Category Archives: political economy

Why Not Just Take It All?

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Spiegel International Online notes that the Cypriot government may be figuring out some of the foolishness of the troika’s (ECB, EC, and IMF) demand concerning the latter’s “offered” bailout as well as some of the variants under discussion.  Some of those variants include reallocating the confiscationtax according to more deposit account sizes than just two, and hitting the highest—still those over €100,000 with a 15.6% claim.

[C]oncerns have emerged that a large number of foreign investors and depositors will withdraw their money from the country en masse.  Critics warn this would devastate Cyprus as a financial center and also threaten the country’s entire economy.

Well, yeah.

Still, even the current proposal has central bankers nervous.  Officials at the Cypriot central bank are still fearing a massive capital flight.  Central bank head Panicos Demetriades said he expects that at least 10 percent of deposits will be transferred abroad during the first few days after the banks reopen, according to lawmaker Roula Mavronikola who attended the session.

Demetriades is optimistic.  The Cypriot banking system would be fortunate to retain a single euro, were this institutionalized theft to go through.  The only way to stop the capital flight would be for the government to steal it all.

In the event, though, the Cypriot Parliament rejected any sort of levy, rather resoundingly.

More Obama Sequester in Action

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A few of items.

Congressman Ted Poe (R, TX) is wondering about sequester cuts to tuition aid for our military veterans while we continue to send education aid to Pakistan.  The Marines, for instance, had spent $47 million tuition aid in 2012, while nearly $13 million went to Pakistan for “higher education.”  And then, post-sequester, the Obama administration committed another $37 million to the Pakistan program.

Hmm….

And there’s this example of Obama cynicism.  Recall that the US Department of Agriculture would be forced to “furlough” a significant portion of its meat inspectors, among other personnel.  In the meantime, though, and again post-sequester, the Obama administration

continues to pursue a “partnership” with the Mexican government to “raise awareness” about food stamps among immigrants from that country.

In complete disregard for current immigration law that says immigrants can’t come in unless they are, or can reasonably be expected to be, self-supporting.

And this:

School officials on Native American reservations across Minnesota are forced into making cuts to their current budgets in anticipation of sequester cuts.  These  are programs that had been making progress, improving high school graduation rates by the small, but concrete, 3% per year.

But in post-sequester DC, a six-figure income position was created for a former aide to Congressman Charles Rangel (D, NY) with the important title of Executive Director of the White House Initiative on Educational Excellence for African-Americans.

Apparently some uses for post-sequester money are more important than others.  Especially when there’s political gain to be had.

YGTBSM

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And these guys are serious.

Recall that Cyprus is as bankrupt as Greece.  In order to bail out Cyprus (we’ve been over the legitimacy of bailouts elsewhere), the European Central Bank, European Commission, and the IMF have demanded a one-time tax on deposits: 9.9% on deposits over €100,000 ($131,000) and 6.75% on smaller deposits.

Nothing underhanded about any of this, either.  Uh, uh.  Because depositors, including many of the 3,500 British soldiers stationed in Cyprus, are complicit in the incompetence of the banks’ management.  Yeah.  That’s it.  We’ll go with that.

Finance Minister Michalis Serris already has taken steps to block depositors from taking their money out ahead of the tax:

We have taken immediate measures so that electronic transfers cannot take effect before banks reopen on Tuesday [today is a holiday in Cyprus.]

Chump change was recovered by depositors over the weekend via Cyprus’ cash machines, but the machines’ money stocks were limited and not replenished as they ran out.  Willy Sutton couldn’t have done it better.

A planned weekend vote by the Cypriot Parliament to pass this thing, however, was been postponed until today amid…concerns…that the Parliament may have more integrity than Serris and block the “agreement” with the ECB, the EC, and the IMF.

This is supposed to raise €5.8 billion ($7.6 billion).  Think about this, though.  Are the interest rates or investment rates of return that the Cypriot banks are paying on those deposits more or less than those taxes?  You get three guesses, and the first two don’t count.  For how long will those depositors leave their remaining money in those banks?  Again, three guesses, and the first two don’t count.

This is what happens when the wrong folks are left in charge of OPM.

Update: Cyprus’ legislative vote has been delayed until Tuesday afternoon.

Update again: Today (Tuesday) the Greek Parliament rejected any “tax” on private deposits by a vote of 36 “No,” 19 abstentions, and 0 “Aye.”

Obamacare…Gifts

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Welcome to ObamaWorld.  Health insurance premiums—which President Barack Obama has been promising for the last three years will be going down, courtesy of his Obamacare—are about to jump up.  High.  The AP is reporting that we can look forward to 20%-100% premium jumps beginning in just nine months—next January.  Here’s what some of those increases will look like, with my editorial comments interspersed.

  • Changes to how insurers set premiums according to age and gender could cause some premiums to rise as much as 50 percent, according to America’s Health Insurance Plans.  NOTE: this is because Obamacare drives insurers steadily away from market-oriented, risk-based premiums.  Age and gender drive differing risks for a given insured malady.  As the AP went on:
  • The law will prohibit insurers from setting different rates based on gender—something they currently do because women generally use more health care.  That means premiums for some men could rise, while they fall for women.  NOTE: this is a redistribution, and a subsidy of one group (here, women) by another.
  • Young people who currently have low-cost coverage may see some of the biggest hikes.  NOTE: or they may start out with no coverage at all, because they don’t need it.
  • In many states, insurers charge a 60-year-old customer $5 in premiums for every $1 they collect from a 24-year-old.  The logic behind that is that older people use health care more and generate more expensive claims than younger customers, so insurers need to collect more to help pay their bills.  …  But the overhaul will narrow that ratio to 3-to-1.  That alone could cause the premium for a 24-year-old who pays $1,200 annually to jump to $1,800, according to AHIP. Meanwhile, the 60-year-old who currently pays $6,000 will see a 10 percent drop in price.  NOTE: This is naked wealth redistribution and a subsidy.  Only this time, the victim has no wealth to redistribute—the 24-year-old is only just starting out.
  • Prices also may change depending on a person’s current coverage.  Many policies on the individual market (coverage not sold through employers) exclude maternity coverage, but that will be considered an essential health benefit under the overhaul.  That could mean higher prices for some.
  • Vikki Swanson, 49, of Newport Beach, CA, resents that the added benefit may lead to higher costs for her.  “I had a hysterectomy, I have no need for maternity coverage, but I have to now pay for it.  I have to pay not only my own premium but I have to subsidize everybody else[.]”  NOTE: Yeah….
  • A new tax on premiums could raise prices as much as 2.3% in 2014 and more in subsequent years, according to a study commissioned by AHIP.  Policyholders with plans that end in 2014 probably have already seen an impact from this.  NOTE: this tax on the top-line revenues of medical equipment manufacturers will suppress development and/or production of items ranging from pacemakers to suits that let paraplegics walk again.
  • Requirements that insurance plans in many cases cover more health care or pay a greater share of a patient’s bill than they do now also could add to premiums, depending on the extent of a person’s current coverage, according AHIP.  NOTE: because insurance companieswelfare agencies aren’t allowed to charge for elective items like contraceptives, they’ll have to recoup these losses from other areas.

Once again, coverage under Obamacare isn’t health insurance, it’s privately funded, Federally mandated health welfare.

Never His Fault

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Once again, President Barack Obama is scuttling away from his responsibility.  This time, he’s throwing his Secret Service under the bus.

You’re all aware that Obama cancelled for the duration all White House tours by the public, and that he did it because of Evil Republicans and their Satanic Sequester.  After the hoo-raw over his cancellation and the sheer pettiness of it, he’s started crawfishing.

He now is insisting “that the Secret Service was behind the…suspension of White House tours.”  When he passed on this little tidbit to the Republican caucus with whom he was meeting, the response he got was a round of “ahaaaaas.”

Obama, in response, told the lawmakers: “Hold on guys, we just talked about respect.”

Sorry, Ace.  You get respect the same way any American does: through actual deeds.  You certainly don’t get it because you think you’re special.

The Secret Service works for Obama; he doesn’t work for them.  They may have made their recommendation, they may have told him their “decision.”  But it was his—overriding—decision to accept their position.  He could have overruled them; it was entirely his choice not to.

This is just cowardice.