Thursday, February 23, 2017

BREAKING Donald Trump Has Repealed Obamacare!

This is a very interesting take from political operative Dick Morris.

He reports that President Trump has ordered that the IRS not enforce the individual mandate and that Trump has changed the rules for health insurance coverage so that insurance companies can offer insurance plans that are much more flexible than what was the case under Obamacare.

In other words, a lot of the coercion of Obamacare has been eliminated by Trump already through the backdoor.



Congress can dillydally all it wants with "repeal and replace,' in fact, the more delay the better if Morris is correct in his analysis.

Here is how FiveThirtyEight reported the Trump executive order on Obamacare when Trump signed it on his first day in office:
As promised, on his first day in office, President Donald Trump took steps to undo the Affordable Care Act, former President Obama’s signature health care law. In one of his first executive orders, Trump pushed the secretary of Health and Human Services (HHS) and other federal agencies to begin weakening the law. The meaning of the executive order is both subtle and bold; on the one hand, it does very little because it doesn’t grant the administration any powers that it didn’t already have. On the other hand, it signals to the public that change is coming and lets employees at HHS know that they’d better be part of that change.

Section 2 of the order instructs the secretary of HHS to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that would place a fiscal burden on states, individuals or health-care providers. Most of the provisions in the ACA can’t just be changed by HHS or the president; they require action from Congress or a lengthy period involving public comment. Which is why it’s reasonable to assume this line is targeted at the things HHS can change, like the individual mandate. The individual mandate, which requires most people to have health insurance or face a tax penalty, has always been the most contentious part of the law...

As promised, on his first day in office, President Donald Trump took steps to undo the Affordable Care Act, former President Obama’s signature health care law. In one of his first executive orders, Trump pushed the secretary of Health and Human Services (HHS) and other federal agencies to begin weakening the law. The meaning of the executive order is both subtle and bold; on the one hand, it does very little because it doesn’t grant the administration any powers that it didn’t already have. On the other hand, it signals to the public that change is coming and lets employees at HHS know that they’d better be part of that change.

Section 2 of the order instructs the secretary of HHS to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that would place a fiscal burden on states, individuals or health-care providers. Most of the provisions in the ACA can’t just be changed by HHS or the president; they require action from Congress or a lengthy period involving public comment. Which is why it’s reasonable to assume this line is targeted at the things HHS can change, like the individual mandate. The individual mandate, which requires most people to have health insurance or face a tax penalty, has always been the most contentious part of the law...

The Affordable Care Act also mandates that insurance plans cover a set of services without charging for them (beyond monthly insurance premiums), but it’s up to HHS to lay out the specifics. For example, that part of the ACA that requires contraceptives be provided to insured women free of co-pays or deductibles? That’s not written in the law; it was part of how the law was interpreted by the Obama administration...

There are other important signals in the short executive order. It says HHS should “encourage the development of a free and open market in interstate commerce” and “provide greater flexibility to States,” suggesting that Trump will push HHS to grant more flexibility to states in how they implement the law.

It was no secret before Trump signed the executive order that he wanted the Affordable Care Act repealed, and all of these changes were possible before it was signed. But now Trump has made his intentions clear, with one of his first acts as president: The Department of Health and Human Services, “to the maximum extent permitted by law,” should get to dismantling.
NOTE: With the massive subsidies still intact, I wouldn't call the healthcare problem "solved" the way Morris does but the non-enforcement of the individual mandate, and the allowance of health insurance companies to sell catastrophic insurance without absurd Obamacare coverage appendages, has for all practical purposes resulted in Trump stabbing Obamacare with a dagger to the heart.

-RW

Wednesday, February 22, 2017

COMING SOON Your Own Personal Cargo-Carrying Servant Robot

I love free market creativity.

-RW

A Harvard Economist Reacts: "You have got to be kidding me"

Greg Mankiw, Harvard econ professor and the world's greatest living econ textbook hustler, reacts to the news that Trump wants to manipulate trade data:

You have got to be kidding me

If I did not know the source, I might have thought that this report was from The Onion:
The Trump administration is considering changing how U.S. trade deficits are calculated, a move that would make the deficit look larger on paper, the Wall Street Journal reported.  
People involved in the discussions told the Journal that the leading idea is to count “re-exports” — goods that are imported to the U.S., and then exported to a third country unchanged — as imports, but not exports.
The change would inflate the trade deficit number, an important figure in trade negotiations and policy.

Libertarian Smacks Down Tucker Carlson On Immigration

Tucker Carlson is the toughest guy on television to go up against in debate. He is very sharp and very skilled at using the television debate platform.

But when you have the facts and debate from a free market perspective, you can even knock Carlson off his game.

Alex Nowrasteh did just that against Carlson that in a debate on immigration.

Carlson had to resort to ass-backward libertarianism and the faulty argument that illegals don't pay for public services.




More on immigration here.

-RW

U.S. Existing Home Sales Rise to 10-Year High



U.S. existing home sales surged to a 10-year high in January, despite higher prices.

The National Association of Realtors reports that existing home sales jumped 3.3 percent to a seasonally adjusted annual rate of 5.69 million units last month. This is the highest level since February 2007.

At the same time, in January, the median house price increased 7.1 percent from a year ago to $228,900.

This is typical activity in the boom phase of the Fed created boom-bust business cycle.

The data flies in the face of Austrian-lites who expected a crash of the economy immediately after the 25 basis point hike in Fed-controlled interest rates in December 2015.

As I am reporting in the EPJ Daily Alert, things may be changing but, as of now, we remain in the bull phase of the business cycle.

  -RW

Shadow CIA Group Warns the End of the Eurozone May Be Near; Including a Collapse of the Currency

Stratfor, referred to by Barron's as "The Shadow CIA," is out with a video clip providing insight into its concerns that the end may be near for the Eurozone and that the euro may collapse.



-RW

Another Currency in the Procees of Being Destroyed By Hyeprinflation



Prof. Steve H. Hanke, Co-Director of The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise, in a new study provides some data on the collapse of the South Sudan pound.

One chart from the study shows the decline in the pound on black markets versus the U.S. dollar:


The inflation rate trended between 200% and 400% on an annualized basis over the year 2016. The last data point, December 2016, showed price inflation at 390%



Note: Technically, Hanke does not classify South Sudan as experiencing hyperinflation:
 [T]he monthly rate only exceeded 50 percent on two days: February 15, 2016 and February 16, 2016. South Sudan failed to ever sustain a monthly inflation rate above 50 percent for 30 consecutive days over the study period. In consequence, South Sudan did not, contrary to many reports in the financial press, experience hyperinflation.
Note 2: There is no reliable information on how much new money has been added to the money supply by the South Sudan central bank in recent years, however, when you see price inflation like this, there is no doubt the bank is pumping out money as if it were popcorn at a 24-hour circus.

   -RW

Tuesday, February 21, 2017

Trump as Scam Artist



A Don Boudreaux letter to the Wall Street Journal:
You describe Trump’s proposed scheme to artificially inflate U.S. trade-deficit figures as an attempt to “deceive” (“A Trump Statistical Trade Trick,” Feb. 21).  Exactly.  Counting goods shipped to other countries through the U.S. as U.S. imports but not as U.S. exports is simply fraudulent.

If the Trump administration gets away with this swindle, don’t be surprised to see it used for other purposes – especially, to further Trump’s goal of stoking Americans’ fears of immigrants.  The same logic that allegedly justifies what you correctly call “single-entry trade bookkeeping” would justify counting all non-Americans who come to the U.S. – even those who come only to visit – as ‘immigrants arriving in the U.S.,’ yet none who return to their home countries counted as ‘immigrants leaving the U.S.’  If this method of measuring immigration flows sounds Orwellian, it is – but it is no more so than is Trump’s proposed new method for measuring trade flows.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
The above originally appeared at Cafe Hayek

RW note: Trump is nothing but a major league street hustler and he will try to get away with whatever he can to achieve whatever his goals are. In this case to bizarrely further justify limiting trade.

Ebeling, Boudreaux and Hornberger: Smashing Basic Economic Myths

Richard Ebeling emails:

Dear Bob,

I participated in the February 21, 2017 “Libertarian Angle,” podcast sponsored by the Future of Freedom Foundation, with the Foundation’s president, Jacob G. Hornberger, on the topic: “Minimum Wage and Free Trade,” joined by our guest, Dr. Donald Boudreaux, professor of economics at George Mason University.

One of the most persistent and harmful fallacies is the belief that worker’s wages can simply be raised by government fiat by passing a minimum wage law making it illegal to hire anyone below a certain amount per hour. Rather than helping the unskilled and inexperienced to improve their economic position, minimum wage laws price out of the market many of those whose value-added from the employer’s perspective is less than the wage governments command the employer to pay.

Thus, many of those most in need of on-the-job training and workplace experience, so they may become more skilled and valuable in the future to earn a higher market-based wage, are left potentially permanently unemployed. They are prevented from moving up that ladder of success over time because the minimum wage keeps them from getting their feet on the bottom rung to start an upward climb to a higher salary down the road.

The other great fallacy is the misplaced belief that government protectionism against imported goods “saves” or “creates” jobs, and improves the economic well being of the citizens as a whole in the country putting up trade barriers against the importation and sale of foreign goods.

All such trade barriers succeed in doing is raising the prices and narrowing the choices of goods available to the consumers in the country practicing trade protectionism. It undermines the cost-efficiencies and productivity of a wider, global specialization in worldwide system of division of labor, with the result that the standard of living in the protectionist country either declines, or at a minimum improves far less than could be case under freedom of trade. The beneficiaries are those protected industries and sectors of the protectionist country that do not have to face the competitive offerings of their foreign rivals, at the expense of the other members of the consuming public in that society.

Also emphasized by all three of us in the discussion is that whether it is minimum wage laws or barriers to trade, both entail a common feature: The denial of individual liberty and freedom of choice by the citizens in the country practicing these interventionist policies. The government arrogantly and presumptuously claims the authority to tell people with whom they may enter into mutually agreeable trades, whether it is a wage contract for employment or the buying and selling of desired goods in the marketplace.

And, thus, governments impose forms of economic tyranny on the people living under such political paternalism and special interest privilege.

Best,
Richard

  -RW

Harvard Educated Economist Clueless About the Fundamentals of Economics (Robot Edition)

Jeffrey Sachs attended Harvard College, where he received his bachelor of arts summa cum laude in 1976. He went on to receive his MA and Ph.D. in economics from Harvard.

He now teaches at Columbia University.

Despite his educational pedigree, the man is clueless when it comes to fundamentals of economics.

In a short youtube, he blurts out more economic fallacies than John Maynard Keynes was able to make in an entire book.



Sachs appears to understand that robots make the economy more productive but he doesn't seem to understand that this results in more product* available for all, including the masses. He babbles on about the mythical "problem of inequality." If the product tide is rising for everyone, who cares if it rises a bit more for those who are responsible for the tide to be increasing in the first place?

Sachs somehow doesn't get this. In the video, he states that "income is shifting from workers to capital (he means capitalists)." But it is not a shift in absolute income, everyone's income (that is, access to more product) occurs, though proportionality it could very well be a greater gain for the capitalists who have created the product increase by investing in robots. This is not a shift in a static amount of income, it is an increase income for all.

But because Sachs doesn't get that it is a gain for all, he proposes all kinds of government interventions that fix a problem of shifting income that doesn't exist---and in the process advocates policies that create a less incentivized economy that will produce less product.

He states in the video that we need an economy that "shares benefits." By this, he means taking income from those who have expanded the array of products through capital investment and giving some of that income to those who have not made such investments. He specifically suggests that the young should be given such a payout. He proposes that:
Every young person is given a certain amount of basically financial assets or capital.  It's like saying everyone can have at least one robot so that as the robots get better and better in the future everyone is sharing in the benefits of an expanding economy.
Again, who says that everyone isn't gaining product in an economy that experiences broad-based gains in robotic productivity? But, further, who says everyone has equally ability in the handling of capital or robot investment? This is an absurd notion. In a free market, capital tends to move toward those who are most capable of employing it efficiently. To take capital away from efficient allocators and spread it around to everyone in an economy is the equivalent of taking medical equipment and spreading a little bit around to everyone in the economy for "medical equipment equality": "Hey you, here's a CAT scan machine, and you, kid, here's a LGO-Fistula Proctology Probe." This is insanity.

Robots don't cause a "distribution problem." If robots only made products for the rich then the masses would still have their old jobs before robots were introduced. But this isn't the case. Robots also make products for the mass market creating more product for all including the masses, which would benefit those who shift to new jobs because of the robots---and there are always jobs, see: Forget Robots, I Need a ManServant.

There is no need for crazed micro-management of the robot world by the robot-looking Jeffrey Sachs. His policies, if enacted, would only make the economy less productive. His view needs to be replaced with a robot that says, "Leave it to the free market."

 -RW

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* I am using the term product to mean both product and service for brevity's sake.