Archive for the ‘Government intervention’ Category

When people think about government regulation, it’s understandable that they focus on things that impact their everyday lives.

Most of us, for instance, are irked by government’s war against modern life. Bureaucratic pinheads in Washington think they have the right to plague us with crummy dishwashers, inferior light bulbssubstandard toilets, and inadequate washing machines.

But what matters more is the way that onerous regulation throws sand in the gears of the economy, slowing growth and undermining job creation. And no matter how you slice the data, there’s no escaping the conclusion that American competitiveness is suffocating because of red tape and regulation from Washington.

Here are some very depressing bits of information I’ve shared in the past.

So what’s President Obama’s plan to deal with this regulatory morass?

Well, he wants to make matters worse. I’m not joking. Here are some excerpts from a report in The Hill.

President Obama is moving to complete scores of regulations as he looks to cement key parts of his legacy… The White House quietly released its formal rulemaking schedule late last week, revealing the administration’s latest plans for regulations currently in the works at agencies across the federal government. …Obama has no intentions of slowing down the process during his final year in office. …Critics, however, say the President has already issued far too many burdensome regulations. …the administration has finalized about one rule a day since Obama took office and estimates the compliance costs associated with those rules to total about $700 billion.

What makes this so depressing is that the Mercatus Center has new research showing that the regulatory burden is especially harmful to entrepreneurs and small businesses.

Here are some of the findings from this new study.

…a 10 percent increase in the intensity of regulation as measured by the RegData index leads to a statistically significant 0.5 percent decrease in overall firm births. …regulation deters hiring overall. A 10 percent increase in regulation is associated with a statistically significant 0.9 percent decrease in hiring. …Regulation leads to a statistically significant reduction in hiring and firm births for firms overall and for small firms. …our results suggest that from 1998 to 2011, increased federal regulation reduced the entry of new firms by 1.2 percent and reduced hiring by 2.2 percent. That result implies that returning to the level of regulation in effect in 1998 would lead to the creation of 30 new firms and the hiring of 530 new employees every year for an average industry.

So who benefits from red tape?

Other than bureaucrats and lobbyists, the big winner is big business.

…we find that large incumbents are actually less likely to die when their industry becomes more regulated. That finding suggests that incumbents, in particular, benefit from increasing levels of regulation and provides support for the idea that incumbents might actively seek increasing regulation to deter entry and limit competition (consistent with capture theory).

The good news is that a growing number of people are recognizing the need to deal with excessive regulation.

I don’t think many people would accuse Professor Noah Smith of Stony Brook University of being a libertarian, yet he makes a strong case for regulatory relief in a recent Bloomberg column.

Republicans should stop focusing so much on taxes and devote more attention to deregulation. …Although it’s very difficult to measure the amount of regulation across the economy, there are more and more areas that are cause for concern. For example, the scope of occupational licensing, which economists mostly believe is a drag on growth, is startling, and seems to have no good reason behind it. …Another concern is environmental regulation…local development opponents are often able to use costly environmental reviews to block needed infrastructure. A third area is zoning. As the incentives for density have risen, zoning regulation has become an increasing burden on growth.

He lists additional items, such as the approval process at the FDA for new drugs and all the Byzantine red tape required by the Sarbanes-Oxley law, and he also makes the very important point that cost-benefit analysis is necessary since not all regulations are created equal.

So what’s the solution to this mess?

Research from the folks at Mercatus points to some possible solution.

First and foremost, cut the budgets for regulatory agencies. If there’s less money, there will be fewer bureaucrats with fewer resources.

Here’s a very persuasive chart from a Mercatus report showing the correlation between regulatory budgets and the burden of red tape.

By the way, notice how regulatory spending exploded during the Bush years. Yet another bit of data showing that statist Republicans can be even worse for the economy than statist Democrats.

But I’m digressing. Let’s now look at another potential way of reining in the regulatory state.

Another study from Mercatus looks at a policy in Canada that put an aggregate cap on red tape.

Canada recently became the first country in the world to legislate a cap on regulation. The Red Tape Reduction Act, which became law on April 23, 2015, requires the federal government to eliminate at least one regulation for every new one introduced. Remarkably, the legislation received near-unanimous support across the political spectrum: 245 votes in favor of the bill and 1 opposed.

The nationwide legislation was based on an experiment in British Columbia.

When the BC government first introduced the Reform Policy in 2001, two regulatory requirements had to be eliminated for every one introduced. …today the policy calls for eliminating one requirement for every new one introduced. …requiring regulators to…eliminate…regulatory requirements for every new one introduced represented a dramatic change in thinking about regulation in BC: It put the onus on the government to…reduce the total amount of regulation.

And this policy apparently was very successful.

There is no question that BC’s economic performance improved markedly after 2001 in contrast to the “dismal decade” of the 1990s. The province went from being one of the worst performing in the country to being among the best. …economic growth in BC was 1.9 percentage points below the Canadian average between 1994 and 2001 but 1.1 percentage points above the Canadian average between 2002 and 2006. BC’s real GDP growth was lower than Canada’s as a whole in six of the nine years between 1992 and 2000, but BC’s GDP grew faster than Canada’s every year between 2002 and 2008.

What’s the key takeaway lesson?

Well, just as a spending cap is the right approach to fiscal policy, a regulatory cap also is the right way to deal with red tape.

…a hard cap on the total amount of regulatory requirements…has forced a discipline that did not previously exist, a discipline that has helped change the culture within government to one where regulators see their job as focusing on the most important rules.

Gee, what a radical idea. Requiring the folks in Washington to set priorities and make tradeoffs!

P.S. I guess we can add regulatory reform to our good-things-we-can-learn-from-Canada collection, along with spending restraint, corporate tax reform, bank bailouts, reducing double taxation, and privatization of air traffic control. Heck, Canada even has one of the lowest levels of welfare spending among developed nations.

P.P.S. Since we just reviewed research on how big corporations can benefit by supporting regulations that will disproportionately hurt their small competitors, you probably won’t be surprised to learn that some of those same big companies support tax hikes that will be especially damaging to small businesses.

P.P.P.S. While I suspect America wins the prize for worst regulatory agency and most despicable regulatory practice, Japan almost surely wins the prize for the oddest regulation.

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Shortly after Obamacare was enacted, I started writing about groups victimized by the law. But after highlighting how children, low-income workers, and retirees were disadvantaged by government-run healthcare, I soon realized that I wasn’t saying anything new or different.

Heck, Obamacare has been such a disaster that lots of people have been writing lots of good articles about the law’s failure and how various segments of the population are being unjustly harmed.

So I chose a different approach. I decided to identify groups that deserve to suffer because of the law. Or at least to highlight slices of the population that are not very deserving of sympathy.

Some politicians and staffers of Capitol Hill, for instance, are very upset about the prospect of being subjected to the law that they inflicted on the rest of the country. Gee, my heart breaks for them.

The bureaucrats at the IRS are agitated about the possibility of living under Obamacare, even though the IRS got new powers as a result of the law. How sad, cry me a river.

Professors at Harvard University, including many who supported Obamacare, are now upset that the law is hurting them. Oh, the inhumanity!

Now we have another group to add to this list. And this group is definitely in the deserve-to-suffer category.

That’s because we’re going to look at the big insurance companies that supported Obamacare, but now are squealing because the law isn’t working and they’re not getting the bailouts they were promised.

Here are some excerpts from a column by the irreplaceable Tim Carney of the Washington Examiner.

Until recently, the insurance giants saw Obamacare as a cash cow. They are now finding the law’s insurance marketplaces to be sickly quagmires causing billions in losses. …United Healthcare, the nation’s largest insurer, last week announced it was suffering huge losses in the exchanges. …The company forecast $700 million in losses on the exchanges. Fellow insurance giant Aetna also said it expected to lose money on the exchanges, and other insurers said enrollment was lower than they expected.

This seems like a feel-good story, very appropriate for the holidays. After all, companies that get in bed with big government deserve bad consequences.

But hold on to your wallet.

…Obamacare insiders — the wealthy and powerful operatives who alternate between top government jobs and top industry jobs — are hustling to find more bailout money for insurers. Republicans, if they are able to hold their ground in the face of lobbyist pressure, can block the bailout of Obamacare and its corporate clientele. …Obamacare included…a three-year safety net for insurers who do much worse than expected, paid for by an extra tax on insurers who do much better. The Centers for Medicare & Medicaid Services (CMS) had announced in October that insurers losses for 2014 entitled them to $2.87 billion in bailout payments… The problem is that super-profitable insurers did not pay nearly that much into the bailout fund.

This means there will be a fight in Washington. The Obama White House wants to bail out its corporate cronies. But there’s not enough money in the bailout fund.

And, thanks to Senator Rubio of Florida, the government can’t write checks out of thin air.

In late 2014, Sen. Marco Rubio, R-Fla., inserted into the so-called Cromnibus spending bill a provision that prohibited CMS from paying out more in risk corridor payments than it takes in. Profitable insurers — not taxpayers — must subsidize their less profitable peers.

Unfortunately, the Obama Administration oftentimes doesn’t care what the law says.

CMS announced last week that the government was going to find a way to pay the insurers their full bailout, anyway. …CMS also declared the unfunded portion of Obamacare’s initial promised insurer bailout was nevertheless an “obligation of the United States Government for which full payment is required,” even though at least under the current appropriation law it is illegal.

Tim outlines the incestuous relationship between Big Insurance and the Obama White House, all of which makes for nauseating reading.

But here’s the part that matters for public policy.

Rubio’s provision…expires along with the current government funding law on December 11. The Obamacare insiders, led by Slavitt and Tavenner, will fight to free up their bailouts and put the taxpayers on the hook for their losses caused by the law they supported.

In other words, we’re about to see – as part of upcoming appropriations legislation – if Republicans have the intelligence and fortitude to retain Rubio’s anti-bailout provision.

This should be a slam-dunk issue. After all, the American people presumably will not favor bailouts for corrupt health insurance corporations.

Especially since Obamacare is still very unpopular.

But what if Obama says “boo” and threatens to veto spending legislation if it doesn’t give him carte blanche bailout authority? Will GOPers be so scared of a partial government shutdown that they instantly surrender?

After all, when there was a shutdown fight in 2013, Republicans suffered a horrible defeat in the 2014 mid-term elections. Right? Isn’t that what happened?

Oh…wait…never mind.

P.S. Let’s not forget that there is one very tiny segment of America that has unambiguously benefited from Obamacare.

P.P.S. If you have any friends who work for the corrupt health insurance companies that are worried about a potential loss of bailout money, you can cheer them up this Christmas season with some great – and very appropriate – action figure toys.

P.P.P.S. Since we’re closing with sarcasm, here’s the federal government’s universal bailout application form.

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The communist economic system was a total disaster, but it wasn’t because of excessive taxation. Communist countries generally didn’t even have tax systems.

The real problem was that communism was based on central planning, which is the notion that supposedly wise bureaucrats and politicians could scientifically determine the allocation of resources.

But it turns out that even well-meaning commissars did a terrible job. There was massive inefficiency and widespread shortages. Simply stated, notwithstanding the delusions of some left-wing economists (see postscript of this column), the system was an economic catastrophe.

Why? Because there were no market-based prices.

And, as explained in this video from Learn Liberty, market-based prices are like an economy’s central nervous system, sending signals that enable the efficient and productive allocation of resources in ways that benefit consumers and maximize prosperity.

And just in case it’s not obvious from the video, a price system can’t be centrally planned. Or, to be more precise, you won’t get good results if central planners are in charge.

Now let’s look at a bunch of economic policy questions that seem unrelated.

What’s the underlying reason why minimum wages are bad? We know they lead to bad effects such as higher unemployment, particularly for vulnerable populations, but how do these bad effects occur?

Why is it bad to have export subsidies such as the Export-Import Bank? It’s easy to understand the negative effects, such as corrupt cronyism, but what’s the underlying economic concern?

Or what’s the real reason why third-party payer is misguided? And why should people be concerned about high marginal tax rates or double taxation? Or Obamacare subsidies? Or unemployment insurance?

These questions involve lots of different issues, so at first glance there’s no common theme.

But that’s not true. In every single case, bad effects occur because politicians are distorting the workings of the price system with preferences and penalties.

And that’s today’s message. We generally don’t have politicians urging the kind of comprehensive central planning found is genuinely socialist regimes. Not even Bernie Sanders. But we do have politicians who advocate policies that undermine the price system on an ad-hoc basis.

Every tax, every regulation, every subsidy, and every handout is going to distort incentives for some people. And the cumulative effect of all these interventions is like a cancer that eats away at prosperity.

The good news is that we don’t have nearly as many of these bad policies as places such as France and Mexico.

But the bad news is that we have more of these policies than Hong Kong and Singapore.

The bottom line is that America could be much richer with less intervention. But that would require less ad-hoc interventionism.

P.S. There’s a bit of economic wisdom in these jokes that use two cows to explain economic systems.

P.P.S. Here are two other videos on the price system, both of which help explain why only a decentralized market system can allocate resources in ways that benefit consumers.

P.P.P.S. A real-world example of the price system helped bring about the collapse of communism.

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Back in 2010, I joked that the Libertarian Party should give Barack Obama a Man-of-the-Year Award because his failed policies rejuvenated interest in limits of federal power.

Though, in retrospect, perhaps the GOP should have given Obama the Award since Republicans reaped the short-term benefits.

In any event, let’s not get distracted by electoral politics. That’s because we have another tongue-in-cheek award. It’s time for the Libertarian Party to give its Woman-of-the-Year Award to Michelle Obama.

Why? Because the First Lady has single-handedly managed to discredit the federal government’s program to subsidize school lunches.

In short, there are now all sorts of federal regulations and mandates that have simultaneously made the program most costly for schools and resulted in food that is less appealing to students.

In other words, she’s helping to teach the next generation that big government makes your life less pleasant. That’s usually a lesson young people don’t learn until they get their first paycheck.

Let’s look at the results of Ms. Obama’s handiwork.

Citing a report from the Government Accountability Office, the Wall Street Journal opines on how Washington has made the school lunch program become far less appealing.

America’s youth are voting with their forks: …participation has plunged for the second year in a row by 1.4 million children, or 4.5%, as they flee inedible government-designed cuisine. …In the name of better eating habits, the USDA has published 141 memos with mandates reaching down to quotas across “vegetable subgroups” and bans on salt and sandwiches. …this cookbook…runs to some 4,700 pages and counting… GAO auditors toured 14 schools in eight states for an on-site look at how kids and cafeterias are responding, and they report that the regulatory deluge is “overwhelming.”

Though I’m glad to see that some local governments and students are engaging in civil disobedience.

“…two had nevertheless been serving pasta that was not in compliance with the whole grain-rich requirement.” …The auditors found students in two schools who carried contraband salt shakers.

Gasp! Non-compliant pasta and contraband salt?!?

Surely it’s time to sic the IRS on these scofflaws.

Or maybe we should learn a different lesson, which the WSJ succinctly identifies.

This exercise has been an epic waste of food and taxpayer money.

Some statist readers doubtlessly are saying that the higher cost is worthwhile because students (even if they don’t like it) are being forced to eat healthier.

Um…not exactly.

Amazingly, the federal government managed to decrease consumption of fruits and vegetables (FV) even though that’s one of the main goals of the new rules. Here’s an excerpt from a scholarly study.

Since 2012, the USDA’s requirement that children select FVs at lunch as part of the reimbursable school meal has been met with concern and evidence of food waste. We compared elementary schoolchildren’s FV selection, consumption, and waste before (10 school visits, 498 tray observations) and after (11 school visits, 944 tray observations) implementation of this requirement using validated dietary assessment measures. More children selected FVs in higher amounts when FVs were required compared with when they were optional (0.69 cups vs. 0.89 cups, p,0.001); however, consumption decreased slightly (0.51 cups vs. 0.45 cups, p50.01) and waste increased (0.25 cups vs. 0.39 cups, p,0.001) when FVs were required compared with when they were optional.

As reported by the Washington Examiner, even the School Nutrition Association is not exactly happy with the federal government’s nanny-state approach to school lunches.

Schools nationwide are being forced to raid their education budgets to cover the costs of federally-mandated school lunches, rejected by students because they taste bad, according to a group the represents school nutrition professionals. Once a profit center for schools, cafeterias have become a financial black hole… And the deficits are being made up by cafeteria worker firings and budget shifting, according to the School Nutrition Association.

The Washington Examiner story represents an interesting development since it’s a sign of a schism between two interest groups – government workers and nanny staters – that normally are part of the same coalition.

So further kudos to Ms. Obama for causing discord on the left.

Though when push comes to shove, the nanny staters lose.

Here’s a real-world example of how the federal government has botched the program. A Montana school board has decided it makes more sense to reject handouts from Uncle Sam.

Bozeman school board members voted 5-3 to pull the high school out of the National School Lunch Program because federal regulations on calories, fat, sugar, sodium, whole grains and other nutritional elements championed by the first lady were driving students off campus for lunch… School officials realized it was financially advantageous to forgo $117,000 in federal food subsidies tied to the National School Lunch Program to draw students back into the cafeteria, and it seems they were correct. …Across the district, the food service program is $1,441 in the black so far for the 2015-16 school year. The food service budget ended last school year $16,000 in the red… And school food service workers told board members students are now getting high quality food from local sources, rather than pre-packaged meals promoted by the government.

Let’s now shift gears and look at other ways the federal government screws up when it gets involved with what goes in our stomachs.

For years, bureaucrats in Washington have tried to tell all of us, not just students, what we should eat and drink.

Well, it turns out that they were giving us bum advice. Here are a few excerpts from some analysis in the Washington Post.

U.S. dietary guidelines have long recommended that people steer clear of whole milk… Whole milk sales shrunk. It was banned from school lunch programs. Purchases of low-fat dairy climbed. “Replace whole milk and full-fat milk products with fat-free or low-fat choices,” says the Dietary Guidelines for Americans, the federal government’s influential advice book, citing the role of dairy fat in heart disease.

Was this advice helpful?

Not so much. At least if the goal is better health.

…research published in recent years indicates that the opposite might be true: millions might have been better off had they stuck with whole milk. Scientists who tallied diet and health records for several thousand patients over ten years found, for example, that contrary to the government advice, people who consumed more milk fat had lower incidence of heart disease.

By the way, it’s not just whole milk. One of my Cato colleagues, Walter Olson, points out that the government has a long track record of botching recommendations.

Previous advice from Washington about the supposed hazards of eggs and other cholesterol-laden foods, the advantages of replacing butter and other animal fats with trans fats, and the gains to be made from switching from regular to diet soda, have all had to be re-evaluated and sometimes reversed in later years.

So what lessons should we learn?

Let’s turn to David Boaz, another colleague from the Cato Institute. He succinctly explains that government shouldn’t be involved in our diets.

It’s understandable that some scientific studies turn out to be wrong. Science is a process of trial and error, hypothesis and testing. Some studies are bad, some turn out to have missed complicating factors, some just point in the wrong direction. I have no criticism of scientists’ efforts to find evidence about good nutrition and to report what they (think they) have learned. My concern is that we not use government coercion to tip the scales either in research or in actual bans and mandates and Official Science. Let scientists conduct research, let other scientists examine it, let journalists report it, let doctors give us advice. But let’s keep nutrition – and much else – in the realm of persuasion, not force. First, because it’s wrong to use force against peaceful people, and second, because we might be wrong. This last point reflects the humility that is an essential part of the libertarian worldview.

Very well said.

Let’s close with one final example to demonstrate the bad things that happen when the federal government gets involved with food.

Writing for the Foundation for Economic Education, my old buddy Jim Bovard explains how biased bureaucrats are deliberately exaggerating hunger in America.

The Agriculture Department announced this morning that 48 million Americans live in “food insecure” households. Soon you’ll hear we’re suffering an epidemic of hunger. While the federal government is already feeding more than 100 million Americans, we’ll be told that it just isn’t enough. But it isn’t true. “Food insecurity” is a statistic designed to mislead. USDA defines food insecurity as being “uncertain of having, or unable to acquire, enough food to meet the needs of all their members because they had insufficient money or other resources for food.”

But this doesn’t mean anyone is going without food, as Jim notes.

The definition of “food insecure” includes anyone who frets about not being able to purchase food at any point. If someone states that they feared running out of food for a single day (but didn’t run out), that is an indicator of being “food insecure” for the entire year — regardless of whether they ever missed a single meal. If someone wants organic kale but can afford only conventional kale, that is another “food insecure” indicator.

Needless to say, statists predictably use the federal government’s biased stats to push for…you guessed it…more government!

After the 2009 USDA food security report was released, President Obama announced that “hunger rose significantly last year. … My administration is committed to reversing the trend of rising hunger.” …USDA food security reports, by creating the illusion of a national hunger epidemic, have helped propel a vast increase in federal food aid in recent years. …The insecurity = hunger switcheroo is also fueling campaigns to compel schools to give free breakfasts to all kids after school starts each day. …USDA has never attempted to create an accurate gauge to measure actual hunger. Instead, citizens are supposed to be satisfied with federal reports that are little more than a subsidy for political grandstanding.

I know what lesson I hope people learn from the deceit, waste, and foolishness discussed today.

We should end any role for the federal government in food. That means ending all the misguided programs discussed above.

It also means abolishing the food stamp program and letting states decide whether such subsidies are desirable.

And it means shutting down the entire Department of Agriculture.

Like all sensible libertarians, I don’t like the idea of having the federal government in my wallet or my bedroom. Perhaps we also need to say we don’t want Washington in our stomachs either.

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I’m happy that many of the presidential candidates are proposing big tax cuts.

Bobby Jindal and Donald Trump have large tax cuts, and Jeb Bush, Rand Paul, and Marco Rubio are proposing smaller – but still significant – reductions in the federal tax burden.

All of these plans, to be credible, should be accompanied by proposals for a sustained reduction in the burden of government spending (with real enforcement mechanisms).

But there’s something else that needs to be part of the discussion. Yes, we need tax cuts and smaller government, but we also need radical tax simplification.

Consider this depressing chart showing the number of pages in the instruction manual for the IRS’s 1040 tax form.

Or the number of sections in the tax law, which has skyrocketed in the past four decades.

I think it’s fair to say that complexity is a proxy for corruption (and even the World Bank agrees with me). Our tax code is a Byzantine mess because interest groups and lobbyists conspire with politicians to swap loopholes for campaign cash.

Some say that this problem could be solved by restricting the First Amendment and limiting people’s ability to participate in the political process. But that’s naive. So long as we have a convoluted tax code, insiders will figure out how to curry favor with the political elite and manipulate the system to their advantage.

Rather than trashing the Constitution, we should be trashing the internal revenue code.

I have lots of economic arguments for fundamental tax reform and I can wax poetic about the harm of high tax rates and double taxation of saving and investment.

But this new chart from the Tax Foundation, showing the ever-growing number of words in the tax code, is probably the single most compelling argument for a simple and fair flat tax.

Wow. It doesn’t seem to matter which party is in power. It doesn’t seem to matter who controls the White House or who controls Congress. Just as the number of pages in the tax code keeps expanding, so does the number of words.

And I think all of us know that this relentless growth in complexity is not good for ordinary taxpayers.

The only winners are the cronyists, politicians, and other insiders who get rich by using the coercive power of government.

And don’t forget that a complicated tax code means a very powerful IRS, and we’ve seen how that leads to venal corruption.

Now let’s circle back to where we started. I mentioned that many presidential candidates have proposed big tax plans that reduce the amount of money flowing to Washington. Many of those plans also include partial reforms of the tax code.

All of these components are desirable in that they both reduce the tax burden and simplify the tax system. And I could list other attractive partial reforms that are in the various tax plans.

But I can’t help but wonder why no candidate has explicitly embraced the gold standard of tax reform.

By the way, I’m ecumenical on a replacement system. There are other plans that satisfy the goals of real reform.

My only caveat, for those who advocate a national sales tax or value-added tax, is that we first need to repeal the 16th Amendment and replace it with something so ironclad that politicians could never do a bait and switch and saddle the American people with both an income tax and a consumption tax.

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Remember the scene in Monty Python and the Search for the Holy Grail, when the Knights of the Round Table have to answer three questions before they can cross the Bridge of Death?

Sir Galahad is cast into the Gorge of Eternal Peril because he changes his mind when asked his favorite color.

I can sympathize because I would hate to be asked for a one-word description of government.

My first instinct would be say “stupid,” but that might not be the most mature response. So I’d probably say “wasteful.” But then I’d change my mind and say “corrupt.” As the bridge keeper was about to cast me to my death, I’d say “thuggish.” And my final choice as I fell into the gorge might be “incompetent.”

And I’d have lots of examples in mind for that final version, such as the time the Italian government appointed the wrong person to a job that shouldn’t even exist.

Or how about the British government being so incompetent that it created a new handout that was so poorly designed that nobody signed up.

I guess Japan’s government was inspired by the British counterparts, because Bloomberg reports that the Japanese government also is too incompetent to give away money.

Not a single Japanese company has applied for a government subsidy to encourage firms to promote women in the 17 months since the plan started. Under a labor ministry plan unveiled in April 2014, small and medium-sized companies that promote women are eligible to apply for a 300,000 yen ($2,500) payment per company, while larger firms can get 150,000 yen each. The ministry had budgeted 120 million yen to be distributed to about 400 companies.

So why didn’t companies want these handouts?

Probably because the government wanted them to waste a lot of time and energy and it simply wasn’t worthwhile.

The program requires companies to set their own numerical targets and achieve the goals within six months. Firms also need to offer at least 30 hours of training to educate their workforce about equal opportunity rights, according to the health ministry’s Megumi Kondo.

Needless to say, the right lesson to learn is that the government shouldn’t be trying to steer the market.

The profit motive and human preferences should determine how many women fill various positions in companies, not the arbitrary diktats of the political class.

Moreover, you would think Japan’s policy community would have more important things to worry about, such as the fact that  the IMF, BIS, and OECD all show the country on track for Greek-style fiscal chaos.

Or the fact that higher taxes are keeping Japan’s economy stagnant.

But I guess it doesn’t make sense to assume smart decisions by Japanese politicians. After all, they’re probably just as venal and short sighted as their American counterparts.

P.S. If I had to pick the most inane regulation on the planet, I’d probably select the Greek rule on stool samples. But, depending on my mood, the Japanese reg on coffee enemas might win the prize.

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Like many Americans, I’m suffering from Obamacare fatigue.

Health Freedom Meter before ObamacareBefore the law was implemented, I repeatedly explained that more spending and more intervention  in the health sector would worsen a system that already was suffering from too much government.

And since the law went into effect, I’ve pointed out – over and over again – the predictably negative effects of Health Freedom Meter after Obamacaregiving the government even more control.

So I’m tempted to wash my hands of the issue.

But that would be wrong, particularly since advocates of statism disingenuously might claim that silence somehow means acceptance or approval.

Moreover, we need to continuously remind ourselves that big government doesn’t work just in case there’s a chance to enact good reforms after Obama leaves office.

With that in mind, let’s look at recent developments that underscore the case against government-run healthcare.

How about the fact that Obamacare is extremely vulnerable to fraud?

…the GAO report showed that federal auditors 11 out of 12 times were able to gain subsidized coverage with fictitious applications, three of the successful applications never provided citizenship or immigration documentation. The investigators in each case were able to obtain $2,500 or around $30,000 annually in advance premium tax credits.

And what about the fact that the Obamacare co-ops have been a big flop?

Nonprofit co-ops, the health care law’s public-spirited alternative to mega-insurers, are awash in red ink and many have fallen short of sign-up goals, a government audit has found. Under President Barack Obama’s overhaul, taxpayers provided $2.4 billion in loans to get the co-ops going, but only one out of 23 — the one in Maine — made money last year, said the report out Thursday. Another one…was shut down by regulators over financial concerns. The audit by the Health and Human Services inspector general’s office also found that 13 of the 23 lagged far behind their 2014 enrollment projections.

Or what about the fact that deductibles have increased under Obamacare?

A survey released earlier this week by the Kaiser Family Foundation found that..deductibles have risen almost three times as fast since 2010 for employer-sponsored plans.

And should we care that Obamacare has meant rising health care costs?

…the actuaries estimated that health spending that year jumped by 5.5 percent, a bigger rise than the country had experienced in five years. …The actuaries cited three main reasons they think health spending is set to tick up. One is the aging of the population… Another is the improving economy… But the third, and a big one, was Obamacare’s coverage expansion.

All of the aforementioned things are contrary to what Obamacare supporters promised.

Though since I focus on policy rather than politics, I’ll take this opportunity to point out that higher deductibles in some ways are a good thing. Which is why I’ve defended Obamacare’s Cadillac tax.

But now let’s look at two additional Obamacare developments. And both represent very bad news.

First, new scholarly research shows that Obamacare will be bad news for all income levels, and even will be of questionable value to those getting big subsidies (h/t: Marginal Revolution).

…the average financial burden will increase for all income levels once insured. Subsidy-eligible persons with incomes below 250 percent of the poverty threshold likely experience welfare improvements that offset the higher financial burden, depending on assumptions about risk aversion and the value of additional consumption of medical care. However, even under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare.

In other words, people generally were making sensible choices when they had some degree of freedom.

But now that they’re being coerced into Obamacare, many of them are worse off. Even in many cases if they’re the ones getting subsidized!

Second, we now know that President Obama’s promise to lower health insurance premiums by $2,500 was laughably misleading.

But it’s not simply that the President exaggerated. As Investor’s Business Daily explains, the numbers actually have gone in the other direction

Since 2008, average family premiums have climbed a total of $4,865. The White House cheered the news, saying it was a sign of continued slow growth in premium costs. …Slightly less higher premiums aren’t what President Obama promised Americans when he ran for office touting his medical overhaul. He specifically said his plan would cut premiums. “We will start,” Obama said back in 2008, “by reducing premiums by as much as $2,500 per family.”

And keep in mind that Obama’s claim of big savings was not a one-time, off-the-cuff comment.

As you can see in this video, it was a pervasive part of his campaign for further government control of the health care system.

But the real story isn’t prevarication by a politician. That comes with the territory.

The real issue is that our healthcare system is more screwed up because government now is playing a bigger role.

And keep in mind that fixing the problem means a lot more than simply repealing Obamacare. We also need to deal with spending programs such as Medicare and Medicaid and address tax preferences and regulations that encourage over-insurance.

After all, never forget that our real healthcare crisis is a giant government-caused third-party payer problem.

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