Cash for Clunkers was a complete failure

“This is the one stimulus program that seems to be working better than just about any other program,” said Ray LaHood, Secretary of Transportation, in August.

Well if that’s the case, than every government program should be thrown out.

The Wall Street Journal explains what a disaster “Clunkers” truly was, calling it one of Washington’s “all-time dumb ideas”.

Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%. Some 700,000 cars were sold in the summer under the program as buyers received up to $4,500 to buy a new car they would probably have purchased anyway, so all the program seems to have done is steal those sales from the future. Exactly as critics predicted.

Of the two things the program was supposed to achieve (boost car sales and help the environment) it did neither:

“According to Hudson Institute economist Irwin Stelzer, at best ‘the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day’s gasoline use.’Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.”

The broken window fallacy teaches that you cannot create wealth by destroying productive assets, and yet that is exactly what bureaucrats had in mind.

The Journal sums it up, “In the category of all-time dumb ideas, cash for clunkers rivals the New Deal brainstorm to slaughter pigs to raise pork prices.

The people who really belong in the junk yard are the wizards in Washington who peddled this economic malarkey.

The union plan to repopulate Detroit: Viagra

-Jarrett Skorup

Detroit Mayor Dave Bing is clearly doing his best to clean up Detroit. Some of his newest reforms are to drop Viagra, weight loss drugs, fertility treatment and smoking cessation from drug coverage for all employees. He also wants to stop covering their kids’health care after age 22 rather than 25.

Seem simple enough? It never is.

The unions are fighting back, saying that preventive medicine saves lives (this claim is dubious at best) and, more interestingly, that Viagra is a necessity.

“We want to repopulate Detroit, don’t we?” asked John Riehl, president of AFSCME Local 207, which represents water department employees.

Just one question: Is there any possible cuts that any of the unions will allow?

Who does your congressman lobby for?

-Jarrett Skorup

The Foreign Lobbyist Influence Tracker is a website that documents who every Congressman and Senator lobbies for from other countries. It’s worth a look.

Filings under the Foreign Agent Registration Act provide far more detail on how lobbyists interact with government officials than those required by the Lobbying Disclosure Act; they contain information on efforts by foreign governments and organizations to influence U.S. policy on trade, taxation, foreign aid, appropriations, human rights and national security.

Since May 2007 the Justice Department has maintained a Web site that posts image files [pdf]of FARA disclosures online, but none of that information is available in a digitized format. Thus, it is impossible, for example, to see how many times the office of an individual member of Congress has been contacted. With the Foreign Lobbyist Influence Tracker, you can now find out with ease by selecting any member’s name from the pull-down list.

Obama questioned hip-replacement for those terminally ill

In an interview in April, President Obama said a hip replacement for his grandma in the final weeks of her life made him wonder whether expensive procedures for those near the end of their life would be a “sustainable model” for health care.

“I don’t know how much that hip replacement cost,” Obama said in the interview. “I would have paid out of pocket for that hip replacement just because she’s my grandmother.”

Well that’s reassuring. But what happens in single-payer systems when the government needs to cut costs? Obama himself in the interview admits, “The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health- care bill out here.”

Obama said “you just get into some very difficult moral issues” when considering whether “to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill. “

Yes, a moral issue indeed. Except that right now people choose whether or not to get procedures, but what happens when the government does it?

And do you really believe health-care costs won’t skyrocket? As the Wall St. Journal points out today, only five states have a type of universal health care: Maine, Massachusetts, New York, New Jersey and Vermont.

And guess what?

New York, New Jersey and Massachusetts have both community rating and guaranteed issue. And, no surprise, they have the three most expensive individual insurance markets among all 50 states, with premiums roughly two to three times higher than the rest of the country. In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799, respectively. ObamaCare would impose New York-type rates nationwide.

So when it comes down to it, who do you want picking your insurance?

Should girls stop watching sports?

Bonnie Erbe thinks so.

The article is about the incident with Erin Andrews, the ESPN reporter who was filmed, while naked, through a peephole in her hotel room. This has caused a national outrage. Though some have blamed Ms. Andrews herself (partially unfairly and partially not, that’s a separate issue) and others have blamed everyone, most of the outrage is directed at men, culture, or sports.

Ms. Erbe’s decides to blame all three.

In her piece entitled, “Erin Andrews Peephole Video Scandal Shows Pro Sports Culture is Nothing But Bad”, Erbe agrees with another writer who says, “It’s about men being men at their worst. It’s about the false notion that it’s OK to be intolerable and horny and barbaric because it’s all part of the guy sports experience. It’s our right, right?”

Um…no. Nobody believes that. This is typical however, but Erbe’s main point is summed up nicely.

I wish women would stop propping up men’s sports. If women didn’t attend NFL games or NBA games, or even watch them on TV to help drive up ratings, they would be doing more to stop men from behaving badly than they could ever do otherwise. If they encouraged their sons to play sports instead of paying to watch other people play baseball or football or basketball or soccer, they would be sending the message that athleticism is good, but pro sports culture is bad. And it is, nothing but bad.

This makes no sense. Can we not just hold individuals accountable without denigrating an entire culture? What if you classified a whole racial group in this way? Sports culture has nothing to do with encouraging men to “behave badly.” There are parts of all culture that are “good” and “bad”, but you call those things out as they happen. It’s not like sports is intended for something bad.

“And [sports culture] is nothing but bad.” Is she serious? What exactly is “sports culture”? I suppose if you define it as denigrating towards women than there is no way around it being bad, but who defines it that way except people like this? Besides that, her point about “encouraging” their sons to play sports instead of watching sports contradicts her point: If there is “nothing but bad” in pro sports culture, why encourage anyone to play sports at all?

Health care fallacies

-Jarrett Skorup

Writing in his New York Times blog, economist Paul Krugman makes some common mistakes when talking about health care.

His piece is entitled “Why markets can’t cure health care” and he is attempting to refute the idea that less government would make health care more efficient and better for everyone.

I’m not going to dissect the whole article, but one of Krugman’s main points is this idea   He writes,

“[I]nsurers try to deny as many claims as possible, and…try to avoid covering people who are actually likely to need care.”

This is a point a lot of progressives are making, usually after mentioning that insurance companies only care about profits and don’t care about people.

Well…so?

I could care less if an insurance company cares about people or not.  Do you really think government bureaucracies care about you more because the government isn’t making a profit?  Does the post office and DMV show more caring to you than Walmart?  What makes people evil the minute they step into the profit-making world?

If Krugman’s theory is correct, then insurance companies would deny 100% of the claims filed.  Is that accurate?  No, in fact, only 3% of claims are denied each year.  Also, Massachusetts universal health care policy turns down more people then the private insurers.  (MassCare turned down 22.8% of claims versus about 5% for private insurers).

Why would these evil companies decide to fulfill 97% of claims anyways?  Don’t they understand that they are losing billions in profits?  The reason is simple economics…if you denied every claim, you would have no customers and your profit would be zero.  Also, if you deny legitimate claims and violate your contract, you could be sued and lose millions more.  Companies don’t fulfill claims because they want to; they do it because they have to.

Now, there are a few things that need to be cleared up.  First of all, the government controls 50% of health care spending in the United States, and this has gone up from 10% in the 1960s. More government in health care, as well as better medicine and treatment, is what’s caused prices to skyrocket; not the free market. 

Second, giving government MORE control will not help keep cost down.  If we look at the states who provided universal health care themselves, it has been a disaster.  Obama cites Massachusetts, and yet a study found that they were the slowest payer of health claims  to doctors (taking 56 days versus 22.6 for private insurers) and had the highest denial rate of care.  Hawaii’s system has also been a disaster.

Third, the government is not “competition”.  Obama has said, “One of the options in the exchange should be a public insurance option — because if the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down.”

This has been said repeatedly by President Obama and it makes no sense.  There are thousands of health care companies, how is that not enough competition?  Government “competition” does not mean competing on an equal playing field, it means getting in and setting prices.  How has that worked out in the past

Basically, the government cannot be an impartial umpire if it owns one of the teams playing and sets the rules of the game.  More involvement will mean worse care, worse service, and higher costs.

Michigan Dems want to hike minimum wage

-Jarrett Skorup

As if things in Michigan aren’t bad enough.

According to the Free Press, the Michigan Democratic Party intends to test support for the following issues before possibly putting them on the ballot:

  • Hiking the minimum wage to $10 an hour for all workers.
     
  • Imposing a blanket moratorium on home foreclosures for 12 months.
     
  • Cutting utility rates 20% across the board.
     
  • Requiring all employers to provide health care to their employees.
     
  • Hiking, by $100 a week, and extending, for six months, unemployment benefits.

Undoubtedly, if they get to a ballot before people, these will be passed.  But the reasons are because many of us think with our hearts instead of our heads, and don’t realize the faulty logic that backs these proposals.

Most economists understand that raising the minimum raise does tremendous damage, particularly to lower-end wage earners and small businesses.  A higher minimum wage locks out small-businesses that can’t afford to pay it, forcing them to layoff workers and combat higher labor prices. 

Remember when Philip Morris joined with the Obama Administration to sign the ““Family Smoking Prevention and Tobacco Control Act,” giving the Food and Drug Administration authority to regulate tobacco?  Do you think that was out of the goodness of their heart?

Well that is exactly why Walmart lobbies for a higher minimum wage.  They already pay well above the national minimum wage anyways and this helps keep out competition and increase their market share.

Many times people (particularly conservatives) mistake the terms ”business-friendly” and ”free market.”  Frederic Bastiat said that what separates a bad economist and a good one is that the bad looks at the seen, while the good also takes into account the unseen.  The unseen are the Detroit small-business owners and those low on the economic totem pole; the Democratic platform will crush them.

Teacher unions don’t care about kids

-Jarrett Skorup

The National Education Association wrapped up their General Assembly recently and people can learn a lot from the event.  I covered in a recent blog post the idea that the NEA cares about control; not students.  As retiring general counsel Bob Chanin explained, “[The] NEA and its affiliates are effective advocates because we have power.”

So what do they do with this power?

Mackinac Center for Public Policy education policy director Michael Van Beek recently wrote about the NEA assembly.  He explains what went on. 

The NEA covered topics including corporate tax reform, “misinformation” about national health care reform, labor rights in Iran, ethnic study programs, same-sex marriage and adult stem cell research.

The NEA has also outlined their support for abortion in the past.  Now, these issues may be interesting; but what exactly do they have to do with education? 

The problem is not with the teachers; its with the bureaucracy and the system as a whole.  The current educational system has tons of regulations, a tenure system that is out of control, and forced-unionization that cripples the system.  The good teachers are caught up in something beyond their control.  But just as its important for parents to remember that the unions aren’t in it for the kids, neither are they necessarily representing teachers well.  As Van Beek reports,

A study of the LM-2 reports for both the NEA and MEA reveals that only 30 percent of their budgets are spent on representation, while almost 60 percent of their expenses go to “overhead” and “administration.” Union members should be aware that only a segment of their dues are used to represent their best interests.

The NEA (and its MEA affiliate) have become systems looking out for themselves.  They are (in effect) supported by dues teachers have no choice but to give them.  This provides them with less incentive to support their members and even less to work for students.  Let’s not pretend otherwise.

Detroit, and Michigan, must change

-Jarrett Skorup

The statistics of Michigan show that the path our state is taking is unsustainable, says Michael LaFaive from the Mackinac Center for Public Policy.

New unemployment statistics are the latest in a seemingly endless series of reminders of Michigan’s economic woes and policy miscalculations. The state’s unemployment rate leapt to 15.2 percent in June, the 40th consecutive month Michigan has had the highest unemployment rate in the nation.

I’ve heard from many people about the unions creating the middle-class in Michigan and how necessary the UAW and DFT are to protecting workers. However, at some point one must confront the figures.

The facts are: School districts are on the edge of bankruptcy. The Big Three are collapsing. Dealerships are closing in record numbers.

Our state is doing something wrong. And blame who you will, but it is a fact that the areas of our country doing well (comparatively at least) are the ones with the least taxes and less regulation (Wyoming, North Dakota, Nebraska, etc.).

Not only does Michigan have the highest unemployment rate in the nation, but, according to the Mackinac report:

To put things in even greater perspective, consider that Puerto Rico’s unemployment rate — 14.5 percent — is lower than Michigan’s, the first time it has been lower than any state in the union since 1976, save for one month after Louisiana was blasted by hurricane Katrina.

Also, United Van Lines indicates that 70% of its Michigan-related moves are people leaving the state. Census figures will soon show our population to be shrinking.

People vote with their feet, and their voting against Michigan. When will our policies reflect these realities?

GM to create jobs?

-Jarrett Skorup

According to AP sources, GM is planning to build an assembling plant for batteries somewhere south of Detroit.  The plant will be for battery packs for the upcoming Chevy Volt.  According to the story:

The new factory off Interstate 75 in Brownstown Township, about 15 miles south of Detroit, will take batteries made by LG Chem in South Korea and assemble them into packs that will power the new Chevrolet Volt, said one of the [sources].

The Volt will be due in showrooms sometime next year and be able to travel 40 miles after being fully charged.  There is a small engine to supply gasoline anytime after that.  And how much does this new car cost?  An alarming “$35,000-$40,000″.  Not a good sign with oil prices apparently stabilized. 

Maybe that’s why, “GM doesn’t expect to make much money on the Volt initially…”

Though 100 jobs is better than nothing, it seems clear to me that GM is merely doing this for a public relations boost and not necessarily because this will become profitable for the company.  I am predicting that our string of bailouts for General Motors is far from over.

At least South Korea will see some job growth.