The Independent Institute


My Political Endorsement, as It Were

thumbs_downI notice that many people are making public announcements these days to identify which candidates they will endorse for the presidency and other public offices in the coming elections. Encountering these statements, I often shake my head because I have no idea who the endorser is or, when I do recognize the name, because he or she is such a nonentity that I wonder, “Who cares whom you endorse?” However that may be, in view of the cavalcade of nobodies who are making endorsements, I suppose it will do no great harm if I make an announcement of my own in this regard. So here is my public statement (my private statement is not suitable for a family-friendly website).

I will not endorse any of the candidates seeking the Republican or Democratic Party nominations for election to the presidency nor any of those seeking a nomination by the minor parties nor any of those seeking nomination for election to lesser offices. Indeed, I will not endorse the election itself. Finally, I will not endorse the continued existence of the nation-state over which these aspirants seek to preside. Enough is enough. I will not give my endorsement to politics as usual, a process by which competing parties seek to gain control the state’s powers in order to plunder and bully the people at large for the sake of their principal supporters.

Oh that all other people would join me in withdrawing their endorsement—indeed, their acquiescence and endurance. Decent people ought to flee the whole diabolical process, leaving only those who are criminally inclined to assault their fellow human beings to go to war exclusively against one another without sacrificing the bodies, souls, and wealth of innocent parties.

Dog Barks, Your Fourth Amendment Rights Disappear

police_dog2Dog barks, that’s enough
Cops steal your cash, guns, and car
Civil forfeiture

Dog’s false positive
Cops and judges play along
Government at work

Insurers Increase Taxpayers’ Costs in Obamacare Exchanges

10750151_MLIn the latest budget update, published in March, the Congressional Budget Office estimated 10 million people would be enrolled in taxpayer-subsidized Obamacare health plans with a total subsidy (via tax credits) of $32 billion this year. That would amount to an average subsidy per enrollee of $267 per month.

In April, analysts at the government agency running Obamacare reported the average Obamacare subsidy will be $280 – $13 higher than CBO estimated. That may not be a big deal, but what is interesting is how much more of the cost of Obamacare has been shifted onto taxpayers in the program’s third year.

According to the same government agency, the average Obamacare exchange premium increased from $346 in 2014 to $386 this year. That comprises 12 percent growth over two years. The average tax credit subsidizing coverage increased from $264 to $280, or just six percent. Therefore, the average net premium increased from $82 to $106, or 29 percent.

However, when we look at each year individually, it is clear insurers have learned how to shift more costs to taxpayers. The change in gross premium from 2014 to 2015 was ten dollars per month, or three percent. The tax credit actually declined by ten dollars, or four percent. So, the net premium increased by $20, or 24 percent.

Harriet Tubman and America’s Immigration Hypocrisy

12201345_MLLast week it was announced that Harriet Tubman would replace Andrew Jackson on the twenty-dollar bill. The announcement was met with mixed reactions, though most seem to be positive. Placing a woman of color on American currency, an honor which thus far has been reserved for the Founding Fathers, is undoubtedly an event, one with deep symbolic significance if nothing else.

Tubman was born into slavery in Maryland. In 1849, her owner died and his widow began making arrangements to sell their slaves. It was at this juncture that Tubman decided to flee.

Tubman succeeded in her escape and became an integral part of the “Underground Railroad,” a network dedicated to helping slaves escape to the free north or Canada. According to documentation, she made 13 trips to Maryland and helped to free some 70 people. She became a well-known abolitionist and worked for the Union Army during the Civil War. She worked as a nurse caring for soldiers and liberated slaves and participated in an assault on several southern plantations. Following the war’s conclusion, she returned to her home in New York and took up the cause of women’s suffrage.

Wall Street Enabled Detroit’s Collapse?

8454285_MLUSA Today published a book review of Nathan Bomey’s book, Detroit Resurrected: To Bankruptcy and Back. I haven’t read the book (which just came out today), so my gripe isn’t with the book but with the spin USA Today is putting on it, starting with the title of the review: “How Wall Street enabled Detroit’s collapse.”

The idea of business being an enabler for government’s bad decisions strikes me as absurd for two reasons. First, the proponents of government argue that government should be making decisions for people because left to their own devices, they’ll make bad ones themselves. Second, with the recent vilification of the financial industry, the proponents of government argue that the industry needs more government regulation, oversight, and control.

First: Government’s proponents advocate giving government control over what substances individuals can ingest into their bodies, from recreational drugs to sugary drinks. They want government control over what types of products we can buy, ranging from mandatory safety requirements for automobiles, children’s toys, ladders, and almost everything else that’s offered on the market. Why would people think that a government that makes bad decisions for itself will make good decisions for its citizens?

Even more absurd, they want government control over our saving, requiring that workers pay into the mandatory Social Security system because people aren’t responsible enough to manage their own financial affairs. And now, this article is telling readers that government cannot even manage its own finances, and is misled by the financial industry it oversees and regulates.

Are Prescription Drug Prices Becoming as Meaningless as Hospital Charges?

Professor Jack Hoadley of Georgetown University recently gave an excellent presentation discussing prices of prescription drugs. Two slides stand out. First, a slide showing how much prescription spending is controlled by insurers and governments versus patients directly:

Graham 1

As recently as 1990, patients controlled over half of drug spending. Today, it is under 20 percent. Has this cost shift made drugs more “affordable”? Obviously not: 8 percent of patients do not take medicines as prescribed, because of cost. Hillary Clinton promises to impose government price controls on drugs if she becomes president.

Tax Freedom Day 2016

33033557_MLAccording to the Tax Foundation, “Tax Freedom Day” this year falls on April 24th—six days after 2015’s personal income tax returns were due (on the 18th if you forgot to file). April 24 marks the day on which the average American will have earned enough income to pay his or her total local, state and federal tax bill, which includes payroll taxes, sales taxes, excise taxes, property taxes, corporate income taxes and and taxes on individual incomes.

The total bill amounts to $4.9 trillion, of which $3.6 trillion goes to Uncle Sam. Since Americans now spend a bit more than $4 trillion on food, clothing and shelter every year, local, state and federal taxes represent the single largest drain on the typical family’s budget.

One interesting wrinkle here is that Pfizer just announced the cancellation of its proposed $160 billion merger with Ireland-based Allergan, owing to worries about new U.S. Treasury rules designed to prevent so-called tax inversions. Such strategies, implemented by, for example, Burger King, which moved its corporate headquarters to Canada, are aimed, rationally it should be said, at reducing a company’s total tax liabilities by relocating to a lower-tax jurisdiction.

The federal corporate income tax rate in the United States tops out at 39 percent of taxable income. It is near the top of the list (tied with France) of the highest corporate income tax rates levied by developed nations belonging to the Organization of Economic Cooperation and Development (OECD). Many localities and states also tax corporate income; corporate earnings distributed to investors as dividends are taxed again at the taxpayer’s individual income tax rate. So, too, are capital gains when ownership shares (stocks) are sold.

Obama Administration Continues to Bail Insurers Out of Exchanges

38932590_MLThe Obama Administration refuses to concede defeat in its struggle to save Obamacare’s exchanges. The exchanges lost one-quarter of their members in 2015. The Blue Cross Blue Shield Association has reported its insurance plans have enrolled people significantly sicker (and more expensive) than anticipated. Finally, UnitedHealth Group, the nation’s largest insurer, will drop out of most of the exchanges in which it is participating.

Desperate to induce insurers to continue participating in exchanges, the administration suggested it would make illegal payments from “risk corridors,” a risk-mitigation mechanism that moves money between insurers to stabilize their profits in Obamacare’s first three years. Republicans in Congress put a stop to that in 2014.

So, the administration proposes apparently illegal payments from another risk-mitigation fund, called “reinsurance.” Reinsurance is described in section 1341 of the Affordable Care Act, which directs the Secretary of Health & Human Services to collect $20 billion from insurers for the years 2014 through 2016. This $20 billion is then paid out to insurers that disproportionately enroll very expensive patients, according to calculations determined by the Secretary and the National Association of Insurance Commissioners.

Death to “Safe Spaces”

39703687_MLThe 1994 film “PCU” is a tale of a senior in high school who visits Port Chester University (otherwise known as Politically Correct University) over a weekend. In error, the admissions department sets the student up to stay with Droz, a 7th year senior. Living with Droz in a place called “the Pit,” it makes for an interesting weekend.

Droz and his friends begin the weekend by disrupting a protest. They throw meat on a group of vegans and make enemies with a variety of other groups on campus including a bunch of stoners, radical feminists (the “Womynists”), and an Afrocentrist group. The president of the fictional university is positively obsessed with “sensitivity awareness” and multiculturalism. Among a variety of other policies (suggesting, for example, that Bisexual Asian Studies be given their own building) she proposes changing the school’s mascot from a potentially offensive Native American character to a whooping crane.

The rest of the film centers around Droz and his cohorts fighting to keep their living space on campus by throwing a massive keg party (while simultaneously locking the Board of Trustees in a room with the song “Afternoon Delight” playing loudly on repeat).

In a recent episode, the show South Park took up the topic of political correctness and college campuses, discussing the prevalence of and continuous push for “safe spaces.” The episode culminated in the townspeople hanging the only thing questioning their safe spaces—a man named Reality.

Health Status Is Associated with Income, Not Health Insurance

11502028_MLAn extremely thorough analysis of changes in incomes and mortality in the United States, 2001 through 2014, presents sobering findings for those who think fixing our health system will make us healthier. The study, let by Raj Chetty of Stanford University, ran data on incomes and mortality through a battery of statistical tools.

It is well understood that people in high-income households are healthier than those in low-income households. The latest research demonstrates how important incomes are to health status. Forty-year old men in households in the highest quartile of income (mean = $256,000 annually) had an average life expectancy just under 85 years in 2001. This increased by 0.20 years (a little over ten weeks) by 2014. For those in the lowest quartile ($17,000), life expectancy was about 76 years in 2001, and it increased only 0.08 years (a little over four weeks) by 2014.

Obamacare is likely to accelerate this gap, because it significantly reduces incentives for people in low-income households to increase their incomes.

The research really gets interesting when it explores other factors explaining lifespan. Unsurprisingly, smoking, obesity, and exercise were moderately significant factors for people at all income levels. However, other factors had opposite effects at higher incomes than lower incomes.