreating from Engagement?

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William Kristol in The Weekly Standard:

Kiev is ablaze.  Syria is a killing field.  The Iranian mullahs aren’t giving up their nuclear weapons capability, and other regimes in the Middle East are preparing to acquire their own.  Al Qaeda is making gains and is probably stronger than ever.  China and Russia throw their weight around, while our allies shudder and squabble.
…
Having withdrawn from Iraq, and seeing it now fall apart, the administration is nonetheless determined to get out of Afghanistan.  Its Russia “reset” is a joke, and its “pivot to Asia” an empty slogan.  Secretary of State John Kerry huffed and puffed when Bashar al-Assad used chemical weapons last year, and asserted it was a Munich moment.  How right he was! Kerry came back brandishing a piece of paper, and Assad remains in power.

Indeed.  But it’s OK, because—look! Shiny!

Kerry now says that global climate change may be the weapon of mass destruction we should most fear.

It’s going to be a hard two years.  And it’s going to be harder, for many more than just two, repairing the damage.