“Econ 101 For The Party Of Sore Losers”: Tea Party Politics And Policy Limit Economic Freedom And Growth
Our businesses, markets and citizens are breathing sighs of relief. After wasting billions and toying with America’s creditworthiness, the so-called tea party has ceased, for the moment, holding our democracy and our economy hostage. Nevertheless, the fringe faction that calls itself by this name has made it abundantly clear that it lacks the character to own up to its folly. This Party of Sore Losers (POSERS, for short) has hacked at the proverbial cherry tree and, learning nothing from young George Washington, has failed to own up. In fact, it is holding the axe behind its back, ready to hack again.
This past month, attention was appropriately focused on the short-term consequences of the government shutdown and the POSERS’ game of chicken with sovereign default – default at the national level. This is serious. As Warren Buffett emphasized during the crisis in an interview with Fortune, we’ve spent hundreds of years building up our credibility; it takes but a moment to ruin it. Worldwide, markets have enormous confidence in our financial integrity and the functioning of our government. To date, the free market believes in America’s capacity and commitment to make good on its obligations. Let’s keep it that way.
During the Reagan years, it was liberals who thought the world was ending because of mounting federal debt. Eventually the country paid it down. We must do this again, but if we’re serious about it, first we need policies that support enterprise and growth. We have come through long wars and a stubborn recession. More of our veterans need employment in the private economy, and more of our businesses need to be able to hire and to invest in innovation again.
It is under such conditions that the Party of Sore Losers thought it would play with default at the national level. This shows a blatant disregard for growth and what growth means to our nation. In their zeal, they have put the economic cart before the horse. It’s as if they truly don’t understand that the horse – private enterprise and the growth and employment it generates – pulls the cart.
Much has been written in recent weeks about what the shutdown cost the nation and what a default would have cost. If the brinksmanship that brought us there were only a one-time tactic, it would have been bad enough. As it is, this tactic was merely the latest instance in a consistent pattern of fixation on cuts and obstruction, to the exclusion of growth. If you were out of a job, would it do you much good to stop showering, doing the laundry or paying rent and utilities, all in an effort to cut expenses? It would bring your costs down, to be sure. But it wouldn’t help you get a job.
As vivid as this analogy might be, it makes the point. POSER policies block investment in infrastructure, financial transparency, food safety, pollution controls and education. These are our Internet, our shower, our breakfast, laundry and rent; these fundamentals provide the stable conditions we need to get back to work. Investment in them is something business owners repay many times over. When a stable and functioning government does its job, we entrepreneurs can do ours: creating value and hiring people without unnecessary hindrance.
There are significant dangers when the government starts doing what private industry does best. Think of the last time you were in line at a government agency, and of the level of customer service you received, compared to what you got from a company that would lose you as a customer if it did a bad job. You can vote your representatives out, but the staff at your local government agency isn’t typically up for re-election.
There are, of course, many dedicated civil servants who give you their very best. Still, overall, beware the performer playing to a captive audience. Private companies that succeed in locking you in as a customer only underscore the point. Think of the last time you were on hold with, or tried to use the latest software from, a business with which you as a customer were more or less stuck. When a company becomes the only game in town, or seduces you into signing that contract, a certain disdain for your needs often follows.
The POSERS who call themselves the tea party appear to be seized by a great fear that we will all be waiting in line at government health clinics. The trouble is that they’re forcing their version of free choice down our throats. It can be hard to see the irony in this when you’re convinced that you’re channeling the will of the people. In an interview in Business Insider just days before the recent debt-ceiling deadline, POSER Rep. Ted Yoho claimed to know what “the people” wanted. He broke it down for the rest of us: “They have chosen not to fund the government.”
How did we get to this point? Did the POSERS get so good at dismissing their perceived political opponents on ideological grounds that they started to hear nothing but their own voices? Was it the hay this faction made by obstructing government, while screaming that the president was a socialist, that allowed its arguments to become divorced from what a functioning market economy is?
However they talked themselves into it, the POSERS have demonstrated their readiness to play havoc with the most basic needs of the business owner in America. They have shown their disregard for what it means to carry on our work with some confidence that government will do its job, while we do ours. What’s so tragic about this, among other things, is that it discredits legitimate efforts to keep government out of places it shouldn’t be.
In view of what the POSERS have put us through of late, Americans of all mainstream political persuasions should be on guard. The so-called tea party may pose the greatest threat to free enterprise in decades. The POSERS would block moves to reestablish the financial transparency on which savers and investors rely. They would make us pay the costs of other people’s pollution. They would restrict the economic opportunity for immigrants on which this country’s success is based. And they would rob us of our right to enjoy or to suffer from that which we have chosen for ourselves in free elections.
Whether “Obamacare” turns out to hurt businesses and employees more than it helps them, we’re going to find out in practice. Far more threatening to private industry is the way the POSERS would cut off our economy’s nose to spite its face. One can only assume they earnestly believe themselves to be in a mortal struggle to keep government from interfering with our choices. In reality, of course, POSER economic policies limit those choices, in the ways I’ve described.
Moreover, these policies function to keep the private economy small and constrain recovery and growth, thereby perversely increasing our dependence on debt spending. We badly need to teach these ideologues the basics of cash flows, debt and investment, value generation and growth. Alas, the Party of Sore Losers has been busy teaching the rest of us a course of its own design. The textbook is titled, “Converting Resilient American Innovation into Entirely Unnecessary, Government-Induced Economic Paralysis (A Sore Loser’s Approach: 2013 Edition).”
By: Alejandro Crawford, U. S. News and World Report, October 29, 2013
“The GOP’s Hypocrisy On Obamacare”: Republicans Get The Vapors And Become Outraged About The Problems They Created
Last spring, the Senate Finance Committee held a hearing on implementation of the Affordable Care Act, otherwise known as Obamacare. Sen. Max Baucus, a Montana Democrat and the chairman of the committee, was not pleased with how things were going.
The Obama administration originally had asked for more than half a billion dollars to spend on public relations and outreach for the law. House Republicans had returned with an offer of nothing. That’s right: zero dollars. Without necessary funds, the Department of Health and Human Services worried it would not have the necessary money to pay for navigators to help people enroll in health care, for the technology needed to implement the exchanges and for the public relations campaign that was required to inform citizens about what the law actually did.
HHS Secretary Kathleen Sebelius made the controversial move of asking insurance companies and nonprofit organizations to donate money and help. Republicans were outraged. She asked for more money. She was refused.
Then, when she tried to move some money from the PR budget to replace cuts to other areas, Baucus became quite upset. He was concerned that if the administration did not do more to inform people about the law and get implementation going, there would be problems:
“A lot of people have no idea about all of this,” he said. “People just don’t know a lot about it, and the Kaiser poll pointed that out. I understand you’ve hired a contractor. I’m just worried that that’s gonna be money down the drain because contractors like to make money. … I just tell ya, I just see a huge train wreck coming down.”
As I’ve said before, it’s important to note that the “train wreck” Baucus was describing was a botched implementation because not enough was being done to make things go smoothly.
It wasn’t a description of the law itself but of what might occur if the government did not devote enough resources to making it work. Sebelius’ response was not surprising to those who were paying attention. She said that she was “incredibly disappointed” that all her requests for resources were being denied by Republicans.
That was then. Today, implementation has arrived, and if it’s not a train wreck, then it’s certainly close. The administration is still under fire because people cannot get the insurance they want through the exchanges. But while I will continue to point out the problems with implementation and fault the administration for mistakes they’ve made, how does one ignore the apparent hypocrisy from many politicians who are now “outraged” about the very problems they’ve helped to create.
Republicans refused to appropriate money needed to implement Obamacare. When Sebelius tried to shift money from other areas to help do what needed to be done, she was attacked by Senate Republicans. At every step, Republicans fought measures to get money to put towards implementation.
Is it really a surprise then that implementation hasn’t gone smoothly?
Federal legislators aren’t the only ones to blame. Let’s remember that original versions of the bill called for one big national exchange. This would have been much easier to implement. But conservatives declared that insurance should be left to the states and kept out of the hands of the federal government. So as a compromise (yes, those did occur), exchanges were made state-based instead of national.
As a precaution, the law stipulated that if states failed to do their duty and enact exchanges, the federal government would step in and pick up the slack. This was to prevent obstructionism from killing the law. Surprisingly, it was many of the same conservative states that demanded local control that refused to implement state-based exchanges, leaving the federal government to do it for them.
That made implementation much harder.
There have been books, webinars and meetings explaining how to sabotage the implementation of Obamacare. There have been campaigns trying to persuade young adults not to use the exchanges. It is, therefore, somewhat ironic that many of the same people who have been part of all of this obstructionism seem so “upset” by the fact that people can’t easily use the exchanges.
For goodness sake, the government was shut down just a few weeks ago because some of the same people who are now bemoaning poorly functioning websites were determined to see that not one dime went to Obamacare.
Lest you think I’m defending this month’s rollout, I encourage you to review my last article here. I still maintain that the administration has had a failure in management in overseeing and reporting on progress towards October 1. But I’m also sympathetic that they’ve had a hard job to do. I would like to see this go better. I’d like to see millions more get insurance. I’d like to see the law of the land function as well as it can, and if it doesn’t, I’d like to see Congress continue to amend it to make it work better. I’d like a better health care system.
What I cannot ignore, however, are the many people who actively worked to see implementation fail now get the vapors over its poor start. The truth is, they got what they wanted. A victory lap is somewhat warranted, not concern-trolling.
If, on the other hand, their concern is real, then I’m sure the administration would welcome their help in making things right.
By: Aaron Carroll, Director, Center for Health Policy and Professionalism Research, Indiana University School of Medicine, Special to CNN, October 28, 2013
“Purposeful Lying”: Time To Investigate Those Health Insurance Company Letters
As a follow-up to this post, I want to talk about the thing that spawns some of these phony Obamacare victim stories: the letters that insurers are sending to people in the individual market. People all over the country are getting these letters, which say “We’re cancelling your current policy because of the new health-care law. Here’s another policy you can get for much more money.” Reporters are doing stories about these people and their terrifying letters without bothering to check what other insurance options are available to them.
There’s something fishy going on here, not just from the reporters, but from the insurance companies. It’s time somebody did a detailed investigation of these letters to find out just what they’re telling their customers. Because they could have told them, “As a result of the new health-care law, your plan, StrawberryCare, has now been changed to include more benefits. The premium is going up, just as your premium has gone up every year since forever.” But instead, they’re just eliminating those plans entirely and offering people new plans. If the woman I discussed from that NBC story is any indication, what the insurance company is offering is something much more expensive, even though they might have something cheaper available. They may be taking the opportunity to try to shunt people into higher-priced plans. It’s as though you get a letter from your car dealer saying, “That 2010 Toyota Corolla you’re leasing has been recalled. We can supply you with a Toyota Avalon for twice the price.” They’re not telling you that you can also get a 2013 Toyota Corolla for something like what you’re paying now.
I’m not sure that’s what’s happening, and it may be happening only with some insurers but not others. But with hundreds of thousands of these letters going out and frightening people into thinking they have no choice but to sign up for a much more expensive plan, it’s definitely something someone should look into. Like, say, giant news organizations with lots of money and resources.
Now, it should be said that when President Obama said during the debate over the Affordable Care Act in Congress that if you like your health coverage you can keep it, he was only half right. The reason he repeated it so many times was that he and his advisors firmly believed that one of the main reasons Bill Clinton’s health-care reform failed was that it changed things too much for too many, and people fear change. In Clinton’s plan, pretty much everybody not on Medicare or Medicaid would have had to go into a new insurance plan. That those plans might be better than what they had didn’t matter; the idea frightened people. So the Obama administration took pains to emphasize that the government would not require anyone to change their insurance. That didn’t mean they were guaranteeing that no insurance company would ever make changes to anyone’s plan, because insurance companies do that all the time. But the law wouldn’t mandate that, say, you leave Aetna and join Blue Cross.
The more complex reality is that because the law imposed new requirements on insurers for what they have to cover and what they can charge, the insurers were inevitably going to make changes to their existing plans in response. And yes, that means many people’s insurance is going to change. In most cases it will change for the better, and the effect all this is going to have on premiums is yet to be seen. But it sure looks like insurance companies are trying to make sure anyone who’s displeased aims their ire at the government, and if they can get people to buy a more expensive product along the way, they’ll be happy to do that.
By: Paul Waldman, Contributing Editor, The American Prospect, October 29, 2013
“Getting Better Coverage”: Obamacare “Sticker Shock”? What Under-Insured Think They Have Versus What They Actually Have
In a comment on resurgent talk of “sticker shock” for premiums on insurance bought through the Obamacare exchanges, Kevin Drum makes two points that are important to keep in mind. The first is that the number of people likely to see a major increase in net insurance costs–in excess of the subsidies they may qualify for–is not as large as you might think:
This probably doesn’t describe a huge demographic—people who are just barely above the subsidy threshold and currently have individual coverage and are young enough to see premium increases—but there’s no question they exist.
Those who do fit into this relatively narrow band of people will typically get better coverage for their additional dollars, but they may not appreciate it just yet. Kevin points to a woman quoted in an L.A. Times article on “sticker shock” as illustrative:
“Fullerton resident Jennifer Harris thought she had a great deal, paying $98 a month for an individual plan through Health Net Inc. She got a rude surprise this month when the company said it would cancel her policy at the end of this year. Her current plan does not conform with the new federal rules, which require more generous levels of coverage.
“Now Harris, a self-employed lawyer, must shop for replacement insurance. The cheapest plan she has found will cost her $238 a month. She and her husband don’t qualify for federal premium subsidies because they earn too much money, about $80,000 a year combined.
“‘It doesn’t seem right to make the middle class pay so much more in order to give health insurance to everybody else,” said Harris, who is three months pregnant. “This increase is simply not affordable.'”
I don’t know for sure how this plays out in the real world, but I’d be shocked if Harris’s $98 plan covers expenses related to pregnancy. If it does, the out-of-pocket max is probably astronomical. A bronze plan under Obamacare is still no picnic, but I’m willing to bet it covers a whole lot more of Harris’s maternity expenses than her current plan. In other words, there’s a pretty good chance that she’ll make up for her extra annual expense of $1,700 by sometime around, oh, April or so.
And even if she doesn’t, she now has insurance that will protect her from unforeseen medical conditions and out-of-pocket expenses even if they don’t occur. It is sometimes forgotten that every kind of insurance involves the potential of “excessive” premiums if you get lucky and don’t need it.
But more basically, the politics of Obamacare will indeed be affected by the attitudes of people who do or don’t view their enhanced insurance as having value, and do or don’t think they’re just shelling out dollars to “give health insurance to everybody else.”
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 28, 2013
“A Pliable Opportunist”: Spinning With The Political Winds, Marco Rubio Is Becoming The Next Mitt Romney
The Great Marco Rubio Recalibration continues.
Months after helping the Senate pass a sweeping immigration reform bill, the junior Republican senator from Florida has dropped his support for the legislation, saying he now favors a targeted, piecemeal approach to the issue.
It’s a stunning about-face from earlier this year, when Rubio’s soaring rhetoric and tireless efforts helped propel a comprehensive, bipartisan bill to a successful vote. And with that, Rubio risks appearing to have flip-flopped on a defining issue even faster than you can say “Mitt Romney.”
With the House resistant to take up a comprehensive immigration bill, Rubio’s spokesman on Monday said he believes a piecemeal approach is the only way anything will get done.
“The point is that at this time, the only approach that has a realistic chance of success is to focus on those aspects of reform on which there is consensus through a series of individual bills,” Rubio spokesman Alex Conant told Politico. “Otherwise, this latest effort to make progress on immigration will meet the same fate as previous efforts: Failure.”
Of course, a piecemeal approach will almost surely doom meaningful reform. The whole point of a comprehensive approach is give each side something they want, such as a pathway to citizenship for Democrats and tougher workplace enforcement for Republicans.
Conant added that Rubio always preferred a piecemeal approach (though many would debate that), but worked with the Gang of Eight anyway “despite strong opposition within his own party and at a significant and well documented political price.”
That gets at another force pushing Rubio away from his own bill: Public opinion. Or, more accurately, Republican public opinion.
Rubio’s standing within the GOP eroded all year as he was unable to convince skeptical conservatives the immigration bill was more than just amnesty for undocumented workers. Once one of the most popular GOP senators in the country, his approval rating slid into negative territory in his home state, and he fell to the middle of the pack in hypothetical polls of the 2016 GOP field.
To stem the bleeding, Rubio tiptoed away from the bill since its passage in June, saying after the government shutdown that President Obama had “undermined” the bill’s odds of passing by refusing to negotiate with Republicans over budget matters. Even before that, he took a backseat in finalizing the bill while two other GOP senators stitched together an almost comically robust border enforcement provision to win over the necessary Republican votes.
Though Rubio may indeed have preferred piecemeal bills all along, his walk-back could wind up earning him a reputation as a pliable opportunist.
“I’m not sure it has ever happened before that an architect of major legislation in the Senate has basically opposed its passage in the House,” Rich Lowry wrote in National Review. “The politics of this aren’t great for Rubio,” he added, saying the freshman senator would surely “take another hit, understandably, for his inconstancy.”
Inconstancy, though not unheard of in politics, is not a good habit to form. Accusations of flip-flopping dogged Mitt Romney’s presidential campaigns and kept him from winning over dubious voters. He tried to position himself, after years of presenting a moderate exterior, as a “severe conservative” to capture the GOP nomination. And, like Rubio, he ran away from his most visible legislative achievement: RomneyCare.
The move to the right didn’t work out so well for Romney, only further cementing his image as a man without convictions.
Rubio hasn’t earned himself quite the same reputation, and we’re a long way from 2016. But if he makes a habit of spinning with the political winds, the GOP will begin to see him less as the party’s savior, and more as the second coming of Mitt Romney.
By: Jon Terbush, The Week, October 28, 2013
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