Tuesday, September 1, 2009

Something Smells Fishy...

I know I'm a bit late in announcing this, but it appears that they finally decided to get rid of "flag@whitehouse.gov." You know, the email address where good little Obama supporters were supposed to send any "fishy" information they received about Obama's health care reform.

Because that's not creepy or "1984"-ish at all. ("Big Brother is reading your email...")

I know, I know, I heard it all. It wasn't a list of dissenters or anything ominous like that, it was just a way to fight misinformation with facts, and "fishy" was just a poor choice of words.

Oh, okay. So let's say it's back under the presidency of George W. Bush, and we've just invaded Iraq. There's a lot of opposition to this move, and lots of emails are circulating containing rumors and false information about the invasion and the motives behind it. The Bush administration wants to be able to keep track of what false information is out there, so that it can more effectively fight dishonest claims with facts and truth. To that end, it sets up an email address where people are encouraged to send any information they receive about the Iraq invasion that seems suspect...you know, any information that seems..."fishy," shall we say. You're telling me that all the current "flag@whitehouse.gov" supporters would be okay with that?

Ri-i-i-i-i-i-i-i-i-i-i-ight.

Monday, August 24, 2009

Insurance? No thanks, I'll pass...while I can...

Well, here goes. I dithered a bit over making this post for a few reasons. Health care is not my favorite issue (yes, I have a favorite issue. Come on, we all do- we all have issues that are more important to us, or that we enjoy debating and talking about more than others. For some people, it is health care. I'm not one of them). There are other issues that are more important to me, and about which I am slightly better informed. Plus, with all the emphasis on health care in the news recently, I've gotten pretty tired of the whole thing. But because it has been such a big issue lately, with so much debate and media coverage, I feel like I should make at least a token post about it. So here goes- the obligatory health care post. Don't get used to it.

Yesterday, my local newspaper ran an article on the controversy surrounding the "public option" in health care. The article itself was only mildly interesting, but what really arrested me when reading it was one of the opening sentences: "Both parties in Congress agree on about 80 percent of the health-care agenda--such as getting rid of exclusions for pre-existing conditions and requiring individuals to buy insurance while subsidies to people who can't afford it."

Whoa, whoa, whoa, stop right there. Hold on a minute. If that sentence doesn't wake you up and scare the bajeebers out of you, something is seriously wrong. Let's focus on the key point, shall we? It's the part where Congress agrees on "requiring individuals to buy insurance." I don't know about you, but after that little gem right there, the rest of the article really didn't matter that much to me. I was too concerned about the fact that, apparently, Congress feels it's okay to require me to buy health insurance. If this is indeed the case, we should all be worried.

Why? Because, simply put, aside from having me pay taxes (and even then, there is plenty of room for debate about which taxes are legitimate and how much the government has a right to tax me), Washington has no right to tell me how to spend my money--but that is precisely what they are doing if they pass a bill requiring me to buy health insurance, regardless of whether I want to or not. What this amounts to is nothing more nor less than big government once again thinking it knows what is best for me, and attempting to force me to make what it thinks is a smart decision to protect me from what it perceives as being my own bad choices.

Except that the government doesn't have that right or that authority. The bottom line is, my income is precisely that- my income. If I want to spend every last penny of my paycheck on lottery tickets and bubblegum cigars, that is my choice and my right, and the government has no right to tell me to do otherwise. If the government suddenly requires me to purchase insurance, however, it is dictating to me how I must spend a portion of my income, even if I have already made the decision that I am willing to forgo insurance in favor of something else. And there are plenty of people who do just that. Yes, it's true what supporters of health care reform say when they quote the statistic about millions of Americans lacking health insurance. What they often omit, however, is that fact that roughly half of these uninsured Americans are uninsured by choice. Your typical uninsured American is not the sob story from the ads: the single mom/low income family with seven children all suffering from leukemia which could easily be cured if only the insurance companies weren't so evil, and they could afford to take said kids to the doctor. Your typical uninsured American is just as likely- if not more so- to be a young, healthy, single individual, who lacks the responsibilities of family and kids, and has made a conscious and rational decision to forgo purchasing health insurance in order to have more money to spend on other things, whether it be partying, frequent dining out, expensive clothes, or the very latest in electronic gadgets (for anyone who's interested, there's a great video on this here). And as I said before, that is their right. For Congress to come in and demand that these people buy health insurance represents a gross intrusion of government into private life. The government has no right to tell me how to spend my money or what decisions I should make regarding my health care. If I choose to forgo health insurance, that is my right. If I choose to eat McDonald's three times a day and never touch vegetables, that is my choice. Those are both extremely personal decisions, and areas where the government has no business. After all, what's next? Will I be required to buy a certain number of fruits, vegetables, and Lean Cuisine every month to help protect me from obesity?

Never mind the "public option," the pre-existing conditions clauses, and all the rest. Let's focus instead on the underlying philosophy here- the idea that the government has the right to control how you spend your money and what decisions you make as regards your health. That's what we should really be worried about.

Friday, August 14, 2009

Clunk!

Apparently, not even the gourmets among us are immune to the economic downturn. The San Francisco Chronicle reported recently that celebrity chef Gordon Ramsay- owner of over 20 gourmet restaurants worldwide, and star of the reality show "Hell's Kitchen"- has suffered from financial problems in today's economic climate, and even faced bankruptcy before pouring $8 million of his own money into his business.

Given this news, my ever dry-witted father proposed the following government plan, intended to stimulate the economy by funneling money to cash-strapped restaurateurs. Entitled "Rebates for Recipes," the plan works as follows:

  • An individual goes to a restaurant, bringing with him a fully prepared, perfectly good meal, which meets pre-determined government standards.
  • The government then gives this individual a certain amount of money, which is used to help him purchase another meal off of the restaurant's menu- one which the government deems to be "healthier" than the one he originally brought in.
  • The restaurant, awaiting reimbursement from the government, takes the perfectly good meal the individual brought in, and destroys it.

The absurdity of such a plan is, I hope, almost painfully obvious. Certainly, one does not have to be a Nobel economist to see that the idea of stimulating the economy by trading in a perfectly good asset to be destroyed is laughable. However, this is exactly what the government, in its infinite wisdom, is already doing- except the name of the program is "Cash for Clunkers," and it's being done with cars instead of meals.

Under this program, individuals who possess cars meeting certain government standards can take those cars to participating dealerships and trade them in for new vehicles. The individuals receive a credit of up to $4500 off the price of the new car, which must be more fuel efficient than the one they are trading in. They then purchase the car at this lower price, and the dealership is reimbursed by the government. The old cars, which have been traded in, are subsequently destroyed by the dealership. Supposedly, this stimulates the economy while at the same time benefiting the environment by putting "fuel efficient" vehicles on the road, and getting rid of "gas guzzlers." Laudable goals in and of themselves, but is it really working? In fact, it's not, and the evidence would suggest that, as with most government programs, the unintended negative consequences are canceling out whatever benefits there might be.

So let's start with the main goal of the program- stimulating the economy. Is "Cash for Clunkers" actually doing this? Not really. It's not clear at all that the program is, indeed, increasing demand or boosting overall sales. Yes, the program has proved popular, and there has been a sudden rush of people to car dealerships to trade in their old vehicles. However, an analysis by Macroeconomic Advisers concluded that roughly half of the sales taking place would have occurred during the time period of the program anyway, with the other half occurring in the months following. At most, "Clunkers" has merely shifted demand, not created it, and sales are receiving nothing more than an artificial boost.

Not only is "Cash for Clunkers" failing to stimulate the economy, it may actually be hurting it. The program has caused overall retail sales to drop, by encouraging consumers to trade in their old vehicles at the expense of other retail spending- according to a journalist for MarketWatch, retail sales in July, rather than achieving the expected gain of 0.1 percent, instead fell 0.6 percent, with data pointing to "Clunkers" as the reason. Moreover, it's not even clear that car dealerships are benefiting either. The law requires that participating dealers deliver the new car to the buyer, even if the government payment hasn't yet arrived. Given the lowered price of the cars, most dealers face a loss on each sale, until they are reimbursed by the government- which, surprise, surprise, is not happening in a timely fashion, meaning that dealers are seeing a boost in sales but a drop in the bank.

In addition, the government seems to have failed to grasp the concept that destroying assets is never good for the economy. Because this is precisely what happens when the traded-in vehicles are destroyed- perfectly good assets are removed from the market. Under ordinary circumstances, most of these vehicles would wind up donated to charity, for sale in used car lots, or sold for parts (according to some estimates, as many as three out of five of the vehicles being destroyed would have ended up on used-car lots, or resold for parts). However, under the "Clunkers" program, this isn't happening- those cars are simply being destroyed, and this ultimately hurts consumers. Take, for example, a low-income family who needs to replace their vehicle. Many of these families find that their current vehicle does not qualify for "Clunkers," and even if it does, the program is still too expensive for them to participate, as they cannot afford to purchase a brand new vehicle even with the government subsidy. For such families the best option is, as it long has been, the purchase of an inexpensive used car. Yet even as the demand for cheap transportation in the form of used cars rises, the supply of such cars dwindles, and the prices of the ones that are available rise dramatically, leaving many people in the lurch, unable to either participate in the government program or find an affordable used vehicle. Not only do used cars become harder to find and more expensive- so do used car parts, making it harder for drivers of modest means to maintain their vehicles. Charitable organizations are also suffering- many organizations, such as Volunteers of America, rely on the money they make auctioning off donated cars to fund their charitable activities (in the case of VofA, such activities include housing, job training, and substance abuse counseling). Yet with cars being destroyed instead of donated, such charities take a hit. Rather than stimulating the economy, "Cash for Clunkers" puts car dealerships in perilous financial situations, and hurts low-income drivers, charities, used car sellers, and salvage/scrap yards that sell used car parts.

Okay, but after all, "Cash for Clunkers" isn't just an economic program- it's also an environmental one, meant to help reduce carbon emissions by putting fuel-efficient cars on the road and getting rid of "gas guzzlers." Is it having any better success in this area?

Once again, the evidence would suggest that it is not. The new cars on the road may have been deemed more "fuel efficient;" however, new cars are driven much more than old ones. As reported in this article, CNW finds that the traded-in vehicles were driven approximately 6000 miles per year. In contrast, new cars are driven, on average, 12000 miles per year- roughly double the amount of driving. In addition, "Clunkers" fails to take into account the environmental costs of manufacturing all the new cars and destroying all the old ones. According to William Chaimedes, dean of the Nicholas School of the Environment at Duke University, anywhere from 3 to 12 pounds of carbon dioxide are produced for every car that is manufactured. According to his estimates, if an individual traded in an 18 mpg car for a 22 mpg car (the minimum mileage allowed on new cars under the "Clunkers" program), it would take approximately five and a half years of typical driving to offset the new car's carbon footprint. With trucks, it could take as long as eight or nine years. Taking these factors into account, it would appear that, in fact, the more environmentally friendly thing to do would be to simply purchase a good used car- something that, as established above, is becoming harder and harder for people to do. When all of this is factored into the equation, it rapidly becomes apparent that any "benefit" to the environment under "Cash for Clunkers" is negligible at best, and negative at worst.

All in all, given the fact that "Cash for Clunkers" is not only not accomplishing its goals, but may, in fact, be actively retarding them, the best thing for the economy, the environment, and the taxpayers, would be to stop scrapping cars and scrap this program instead.

Thursday, August 13, 2009

Calling All Freedom Lovers...

America's government is spiraling out of control. Increased executive powers, the creation of ever more bureaucracy and red tape, uncontrollable government spending, programs, handouts, bailouts...all of it with the best of intentions. All of it aimed-outwardly, at least- at making America safer. Healthier. Smarter. More prosperous.

But is it really working?

There is no doubt that America today faces problems. Health care isn't perfect. The economy has seen better days. The school system often leaves much to be desired. But is increasing government involvement in these and other spheres really the best solution?

I would suggest not. That with these problems, as with many other things in life, the correct response is "less is more." In this case, less government regulation and involvement means more wealth, better education, healthier people, and, most importantly of all, more personal freedom and individual liberty. In other words, more of what this country was founded on. More of what our Founding Fathers fought to protect.

We don't need more government. We need less of it. Less government and more freedom. A return to the ideas of individual liberty and limited government that the Founders of our nation believed in and outlined in the Constitution. We need to stop listening to the hysterical cries that only the government can save us and start returning that power to ourselves. We need a return to the principles on which our country was founded, to the ideals of early America. What we need, in the midst of the problems that face us, and the myriad of proposed government "solutions" is nothing more than a little common sense.

So that's why I'm here, blogging away. Just doing my bit to keep the glory days of the American Revolution alive and well.