I normally don't beat up on little girls, but liberals deserve no mercy

Check it out. Like most liberals, she ignores that I refute her every claim, debunk her junk science, justifiably dismiss her bad statistics, and expose her sources' liberal agendas.

But it's fun, and good intellectual exercise.

Read her lips: no new bureaucracy!

Hillary did a Sunday morning talk show blitz, appearing on all five that are nationally broadcast to defend her socialist health care agenda. I didn't watch any of them, as is my normal practice, so I can only wonder how she "giggled." Is it really a laughing matter to her? I guess it's all fun and games to her that she wants to take money forcibly from those who produce things of economic value, and give it to those who don't produce as much (if at all).

Remember that the supposed 47 million Americans aren't as numerous as is claimed. Many Americans voluntarily choose not to have it, because while they can afford it, they'd rather pay out of pocket. Many of these "uninsured" are illegal immigrants (who should be deported into the Pacific, along with others who leech off taxpayers, before the rest of us are coerced into giving them so much as a goddamn penny). Under Hillary's plan, those of us who work will have to pay for every Pablo and Maria who come here for our welfare state, and every Akisha on welfare with her five out-of-wedlock children. But of course, Hillary will raise taxes only on the richest Americans, right? Never mind that, as I said below, everyone else's jobs depend on the saving and consumption of "the rich." When "the rich" are taxed more, and assuming the unlikelihood of them continuing to produce as much economic output, they'll have less to spend and save. As Bastiat taught us, in the end the money merely shifts. Instead of hiring yard workers, going out to dinner, and buying fancy clothes, cars and jewelry, "the rich" will be paying taxes for everyone else. So some landscapers, waiters, Mercedes-Benz car dealers, jewelers in the Diamond District on 47th Street, et al, will be out of jobs when "the rich" cut back -- but at least they'll have health care, right?

Notice how Newt Gingrich, often hailed as a real conservative, and the architect of the bullshit called the "Contract With America" (the lies the GOP told in 1994 to regain control of Congress), actually said, "Some things that she proposes are interesting and useful." There's nothing "interesting" or "useful" about her plan. That's the problem with Republicans: for all their talk, they also want a bloated government, just with different programs than Democrats want. What happens is that both sides compromise, leading to further expanded government.

I didn't see the interview, so I don't know if she repeated her claim that there would be no new bureaucracy necessary for her plan. Who really believes that a plan costing $110 billion a year (meaning we can count on easily double that estimate) will require no new bureaucracy? Oh no, she says, no new bureaucracy, even though government will need a way to force you into the plan unless you want to work an underground job. Or is she technically speaking the truth, in the same way that Bill didn't create new taxes (or did he?). He merely increased them. So Hillary won't create a new bureaucracy -- she'll just expand the existing Department of Health and Human Services.

But forget the argument about logistics and economic efficiency. Her plan is based on the immoral notion of a "moral imperative" to coerce people into giving up their property for others. That's all there is to say. Only a state-worshipper can fail to understand.

Insurance companies' right to deny you a policy

As I said last night, the fundamental nature of private property rights must include the right of companies to hire only those they want, for any reason or no reason at all, even if it's "discrimination." Another right is of companies to do business with only those they want, also for any reason or no reason at all, even if it's "discrimination." Many people challenge this, saying companies should treat everyone equally. But how can there be any argument, any complaint, when a company ceases to do business with you because you're less profitable?

When I came across this article earlier today, I couldn't believe that the quoted homeowners don't understand how insurance and risk work, or their attitudes implying they have a right to it. Marie Collins may feel it's "outrageous" that Allstate cancelled her hurricane policy, but Allstate's actuaries have reckoned that Long Island (Brooklyn and Queens are on its western end, but "Long Island" rarely is used to include them) is now a much higher risk. Whether that is true or not is irrelevant: all that matters is the insurance company's judgment. People might complain they're "paying more for less," but insurers think they've become a greater liability. Therefore, balking at higher premiums is expecting the insurance company to bear a higher risk of losing money on them.

The risk is now calculated so significantly higher that Allstate likely decided that requisitely higher premiums would drive away too many customers for the area to remain profitable. So Allstate chose to lose the revenue from those policyholders, rather than risk payouts that could well exceed collected premiums. Though a "devastating" hurricane may not have hit Brooklyn since the "Long Island Express" of 1938, it wouldn't take that or a Katrina. Insurers could lose a lot of money if a strong hurricane hit at high tide, causing severe flooding from coastal New Jersey to Montauk. Yes, they would turn to their own reinsurers, which is actually common practice, but then insurance companies' own reinsurance premiums would surge, and they couldn't afford to pay out for the next castastrophe.

The article mentions insurers' "record $43 billion profit in 2005 -- an 11.7 percent increase from the previous year and the highest net income since 1991." Did the writer really intend to admit that it took insurance companies 14 years to return to a previous level of profit? This is another of mainstream media's insinuations (a slur, really) that big companies are greedy and exploitative of their customers. If you look at Allstate's 2004 report (2005 isn't available yet), you'll see its net income in 2004 was $3.181 billion, but out of total revenues of $33.936 billion. That 9.4% is not particularly impressive compared to other industries (be sure to check that link to a page on our friend Josh Hendrickson's blog), and in fact, it's better than the previous few years. In all fairness, if you criticize insurance companies' profits, then you must also weep for years like 2001 and 2002, where Allstate's net income was only 4% and 3.8% of revenues. Similarly, no one wept for oil companies in the late 1990s, when their profits practically withered as oil prices approached $10.

A lot of people don't realize that Allstate, like any other insurer, is hardly pocketing the difference between premiums and payouts. Allstate necessarily holds tens of billions in reserves ($86 billion as of 2004) for major future payouts, like life insurance. Additionally, any insurer invests a great deal of these in a wide variety of assets, so a good chunk of people's premiums actually become fuel for the economy. This is one reason the U.S. national savings rate is higher than is commonly calculated. Insurance premium payments are treated as consumption spending, though part is turned into investments. If you pay $200 a month in policies, and $20 is invested in stocks or government bonds, you yourself aren't saving $20 more a month, but that does count toward national (total) savings.

Most fundamentally, it is Allstate's right not to renew policies, whether or not someone's genuinely an increased risk, and no matter how long Collins has been a customer. You do not have a right to others' property beyond their consent. Once the contract is up for renewal, it is not enough that one side alone wants to continue the relationship. It's utter rubbish that there should be government agencies to which people can complain. The proper way for them to complain is through not doing business with that insurer.

Ah, but other insurers would also charge them higher premiums, or refuse to give them a policy? Then perhaps the homeowners need to understand that they're higher-risk customers, and that there's a reason for what the insurers are doing. After all, Allstate, Nationwide, MetLife, et al, are not stupid. They're not going to turn down free money, no more than they'll continue insuring people that they believe aren't profitable (or at least sufficiently profitable).

Competing to be the party of big government

"Dems Lambast Prescription Drug Benefit" reads the headline. You'd think, considering how the Democrats are trying to reinvent themselves as "fiscal conservatives," that their criticism of the prescription drug behemoth is its size. But they're not criticizing that the program could grow to be the most expensive piece of legislation ever:

WASHINGTON Mar 25, 2006 (AP)— Seniors need another six months to sign up for the Medicare prescription drug benefit, a Democratic congressman who's also a pharmacist said Saturday.

Rep. Marion Berry of Arkansas also said the government needs to think long and hard about meaningful Medicare reform.

Berry said people eligible for the prescription benefit are confused by the various offerings, and some are even paying more for medicine now than they were before they joined the program.

"We need to extend the sign-up period by six months to give seniors more time to make sense of this benefit, and we need to eliminate the Bush administration's prescription drug tax," Berry said in the Democrats' weekly radio address....

"I will never forget one conversation I had with a pharmacist from DeWitt, Ark., who had given away $60,000 in free medications in just one week because he knew his customers might die if they did not receive their refill that day. Medicare Part D is the FEMA of health care," Berry said.

Medicare could bargain for lower drug prices to save money for the government and for the elderly, he said.

"Every American deserves the best health care we can provide. We do not have to accept a failed benefit and we do not have to tolerate a culture of corruption or leaders who are afraid to admit their mistakes. Democrats have the answer, and under a Democratic Congress, we will give seniors the prescription drug benefit they were promised years ago. Together we can do better," Berry said.

The Democrats aren't criticizing the Medicare bill because it's a waste of $700 billion over the first ten years. They're criticizing it because it doesn't go far enough! This is yet another manifestation of Democratic hypocrisy, particularly when Democrats can get all sorts of misleading headlines from sympathetic mainstream media. Once again, "we" must provide this and that, but just who's picking up the tab? Who will bell the cat?

The one thing Berry got right is equating "Medicare Part D" with FEMA: both should be abolished, and that can't happen too soon.

Berry gave a sob story about a pharmacist who gave customers "$60,000 in free medications in just one week." Don't believe it for a second. He simply distributed the drugs, knowing the federal government would later pay him -- by taking money from everyone else. Let's not kid ourselves: the pharmacist knew what he was doing, and he certainly knew he was doing no act of genuine charity. As a matter of economics, government again skews supply and demand curves, because it takes wealth from some people and gives it to others.

It's yet another fallacial notion about the pharmaceutical industry that a government can "bargain" to buy drugs at lower prices. Drug companies can only go so low, because if marginal revenue falls below marginal cost, they will stop selling. Even if marginal revenue still exceeds marginal cost, if it's not profitable enough, then the company will pursue another drug or possibly shift to different endeavors. Let's say that in the natural equilibrium of the free market, consumers might value life-prolonging drugs more than drugs to treat, for example, erectile dysfunction, and pharmaceutical companies are happy to offer the former because of higher profit. So when government makes it too expensive to make Lipitor, which cuts into profit margins because consumers aren't willing to pay the higher prices, then let's not be surprised when we have more Cialis.

If politicians were really serious about making drugs more affordable, they would eliminate all the FDA red tape (preferably abolish the FDA altogether) that drives up pharmaceutical companies' costs. Because of the studies and years required to obtain FDA approval, it costs an average of $800 million to bring a new drug to market. That $800 million used to come from individual customers, but now with the Medicare prescription drug bill, the federal government can pay it via the taxpayer's wallet. Am I the only one who sees the senselessness in government "bargaining" to reduce prices that it drove up in the first place? It's as senseless as the "War on Drugs," one of whose effects is making criminalized drugs more scarce, and hence a much more profitable and attractive business than before.

While environmental activists suggest we can find cures for cancer in the rain forests, it would be more effective to let pharmaceutical companies do the research without having to jump through all the bureaucratic hoops. And if a particular drug has certain dangers, whether it's a "clot-buster" for stroke victims or a drug that suppresses a transplant patient's immune system, then caveat emptor. Let the buyer beware and assume the risks, because someone might consider the possibility of death worth the chance at life. You, I and no one else -- and that includes government -- have no moral right to deny someone that choice.

John Edwards' hypocrisy

From the AP:

John Edwards, former senator and vice presidential candidate, has a new part-time job as head of the University of North Carolina law school's new Center on Poverty, Work and Opportunity.

Edwards, who represented North Carolina for one term in the Senate, began work Tuesday by moderating a panel discussion on the importance of savings and assets in moving families out of poverty.

"We have millions of Americans who work full time and still live in poverty, and that is absolutely wrong," said Edwards, a Democrat.

It's not "wrong" per se, but a fact of life. That doesn't mean we can't extend a helping hand, however. That sounds like a worthy cause, doesn't it? A "Center on Poverty, Work and Opportunity," with emphasis on helping impoverished families save and accumulate assets.

From its name, I presume that John Edwards will work toward Social Security privatization. After all, it is the way for lower-income people to save money that is theirs. That's the ultimate way for poor people to build up their own assets.

Oh, but John Edwards doesn't support Social Security privatization. He'd rather have poor people stay poor, and be supplicants (as Michael Tanner of Cato said) to the government for their retirement.

Will John Edwards support free trade, which benefits poor people the most? First, free trade creates jobs, and better ones to help poor people out of poverty. NAFTA did push some jobs to Mexico, but the U.S. had a net gain in jobs -- and mostly higher-paying ones at that. That's because it allows us to do more productive, better-paying work that Mexicans, Chinese, et al, cannot do as well. Meanwhile, our trading partners produce things more efficiently -- more cheaply -- than we can, and they trade for the things we produce better. And the low prices benefit poor people more than others.

Oh, but John Edwards doesn't support free trade. Not real free trade, no. He voted for the farce of "permanent normal trade relations" with China and Vietnam, but he believes free trade puts Americans at a disadvantage and even "hurts" them. And just what would this "National venture capital fund" do? Evidently it will use tax dollars, so I'd like to know just how you'll take people's money and redistribute it to Americans "hurt by trade" -- how would you determine who's worthy, and how much each receives? And more fundamentally, how do you justify forcibly taking money from one person and giving it to another?

Look at John Edwards' switch-hitting: he actually came out somewhat for NAFTA before he came out against it. That's worthy of John Kerry.

Well, maybe John Edwards supports across-the-board tax cuts for businesses, so that they can afford to expand? More jobs mean more opportunity for poor people, instead of wasteful government spending. But no, John Edwards doesn't believe in tax cuts for businesses. The Kerry-Edwards plan proposed tax credits, and only to certain businesses. It also proposed cutting "the corporate tax rate by 5 percent – providing a tax cut for 99 percent of taxpaying corporations," but paid for by a tax hike on the remaining 1%.

As Bastiat would remind us (go here and scroll down to 1.56), that is not the creation of wealth, but merely a transfer. These "tax credits" are a euphemism for subsidy, whereas a true tax cut is an incentive giving real economic benefit to everyone. The plan's provided scenario is mind-boggling in its ignorance of economics:

For example, a medium-sized manufacturing company employs 1,000 workers. If this company hires an additional 100 employees at $40,000 – bringing the total to 1,100 workers – they would get a tax cut of $3,060 per worker $306,000 in total.

So the Kerry-Edwards plan was to pay the payroll taxes of certain businesses...just where did the Dynamic Duo think that money would come from? And it is a transfer at best, because the requisite tax increases are a disincentive for the other businesses that must pay them. Also, why do Kerry and Edwards believe it's ok to discriminate against big businesses, like Wal-Mart? It seems to be solely because they're "big." What is intrinsically wrong with a big business, whether or not it uses "economy of scale" to the consumer's advantage? It's still people, and people working.

Why are liberals like John Edwards so against Social Security privatization, free trade, and real tax cuts for all businesses? Well, it doesn't matter that these are the most economically effective measures to benefit the poor, as well as the rest of society. That's just it: liberals oppose any public policies that would help the poor if such policies might possibly benefit one "rich" person, no matter how small the extent. Can't cut income taxes, that would help the "rich"; can't cut capital gains taxes, that would help the "rich"; can't cut property taxes, that would help the "rich" too. But the fact remains that we're all in this economy together, and I for one declare that "trickle-down" does work. Read carefully what I say in my entry there: I'm not saying the rich shouldn't pay any taxes while the rest of us do, but a heavily progressive tax structure eventually hurts poor people too.

I wonder about something. John Edwards is a multi-millionaire trial lawyer. Since he thinks millionaires don't pay enough taxes, will he donate his $40,000 annual salary from the UNC to the U.S. Treasury? Has he started to calculate what is his own "fair share" of taxes and start paying that, regardless of current tax law? Will he sign a pledge stating he will never "evade" taxes via tax-free investments, like munis?

Or he could demonstrate his compassion for the poor by donating his $40,000 annual salary from this "Center" to a charitable cause. If he will or already donates extensively, please correct me: I will applaud anyone, even a liberal, who puts his money where his mouth is. On the other hand, I will not refrain from criticizing liberals who want to tax some people to benefit others, without putting up their own money first.