This morning’s key headlines from GenerationalDynamics.com
- Pro-Russians riot in cities across eastern Ukraine
- President Obama declares ‘Mission Accomplished!’ on Obamacare
Pro-Russians riot in cities across eastern Ukraine
In Donetsk, Luhansk, and Kharkiv in eastern Ukraine, pro-Russianprotesters on Sunday stormed government buildings, clashed withpolice, hung Russian flags from the buildings and called for areferendum on independence similar to the one that led Russia to annexCrimea.
Russian President Vladimir Putin has said that Russia has “nointention” of invading eastern Ukraine, despite the tens of thousandsof Russian troops on the border, all active, well-trained,well-supplied with food and spare parts. However, Putin has also saidthat Russia WOULD invade eastern Ukraine if it became necessary toprotect ethnic Russians.
President Obama declares ‘Mission Accomplished!’ on Obamacare
President Obama was visibly gloating this past week when he declaredthat 7.1 million people had “signed up for” Obamacare. He claimed tohave no information on how many of those had even made a singlepayment, or how many were subsidized, or how many of these were forfree Medicaid. He declared that “Obamacare is here to stay!”
When I first wrote about the “Obama’s health plan, a proposal of economic insanity”in 2009, I said that this plan would never be implemented because itwould destroy markets and be economically disastrous. I compared itto President Richard Nixon’s wage-price controls which were not asdisastrous for the markets as Obama’s health plan, but still wreckedthe economy for close to a decade. I’ve repeated that many timessince then, and I’m going to repeat it today: Obama’s health plan willnever be implemented.
Obama’s health plan called for employer mandates, individual mandates,a working federal health care marketplace, and integration of allhealth records in the country into the IRS’s databases. None ofthese things have been implemented yet, and most will probably never beimplemented. In just this past week alone, close Obama advisor RobertGibbs sent out a trial balloon, saying in a speech that the employermandate will be killed completely: “I don’t think the employer mandate will go intoeffect. It’s a small part of the law. I think it will be one ofthe first things to go.”
Gibbs has a good sense of humor. The employer mandate is an essentialcore component of the law, not a small part of the law.
So the markets have been all but destroyed by Obamacare. The7.1 million signups that Obama was gloating about are irrelevantto the markets. It’s his economic philosophy that it’s all rightfor a business to lose money, because they can make it up involume.
Suppose President Nixon had announced something like, “Citizens,please sign up for NixonCarePriceControls, and if you sign up, you canbuy as much Coca-Cola you want for just a penny a bottle.” Then wecan assume that many millions would sign up forNixonCarePriceControls, even more than 7.1 million. The problem isthat the Coca-Cola company would go out of business. That in fact iswhat happened to many businesses. The one that I’ve always rememberedwas that chicken farmers were killing chickens, rather than bringingthem to market, because chickens were price-controlled, while chickenfeed was a commodity and could not be controlled, so it cost more togrow a chicken than the farmer could get under the price controls.
So the fact that 7.1 million signed up for unsustainably cheapinsurance may be a victory to President Obama, but it’s a disaster forthe economy. The only thing that would have been worse isif 10 or 15 million people had signed up.
You’d think that an economist would have to be particularlyincompetent and stupid to know nothing about an event as recent asNixon’s price controls, but incompetence and stupidity are availablein abundance these days.
The public loved President Nixon’s wage-price controls when theywere first announced, but then the shortages starting occurring– gasoline, heating oil, red meat, soybeans, and numerous otherproducts. Nixon did everything he could to save the controls,granting special exemptions and perks to favored people, announcingfrequent rule changes to resolve each new problem as it arose,and so forth.
Nixon’s wage-price controls were supposed to reduce inflation from4% to 2%. That didn’t happen. Instead, the economy was so screwedup with shortages and misallocations that the inflation raterose to 12%.
In other words, Nixon’s wage-price controls destroyed the economy andnot only accomplished nothing but were much worse than nothing.
Now we have the same thing with Obamacare. It’s hard to know what’sgoing on with all the confusion and chaos, with Obama changing therules every week and refusing to release any figures that he considersunfavorable. But apparently, the number of uninsured people today iscomparable to the number of uninsured people before all this started.So nothing has been accomplished.
Obama has lied repeatedly and often. He’s bribed cronies with perks and extorted political enemies. Even among his ardent supporters,you’d have to be crazy to believe anything he says. He’ll say onething on Monday and then reverse himself the next day and screw thecountry.
Insurance costs have significantly increased, people have lost theirhealth insurance policies, people have lost their doctors, even peoplewho have signed up are often not sure whether their next visit to theemergency room will be insured.
There’s also a constitutional crisis on the agenda. Obama has simplyignored the constitution and changed his own Obamacare law repeatedlyto suit his whims. That violates the Constitution, and at some pointin the next year or so, the Supreme Court is going to have its say,creating a legal and constitution disaster comparable to theHealthCare.gov IT disaster. There’s apparently no law and noconstitutional provision that Obama is unwilling to violate.
And the worst is yet to come, because there’s a huge bill to be paid.Those 7.1 million people, as an aggregate, will incur far more medicalcosts than they will pay for in premiums. This means that when thebill comes due in the next few months, the insurance companies willhave to be bailed out (which is apparently permitted by the Obamacarebill), and they’ll have to substantially increase insurance premiumsfor next year. And so far, Obamacare has simply wasted something likea trillion dollars. (See “1-Dec-13 World View — Obamacare: 500M lines of code, $500M, only 60% completed” from last year.)
And for what? Obama announced “MissionAccomplished,” but what exactly was accomplished? What has Obamacareaccomplished except to feed Obama’s ego?
This brings up an important difference between Obamacare andNixon’s wage-price controls. Nixon was a member of the Silent Generation and had fought in and survived World War II. Like most Silents, hewas willing to put the good of the country ahead of his own ego,because he understood how dangerous the alternative was. So when itbecame clear that Nixon’s wage-price controls were a disaster, heended them. It was the right thing to do, and it was for the good ofthe country.
Obama is in Generation-X, whose people typically put their egos at thehighest importance level and put the good of the country about 50thdown on the list. Obama is following the standard generational Nomadarchetype. (See “The nihilism and self-destructiveness of Generation X” from 2008.) Obamais determined to save something called “Obamacare” for hislegacy, no matter how disastrous it is for the country. And that’sjust something the rest of us will have to suffer for. BenefitsPro and Forbes and Nixon’s Wage and Price Freeze
KEYS: Generational Dynamics, Ukraine, Donetsk, Luhansk, Kharkiv,Russia, Vladimir Putin, Obamacare, Nixon’s wage-price controls