The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for April 4th, 2010

Democrats Find Way to Tax Only White People

Posted by iusbvision on April 4, 2010

The new tax on tanning. If memory serves its 10%. How many Blacks, Asians or Hispanics do you know that regularly go to tanning booths? By percentage its next to none.

Imagine if the roles were reversed. What would the reaction be from the elite media and the race exploiters like Jesse Jackson? What if there was a special tax on drugs that were used to treat sickle-cell or a special tax on products used for people who suffer from shaving bumps (who are mostly black).

Instead of bringing people together as promised, this may be the most polarizing and racially divisive president since Woodrow Wilson.

Posted in Chuck Norton, Culture War | 1 Comment »

Glenn Harlan Reynolds: Progressives can’t get past the Knowledge Problem

Posted by iusbvision on April 4, 2010

Economnics 101 – why central planning of the economy always ends up in corruption and a decline.

The more the planners plans fail the more the planners plan – Ronald Reagan.

By: Glenn Harlan Reynolds via Washington Examiner:April 4, 2010

“If no one among us is capable of governing himself, then who among us has the capacity to govern someone else?” — President Reagan, Jan. 20, 1981.

Economist Friedrich Hayek explained in 1945 why centrally controlled “command economies” were doomed to waste, inefficiency, and collapse: Insufficient knowledge. He won a Nobel Prize. But it turns out he was righter than he knew.

Glenn Harlan Reynolds

In his “The Use of Knowledge In Society,” Hayek explained that information about supply and demand, scarcity and abundance, wants and needs exists in no single place in any economy. The economy is simply too large and complicated for such information to be gathered together.

Any economic planner who attempts to do so will wind up hopelessly uninformed and behind the times, reacting to economic changes in a clumsy, too-late fashion and then being forced to react again to fix the problems that the previous mistakes created, leading to new problems, and so on.

Market mechanisms, like pricing, do a better job than planners because they incorporate what everyone knows indirectly through signals like price, without central planning.

Thus, no matter how deceptively simple and appealing command economy programs are, they are sure to trip up their operators, because the operators can’t possibly be smart enough to make them work.

Hayek’s insight into economics and regulation is often called “The Knowledge Problem,” and it is a very powerful notion. But recent events suggest that it’s not just the economy that regulators don’t understand well enough — it’s also their own regulations.

This became apparent when various large businesses responded to the enactment of Obamacare by taking accounting steps to reflect tax changes brought about by the new health care legislation. The additional costs created by Obamacare, conveniently enough, weren’t going to strike until later, after the November elections.

But both Generally Accepted Accounting Principles and Securities and Exchange Commission regulations require companies to account for these changes as soon as they learn about them. As the Atlantic’s Megan McArdle wrote:

“What AT&T, Caterpillar, et al did was appropriate. It’s earnings season, and they offered guidance about , um, their earnings.”So once Obamacare passed, massive corporate write-downs were inevitable.

They were also bad publicity for Obamacare, and they seem to have come as an unpleasant shock to House Energy and Commerce Committee Chairman Rep. Henry Waxman, D-Calif., who immediately scheduled congressional hearings for April 21, demanding that the chief executive officers of AT&T, John Deere, and Caterpillar, among others, come and explain themselves.

Obamacare was supposed to provide unicorns and rainbows: How can it possibly be hurting companies and killing jobs? Surely there’s some sort of Republican conspiracy going on here!

More like a confederacy of dunces. Waxman and his colleagues in Congress can’t possibly understand the health care market well enough to fix it. But what’s more striking is that Waxman’s outraged reaction revealed that they don’t even understand their own area of responsibility – regulation — well enough to predict the effect of changes in legislation.

In drafting the Obamacare bill they tried to time things for maximum political advantage, only to be tripped up by the complexities of the regulatory environment they had already created. It’s like a second-order Knowledge Problem.

Possibly this is simply because Waxman and his colleagues are dumb, and God knows there’s plenty of evidence that Congress isn’t a repository of rocket scientists. But it’s just as likely that adding 30 or 40 IQ points to the average congressman wouldn’t make much difference.

The United States Code — containing federal statutory law — is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes226volumes.

No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can’t be aware of all the real-world complications it’s producing, it can’t even understand the legal and regulatory implications of what it’s doing.

There’s good news and bad news in that. The bad news is obvious: We’re governed not just by people who do screw up constantly, but by people who can’t help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or “better” rules will do any good: Incompetence is built into the system.

The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don’t know what they’re doing.

If that doesn’t encourage skepticism toward big government, it’s hard to imagine what will. 

Examiner Contributor Glenn Harlan Reynolds, a law professor at the University of Tennessee.

Posted in 2012, Chuck Norton, Economics 101, Health Law, Obama and Congress Post Inaugration | 1 Comment »

“Better than a Hallelujah” – Amy Grant on Fox & Friends, Easter Sunday morning

Posted by iusbvision on April 4, 2010

Listen to the lyrics closely, great song.

Posted in Chuck Norton, Culture War | Leave a Comment »

Mark Steyn and Jim Quinn take on the New York Times’ racism and sexism. This is what the Elite Media thinks about you.

Posted by iusbvision on April 4, 2010

This is perhaps the quintessential example of why the New York Times circulation and influence has been dropping for years.  This clip reveals what the elite media really thinks about you; that you are either a Neanderthal or that you are really foolish enough to fall for such obvious propaganda nonsense.

Marxist conflict theorists count on keeping groups at battle to keep themselves in power in the name of “social justice”. In this segment Mark Steyn and Jim Quinn show how the elite media such as the New York Times have all but abandoned discussing or seriously reporting policy facts and consequences and level racial and other conflict theory invective at anyone who would support the very idea of limited government. March 30, 2010.

The more the planner’s plans fail the more the planners plan – Ronald Reagan

Posted in 2012, Campus Freedom, Indoctrination & Censorship, Chuck Norton, Culture War, Journalism Is Dead, Leftist Hate in Action, Obama and Congress Post Inaugration | Leave a Comment »

POLL: 79% Say U.S. Economy Could Collapse – UPDATED!

Posted by iusbvision on April 4, 2010

If the United States loses its AAA credit rating which is now quite likely according to Moody’s, the economic mess of the last year will look like the good old days.

Fox News:

Most American voters believe it’s possible the nation’s economy could collapse, and majorities don’t think elected officials in Washington have ideas for fixing it.

The latest Fox News poll finds that 79 percent of voters think it’s possible the economy could collapse, including large majorities of Democrats (72 percent), Republicans (84 percent) and independents (80 percent).

Just 18 percent think the economy is “so big and strong it could never collapse.”

Moreover, 78 percent of voters believe the federal government is “larger and more costly” than it has ever been before, and by nearly three-to-one more voters think the national debt (65 percent) is a greater potential threat to the country’s future than terrorism (23 percent).

This is how it will be as long as we decide to borrow and print money while we have tens of trillions of dollars in coal, minerals, natural gas and oil wealth that the feds keep buried in the ground. And as long as we continue with these anti-wealth policies.

UPDATE

Posted in 2012, Chuck Norton, Economics 101, Energy & Taxes, Is the cost of government high enough yet?, Obama and Congress Post Inaugration | 1 Comment »

Amity Shlaes: Obama’s Health Beast Squashes State Experiments (Including Indiana’s)

Posted by iusbvision on April 4, 2010

We hear about Massachusetts’ “RomneyCare” all the time in the news because it is going broke and the cost overruns have been staggering. RomneyCare is similar in several ways to the new federal legislation.

What you never hear about is Indiana’s experiment called “HIP” Healthy Indiana Plan, which has been a great success at gettring people care, keeping costs down and it is completely voluntary. In short, the incentives built into the plan are smart and it works. Of course since the plan was concieved by Indiana Governor Mitch Daniels the elite media doesn’t really want to talk about it.

Amity Shlaes:

State attorneys general are filing lawsuits seeking to prove President Barack Obama’s health-care plan is unconstitutional. The litigation takes the spotlight away from something else about the states that matters.

It is that states can be laboratories where the country experiments to ascertain which mix of taxes, incentives and public administration works best when it comes to health care.

Amity Shlaes

Amity Shlaes

Obamacare threatens such experiments by superseding them. In doing so, the new federal program deprives the country not only of the experiments themselves but also of evidence that might cast doubt on the promises of the new legislation.

In few states is the change as dramatic as in Indiana. Several years ago Republican Governor Mitch Daniels and the legislature began wondering about the same questions that preoccupied the framers of Obama’s health-care plan: why so many of the uninsured mob hospital emergency rooms, why citizens turn their backs on preventive medicine, why health-care spending expands, and how you get Americans to be aware of health-care costs.

In response, Daniels’s team created the Healthy Indiana Plan, known as HIP. It was billed as subsidized insurance for low- and middle-income Hoosiers: citizens who suffer from catastrophically expensive illnesses get coverage subsidized by state and federal dollars. The state doubled cigarette taxes to pay for it all. So far, so familiar.

But Healthy Indiana features a few other interesting traits. Joining was voluntary. Participants pay a penalty co-pay if they use an emergency-room for routine health-care needs.

Spending Accounts

In addition, as part of HIP, the state created a health spending account of $1,100 per adult to be used for basic medical needs and preventive care. At the end of the year, patients can roll over what remains in the account. If they have a record of seeking appropriate preventive care, they may also get additional cash from the state for their health needs. Those who don’t get the preventive care do not get those funds.

In its two-year life, Healthy Indiana has proven popular, with some 60,000 Hoosiers enrolling. Ninety nine percent said they would re-enroll.

The preventive component seems to work: Adult HIP members use emergency rooms at a lower rate than adults on standard Indiana Medicaid. They use generic drugs more frequently than the commercially insured. The program hasn’t busted the budget. Some three-fourths of HIP enrollees say they are more likely to seek preventive services. In a state where one in four adults is obese, this is perhaps the most interesting news of all.
Now Healthy Indiana will be overwhelmed by Obamacare, which will have little regard for individual budgeting and incentives. Perhaps Medicaid administrators will cut off the cash that has flowed to Healthy Indiana. Or perhaps the insurance that Obamacare offers will be more attractive and woo away HIP’s volunteers. Healthy Indiana may survive in name. But the experiment, isolating the effect of a certain incentive upon a certain problem, has been aborted.

I happened to be in the Indiana state house the week that it became clear the president’s plan would become law. Unsure of future funding, Daniels was already freezing new enrollment for the plan. Daniels points out that the federal law will force tax increases at the state level in Indiana and elsewhere. That’s because the federal law effectively mandates expansion of Medicaid, whose costs the states help foot.

Posted in 2012, Chuck Norton, Health Law, Obama and Congress Post Inaugration | 1 Comment »

Amity Schlaes: How the CBO Works & How it is Easily Manipulated

Posted by iusbvision on April 4, 2010

Amity Schlaes is perhaps the greatest living economic historian.

I like how Schlaes describes how the CBO works, they are asked to score what is placed in their box and that includes the assumptions they are asked to make in the request.

For example Ann Coulter once made the following analogy. If Congress proposed a new “green energy bill” that assumed that there was a car that ran on grass and got 1000 miles per gallon of grass the CBO would tell us that our dependency on foreign oil would drop significantly.

Bloomberg News Amity Schlaes:

The question is how can lawmakers get away with their misrepresentation? One answer lies in the structure of the Congressional Budget Office, the government’s official accountant. Its job is to establish an honest price: to tell legislators and voters what a policy will cost in the short, medium and long terms. That CBO work is important because Americans rightly sense that the politicians’ math is rigged.

Amity Shlaes

Amity Shlaes

“Nobody told me you were cheating.

Aww, it’s just a feeling I had.”

Flawed Assumptions

The CBO’s rules make it hard for the group to fulfill its own mandate. You’d think, for example, that the CBO would use its own parameters when it crunches numbers. Instead, the CBO must use the same mathematical assumptions supplied by the very lawmakers who wrote the bill the group is evaluating. No matter how improbable those formulas are.

Former CBO director Douglas Holtz-Eakin, writing in the New York Times, described the group’s process as “fantasy in, fantasy out.”

CBO rules often preclude common sense. Its forecasters can’t take into account any other legislation when studying the price tag of a proposed bill. That enabled the forecasters costing out House Speaker Nancy Pelosi’s bill to overlook this fact: Medicare spending increases will force tax increases, which in turn will hurt growth.

Political Salesmen

This dynamic is permitted because the answers the CBO supplies make it easier for politicians to sell their bills. They’re happy. And so, for the moment, are voters who are painfully aware that the U.S. federal budget can’t cover new entitlements, yet accept such legislation as a balm for that pain.

“So if I’m right, you got to lie to me

Then I won’t feel so bad.”

The CBO’s structural failure benefits the Democrats this week. Indeed, Pelosi is teaching Republicans something: the bigger the misrepresentation, the greater the credibility with voters. Croon to them a tune about entitlement, and they forget that you’re clearing a path for a tripling of the tax on dividends.

The CBO’s rules are bipartisan — they hold for whatever legislation lands in its in box. Congressman Paul Ryan, a Republican from Wisconsin, recently put forward a new blueprint for the federal budget. Ryan’s plan is less questionable than Pelosi’s because it’s relatively honest about costs. Ryan points out that the current unfunded part of the Medicare liability is in the trillions.

Posted in Chuck Norton, Economics 101, Energy & Taxes, Health Law, Journalism Is Dead, Obama and Congress Post Inaugration | 1 Comment »

Feds Approving Bogus Products as ‘Energy-Star Compliant’, Investigation Finds

Posted by iusbvision on April 4, 2010

Fox News:

The federal government has been slapping “energy-efficient” ratings on products that don’t even exist — including a bogus space heater with a duster stuck to it and an alarm clock supposedly powered by gasoline. 

The federal government has been slapping “energy-efficient” ratings on products that don’t even exist — including a bogus space heater with a duster stuck to it and an alarm clock supposedly powered by gasoline. 

These fake products were submitted to the Environmental Protection Agency and the Department of Energy for approval as part of an undercover investigation by the Government Accountability Office. 

The office wanted to see how easily the feds could be duped, since the Energy Star program used to identify products as energy savers serves as a guide to businesses looking for such modern marvels and the basis for millions of dollars in incentivizing tax credits — including $300 million from the stimulus. 

The products fooled the federal government three out of four times. Of the 20 products submitted for approval, 15 were given the thumbs up. GAO reported that the federal government generally did not ask for critical evidence to back up its claims about how energy-efficient — or real — its bogus products were. 

“Certification controls were ineffective primarily because Energy Star does not verify energy-savings data reported by manufacturers,” the report said. Two of the fake firms even received requests from real firms to buy the products after they were listed. 

Among the products approved was a “room air cleaner.” The product image should have been a giveaway — it showed a space heater with a duster and several fly strips attached to it, looking more like a fire hazard than an energy saver. The EPA approved it in 11 days and listed it on the official Web site, according to GAO. 

The government also approved a “metal roof panel,” a “geothermal heat pump,” and a “gas-powered alarm clock.” The latter was described as a generator-sized clock run on gasoline.

Posted in 2012, Alarmism, Chuck Norton, Economics 101, Energy & Taxes, Is the cost of government high enough yet?, Obama and Congress Post Inaugration | Leave a Comment »