Ratcheting Up for New Water Laws

Does California’s water shortage warrant immediate water rationing by state authorities? Jay Famiglietti, a senior water scientist at NASA’s Jet Propulsion Laboratory at Caltech, thinks so. If this sounds familiar, it’s because his March 12 Los Angeles Times op-ed advocating such drastic actions made national headlines, and his op-ed and the resulting news coverage have circulated widely over social media.

Familglietti underscores the seriousness of California’s drought and water shortage. Unfortunately, he jumps into the deep end when he urges the state to impose “immediate mandatory water rationing [that] should be authorized across all of the state’s water sectors, from domestic and municipal through agricultural and industrial.” The crisis is real, but mandatory rationing is the wrong approach.

There’s another reason this episode has the ring of familiarity. Here, we see an authority figure calling for the growth of the State during an emergency—a call for government action that reminds us of the “ratchet effect,” made famous by Robert Higgs in Crisis and Leviathan, in which a State expands during an emergency but often fails to return to its original size after the emergency has passed.


Shining Spotlight on Bogus U.C. Berkeley “Think Tank” During National Sunshine Week

19372710_MThis week is National Sunshine Week, a time when many journalists across America publish stories on government spending and transparency. One organization that needs more sunshine is the Institute for Research on Labor and Employment (IRLE) at the University of California at Berkeley, a union propaganda mill disguised as an academic think tank and financed with taxpayer dollars.

The IRLE receives money from the State of California to churn out shoddy and biased research timed to influence election results. It released two reports examining proposals to increase the minimum wage in San Francisco and Oakland before voters cast their ballots. Voters subsequently approved both wage hikes. The Oakland increase went into effect on March 2, a nearly 36 percent increase to $12.25 an hour. San Francisco’s hourly minimum wage increased to $11.05 on January 1, and will increase to $12.25 on May 1, matching Oakland’s rate.


Obamacare Costs Are Shrinking – So Should Its Taxes

health_costsThe Congressional Budget Office’s March budget baseline updates the agency’s estimates of costs and insurance coverage due to Obamacare. The March baseline estimates that the gross cost of Obamacare’s subsidies and Medicaid spending for the years 2016 through 2025 will be $1.7 trillion, $286 billion less than it had estimated in the January baseline.

The CBO calculates a so-called “net cost” by subtracting revenues from businesses and individuals paying the mandate/fine/penalty/tax for not buying Obamacare, the “Cadillac tax” on high-cost health cost insurance, and the effect of changes in taxable compensation. This net cost has shrunk by $142 billion to $1,207 billion.

Even more impressive are the reductions in the cost of Obamacare from the CBO’s original March 2010 score of Obamacare. The two estimates overlap for the seven years, 2015 through 2021. The original estimate was that Obamacare’s gross cost would be $1.4 trillion over the period, and the net cost $1 trillion. These have shrunk to $992 billion and $751 billion, reductions of 28 percent and 29 percent.


Weak Health Jobs Growth; Mostly in Hospitals and Physicians’ Offices

Healthcare_costs_small1Last Friday’s employment report, cheered as positive, had a grey lining for health workers, corroborating last December’s signal of weakness.

Total nonfarm payroll increased by 295,000 from January, but only 24,000 (fewer than 8 percent of the total) were health jobs. And 9,000 of those jobs were in hospitals. Physicians’ offices saw 7,000 jobs, but employment in other health facilities grew only slightly or shrank (Table 1).

Looking at the longer term, job growth in health has been about the same as in other sectors. However, the composition of the health workforce is clearly changing. Hospitals added 70,000 jobs, but that from a headcount of 4.8 million. Physicians’ offices, which employed only 2.5 million in February 2014, added 74,000 jobs in the last twelve months (Table 2).


Military Aid — “If We Don’t Do It, Someone Else Will”

“If we don’t do it, someone else will.” If I had a nickel for every time someone said this to me in regard to U.S. foreign policy, I’d have enough to pay off the rest of my student loans and put any future children through college.

This is particularly true when it comes to the idea of the U.S. providing arms to foreign nations. Advocates of this practice argue that the U.S. can maintain significant control over international peace and stability and effectively implement its policies, all while enhancing the domestic economy.

If the United States government were to lose this tool or relinquish its position, it is claimed that other governments may step into this role, reap the benefits, and possibly implement policies that counter U.S. interests.


A Case for Patent Reform

Arthur M. Diamond makes his case for patent reform in the Winter 2015 issue of The Independent Review.

Arthur M. Diamond, Jr., makes his case for patent reform in the Winter 2015 issue of The Independent Review.

For many decades most economists believed patents were key to the innovation and material progress enjoyed by the West. In recent years, however, many have looked at patents with growing skepticism, with some even suggesting that the patent system be scrapped. In contrast, economist Arthur M. Diamond Jr. (Univ. of Nebraska at Omaha) believes these critics miss their mark. Diamond recognizes that the U.S. patent system has major problems, including overly costly litigation, but he holds that it can and should be mended, not ended. He makes his case in “Seeking the Patent Truth: Patents Can Provide Justice and Funding for Inventors,” the lead article of the Winter 2015 issue of The Independent Review.

Diamond begins by arguing that critics and defenders of patents often share false assumptions. For example, both camps tend to overlook what he regards as patents’ primary moral purpose: to provide justice to inventors. They also tend to misunderstand patents’ main economic function: Their actual role isn’t to incentivize inventors to invent, but rather to enable them to do so—such as through the licensing of their patents to manufacturers. (Thomas Edison relied on this practice early in his career.)


Senate Dems: Get Pregnant, Then Get Health Insurance

HealthInsWhile everyone else is wondering whether or not the Supreme Court will strike down the Obamacare tax benefits in 37 jurisdictions (36 states plus Washington, D.C.) with the actual Affordable Care Act as written, some Democratic U.S. Senators are urging women to dig deeper into Obamacare by encouraging them to delay getting health insurance until after they become pregnant.

As reported by Lydia Wheeler in The Hill, Senator Patty Murray has round up 36 signatures on a letter addressed to U.S. Health & Human Services Secretary Sylvia Burwell, urging her to pull yet another “special enrollment period” out of her bag of tricks.

In a statement, Christina Postolowski, health policy manager of Young Invincibles, said she’s thrilled to see a growing chorus of leaders calling on the administration to create a special open enrollment period to make maternity coverage available to pregnant women year-round.

According to Postolowski’s December 2014 report “Without Maternity Coverage” maternity care and delivery ranges from $10,000 to $20,000 without complications.

Secretary Burwell has recently conjured up a special enrollment period, in April, for those who are shocked to learn from the IRS that they must pay a fine (or tax or penalty) for not having Obamacare-qualifying coverage in 2014.


The Power Elite

Women are equal
Madeleine lusts for murder
Hillary’s on board

Uncertain prospect
Cheney and Wolfowitz weep
‘Cause peace might break out

Mission accomplished
Bush II stages a cool stunt
Women and kids die

So sorry, Saddam
No nukes, yet Shrub keeps his seat
Condi skips debate

No one’s in prison
Guilty parties sit pretty
All is forgiven

United States of Fear

[F]irst of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory.

Many people will recognize these as the words of former President Franklin D. Roosevelt. After taking the oath of office on Saturday, March 4, 1933, Roosevelt delivered his inaugural address, containing the now famous line. In his speech, the President spoke to a crowd in the early throws of the Great Depression. High unemployment and an uncertain future had many Americans wondering, “What’s next?”


How Much of Federal Transfer Payments Are Obamacare Subsidies? More than You Think!

franklin_doctorJanuary’s Personal Income and Outlays report from the Commerce Department’s Bureau of Economic Analysis shows how significant Obamacare’s subsidies to households have become. Last month, they accounted for 21 percent of the increase in total government transfer payments to households:

Personal current transfer receipts increased $24.8 billion in January, compared with an increase of $13.8 billion in December. The January estimates of current transfer receipts reflected several special factors…. Other government social benefits to persons was boosted $5.3 billion, primarily reflecting health insurance premium subsidies paid in the form of tax credits to enrollees of the Affordable Care Act exchanges.