Month: November 2012

According to recent news stories, the Mississippi River is at record low levels, and this has the potential to stop the movement of shipping on the river. This will have a major impact on the transportation of bulk goods, which are shipped up and down the river. The reason the river is so low? Lack of rainfall, obviously, but this lack of rain fall is the product of changing weather patterns. And changing weather patters are the result of global warming. So we can add the cost of shipping to the ledger of global warming.

Here’s the Time Magazine Story: Mississippi River Near Record Low.

Economists long ago gave up on the idea of Trickle down economics, or the idea that you cut taxes on the rich to spur economic growth, and this growth at the top will trickle down to the bottom. Even many Republicans have turned on the idea, including David Stockman, who was President Reagan’s budget director. But now one prominent Republican elected official – Bobby Jindal, Governor of Louisiana – has publicly disagreed with the theory.

Here’s the story from Business Week.

This is certainly a good thing for sanity in public policy, though it might be a bad thing in electoral politics. Only time will tell.

Economists long ago gave up on the idea of Trickle down economics, or the idea that you cut taxes on the rich to spur economic growth, and this growth at the top will trickle down to the bottom. Even many Republicans have turned on the idea, including David Stockman, who was President Reagan’s budget director. But now one prominent Republican elected official – Bobby Jindal, Governor of Louisiana – has publicly disagreed with the theory.

Here’s the story from Business Week.

This is certainly a good thing for sanity in public policy, though it might be a bad thing in electoral politics. Only time will tell.

Mitt Romney has said that President Obama won reelection by promising his supporters “gifts.”

According to the Washington Post:

In explaining his overwhelming electoral college defeat last week, Romney said Obama followed what he called the “old playbook” of seeking votes from specific interest groups, “especially the African-American community, the Hispanic community and young people,” the New York Times said. “In each case they were very generous in what they gave to those groups,” he added, according to the paper.

See: Post Article

But this raises a couple of questions for me.

First, why did Asian Americans vote overwhelmingly for Obama?

According to CNN’s post election exit polling, Asian Americans voted for Obama over Romney by a margin of 75% to 26%. See, CNN Exit Polling

If Obama was promising “gifts” to Asian Americans I did not hear it. In fact, to the best of my recollection, few politicians pander to Asian Americans. I wonder how they feel about this? Do they resent not being pandered to, or are they grateful?

But the more important point is if voters only voted for Obama because he essentially bought them off, why did Asian Americans vote so overwhelmingly for him?

Second, why did Jews vote favor Obama by 69%?

After all, Romney attacked Obama for not supporting Israel enough, and promised to be the best friend Israel has ever had (OK, that might be a bit over the top). What did Obama promise the Jews to win their vote?

As far as I can see, nothing.

The fact that Jews and Asian-Americans voted overwhelmingly for Obama puts the lie to Romney’s claims that Obama only won by buying-off interest groups.

I should also note that some Republican’s reject this idea. Louisiana Gov. Bobby Jindal said it was “absolutely wrong.” See Salon article.

Here’s a link to an excellent article in the Lane Report about Kentucky exports. Write more about this later.

Exports: Made in Kentucky

In the wake of Obama’s reelection, a number of states have announced that they will not implement a number of state required provisions of the new law. See, “Kansas, Missouri Won’t Set up Obamacare’s State-Run Health Insurance Exchanges “

The specific provision that a number of states object to is the requirement to set up an “Insurance Exchange.”  The Insurance Exchange is basically a marketplace where consumers can go to price and purchase insurance.

The rejection of this provision by conservatives is ironic for two reasons: federalism and the free market.

It is odd that states’ rights conservatives are refusing to implement a state program and allowing the federal government to create and run the program for the state. This directly contradicts the basic idea of federalism, which is that states are better able to create and run programs that affect the state. While it is certainly understandable that state politicians don’t like the federal government telling them what to do – in this case establish an “insurance exchange” – any federalist worth his salt would say that even if the program is mandated the states are better able to create the specifics of the program for the state. I know that these politicians are refusing to act simply out of spite, but the irony of their behavior is laughable.  

But the clear rejection of federalism is only one of the ironies. The other is the rejection of free market principles. The Insurance Exchange is a one stop market for health insurance. It is essentially an Amazon for health insurance. Currently a person shopping for insurance can go to different insurance companies and try to interpret their policies, and then must go to an insurance agent to actually purchase the insurance. As someone who has purchased health insurance as an individual I can tell you that this is a difficult process.

One principle that is supposed to be the foundation of the free market is the free availability of information. A free market only works if purchasers have access to all pertinent information about the product they wish to buy. A consumer can only make an informed choice in the free market if they have all the information they need about the desired product: the price, the quantity, the quality, the selection, the availability of alternatives. Theoretically the free market works best when consumers know the most about the products they want. It is only through that knowledge that consumers can buy the least expensive, or highest quality products, and thus, through the magic of supply and demand, drive costs down.

The purpose of the Insurance Exchange is for each state to provide a comprehensive list of all the available insurance options within the state. This allows the consumer to make an informed choice, and select the insurance policy that best meets their needs. It is a marketplace out of Adam Smith’s dreams. And yet conservatives reject it. It kind of makes me wonder if they think through their policy choices, or if every choice is a simple, and thoughtless, knee jerk reaction.