Tag Archives: Basic Economics

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Why don’t young Americans understand the effects of socialist policies?

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Supermarket shelves empty thanks to socialist policies
Supermarket shelves empty thanks to socialist policies

Here is an interesting article by Kathryn Blackhurst, writing for LifeZette.com. The article reports on how the mainstream media has covered the situation in Venezuela, which has been under socialist rule for decades.

Kathryn explains:

Out of approximately 50,000 total evening news stories on ABC, CBS and NBC combined in the last four years, just 25 have covered the ongoing crisis in socialist Venezuela, according to a Media Research Center study published Tuesday.

After Venezuela’s former socialist president, Hugo Chávez, passed away in March 2013, the country has spiraled into economic disaster and civil chaos. So far in 2017, more than 50 Venezuelans have been killed during protests against current Venezuelan President Nicolás Maduro and his socialist policies. Many Venezuelans are starving due to shortages of food and other essentials. The country’s inflation rate is set to surpass 700 percent and 25 percent of Venezuelans will be unemployed.

“Yet the Big Three evening newscasts have tried to pretend this crisis does not exist, offering virtually no coverage as the situation has deteriorated over the past four years,” MRC Research Analyst Mike Ciandella wrote.

“The networks have also been reluctant to attach the ‘socialist’ label to Venezuela’s government, and have utterly failed to criticize liberal politicians and celebrities who have praised the Chávez and Maduro regimes,” Ciandella added.

Indeed, out of the 50,000 total evening news stories on the three networks, just 25 covered Venezuela, and only seven mentioned “socialism.” In addition, NBC Nightly News only broadcast 13 stories spanning 16 minutes and 54 seconds, ABC’s World News only covered 8 minutes and 34 seconds over seven stories, and CBS Evening News only offered 3 minutes and 11 seconds over five stories.

“The network evening news programs seem allergic to reporting on the ongoing crisis in Venezuela,” Ciandella told LifeZette in an email. “Even worse, the few times they have managed to cover the widespread poverty, starvation and government oppression in that country, they somehow find ways to do that without mentioning the word ‘socialism.’”

That’s why your children can go through public schools and consume mainstream media news without ever understanding what effects follow from left-wing socialist economic policies. There just isn’t anyone intelligent and honest enough in the mainstream media to give the historical context that explains what policies were tried in the past, which resulted in the effects in the present.

Over 100,000 Venezuelans pouring into Colombia from the Venezuela in order to buy food
Over 100,000 Venezuelans pouring into Colombia from the Venezuela in order to buy food

Economist Stephen Moore has more about the situation in Venezuela, in this Investors Business Daily article.

He writes:

Venezuela is a human rights crisis of epic proportions ‎with mass hunger, mass poverty, despair, ghetto upon ghetto, and a mass exodus of private businesses and anyone with money. There are no rich and no evil corporations to loot anymore. The inflation rate is almost 500% as the currency is now about as valuable as Monopoly money.

The Wall Street Journal reports that Venezuela now employs 100,000 security forces — not to repel foreign threats or invaders, but to keep the government leaders like corrupt president Nicolas Maduro safe from their own citizens. Adjusted for population size, this would be the equivalent of one million Americans employed every day to stop riots in the streets. More than 40 protesters have been shot so far this year by the guardsmen.

The average pay has fallen to less than $50 — not per day, or per week, but per month. How’s that for a minimum wage?  ‎The people eat dogs if they can find them and the world was shocked by the story earlier this year of the raid on the municipal zoo to eat the animals. How bad off does a population have to be to start carving up elephant meat?

The burgeoning resistance throws molotov cocktails, rocks and even human feces at the security forces during the nonstop rioting. It’s like a scene out of an HBO movie. “I don’t fear death because this life is crap,” one protester told the WSJ.

[…]What is stunning about this story is that this is a nation that was once one of the wealthiest places in South America. Unlike places such as Subsaharan Africa where extreme poverty is the norm,  there is no excuse for Venezuala’s steep fall into the abyss because this is a resource-rich nation.

Under thug Hugo Chavez the former socialist dictator, Venezuela began its relentless conquest of private wealth and it’s process of nationalizing private enterprises. Chavez was lionized by the American left and the Hollywood elite — Sean Penn and Chavez were BFFs — for his “progressive” policies.

There’s literally no difference between the views of Chavez and Maduro and mainstream Democrat economic policy in the United States. They’re just further along the road to serfdom than we are, because their population is less economically literate than we are. For now.

I’d be willing to bet that many of these starving protestors in Venezuela voted over and over again for the socialists. That’s what happens when people vote with their feelings instead of knowledge of basic economics. But where would ignorant Venezuelans have picked up a knowledge of basic economics? Come to think of it… where would ignorant American millenials, who hold entire conversations in memes, pick up a knowledge of basic economics? They certainly wouldn’t get it from public schools teachers or the mainstream media “journalists”.

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Analysis: how much did each Obamacare mandate drive up health insurance premiums?

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How each Obamacare mandate affected the health insurance premiums
How each Obamacare mandate affected the health insurance premiums

Since 2010, we were inundated with reports and studies from various groups that argued that the new mandates in Obamacare would drive up the cost of health insurance. And that was actually observed to happen. Year after year, health insurance costs rose – usually by double digits. We knew why this was happening, too: Obamacare required health insurers to cover more conditions, many of them not even related to health insurance.

Here is an an analysis of which mandates caused health insurance costs to rise the most from the Daily Signal.

Excerpt:

Obamacare caused premiums to rise for various reasons, chief among them being the vast new regulations the law imposed on insurance markets. A new analysis from Milliman backs this up. The study provided estimates of the average impact that various Obamacare regulations had on premiums.

[…]Changes in morbidity (or the sickness of the population) due to newly uninsured by itself caused 4 percent increases in premiums nationally, but in Ohio it raised premiums by 35-40 percent.

Age is also a factor in premium prices, and Obamacare disrupted the natural order by dictating the age banding, which disproportionately harmed young people. (Age banding here refers to how much the most expensive plans can be in comparison to the cheapest.)

Before Obamacare, the national rate of age banding was 1-to-5. In other words, the most expensive plan was five times more costly than the cheapest plan, with expense increasing with age.

Obamacare mandated that the rate be set at 1-to-3, so that the most expensive plan could be no more than three times as expensive. While elderly people’s premiums might have seen fewer increases—which is both due to banding and the fact that Obamacare is close to a death spiral—young people have suffered.

Overall, young people can expect to have rate increases between 58.9 percent and 91.8 percent using national averages. However, not every state had a 1-to-5 age band.

In places like Ohio, the effects are far worse—it had a 1-to-6 age band. Even accounting for the differences in its population from the national average, young people in Ohio can still expect to pay an average of 7.7 percent more on top of other increases.

In addition to this “youth tax,” mandates like the “essential health benefits” and actuarial requirements further punish all Americans with benefits that they don’t need, at prices they can’t afford. While in places like Maryland these mandates might only contribute 8 to 10 percent to premium increases, nationally they raise premiums by an average of 16.5 percent, up to 32 percent.

Overall, accounting for gender, age, and the relative proportions of all those groups, Americans are paying 44.5 to 68 percent more in premiums owing just to Title I regulations. That number is even higher when factoring all the other adverse effects of Obamacare.

Notice that “guaranteed issue”, which is so popular with those who feel that they can somehow be generous by spending other people’s money, is one of the biggest drivers of health insurance costs. When pollsters ask people whether they want to keep these provisions, they mostly say yes. But when the pollsters ask whether they want to keep these provisions if it means that their own health insurance costs will go up, they mostly say no. It’s amazing how American voters, especially Democrats, love the idea of spending other people’s money. As long as they don’t have to pay for it, then it’s a great idea to spend someone else’s money in order to buy the feeling (and the peer approval) of being generous and compassionate.

And after 8 years of Obama offering that feeling to his supporters, we now have a national debt of $20 trillion, instead of $10 trillion. Mind you, in decades of asking my co-workers, I’ve never yet met one Democrat who could tell me what the national debt was. I guess that would interrupt their feelings of generosity and compassion.

 

 

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New study: in 2017, minimum wage increases will cost 383,000 low income jobs

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I have a key that will unlock a puzzling mystery
I have a key that will unlock a puzzling mystery

Is raising the minimum wage a good idea? Where would the money come from for the higher wages? Would job creators be able to afford to pay people more for the same level of productivity?

Investors Business Daily discusses a new study about the minimum wage increases that will take effect in 2017:

One of the most vexing economic issues today is the minimum wage. For many, the failure to raise the minimum wage to $15 or higher is a sign of our nation’s stinginess and an essential part of the fight for income equality. However, the truth, sad to say, is quite different, as a new study shows.

The study by the American Action Forum, a nonpartisan think tank led by former Congressional Budget Office Director Douglas Holtz-Eakin, looked at minimum-wage hikes scheduled to take effect in the coming years in 14 states and the nation’s capital and found they will “cost millions of jobs across the country and each lost job only leads to total wage earnings rising by a few thousand dollars.”

The reason is simple: When you raise the minimum wage of low-skilled, low-productivity labor — a group that disproportionately includes young minority males — you inevitably destroy jobs. No business will hire someone and pay him more than he’s worth.

So all those states might think they’re helping the downtrodden and the poor, and striking a blow for equality by mandating higher wages, but they’re doing just the opposite: Pricing many young people out of entry-level jobs.

The study estimates that minimum-wage hikes in just 2017 will kill off 383,000 low-end jobs. When phased in over a series of years, the losses become truly big: 2.6 million jobs. But wait, won’t the minimum-wage hike at least boost incomes?

Yes, but not much. For each job lost, earnings for the employees affected by the increase would go up just $6,900.

“While proposals to raise the minimum wage are well intended, it is important to consider the negative labor market consequences,” the report said. “A 10% increase in the real minimum wage is associated with a 0.3 to 0.5 percentage-point decline in the net job rate.”

What will happen when all of these young workers come out of high school and cannot find entry level jobs? Answer: they will have to get money through crime or black market or by collecting welfare. That’s how you earn money if you can’t get employment through legal means.

If we left the minimum wage low, they would be able to find entry level jobs and move up the ladder, perhaps by taking classes at night, like my parents did. My Dad was able to earn his Bachelor’s degree by working in a flower shop and as a security guard for minimal pay. Then he was able to find full-time work that allowed him to have another child, i.e. – me. My parents married first, got jobs, then had children later. But they relied on the availability of entry level jobs in order to work that plan through.

It’s very important to understand that not everyone who INTENDS to help the poor really ACHIEVES helping the poor. I really hope that Americans start to understand from disasters like Obamacare that you cannot let economic illiterates drive policy decisions. No matter how good the happy-talk sounds when read off of a teleprompter, there is no getting around the laws of economics.