Category Archives: markets

Hollywood, Too

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A month into the summer movie season and the box office is already suffering from poor performances by a number of widely panned films.

Box office gross receipts are off nearly 5% through the summer compared to the same period last year and its this-year Memorial Day weekend wasn’t this bad since 1999.

Megan Colligan, Paramount’s President of Worldwide Marketing and Distribution on her studio’s Baywatch:

The cast could not have done more work in aggressively promoting “Baywatch.” Dwayne [Johnson] gave this 150%[.]

It is to weep.  They tried so hard—where’s their participation ribbon?

It couldn’t possibly be that they’re making bad movies, or movies on a theme that’s already played out, or….  Mm, mm.  Couldn’t be.  Gotta be somebody else’s fault.

But it’s expectable.  They’re of a piece.

Medicaid Transfers

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It’s well understood that Medicaid badly wants reform.  My own view is to give it back to the States by reducing Federal fund transfers to them until the transfers are zero, which also would eliminate Federal strings jerking the States to do everything the same way, the Federal way.

There are lots of paths to that end, and there are a number of other reforms that would help the situation at least a little.  The House plan for repeal and replace of Obamacare, the first step of which was the American Health Care Act, has one such step, the repeal of Obamacare’s Medicaid expansion.

Expanding State participation in Federally provided—with those strings attached—funds—expanding Medicaid—as a number State governors have done, is not one of those reforms.  Not even for Republican governors.

Sixteen GOP governors represent states that expanded Medicaid under the Affordable Care Act, and they are generally loath to see the program cut back.

Nobody forced these persons to mainline the Federal funds drug. They stuck that needle in their veins and addicted themselves, with no outside pressure at all.

These guys are badly mistaken, and they’ve only made things worse for the constituents for whom they claim to work.

Michigan Governor Rick Snyder, one of those 16, thinks the expansion is just peachy keen; he’s still riding the high from his needle.  He says that “600,000 Michiganders have gained coverage and the state’s hospitals have saved about $300 million.”

What he’s carefully ignoring, though, is how much money Michiganders and those hospitals sent to the Federal government in various taxes and fees to contribute to 49 other States’ Medicaid program participation.  How many of those Michiganders could have been helped and how much money could Michigan’s hospitals have saved had the State kept those monies, instead?  How much would those Michigan citizens and those Michigan hospitals have benefited, had they been able to keep their money—their money, not the State or Federal government’s money—instead of paying all those taxes and fees to the Federal government?

Hindsight

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…and learning from it for better anticipations.

Federal Reserve officials grappling with the legacy of expansive stimulus would find it difficult to return to the central bank’s precrisis role on the sidelines of financial markets, analysts and central-bank watchers say.

Well, NSS.  Frankly, these worthies should have known the outcomes likely from their intervention before they intervened.

Aside from the magnitude of the necessary rollback and its attendant difficulty—the Fed’s balance sheet has expanded four and a half times, from $1 trillion to $4.5 trillion since right before the Panic of 2008—there’s the human engineering aspect of personal political power:

The Fed has become “like an octopus,” said Jeffrey Cleveland, chief economist at Payden & Rygel, a Los Angeles money manager.  “Once you get the power and you are influencing all these markets, do you really want to retreat from all that?”

Well,…

New York Fed President William Dudley told an audience this month the portfolio isn’t likely to return to its precrisis size. Federal Reserve Bank of San Francisco President John Williams said this month the portfolio would be “significantly smaller” than it is today, but likely above $2 trillion in assets.

Still twice the original size of the Fed’s balance sheet.  Oops.

Now the rationalization, summarized in the subheadline of the article at the link:

Pulling out of newest central-bank innovations risks market disruptions

A definite possibility, but there’s not much concern for the underlying economy in that remark.  And the economy is what’s important.

We’ll see whether these guys are worth their taxpayer-funded paychecks by how well they learn from hindsight and their mistake.  It doesn’t look promising.

Yet Another

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…Alinsky-esque distraction by the Ctl-Left.  This one is on the matter of Obamacare subsidies to health coverage providers to compensate them “for reducing out-of-pocket costs for some low-income consumers who sign up for plans on the exchanges.”

The Obama administration paid billions of our tax dollars to these providers, the amount for this year alone looks to be in the neighborhood of $7 billion, with the annual payout looking to rise to $16 billion in 10 years.

The House has sued to block further payments because no funds were appropriated for them, and so they’re illegal.  A number of State AGs are seeking to intervene in the suit.

More than a dozen Democratic state attorneys general took legal action Thursday seeking to preserve billions of dollars in federal subsidy payments….

It’s a fair debate to have in the courts, although, absent appropriation, there’s no money to spend, and so it would seem illegal to spend.

Now comes the cynical distraction.  New York Attorney General Eric Schneiderman said,

Millions of families across the country—including hundreds of thousands right here in New York—rely on these subsidies for their basic health care[.]

As if that’s relevant to the legality of the matter.  The courts should allow the spending independently of the law because tear-jerking.

Schneiderman is demonstrating the intellectual, legal, and moral bankruptcy of the Ctl-Left’s demands.  They’re wholly unable to present a case, and so they stoop to emotionalism.

Medicaid Cuts?

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Some conservative Republican Senators are looking to cut Federal transfers to the States earmarked for those States’ Medicaid programs.  Others are concerned.

[T]he [conservative Senate Republicans’] Medicaid plan could affect many more people and shift significant costs onto hospitals and states.

One State’s Medicaid program, though, should be paid for exclusively by that State and not subsidized by the other 49 through those Federal transfers. Medicaid is, after all, a state program by design, and Medicaid eligibility is determined by each State.  The Federal transfer subsidies are made the more egregious by the fact that each State determines its own citizens’ eligibility for Medicaid, and that eligibility is income-based—with the maximum income for eligibility in most States being a multiple of the Federal Poverty Guidelines.  This means that in those States, a citizen can be eligible for Medicaid funds even though, by definition, that citizen isn’t in poverty.  Other States ought not be required to subsidize, through Federal Medicaid transfers, such eligibilities.  Not only are the States are defining “low income” much too loosely, other States have to pay into those definitions.

If each of those other 49 were able to keep the monies collected by the Feds for transfer, they’d also have more money—of their own—with which to fund their own Medicaid programs, and each of the States, absent attendant Federal strings, would be freer to structure their individual Medicaid programs according to their own citizens’ needs and demands.  As it is, States wanting to structure their programs must waste time and resources pleading to the Feds “Mother, may I?” and then argue the matter.

Such State-initiated restructuring—subject to central government approval—already is beginning to include things like work requirements, drug testing and time limits on coverage, all of which would free up State resources for the State’s truly poor.  Federal cuts to transfers to State Medicaid need not interfere with this; on the contrary, such cuts would encourage needed restructuring, while moving to insulate each State from other States’ decisions.

Of course, such Federal transfer cut would have complex implications and require serious Federal tax code restructure and reform—the taxes the Feds transfer for Medicaid come from a variety of sources: individual and business income taxes, dividend and cap gains taxes, and on and on.

That just puts a premium on getting started.