Tag Archives: Unintended Consequences

Jobless rate climbs in 46 states

Wall Street Journal has the story here.

Excerpt:

The state-by-state employment figures showed only a few states avoiding the deterioration seen nationwide. Unemployment rose in 46 states during the month, and 12 states plus the District of Columbia posted unemployment rates in March that were significantly higher than the 8.5% nationwide figure the government released earlier this month.

The chief economist for California’s finance department, Howard Roth, said the state’s unemployment rate hasn’t been this high since reaching 11.7% in January 1941. The highest level on record in California is 14.7% in October 1940, he said.

…Most economists expect job losses across all U.S. nonfarm employers to continue in April at or near the rapid pace seen in March, when 663,000 jobs disappeared.

Here’s WSJ’s map of the numbers. Click the map for more details.

March year-over-year unemployment
March year-over-year unemployment

So much for socialism hope and change.

How government regulations can cost us our jobs

Good post on the effects of government regulation, over at the Competitive Enterprise Institute’s Open Market blog.

Excerpt:

A story in the Star Tribune in Minneapolis St. Paul shows how adverse effects of such needlessly onerous standard can spill over into other areas. In this case, a meat plant had to shut its doors, putting 200 people out of work because their water exceeded EPA’s standard by 8 parts per billion. EPA can’t show that the Clinton era its standard won’t save a soul, but we do know that economic hard times hurt many.

Here’s an excerpt from the Strib piece:

More than 200 workers in a small town 90 minutes west of Minneapolis have lost their jobs after a beef slaughtering plant was forced to shut down because its water contained excessive levels of arsenic, a condition the plant owner said he couldn’t afford to fix in time to avoid federal penalties.

“I’m done,” said William Gilger, owner of North Star Beef Inc. in Buffalo Lake, Minn.

The Heritage Foundation has a good post on how the EPA intends to expand their control of the economy in order to save us from global cooling warming.

In essence, the endangerment finding says that global warming and climate change pose a serious threat to public health and safety and thus almost anything that emits carbon dioxide and other greenhouse gases could be regulated under the Clean Air Act.

The endangerment finding is the first step in a long regulatory process that could lead to EPA requiring different regulations and units of emissions requirements for each gadget that emits carbon dioxide. The first target would be automobiles, but the EPA’s Advanced Notice of Proposed Rulemaking (ANPR) suggested regulations of almost everything that moves, including new regulations smaller items such lawnmowers and forklifts. The ANPR also suggests putting speed limiters on large trucks on the table as a means of reducing carbon dioxide and even suggested sharkskin boats oozing bubbles to reduce emissions from the shipping industry.

…Beyond things that move, the agency could go after things that stand still. More than a million energy using businesses, buildings, and farms could also be hit with crushing administrative burdens and costly controls. And even if EPA decides not to go that far, they will almost certainly be sued into doing so.

And they have a forecast of the potential costs of this regulation:

However, the economic damage would be similar to any carbon capping bill passed by Congress and perhaps even worse. Dr. David Kreutzer and Dr. Karen Campbell of The Heritage Foundation’s Center for Data Analysis found the economic costs of EPA regulations to be:

• Cumulative gross domestic product (GDP) losses are nearly $7 trillion by 2029 (in inflation adjusted 2008 dollars)
• Single-year GDP losses exceed $600 billion (in inflation-adjusted 2008 dollars).
• Annual job losses exceed 800,000 for several years.
• Some industries will see job losses that exceed 50 percent.

If you tax or regulate something, you get less of it. If you cut taxes and remove regulations, you get more of it. The best protection a worker has is not onerous taxes and regulations on their employer. The best protection a worker has is a choice among a huge number of employers. If you want a choice of employers, try creating conditions that employers actually want.

Republicans care about creating conditions that allow businesses to create jobs. We want this because we believe that people should not dependent on the government for their livelihood. Your ability to choose your employer is part of your liberty. Democrats care about inventing a faked crisis using junk science in order to justify government-coerced redistribution of wealth.

An analysis of the Democrats socialist health care policies

I would summarize the ideals of Democrats (socialists) as follows:

  1. There are unequal life outcomes in society
  2. Those who have little wealth are the victims of those who produce wealth
  3. We (democrats) must transfer wealth until everyone’s life outcomes are equal, regardless of their life choices
  4. We (democrats) must use government coercion to achieve this equality
  5. Since we (democrats) are so morally superior, we are not obligated to transfer our own wealth to anyone

Consider health care. Some risky lifestyle choices are more likely to require more health care services. The socialist’s goal is to make sure that no one is deterred from making these risky choices. Those who do not engage in these risks must be forced to pay for the health care of those who do choose to take on these risks. That way, everyone is equal in the end.

The way this is done is to make sure that people who don’t engage in risky behaviors cannot pay less for their health care than those who do engage in risky behaviors. Let me explain.

Suppose a safe person S knows that he only needs coverage for catastrophic care, since his lifestyle choices eliminate the need for elective treatments like abortions, birth control, STD medications, sex changes and drug addiction treatments. He can be covered for a very low premium.

Consider another irresponsible, risky person R who is engaged in all kinds of risky behavior. He can be covered for all of the medical services for a very high premium. His own choices expose him to risks that will require more medical services.

Democrats (socialists), solve this problem by forcing S to pay for mandatory health care with a very high premium that covers services he will never use. That way, he is really paying for his own health care, and R’s health care, too.

Take a look at this article I found on Health Care BS. In the article, they cite Michael Tanner of the Cato Institute, who analyzes the health care policies that may be included in the Democrats’ health care reform bill.

This is the one I want to draw your attention to, because this is what single-payer countries like Canada have that causes them so many problems:

An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements.  Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need.

And here is another one that will force employers to lay off American workers because employers have to pay more for the same productivity.

An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.

Yes, that’s right. Socialism attacks businesses. Attacking businesses causes unemployment.

And there’s more:

A Government-Run Plan, competing with private insurance.  Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance.  In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage.   That would mean a nearly 60 percent reduction in the number of Americans with private insurance.  It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.

When government controls your health care, you pay them at gunpoint and when you want care you get in line behind people who paid nothing into the system. That is socialized medicine, the dream of all Democratic socialists.

And there’s also redistribution of wealth:

Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.

And remember what I said about the government needing to reducing costs when demand skyrockets for “free” care?

Government Playing Doctor.   Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.”  While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

This is all caused by the good intentions of people who have no knowledge of economics, whatsoever. And it is important to note that it is this kind of naive, incompetent meddling in the free-market that leads to poverty and the loss of all of our liberties.

Further study

Here are some previous links that are relevant: