Category Archives: markets

Republican Gadflies

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Karl Rove talked about health care coverage prospects in a recent Wall Street Journal op-ed, and that triggered a thought in my pea brain.

Senator Tom Cotton (R, AR) has announced that the House plan on offer, a plan designed to be passable through reconciliation, with later phases of repeal and replace for completing the task, is dead on arrival, and the House shoe start over and produce a more comprehensive plan in this first phase.  But Cotton has chosen to not offer a plan of his own, or outline what a plan acceptable to him would look like other than to address taxes and to more fully repeal right damn now Obamacare, or even to offer the tactics he’d use to get the new plan—which could not be done through reconciliation—past a Progressive-Democrat filibuster.

Congressman Jim Jordan (R, OH) similarly demands a broader bill right damn now, but he, too, has chosen to offer no tactics for getting his bill past a Senate Progressive-Democrat filibuster.  He’s just using the copout excuse that that’s the Senate’s problem.  Oh, and Jordan also declines to identify the value of a bill that can’t be passed.

Senator Rand Paul (R, KY) at least has offered an actual plan, but he, too, has declined to identify how he expects to get his plan past a Progressive-Democrat filibuster.

These gadflies keep demanding that everyone else put up (these three’s demands) or shut up.  It’s time these three put up; otherwise, they’re just porch dogs, yapping from the safety of their stoops.

Tax Credits in the Obamacare Replacement Proposal

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In the main, I’m opposed to these on a couple of grounds.  One is that it’s just more welfare; we need to find a way to move folks off welfare and into the labor force and jobs rather than keeping them trapped in the welfare cage—like we did when we originally reformed the food stamps program by requiring recipients to get a job or lose the stamps.  That reform not only reduced overall unemployment, it put recipients back into jobs (and off that welfare program).  These weren’t make-work jobs, either; net prosperity for those recipient families increased.  (Then the Obama administration withdrew the work requirement, and we got record numbers of folks back on food stamps).

The (refundable) tax credits are just more of this sort of subsidy, just in the form of a tax credit rather than a direct payment, like most subsidies are.

The other is that the tax credits won’t encourage health coverage providers to lower their rates and deductible requirements.  Quite the opposite, the credits would prop up those costs by allowing the providers to put a commensurate fraction of their charges onto the taxpayer: the credits would be used by the providers to make up the difference between what the coverage purchaser pays and what the provider charges.

On the other hand, the tax credits would approach acceptability under a couple of conditions: if the credits decline year-on-year to a final value of zero over some number of years, say, two or three; or the credits are sunsetted and disappear after some number of years, say two or three.  Or a combination of the two.

With those conditions, and with the understanding that both individual and State budgets need time to adjust, a disappearing tax credit, by providing that adjustment time, could become acceptable.

Hysteria or Hypocrisy?

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You pick ’em.  The latest example of irrationality (which is a superset of both hysteria and hypocrisy) comes via V the K at GayPatriot.

Recall that the Progressive-Democratic Party that runs Philadelphia passed a massive sugar tax to be levied against soft drinks sold in the city.  Recall, too, the high school economics teaching that if you raise the price of something, demand for that something falls off.  Finally, recall that applying a tax to that something is the same as raising its price.

The [soda] tax is huge, amounting to a 45% to 100% increase in the final consumer cost of typically affected beverage products.

Last week the other shoe dropped.

Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and are planning for layoffs.

And

One of the city’s largest distributors says it will cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.

“People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.

And

Sources with Teamsters Local 830 say that layoffs are “imminent” and that some workers have seen their take-home pay drop by 50 to 75% because they’re moving less product.

Restaurants are feeling the pinch, too. Josh Kim, owner of Spot Gourmet Burger, says sugary drink sales at his shop have gone down about 10 to 15%.

Naturally, the Progressive-Democrats, unable to confess to their economic illiteracy (I don’t think they’re economically illiterate, either; these are the party of Know Betters; economics is one of the things they Know Better than us petty commoners), are calling the supermarket and distributor management greedy liars.

We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering to prevent this from happening in other cities,” said city spokesman Mike Dunn.
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“I didn’t think it was possible for the soda industry to be any greedier,” [Philadelphia Mayor Jim] Kenney said in an emailed statement. “… They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven figure bonuses.”

Go figure.

Call Them on Their Obstructionism

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Heather Higgins, CEO of Independent Women’s Voice, says go big or go home regarding Obamacare.  Republicans in Congress should quit dithering, should not play reconciliation games, and should simply put an Obamacare repeal and replace package up for vote.  This would force the Democrat obstructionists—especially those #NeverTrumpNoHow and #NeverRepublicanNotEver Progressive-Democrats in the Senate on the record as by-name blocking reform of the Obama program that is in its death spiral, the endpoint of which will leave millions of Americans without health coverage and without even coverage providers to which to appeal.  Especially put those 10 Progressive-Democrats pretending to moderacy in order to protect their precarious reelection chances in 2018 on the spot.

Now that insurers are acknowledging the death spiral, there’s an opportunity for bolder action. The House could use regular order, not reconciliation, to pass a bill that not only fully repeals ObamaCare—returning control of the private market to the states—but simultaneously puts into effect at least the core components of reform while including grandfathering and other provisions to smooth the transition to lower-priced options on the free market.

Such a bill could easily pass the House, putting pressure on the Senate. Would Minority Leader Chuck Schumer allow proper consideration of much-needed health-care reform? And with all the evidence that ObamaCare has been a disaster and—untouched by Republicans—is quickly unraveling, would Democrats, 25 of whom are up for re-election next year, vote to defend the status quo?

And

There would be two Senate filibuster points—the first, to allow consideration; the second, to allow a vote. Thinking through what would happen, the American public and Trump administration would be well served by this exercise of transparent democracy.
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If Democrats blocked consideration of the bill, they would do President Trump a favor by showing the public the parliamentary shenanigans of the anti-deliberation filibuster—call it the “Senatorial Full Employment Through Avoiding Tough Votes” maneuver.

And

If Democrats refuse to allow debate, Republicans should kill the filibuster against deliberation (as distinct from the filibuster to end debate and hold a vote). They can do so by simple majority vote, as Harry Reid showed when he ended the filibuster against most nominations in 2013. Either way, the Senate can actually have a vote on repealing the Affordable Care Act and reforming health care.

Republicans should heed this advice, and go for it.  If it fails, Republicans can always go the reconciliation route.

Domestic Protectionism

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Illinois State Congressman Michael Zalewski (D), after consulting heavily with General Motors, wants car makers to be able to operate self-driving taxis—which, of course, those same car makers would make.

However.

His bill, introduced February 8, would limit access to the business to companies that make their own vehicles. That means GM would be eligible, but not tech companies like Uber Technologies Inc that are developing their own self-driving cars and don’t make their own vehicles.

Nor would Google be allowed in.  Or Lyft, were they to want to get into the business.  Or an IBM, should it want to build a Watsonmobile.  Or….

After falling behind in self-driving cars, GM has unleashed its powerful lobbying team to cultivate relationships with statehouses. The largest US vehicle maker by sales has a long history of backing legislation to preserve its interests, including a bill in Indiana last year that would stop electric-vehicle maker Tesla Inc from operating its own stores there.

What a surprise.

Of course, GM is denying ulterior motives, but this is just internal protectionism—anti-competitive and monopolistic.  Rather than competition pushing car companies to produce better cars, including self-driving ones, the fearful ones like GM are pushing to squelch competition.

It’s no wonder that a bare nine years ago GM was facing bankruptcy up close and personal.