Gimme, Gimme, Gimme

That’s what French unions are demanding with their strikes against French President Emmanuel Macron’s and French Prime Minister Édouard Philippe’s plans to streamline, standardize, and otherwise reduce the cost to French taxpayers of France’s byzantine pension system.

Never mind that the pension system consists of 42 different pension plans or that French civil servants insist that they are, somehow, special and so should have special perquisites unavailable to petty private sector workers.

Trains, subways, and buses were still severely curtailed on Friday, and hundreds of domestic and regional flights were canceled. There were no demonstrations on Friday, but unions have warned the strike could last days and become one of the biggest in France in over two decades.

And

Civil servants, in particular, fear they may lose advantages they have over private-sector employees.

To hell with their fellow citizens attempting to get to and from their own work, to and from their own necessary errands, to and from their own entertainments.  The unions want theirs, and no one else matters.

All the government wants to do is to

extend the number of years needed to collect a full pension and create a universal plan that would do away with the so-called special regimes enjoyed by French civil servants, including rail workers.

Currently, full retirement occurs after 43 years of work or age 62; the latter being the youngest full-retirement age in the OECD.

“Screw you,” say the unions, exemplified by Catherine Perret, Confederal Secretary of the CGT trade union:

We won’t let go[.]

This is the naked, if strictly legal, extortion of union strikes made national.  The US has Taft-Hartley, in which the government can order the end to a strike for a significant period during which serious negotiations could occur.  France, not so much; its unions are amok.

Medicare for All

Simon Johnson, of the MIT Sloan School of Management and an “informal” advisor to Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) presidential campaign, thinks her Medicare for All scheme is the cat’s meow.  It would, he claims

cut costs by reducing inefficiency, eliminating predatory pricing (for example, for prescription drugs) and using the purchasing power of a single-payer system. Her plan would also constrain the growth rate of underlying medical costs.

This, of course, is utter nonsense.  While Johnson correctly notes that our present health care burden hangs around the neck of every company in America, and this dead weight gets heavier each year, government intervention only makes things worse, as each of the points he makes, ostensibly in support of his contention, illustrate clearly. Medicare for All schemes—not only Warrens, but all of them—only and severely exacerbate that government intervention and increase the costs heavily.

First, there is the onerous contribution most companies are required to make through employer-sponsored insurance. Every business owner wants employees and their families to have health insurance, but the cost rises inexorably.

Labor market competition and labor unions are the source of this “requirement,” and the government-mandated restrictions on businesses’ ability to band together—unless they’re in a narrowly defined “similar” business—denies them the market power to negotiate effectively.

Second, companies cannot by themselves easily constrain health-insurance premiums. They need healthy workers who are not ruined financially when a family member is rushed to the emergency room. In most competitive markets across the US, if an employer cuts back on health benefits (or raises deductibles, copays or out-of-pocket expenses), it raises the burden on employees and increases the risk that the best will leave.

See above regarding labor market competition, union power, and government-mandated limits on businesses’ negotiating power.

Third, the unpredictable nature of health-care costs makes it significantly harder to start and run a company. Every year, entrepreneurs and managers hold their breath while insurance companies decide what to charge them.

Again, see above regarding businesses’ government-mandated limits on negotiating power, now in contrast with the unpredictability of realized health care needs.

Nor is Medicare for all damaging only fiscally: such schemes eliminate choice; in fact, their proponents say that we Americans are too stupid to make our own choices; each of the plans’ proponents would throw the millions of us who have private health coverage, coverage better tailored to our individually determined needs, from one source or another off those plans.

 

Further restricting our choice—our right to decide for ourselves on what we’ll spend our property, our money, is Medicare for All’s requirement that we buy that one-size-fits-all government insurance—even though we judge ourselves healthy enough to not need a coverage plan or to not need Government’s dictated plan, or we just choose to run the risk and spend our money on our own needs and wants.  After all, these Progressive-Democrats Know Better, so by their fiat, we are to be denied.

 

Then Johnson sneers at efforts to switch to competition, but as the political economist should know, the failures here are failures of Republicans and failures of Progressive-Democrat obstructionism. The failures have nothing to do with competition.

Finally, the health care coverage costs—which are apart from health care needs—exist and burgeon by government fiat at the State level as well as the Federal, and the costs inflicted have little to do with health care provision or cost of provision, nor are they related to the likelihood of any particular health care need. Businesses—and we consumers—are not allowed to trade across state lines, and State insurance commissions set the range of premiums health care coverage entities are allowed to charge.

Obamacare made that even more explicit at the Federal level: the coverage plans carried coverages for matters we consumers neither want nor need and at fixed prices that are by design independent of the likelihoods of those mandated coverages. Beyond that, Obamacare forced millions of consumers off our privately held plans that we preferred and forced us to buy from the Federal government’s “market.”

Medicare for All is just an extreme version of Obamacare. In every respect. At trillions of dollars of higher cost.

Obamacare Premiums

Stephanie Armour noted that Obamacare premiums are expected to be lower in 2020 than they are this year, and she wondered whether that means Obamacare is working, or if there remain problems to be fixed.

The drop doesn’t address the core problem with Obamacare: it’s a government welfare program that mandates coverages at prices independent of the risk being transferred.

Falling premiums? They’re still much too high, as are deductibles (which Armour completely omitted from her article), especially when compared to what would be the case in a free market, and they’re for coverages that aren’t, generally, needed, to boot.

To the extent subsidies are legitimate and truly needed to help offset [excessively high] premium costs, those just as easily can be paid in conjunction with policies bought through employers or privately in a free market.

Leverage

Since so many American businesses—Apple, Alphabet, the NBA, to name a few—put their individual fiscal game ahead of American values, especially regarding Hong Kong and its citizens ongoing struggle for their own liberties (which just happen to lie at the core of our values), here are some thoughts on the fiscal value of Hong Kong to the People’s Republic of China.

Since 1997, mainland Chinese companies have raised $335 billion by floating in Hong Kong, tapping a broader range of shareholders than they could onshore.
…since the Hong Kong dollar is pegged to its US equivalent, and the city has no capital controls, a listing there can generate hard currency for foreign takeovers and investments. It would be harder to use a Shanghai stock sale for the same goal.

And [emphasis added]

For global investors, Shanghai and Shenzhen have become more accessible. But investors typically prefer Hong Kong’s legal protections, and they have other concerns about mainland markets, including the difficulties of moving money out.

And

Hong Kong is by far the largest offshore center for bond sales by Chinese firms. Companies can borrow for longer than they can onshore and, crucially, can raise funds in hard currency….

And

Hong Kong serves as the main offshore hub for yuan loans, bonds, and trading.

Interestingly [emphasis added],

When it comes to dollar bonds, big state-backed banks and industrial companies even prefer to sell these in Hong Kong…. US deals would be overseen by American regulators and would require greater disclosure.

And

Hong Kong is a preferred location for Chinese and international financiers or business people to conduct transactions because it has a Western-style legal and regulatory system that is seen as fair and nonpolitical.

In sum,

…Hong Kong stands out from its mainland rivals for its rule of law, competent regulators, low taxes, free movement of capital, and use of English.
Neither Shanghai nor [the People’s Republic of] China’s free-trade zones “can really compete with what Hong Kong is and does….”

Hong Kong is still [the People’s Republic of] China’s financial window on the world, and the rest of the world’s financial window on [the PRC].

RTWT; there’s more.

Sadly, too many of our major corporations don’t have the moral underpinnings to exercise that leverage.  Apple’s Tim Cook would rather the prestige of sitting as Chairman of a major university in Beijing.  Alphabet would rather work on censorable search engines for the PRC and help develop AI tools for the PRC’s government and People’s Liberation Army than it would work with our own defense establishment on such tools or refuse to support PRC censorship.  And we’ve seen, just in last couple of weeks, how the NBA as a whole, and its individual team staffs and players think their pocket books are more important than the rights of others.

Secular Authority and Morals

A letter writer in a recent Wall Street Journal‘s Letters to the Editor section, demurred from Attorney General William Barr’s remarks on secularism and religion at the University of Notre Dame’s Law School and de Nicola Center for Ethics and Culture. The letter’s author wrote,

Our society can teach morality, ethics, civility, self-reliance, and humility without reference to religion or any particular faith. Children can be taught….

Certainly, such principles can be taught.  But how to enforce them? Relying on Government for enforcement means relying on the men who are in Government from time to time, men with views on the legitimacy of those principles and the means of their enforcement that are as variable as those men. And each man’s views will vary over time.

No, moral and ethical principles are universal and timeless, and the only even moderately sure way of enforcing them is through appeal to a higher power—in fine, to religion, which is what our republic’s founding documents do, and our Founders did.