Monday, January 31, 2011

ObamaCare: read Judge Vinson's ruling

If you would like to read Judge Vinson's ruling regarding the unconstitutional individual mandate within ObamaCare, a link appears below to the entire ruling. (1) (2)

On page 77 and concluding on page 78 appears the flollowing:

“For all the reasons stated above and pursuant to Rule 56 of the Federal Rules of Civil Procedure, the plaintiffs’ motion for summary judgment (doc. 80) is hereby GRANTED as to its request for declaratory relief on Count I of the Second Amended Complaint, and DENIED as to its request for injunctive relief; and the defendants’ motion for summary judgment (doc. 82) is hereby GRANTED on Count IV of the Second Amended Complaint. The respective cross-motions are each DENIED.

In accordance with Rule 57 of the Federal Rules of Civil Procedure and Title 28, United States Code, Section 2201(a), a Declaratory Judgment shall be entered separately, declaring “The Patient Protection and Affordable Care Act” Unconstitutional.” (3)

Link appears below:




ObamaCare: and then there were 28

Twenty six states and their respective state attorney generals joined a law suit opposing the individual mandate provision of ObamaCare. That requiring US Citizens to purchase health insurance was unconstitutional.

The twenty six states had their case heard in Florida. A separate case was heard in December with Virginia alone opposing the individual mandate.

In both the Florida case and the Virginia case the individual mandate was held as unconstitutional. And then there were 27. Number 28 is Oklahoma in their own separate law suit opposing the individual mandate.

'Judge Roger Vinson, a Reagan appointee serving in Pensacola, Florida, ruled that key components of the law are unconstitutional and that the entire law "must be declared void." '(1)

Who are the twenty six states joined in today's law suit ruling? Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Indiana, Idaho, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming. (2)




Saturday, January 29, 2011

Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services

Let's Talk About ObamaCare - Kim Strassel, Wall Street Journal, Political Diary, 01/28/2011

"Their health-care repeal vote behind them, Republicans this week got down to exercising the power of hearings that House control now affords them. And the Obama administration, for its part, got a glimpse of how painful those hearings will prove to its policy causes.

Fresh off of his State of the Union response, House Budget Chairman Paul Ryan plowed into a hearing Wednesday morning on the true costs of ObamaCare -- a public-education service that Mr. Ryan has been performing for much of this past year. Now finally wielding the spotlight, Mr. Ryan called as a witness Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services. Mr. Foster, whose job is to provide independent economic analysis, confirmed the central charges that Republicans have leveled at the health-care law.

Mr. Foster was asked by California Rep. Tom McClintock to provide true or false responses to two key questions. The first: Will ObamaCare bring down medical costs? Mr. Foster's answer: "I would say false, more so than true." Behind his argument was the obvious -- that because the law now requires coverage for people who weren't covered before, costs will by necessity rise.

The second: Will the law allow people to keep their current health insurance? Mr. Foster: "Not true in all cases." Mr. Foster's office has projected that some seven million members of Medicare Advantage -- which was hurt by the law -- will have to find other coverage. Mr. Foster also took a whack at the slippery accounting that was used to calculate the cost of the legislation.

This isn't Mr. Foster's first time as the health-care party pooper. He's developed a reputation for skepticism about political promises made by members of both parties. His non-rosy projections tweaked the Obama administration during the ObamaCare debate, just as his financial warnings annoyed the Bush administration during the run-up to the creation of its prescription-drug plan. And if Republicans have their way, Mr. Foster will no doubt continue to be in front of the cameras over the coming months."

Sunday, January 23, 2011

ObamaCare: is legislation "law"?

Economic Liberty Lecture Series - Donald J. Boudreaux from The Future of Freedom Foundation on Vimeo.

Dr. Donald J. Boudreaux of George Mason University lectures on the topic of Liberty, Legislation, and Law. The discussion is fascinating in that his premise is that legislation is not law. He argues, much as F.A. Hayek argued, that "law" is derived from general social norms. Boudreaux gives some most excellent examples in his presentation.

The entire video is intriguing. Regarding ObamaCare, Boudreaux makes reference at 33:00 - 34:30 of the video to some interesting aspects of ObamaCare legislation. Boudreaux makes an excellent point that unread legislation, those purveyors of the legislation having not read the legislation they indeed passed into "law" would have an extremely difficult time stating someone broke their "law" as they themselves don't know, have not read, have not studied, have not researched the very law they would attempt to enforce.

Also try 52:20 - 55:10 in the question and answer session. Boudreaux fields a very interesting question on the ObamaCare topic.

HT Seth at Our Dinner Table

ObamaCare: a less demanding parasite?

"However that may be, since we must turn to what the socialists call a parasite, which of the two—the merchant or the public official—is the less demanding parasite?" - Frédéric Bastiat, French economist, 1848. (1)

" Our country, it is increasingly clear, has arrived at a pivotal moment – perhaps the pivotal moment – in its history. Together, we face a choice between two futures. One is a collectivist future where the federal government claims ever increasing shares of our income and grants itself the authority to make decisions affecting virtually every aspect of our daily lives. The other future is built upon the idea that individual freedom trumps government authority, and that in those rare cases when solving a problem requires government, the government that governs best is the one that is smallest and closest to the people." - Edwin J. Feulner, Ph.D., President, The Heritage Foundation, 2011 (2)

Frédéric Bastiat wrote a famous essay entitled What Is Seen and What Is Not Seen. (3) Bastiat exposed many economic fallacies within this single essay. Feulner echos the argument Bastiat made regarding his quote above. That is, that the collectivist argument is that only institutions of state can deliver the collectivist vision.

What was Bastiat's argument regarding collectivists wanting to deliver their vision through state and the institutions of state? Part of Bastiat's argument appears below:

Middlemen -Frédéric Bastiat

Society is the aggregate of all the services that men perform for one another by compulsion or voluntarily, that is to say, public services and private services.

The first, imposed and regulated by the law, which is not always easy to change when necessary, can long outlive their usefulness and still retain the name of public services, even when they are no longer anything but public nuisances. The second are in the domain of the voluntary, i.e., of individual responsibility. Each gives and receives what he wishes, or what he can, after bargaining. These services are always presumed to have a real utility, exactly measured by their comparative value.

That is why the former are so often static, while the latter obey the law of progress.

While the exaggerated development of public services, with the waste of energies that it entails, tends to create a disastrous parasitism in society, it is rather strange that many modern schools of economic thought, attributing this characteristic to voluntary, private services, seek to transform the functions performed by the various occupations.

These schools of thought are vehement in their attack on those they call middlemen. They would willingly eliminate the capitalist, the banker, the speculator, the entrepreneur, the businessman, and the merchant, accusing them of interposing themselves between producer and consumer in order to fleece them both, without giving them anything of value. Or rather, the reformers would like to transfer to the state the work of the middlemen, for this work cannot be eliminated.

The sophism of the socialists on this point consists in showing the public what it pays to the middlemen for their services and in concealing what would have to be paid to the state. Once again we have the conflict between what strikes the eye and what is evidenced only to the mind, between what is seen and what is not seen.

It was especially in 1847 and on the occasion of the famine that the socialist schools succeeded in popularizing their disastrous theory. They knew well that the most absurd propaganda always has some chance with men who are suffering; malesuada fames.

Then, with the aid of those high-sounding words: Exploitation of man by man, speculation in hunger, monopoly, they set themselves to blackening the name of business and throwing a veil over its benefits.

"Why," they said, "leave to merchants the task of getting foodstuffs from the United States and the Crimea? Why cannot the state, the departments, and the municipalities organize a provisioning service and set up warehouses for stockpiling? They would sell at net cost, and the people, the poor people, would be relieved of the tribute that they pay to free, i.e., selfish, individualistic, anarchical trade."

The tribute that the people pay to business, is what is seen. The tribute that the people would have to pay to the state or to its agents in the socialist system, is what is not seen.

What is this so-called tribute that people pay to business? It is this: that two men render each other a service in full freedom under the pressure of competition and at a price agreed on after bargaining.

When the stomach that is hungry is in Paris and the wheat that can satisfy it is in Odessa, the suffering will not cease until the wheat reaches the stomach. There are three ways to accomplish this: the hungry men can go themselves to find the wheat; they can put their trust in those who engage in this kind of business; or they can levy an assessment on themselves and charge public officials with the task.

Of these three methods, which is the most advantageous?

In all times, in all countries, the freer, the more enlightened, the more experienced men have been, the oftener have they voluntarily chosen the second. I confess that this is enough in my eyes to give the advantage to it. My mind refuses to admit that mankind at large deceives itself on a point that touches it so closely.

However, let us examine the question.

For thirty-six million citizens to depart for Odessa to get the wheat that they need is obviously impracticable. The first means is of no avail. The consumers cannot act by themselves; they are compelled to turn to middlemen, whether public officials or merchants.

However, let us observe that the first means would be the most natural. Fundamentally, it is the responsibility of whoever is hungry to get his own wheat. It is a task that concerns him; it is a service that he owes to himself. If someone else, whoever he may be, performs this service for him and takes the task on himself, this other person has a right to compensation. What I am saying here is that the services of middlemen involve a right to remuneration.

However that may be, since we must turn to what the socialists call a parasite, which of the two—the merchant or the public official—is the less demanding parasite?

Business (I assume it to be free, or else what point would there be in my argument?) is forced, by its own self-interest, to study the seasons, to ascertain day by day the condition of the crops, to receive reports from all parts of the world, to foresee needs, to take precautions. It has ships all ready, associates everywhere, and its immediate self-interest is to buy at the lowest possible price, to economize on all details of operation, and to attain the greatest results with the least effort. Not only French merchants, but merchants the whole world over are busy with provisioning France for the day of need; and if self-interest compels them to fulfill their task at the least expense, competition among them no less compels them to let the consumers profit from all the economies realized. Once the wheat has arrived, the businessman has an interest in selling it as soon as possible to cover his risks, realize his profits, and begin all over again, if there is an opportunity. Guided by the comparison of prices, private enterprise distributes food all over the world, always beginning at the point of greatest scarcity, that is, where the need is felt the most. It is thus impossible to imagine an organization better calculated to serve the interests of the hungry, and the beauty of this organization, not perceived by the socialists, comes precisely from the fact that it is free, i.e., voluntary. True, the consumer must pay the businessman for his expenses of cartage, of trans-shipment, of storage, of commissions, etc.; but under what system does the one who consumes the wheat avoid paying the expenses of shipping it to him? There is, besides, the necessity of paying also for service rendered; but, so far as the share of the middleman is concerned, it is reduced to a minimum by competition; and as to its justice, it would be strange for the artisans of Paris not to work for the merchants of Marseilles, when the merchants of Marseilles work for the artisans of Paris.

If, according to the socialist plan, the state takes the place of private businessmen in these transactions, what will happen? Pray, show me where there will be any economy for the public. Will it be in the retail price? But imagine the representatives of forty thousand municipalities arriving at Odessa on a given day, the day when the wheat is needed; imagine the effect on the price. Will the economy be effected in the shipping expenses? But will fewer ships, fewer sailors, fewer trans-shipments, fewer warehouses be needed, or are we to be relieved of the necessity for paying for all these things? Will the saving be effected in the profits of the businessmen? But did your representatives and public officials go to Odessa for nothing? Are they going to make the journey out of brotherly love? Will they not have to live? Will not their time have to be paid for? And do you think that this will not exceed a thousand times the two or three per cent that the merchant earns, a rate that he is prepared to guarantee?

And then, think of the difficulty of levying so many taxes to distribute so much food. Think of the injustices and abuses inseparable from such an enterprise. Think of the burden of responsibility that the government would have to bear.

The socialists who have invented these follies, and who in days of distress plant them in the minds of the masses, generously confer on themselves the title of "forward-looking" men, and there is a real danger that usage, that tyrant of language, will ratify both the word and the judgment it implies. "Forward-looking" assumes that these gentlemen can see ahead much further than ordinary people; that their only fault is to be too much in advance of their century; and that, if the time has not yet arrived when certain private services, allegedly parasitical, can be eliminated, the fault is with the public, which is far behind socialism. To my mind and knowledge, it is the contrary that is true, and I do not know to what barbaric century we should have to return to find on this point a level of understanding comparable to that of the socialists.

The modern socialist factions ceaselessly oppose free association in present-day society. They do not realize that a free society is a true association much superior to any of those that they concoct out of their fertile imaginations.

Let us elucidate this point with an example:

For a man, when he gets up in the morning, to be able to put on a suit of clothes, a piece of land has had to be enclosed, fertilized, drained, cultivated, planted with a certain kind of vegetation; flocks of sheep have had to feed on it; they have had to give their wool; this wool has had to be spun, woven, dyed, and converted into cloth; this cloth has had to be cut, sewn, and fashioned into a garment. And this series of operations implies a host of others; for it presupposes the use of farming implements, of sheepfolds, of factories, of coal, of machines, of carriages, etc.

If society were not a very real association, anyone who wanted a suit of clothes would be reduced to working in isolation, that is, to performing himself the innumerable operations in this series, from the first blow of the pickaxe that initiates it right down to the last thrust of the needle that terminates it.

But thanks to that readiness to associate which is the distinctive characteristic of our species, these operations have been distributed among a multitude of workers, and they keep subdividing themselves more and more for the common good to the point where, as consumption increases, a single specialized operation can support a new industry. Then comes the distribution of the proceeds, according to the portion of value each one has contributed to the total work. If this is not association, I should like to know what is.

Note that, since not one of the workers has produced the smallest particle of raw material from nothing, they are confined to rendering each other mutual services, to aiding each other for a common end; and that all can be considered, each group in relation to the others, as middlemen. If, for example, in the course of the operation, transportation becomes important enough to employ one person; spinning, a second; weaving, a third; why should the first one be considered more of a parasite than the others? Is there no need for transportation? Does not someone devote time and trouble to the task? Does he not spare his associates this time and trouble? Are they doing more than he, or just something different? Are they not all equally subject, in regard to their pay, that is, their share of the proceeds, to the law that restricts it to the price agreed upon after bargaining? Do not this division of labor and these arrangements, decided upon in full liberty, serve the common good? Do we, then, need a socialist, under the pretext of planning, to come and despotically destroy our voluntary arrangements, put an end to the division of labor, substitute isolated efforts for co-operative efforts, and reverse the progress of civilization?

Is association as I describe it here any the less association because everyone enters and leaves it voluntarily, chooses his place in it, judges and bargains for himself, under his own responsibility, and brings to it the force and the assurance of his own self-interest? For association to deserve the name, does a so-called reformer have to come and impose his formula and his will on us and concentrate within himself, so to speak, all of mankind?

The more one examines these "forward-looking" schools of thought, the more one is convinced that at bottom they rest on nothing but ignorance proclaiming itself infallible and demanding despotic power in the name of this infallibility.

I hope that the reader will excuse this digression. It is perhaps not entirely useless at the moment when, coming straight from the books of the Saint-Simonians, of the advocates of phalansteries, and of the admirers of Icaria, tirades against the middlemen fill the press and the Assembly and seriously menace the freedom of labor and exchange.


(1) The Seen and the Unseen, Frédéric Bastiat,

(2)The House Repealed Obamacare. What Next?

(3)(4)The Seen and the Unseen, Frédéric Bastiat.

Friday, January 21, 2011

ObamaCare: got waiver?

Need a waiver to escape ObamaCare?

Over 220 ObamaCare waivers to unions, corporations, and non-profits have been granted by the Department of Health and Human Services (HHS) as of 12/03/2010. The HHS Secretary is Kathleen Sebelius.

The complete list of waivers as of 12/03/2010 can be found at the link below:

ObamaCare repeal vote: final results

Official Results from Washington Downs:

The match race between ObamaCare and Repeal ObamaCare was over in the backstraight as the morning line played out. Repeal ObamaCare distanced ObamaCare and was still driving at the finish.

The foal ObamaCare was seen stumbling on it hotwalk after the race.

Final pari-mutal results appear above.

Thursday, January 20, 2011

Social Security Insolvency

Social Security's huge unfunded future entitlements leading to a bankrupt plan has grabbed many headlines in the past several years. However, it can be difficult to put your arms around such a monster of an issue.

Dan Mitchell of the Cato Institute has put together an eight minute video that makes the issues much more understandable. You will be surprised how many countries around the world have already adopted plans to solve their particular unfunded retirement plans. The most interesting example is Australia which solved their retirement funding plan some twenty five years ago. Link to the video appears below.

Saving Social Security with Personal Retirement Accounts!

Monday, January 17, 2011

Obamacare unconstitutional? Scholars Richard Epstein and John Yoo respond.

Peter Robinson of the Hoover Institute and the series Uncommon Knowledge interviews law professors Richard Epstein of New York University and John Yoo of University of California Berkeley, two leading constitutional scholars.

The question posed: Is ObamaCare constitutional?

Link to the seven minute discussion appears as follows:

Tuesday, January 11, 2011

ObamaCare: the repeal of first stage economic thinking

The government solution to a problem is usually as bad as the problem. - Milton Friedman

Thomas Sowell has written extensively that politicos have a short political time horizon i.e. the next election cycle. Politicos then match their short term political time horizon to first stage economic effects of policy proposals. Matter-of-fact, Sowell wrote an entire book regrading first stage economic thinking entitled Applied Economics, thinking beyond stage one. (1)

Government solutions and the ObamaCare Repeal vote Wednesday 01/19/2011

The vote next week to repeal ObamaCare is odd out. That is, Friedman's advice is coming home to roost. Politicos always cave-in or never can quite muster a vote on the concept: "The Government solution to the problem is usually as bad as the problem". Never quite bring ourselves to test Friedman's quote. Ah, but the evil of it Wednesday Friedman is coming to bat.

Political time horizons and first stage economic consequences

Friedman's observation above and Sowell's "thinking beyond stage one" are worth considering regarding ObamaCare and much legislation in general. The basic premise is that legislation can have immediate economic consequences that are favorable. This short term favorable economic consequence matches the short term political time horizon of politicos. However, the exact same legislation has long term unfavorable economic consequences (known-knowns) as well as long term cascading unintended economic consequences (known-unknowns).

The long term economic consequences of legislation is not a concern of politicos as their focus is on a short term political time horizon i.e. next election. Hence legislation becomes a tool to create first stage favorable economic consequences to match a short term political time horizon. The problem immediately arises that legislation in fact creates long term economic consequences. These long term consequences are what James and Jane Goodfellow, their children, grand children, and so on must live with for years and decades to come. The Politico on the other hand merely wants to win the next election.

Therefore we have policy making politicos of the short term world creating long term economic consequences for the long term world that James and Jane Goodfellow live within. Real life examples abound. Social Security had major short term favorable economic consequences and hence matched the short term political time horizon of legislators of the time. Decades later James and Jane Goodfellow find that the unfunded future liabilities of Social Security are daunting. Merely take the term Social Security in the prior sentence and plug in Medicare, Medicaid, welfare, food stamps, public sector pensions, etc., etc.. The legislation created short term favorable economic consequences followed by cascading unintended economic consequences.

Behind the curve, ahead of the curve, and the 70 year dream

An odd out item with ObamaCare aka socialized medicine is that certain political groups have been pushing for socialized medicine for decades and decades stretching back at least seventy years. The socialized medicine scheme, when debated in 2009 and 2010, was referred to as a "dream" by proponents. A seventy year old dream.

Exactly what grand scheme had been developed and tested during these seventy years of dreaming? If one wants an item for seventy years wouldn't one have developed a comprehensive plan with details? Apparently not. In essence seventy years of a dream of socialized medicine was kept right in the dream world with nothing more developed than a fuzzy theme with no plan. For a group that wants to rely so heavily on government central planning it seems odd that for seventy years they forgot to develop a central plan. You might say proponents were/are seventy years behind the curve as ObamaCare was/is a cobbled together plan that boils down to a scheme of centralized price fixing. Problem is: central planning fails miserably and price fixing schemes have never worked in all of economic history. (2) (3) Brilliant! A failed delivery system delivering a known failed result!

However, there appears to be a vast majority of James and Jane Goodfellows that have looked ahead of the curve. You might even say, that for once, politicos have been caught with their hands in the short term political time horizon cookie jar. One might even speculate that James and Jane Goodfellows have come to the point of clearly understanding and adopting the classic essay by William Graham Sumner "The Forgotten Man". That is, the Goodfellows clearly understand they have in fact become the Forgotten Man: "He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him". (4)

So many social insurance and social welfare plans have exposed themselves as failures. That their long term economic consequences and cascading unintended economic consequences are failures for all to see. That massive hulking failures such as Social Security, Medicaid, and Medicare, have shown the public that long term dire consequences await them and their children. That the dreams of certain politicos become nightmares of the first order.

Behind the curve, politico's political time horizon, and a failed delivery system with known failed results.

The repeal vote, which is a vote on HR 2, becomes an affront to proponents of ObamaCare. How could anyone want to repeal a dream they have held for 70 years? A dream that in their view has become a reality.

The repeal vote is more reality than dream. The seventy year dream was really a theme with no plan. Then the plan was cobbled together based on politico's using first stage economic thinking to match their political time horizon. With the entire plan based on using a failed delivery system with known failed results. The problem is that the plan does not even have first stage favorable economic consequences. That the plan right out of the gate failed. Hence a cobbled together plan that was suppose to have, at the very least, first stage favorable economic consequences became an immediate cascading unintended economic consequence nightmare. That is, the politico's that are proponents of ObamaCare were so silly as to produce a plan that doesn't even create the illusion of favorable results to match their very own short term political time horizon. In other words, proponents of ObamaCare by their very own design produced the stage, set the stage, and generated the momentum for the repeal vote.

Collectivism's long history of failure

One only needs to examine history to see how collectivist plans fail. First we have the dawn of recorded history up to the Agricultural Revolution that was century-in, century-out of collectivism. Yes, collectivism is the oldest of economic systems. The results of collectivism up to the agricultural revolution was that mankind lived in an environment of constant starvation. Life was basic subsistence. Basic subsistence handed down from one generation to the next.

Collectivism's results were so poor that Malthus developed his theory of the Malthusian Population Trap. That mankind was stuck in a perpetual environment of basic subsistence and starvation as population was growing faster than food production. That mankind was stuck in a never ending battle to merely sustain life.

What changed the Malthusian Population Trap? The advent of private property agriculture in the Agricultural Revolution. Private property farming suddenly produced abundance in agriculture and man could for the first time feed himself. Out with Malthus in with abundance. (5)

Along the way private property, private property rights, and the price system developed. Note that private property, private property rights, and the price system "developed". That is, no central authority decided upon private property, private property rights, and the price system. Mankind merely stumbled into the systems. The systems occurred due to decentralized means. (6)

A basic premise should appear very quickly to the reader: decentralization created abundance and collective centralized planning created never ending subsistence results.

A major source of objection to a free economy is precisely that it ... gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

If collectivism is a failure why do collectivist propositions such as ObamaCare continue to be proposed?

The answer goes back to the constrained vision of mankind and the unconstrained vision of mankind.
The unconstrained vision of mankind, held by most collectivists, is that the nature of mankind can be changed, improved, and molded only by institutions of state. That a central authority [state] through governmental institutions is the only way to improve the nature of mankind.(7)

A review of the basis for repeal and first stage economic thinking

Prior to the repeal vote next week its likely a good idea to review the laundry list of basic errors within ObamaCare. Although this is not a complete list it should suffice to say that the problems are those of a plan doomed to fail:

(1) Federal bureaucrats overriding state rights and circumnavigating the McCarran-Ferguson act.
(2) The demise of consumer directed health-care.
(3) ObamaCare purposely designed to collapse into a single payer system.
(4) Another unsustainable entitlement atop of current unsustainable entitlements.
(5) A central planning scheme that is a known failed delivery system.
(6) A plan based on price fixing that results in quantitative and qualitative reduction in supply aka rationing.
(7) Ultimate third party decisions removing consumer choice.
(8) An unconstitutional individual mandate.
(9) The error of categorical risk management.
(10) A plan based on reverse risk management.
(11) A plan that fails to address let alone bend the cost curve.
(12) A plan that is based on the fallacy of universal coverage as universal coverage does not mean universal access and access will deteriorate.
(13) A plan with massive administration needs at a massive price.
(14) A plan that fails to address the allocation of scarce resources with alternative uses.
(15) A plan that fails the risk management matrix which is an axiom of insurance theory.
(16) Shifting costs to states in the form of massive increases in Medicaid that will bankrupt already stained state budgets.
(17) Massive tax increases.
(18) Lose of individual freedom.
(19) Add your basis for repeal here ---> ________.

Also, one sometimes will refuse to let issues stay settled by the adverse decision of such a procedure, specifically when the wrong decision is worse even than the disruption and costs of refusing to accept it, when the wrong decision is worse than conflict with those on the other side. - Robert Nozick


If one wishes to reform, improve, stream line, create more efficiency, allow for freedom of choice, reduce costs then ObamaCare needs scrapped. The ObamaCare plan has so many built-in failures that beginning anew is the only course of action. Ford once built the Edsel and they scrapped it. Howard Hughes built the H-4 (The Spruce Goose) and he scrapped it. There comes that point that a failed plan needs scrapped and a new course of action is desirable.


(1) Applied Economics, Thinking Beyond Stage one, Thomas Sowell.

(2)At 35, Nixon freeze still chilling, William Neikirk, The Swamp.

(3) Nixon, Price Controls, and the Gold Standard, excerpt from Commanding Heights by Daniel Yergin and Joesph Stanislaw, 1977, ed., pp. 60-64.

(4) The Forgotten Man by William Graham Sumner, 1876

(5) From Economic Man to Economic System, Harold Demsetz

(6) Hayek: His Contributions to the Political and Economic Thought of our Time, Butler and Riggenbach.

(7) A Conflict of Visions, Thomas Sowell.

Thursday, January 6, 2011

ObamaCare:HHS Secretary Kathleen Sebelius vs. McCarran-Ferguson Act

"Then, on Dec. 21, Ms. Sebelius announced that insurance companies seeking rate increases of 10% or more in the individual or small group market must publicly justify the hikes under standards set by her department.

Insurance regulation has traditionally been a state responsibility, and 43 states must already approve proposed insurance-rate increases. ObamaCare does not authorize HHS to deny rate increases, but the agency said that if a state "lacks the resources or authority" to conduct the kind of review the agency wants, it will conduct its own." - Karl Rove 01/06/2010 (1)

Rove makes a grand point. Sebelius has decided to have the gun fight at the OK corral with health insurers. Only problem is, the OK corral is owned by brothers Pat and Homer.

The McCarran-Ferguson Act is a federal law that was enacted on 03/09/1945. The act had the co-sponsors of democrat Pat McCarran of Nevada and republican Homer Ferguson of Michigan. (2) (3) (4)

The law gives insurers a very narrow exemption to anti trust laws. It allows "the business of insurance" to share loss data, jointly develop insurance forms and allows for the standardization of policy language. It more importantly allows states to regulate and tax insurance. (5) (6) (7)

Moreover, the "business of insurance" is otherwise subject to all other aspects of federal anti-trust. (8) (9) The business of insurance is subject to state level anti trust laws as well. (10)












Wednesday, January 5, 2011

ObamaCare: risk pools for pre-existing conditions

"We now know how many people have the problem most often cited as the reason for last years’ health overhaul legislation. Answer: 8,000." - John Goodman
Apparently the mantra of ObamaCare, those nasty pre-existing conditions, that dearth for the American public, has attracted 8,000 people into risk pools. The same risk pools that were projected by Medicare's chief actuary to be populated by 375,000 people by year end 2010 have attracted 8,000 out of 310,000,000 Americans. Please take a moment and visit Mr. Goodman's blog for a very insightful post entitled Health Problem Quantified: