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Archive for December, 2011

Paul Krugman has told us that awful stories about government-run healthcare in Britain “are false.”

I guess this means that the media must be dominated by conservative liars, since we keep getting reports about substandard care and needless deaths (see herehereherehereherehereherehere, here and here).

And the Boston Globe and Associated Press must be part of this vast right-wing conspiracy, because the Globe just ran an AP report exposing more problems in England. Here is an excerpt.

When David Evans needed a hernia operation, the 69-year-old farmer became so alarmed by the long wait that he used an ultrasound machine for pregnant sheep on himself, to make sure he wasn’t getting worse. It was only after repeated calls from himself, his doctor and his local member of parliament that the hospital performed the surgery, nearly a year after it was first requested. Under government guidelines, he should have started getting treatment within 18 weeks. “I was in quite a lot of pain,’’ Evans said of his ordeal in Cornwall, southwest England. “It really restricted what I could do around the farm since I couldn’t lift anything heavy.’’ Across Britain, an increasing number of patients like Evans are facing more pain and longer waits.

The deep flaws in the British system, by the way, do not imply that the American system is ideal. As I’ve explained, the U.S. system also is heavily dominated by government, causing a massive third-party payer problem.

(h/t: Reason)

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Yes, the Christmas season is over, but somebody just sent me this cartoon and it’s worth sharing because it captures the hate-and-envy mentality of the parasite class in Washington.

And I probably like it because it is sort of similar to the riding-the-wagon-pulling-the-wagon cartoon drawn by a former Cato intern.

And if you like cartoons about class warfare, click here and here for some amusing portrayals of Obama’s divisiveness.

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I’ve written many times about politicians and bureaucrats screwing taxpayers with lavish compensation packages, but this story from Philadelphia is jaw dropping.

Councilwoman Marian B. Tasco is retiring Friday, but only so she can collect a $478,057 pension check and return to work Monday, when she will be sworn in for her seventh term. Tasco was one of six Council members to enroll in the city’s controversial Deferred Retirement Option Plan, better known as DROP. She did not immediately return a request for comment. …When DROP was introduced during the Rendell administration, it was thought that it would cost little or nothing. But a study by the administration of Mayor Nutter said DROP had cost the city $258 million over 10 years.

Remember stories like this every time ones of these reprehensible politicians claim that spending has been cut to the bone and taxes have to be raised.

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Because of his semi-frontrunner status in Iowa, Ron Paul is now attracting some negative attention, including the fact that he received a $500 campaign contribution from an avowed racist.

Very few people think Paul is biased, but read this article by Steve Horwitz, my grad school classmate. Since I’ve written both supportive and critical posts about Paul, I think I have some credibility in saying that it is a fair summary of the issues.

Not surprisingly, other GOP presidential campaigns would like voters to disqualify Paul on the basis of unsavory associations, and I certainly agree that Paul showed very bad judgment. Normally it’s a good thing that he’s not a typical politician, but this is one of those cases where it undermines the case for freedom – as Steve explains in the article linked above.

But if sauce for the goose is supposed to be sauce for the gander, shouldn’t we also be upset that the head of the Communist Party in the United States has – for all intents and purposes – endorsed Barack Obama? Here’s some of what Sam Webb, an apologist for totalitarian mass murder, wrote earlier this year.

Communists don’t agree with either one of these views. In our view, the differences between the two parties of capitalism are of consequence to class and democratic struggles. Neither party is anti-capitalist, but they aren’t identical either. Differences exist at the levels of policy and social composition. And despite the many frustrations of the past two years, the election of Barack Obama was historic and gave space to struggle for a people’s agenda. …We don’t have any illusions about the Democratic Party, but we don’t have any illusions about the Republican Party either. Furthermore, we are also aware of the undeniable fact that no other party besides the Democratic Party stands a chance of beating the GOP next year.

It goes without saying that these unwelcome expressions of support should not be used as evidence that Barack Obama is a communist or that Ron Paul is a racist. It’s not the fault of politicians that they sometimes receive support from nutjobs and morons.

My only complaint is that there’s not a level playing field. There’s lot of coverage of a loathsome person who supported Ron Paul, but I’m not aware of anybody paying attention to Sam Webb’s expressions of support for Barack Obama.

Yes, racism is evil, and we should be suspicious of people who get support from racists. But communists have butchered tens of millions of people. Shouldn’t we be equally skeptical of politicians who attract support from these evil people as well?

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Kevin Williamson of National Review is always worth reading, whether he’s kicking Paul Krugman’s behind in a discussion about the Texas economy, explaining supply-side economics, or even when he’s writing misguided things about taxation.

But I’m tempted to say that anything he’s written to date pales into insignificance compared to his analysis of the corrupt relationship between big government and Wall Street. Here are some excerpts, but read the entire article.

He starts out with a strong claim about the Obama Administration being in the back pocket of Wall Street.

…it’s no big deal to buy a president, which is precisely what Wall Street did in 2008 when, led by investment giant Goldman Sachs, it closed the deal on Barack Obama. For a few measly millions, Wall Street not only bought itself a president, but got the start-up firm of B. H. Obama & Co. LLC to throw a cabinet into the deal, too — on remarkably generous terms. …the real bonus turned out to be Treasury secretary Tim Geithner, who came up through the ranks as part of the bipartisan Robert Rubin–Hank Paulson–Citigroup–Goldman Sachs cabal. Geithner, a government-and-academe man from way back, never really worked on Wall Street, though he once was offered a gig as CEO of Citigroup, which apparently thought he did an outstanding job as chairman of the New York Fed, where one of his main tasks was regulating Citigroup — until it collapsed into the yawning suckhole of its own cavernous ineptitude, at which point Geithner’s main job became shoveling tens of billions of federal dollars into Citigroup, in an ingeniously structured investment that allowed the government to buy a 27 percent share in the bank, for which it paid more than the entire market value of the bank. If you can’t figure out why you’d pay 100-plus percent of a bank’s value for 27 percent of it, then you just don’t understand high finance or high politics.

Since I’ve compared Tim Geithner to Forest Gump, I’m not going to argue with this assessment.

Later in the article, Kevin makes a case that politicians are engaging in widespread insider trading.

Nancy Pelosi and her husband were parties to a dozen or so IPOs, many of which were effectively off limits to all but the biggest institutional investors and their favored clients. One of those was a 2008 investment of between $1 million and $5 million in Visa, an opportunity the average investor could not have bought, begged, or borrowed his way into — one that made the Pelosis a 50 percent profit in two days. Visa, of course, had business before Speaker Pelosi, who was helping to shape credit-card-reform legislation at the time. Visa got what it wanted. The Pelosis have also made some very fortunate investments in gasand energy firms that have benefited from Representative Pelosi’s legislative actions. The Pelosis made a million bucks off a single deal involving OnDisplay, the IPO of which was underwritten by investment banker William Hambrecht, a major Pelosi campaign contributor. …Besting Nancy Pelosi, Rep. Gary Ackerman (D., N.Y.) got in on the pre-IPO action, without putting up so much as one rapidly depreciating U.S. dollar of his own assets, when a political supporter — who just happened to be the biggest shareholder of the firm in question — lent him $14,000 to buy shares in the private company, which he then sold for more than a hundred grand after the firm went public. There wasn’t so much as a written loan agreement. On and on and on it goes: Sen. John Kerry invested aggressively in health-care companies while shaping health-care legislation. Rep. Spencer Bachus (R. Ala.) was a remarkably apt options trader during the days when he had a front-row seat to Congress’s deliberations on the unfolding financial crisis.

I wish I had known these details when I went on TV to discuss congressional corruption earlier this year.

Kevin also explained how Warren Buffett made a boatload of money thanks to insider knowledge about bailouts.

…during the financial crisis, a big piece of Goldman Sachs was bought by Warren Buffett, who stacked up a lot of cash when the government poured money into that struggling investment bank with the support of Barack Obama. When the federal government bought into Goldman Sachs, it negotiated for itself a 5 percent dividend. Warren Buffett got 10 percent — on top of the benefit of having Washington inundate his investment with great rippling streams of taxpayers’ money.

No wonder Buffett’s willing to lie in order to help his buddies in Washington raise taxes.

There’s a lot more in the article, but here’s a final excerpt that sums up Kevin’s article.

Wall Street can do math, and the math looks like this: Wall Street + Washington = Wild Profitability. Free enterprise? Entrepreneurship? Starting a business making and selling stuff behind some grimy little storefront? You’d have to be a fool. Better to invest in political favors. …hedge-fund titans, i-bankers, congressional nabobs, committee chairmen, senators, swindlers, run-of-the-mill politicos, and a few outright thieves (these categories are not necessarily exclusive) all feeding at the same trough, and most of them betting that Mitt Romney won’t do anything more to stop it than Barack Obama did. …Free-market, limited-government conservatives should be none too eager to welcome them back, nor should we let our natural sympathy with the profit motive blind us to the fact that a great many of them do not belong in the conservative movement, and that more than a few of them belong in prison.

All of this underscores why TARP was such an unmitigated disaster – and why we should be suspicious of politicians like Romney and Gingrich who supported the bailouts.

Remember, capitalism without bankruptcy is like religion without hell.

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The statists are making a big issue out of income inequality, hoping to convince ordinary Americans that redistribution is their only hope for a better life.

I’ve explained with a pizza analogy that this is horribly misguided because it falsely assumes the economy is a fixed pie.

Simply stated, it doesn’t make sense – or help anybody – if inequality is reduced by policies that hurt everyone, but happen to hurt upper-income people more than lower-income people.

Moreover, redistribution tends to create a “poverty trap” as people get seduced by dependency.

That’s why I’ve argued that economic growth is the best way of helping the less fortunate.

But I have to admit that Margaret Thatcher does a much better job of eviscerating the left’s agenda on this issue.

While it’s inspiring to watch Thatcher in action, it’s also painful to realize that the current crop of GOP presidential candidates seems generally incapable of making similar arguments. Can you imagine, for instance, Mitt Romney making these remarks?

Last but not least, Thatcher’s remarks remind me about Churchill’s famous quote, which is very appropriate for this discussion.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

And if you want real-world examples, look at this chart comparing North Korea and South Korea, or this chart comparing Chile, Argentina, and Venezuela. Now ask yourself a simple question: Which societies have generated more prosperity and higher living standards for ordinary people?

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