8/29/11
The big sub-story on the Greek bailout (at least until this morning’s announcement of the merger of Alpha Bank SA and EFG Eurobank Egrasias SA) was the insistence on the part of Finland that the Greek government put up cash collateral for Finland’s portion of the new debt being extended as part of the latest iteration of the Greek bailout.
This call for collateral by the Finns is causing consternation among the countries contributing to the financial package that is supposed to save Greece, though no one really believes that end will be achieved. If Finland gets cash collateral, the thinking goes, why shouldn’t everyone get collateral? And if everyone gets cash collateral, so much more financing will be needed that the overall deal will fall apart.
So how will this issue be resolved? Some are speculating that physical, as opposed to cash, collateral will be offered for the bailout lending; real estate, gold, state owned industries, etc. would be put up to secure the loans Greece will receive from its EU brethren. But the problems involved in offering physical collateral are myriad. Will the Greeks be amenable to such a deal? Aren’t some of those assets to be put up to secure the loan supposed to be sold as part of the overall restructuring of the Greek fisc? (I don’t think the latter objection is a worthy one for reasons that could be grist for another post.) What exactly will the lenders do to seize collateral should the Greek government default? What consequences would ensue from such efforts? And on and on and on.
I can’t get inside the heads of the Finns who are asking for collateral. But if I were to guess, what the Finns are really after is to be excused from the whole deal. One of the lessons one can derive from restructuring negotiations is that creditors can get more than they are legally entitled to if they make themselves a sufficiently large nuisance. While the analogy is not perfect, it looks to me like the Finns are making themselves a nuisance in order to get out of the Greek bailout deal. While Finland is among the most financially responsible countries in the Eurozone, the EU, and the world, for that matter (See my 4/14/11 post, “…’CAUSE I DON’T HAVE A WOODEN HEART…”), it is a small country that, due to its diminutive size, is expected to contribute only a miniscule portion of the lending facilities necessary, supposedly, to keep Greece afloat. Finland’s portion could easily be covered by, say, Germany or France. So the big countries in Europe may see it in their interest to just excuse Finland from any obligation to help bail out Greece rather than accommodate Finnish demands for cash collateral. Such an excusal, if that is a word, I am guessing, is exactly what Finland is seeking.
Sure, a move by Germany or France to pick up Finland’s tab for the Greek bailout would set a very bad precedent, but what action that the European Union has taken in response to the problems in Ireland, Greece, Portugal, et. al. hasn’t set a very bad precedent?
Monday, August 29, 2011
BETTING ON BEN?
8/29/11
Today’s (i.e., Monday, 8/29’s, page C1) Wall Street Journal contained an article that, while not living up to the billing of its headline, “Fed Faces Old Foe As Hazard Returns,” nonetheless contained some compelling observations and a few piquant facts.
One of those observations was made by Richard Weiss, senior portfolio manager for asset allocation at American Century Investments in Kansas City. Mr. Weiss, according to the article, is continuing to invest in growth stocks because, in his words
“One of the Fed’s mandates is to avoid a recession at all cost, and we fully expect them to use all their tools to do so.”
Mr. Weiss is largely right in his observation on the Fed’s mandates. Before 1978, the Fed’s sole mandate, at least concerning its management of monetary policy, was to rein in inflation. But in 1978, with the passage of Full Employment and Balanced Growth Act, better known as Humphrey-Hawkins, after its chief sponsors and presumed authors, the Fed’s mandate changed to a dual role of both containing inflation and assuring full employment. Unfortunately, neither Congress nor President Carter handed the Fed a magic wand along with this mandate, but I digress. So, indeed, as Mr. Weiss said, one of the Fed’s mandates is to avoid recession. I probably would not have used the words “at all cost,” but Mr. Weiss is largely right in that contention.
Mr. Weiss may also be right in the conclusion he draws from his observation; i.e., to buy growth stocks that, as the Journal puts it, “benefit from stable economic growth.” (I wonder whether Mr. Weiss’s, and American Century’s, decision to buy growth stocks has more to do with the nature of American Century as a growth shop than with any notions about the market at any given time, but, again, I digress. At least I do so parenthetically in this instance.) But I doubt it.
If the Fed uses all the tools at its disposal to avoid recession, and it certainly has so far, there are three possible outcomes:
--The Fed succeeds in avoiding recession and does so with such a degree of aplomb that it also avoids igniting inflation and debasing the currency.
--The Fed succeeds in avoiding recession but, in the process, ignites inflation and debases the currency, making its “victory” largely an ephemeral one.
--The Fed fails miserably at avoiding recession and ignites inflation and debases the currency as a result of those ill-fated efforts, leading us into a dystopic bout of stagflation.
In order to buy growth stocks based on the Fed’s efforts, one would obviously have to assign a higher degree of probability to the first possible outcome than to the other two put together, though one could see how growth stocks could do well, at least in the short run, under the second above scenario. As loyal readers might guess, I would assign the highest degree of probability to the third scenario, followed by the second scenario, and trailed at an eyesight challenging distance by the first scenario. Therefore, I won’t be buying growth stocks any time in the near future. But one does not have to have as bleak a view of the current Fed, or of life in general, as yours truly to avoid growth stocks at this juncture. One only has to assign equal probabilities to the above three scenarios; two out of three would thus carry and dissuade an investor from investing heavily in growth stocks.
Fighting the Fed is rarely advisable; doubting the ability of the Fed is often advisable, especially when we are dealing with Obsequious Ben Bernanke’s Fed.
Today’s (i.e., Monday, 8/29’s, page C1) Wall Street Journal contained an article that, while not living up to the billing of its headline, “Fed Faces Old Foe As Hazard Returns,” nonetheless contained some compelling observations and a few piquant facts.
One of those observations was made by Richard Weiss, senior portfolio manager for asset allocation at American Century Investments in Kansas City. Mr. Weiss, according to the article, is continuing to invest in growth stocks because, in his words
“One of the Fed’s mandates is to avoid a recession at all cost, and we fully expect them to use all their tools to do so.”
Mr. Weiss is largely right in his observation on the Fed’s mandates. Before 1978, the Fed’s sole mandate, at least concerning its management of monetary policy, was to rein in inflation. But in 1978, with the passage of Full Employment and Balanced Growth Act, better known as Humphrey-Hawkins, after its chief sponsors and presumed authors, the Fed’s mandate changed to a dual role of both containing inflation and assuring full employment. Unfortunately, neither Congress nor President Carter handed the Fed a magic wand along with this mandate, but I digress. So, indeed, as Mr. Weiss said, one of the Fed’s mandates is to avoid recession. I probably would not have used the words “at all cost,” but Mr. Weiss is largely right in that contention.
Mr. Weiss may also be right in the conclusion he draws from his observation; i.e., to buy growth stocks that, as the Journal puts it, “benefit from stable economic growth.” (I wonder whether Mr. Weiss’s, and American Century’s, decision to buy growth stocks has more to do with the nature of American Century as a growth shop than with any notions about the market at any given time, but, again, I digress. At least I do so parenthetically in this instance.) But I doubt it.
If the Fed uses all the tools at its disposal to avoid recession, and it certainly has so far, there are three possible outcomes:
--The Fed succeeds in avoiding recession and does so with such a degree of aplomb that it also avoids igniting inflation and debasing the currency.
--The Fed succeeds in avoiding recession but, in the process, ignites inflation and debases the currency, making its “victory” largely an ephemeral one.
--The Fed fails miserably at avoiding recession and ignites inflation and debases the currency as a result of those ill-fated efforts, leading us into a dystopic bout of stagflation.
In order to buy growth stocks based on the Fed’s efforts, one would obviously have to assign a higher degree of probability to the first possible outcome than to the other two put together, though one could see how growth stocks could do well, at least in the short run, under the second above scenario. As loyal readers might guess, I would assign the highest degree of probability to the third scenario, followed by the second scenario, and trailed at an eyesight challenging distance by the first scenario. Therefore, I won’t be buying growth stocks any time in the near future. But one does not have to have as bleak a view of the current Fed, or of life in general, as yours truly to avoid growth stocks at this juncture. One only has to assign equal probabilities to the above three scenarios; two out of three would thus carry and dissuade an investor from investing heavily in growth stocks.
Fighting the Fed is rarely advisable; doubting the ability of the Fed is often advisable, especially when we are dealing with Obsequious Ben Bernanke’s Fed.
Saturday, August 27, 2011
I OWE, I OWE, SO OFF TO WORK I GO…
8/27/11
An article in this morning’s (Saturday/Sunday, 8/27-8/28/11, page A5) Wall Street Journal entitled “Tug of War on Timing for Belt-Tightening” prompted me to write a post (this one) that I have been contemplating for a long time.
The article outlines the now long running argument between what the Journal refers to as liberals and conservatives, though that breakdown is not as clear cut for this issue as it might be for others, regarding the advisability of what passes for fiscal austerity at this time. The “liberals” (Keynesians, really, and despite the largely undeserved derision that Lord Keynes and his acolytes have received from the right for the last 35 or so years, the two terms are not necessarily interchangeable) argue that, with the economy still shaky, this is not the time to cut spending and raise taxes. The “conservatives” argue that fiscal austerity is needed because what is holding back the economy is uncertainty about what Washington is up to and fear that the pols will spend us into oblivion, necessitating a future tax increase that is subtly entering into the calculations of businesses and individuals. Some in the latter camp are also arguing for “real” tax cuts, i.e., cuts in marginal tax rates as opposed to what they consider tinkering with the tax code, such as payroll tax holidays and the like. Mostly, however, what the Journal refers to as the conservative camp is pushing for Washington to get is spending under control.
While, as you might guess, yours truly is far more sympathetic with the latter argument than the former, neither fiscal austerity nor what passes for fiscal prudence nowadays will have much impact on our miserable economy. Why? In times of heavy indebtedness, such as those we are experiencing today, the traditional tools of fiscal, and even monetary policy, do not work well, if at all. Any money received from stimulative policy is either used to pay down gargantuan debt levels (individuals) or horded because of lack of overall confidence (individuals and businesses). Any confidence engendered by a demonstration of a determination by our public servants to follow a path of fiscal virtue (as if such a thing could ever happen, but I digress) will be more than offset by fear for one’s personal finances when one is confronted by the realities of a mountain of debt built up due to a sense of entitlement to a lifestyle that was clearly unsustainable.
You have heard the arguments outlined in the last paragraph; they are neither insightful nor fresh. But I would take it a step further into the realm of the real economy. Not only will the fruits of fiscal stimulus, or the engenderment (if that’s a word) of new confidence be blunted by a mountain of debt, but any actual increase in output, rather than funny money created by our ever wise “policymakers,” will have to be dedicated to the reduction of debt. We simply lived way over our heads for the last twenty or so years and now have to face the music. We can’t enjoy the fruits of our labor; instead, our creditors will, of necessity, enjoy those fruits. Despite the earnest efforts of Obsequious Ben Bernanke and the Washingtonians to punish savers by keeping interest rates as low as possible, this ultimate transfer of wealth is a fact of life that cannot be avoided, nor should it be.
Not only did we go through the seed corn over the last twenty or so years, we borrowed even more to finance a lifestyle to which we thought we were somehow entitled. Now we have to pay back the debt and, if we are to survive as a society, begin rebuilding the seed corn. Though these efforts probably, the latter almost certainly, will prove ineffectual, even the feint at such efforts we will make will render the traditional tools of economic management largely ineffectual. Recovery, if it ever comes, will be a long, hard slog. More importantly, what will prove to be the ultimate futility of our efforts to get our personal and public fiscal houses in order will demonstrate that we are doomed as an economic going concern and probably as a society.
Market watchers, some very smart and some not so smart, have long argued, with some historical justification, that the time to buy stocks is when things look bleakest. If I really believed that, I would be backing up the truck on stocks and would borrow money to buy more. But I’m not going to do that. This time, I fear, things really are different, though those are very dangerous words.
An article in this morning’s (Saturday/Sunday, 8/27-8/28/11, page A5) Wall Street Journal entitled “Tug of War on Timing for Belt-Tightening” prompted me to write a post (this one) that I have been contemplating for a long time.
The article outlines the now long running argument between what the Journal refers to as liberals and conservatives, though that breakdown is not as clear cut for this issue as it might be for others, regarding the advisability of what passes for fiscal austerity at this time. The “liberals” (Keynesians, really, and despite the largely undeserved derision that Lord Keynes and his acolytes have received from the right for the last 35 or so years, the two terms are not necessarily interchangeable) argue that, with the economy still shaky, this is not the time to cut spending and raise taxes. The “conservatives” argue that fiscal austerity is needed because what is holding back the economy is uncertainty about what Washington is up to and fear that the pols will spend us into oblivion, necessitating a future tax increase that is subtly entering into the calculations of businesses and individuals. Some in the latter camp are also arguing for “real” tax cuts, i.e., cuts in marginal tax rates as opposed to what they consider tinkering with the tax code, such as payroll tax holidays and the like. Mostly, however, what the Journal refers to as the conservative camp is pushing for Washington to get is spending under control.
While, as you might guess, yours truly is far more sympathetic with the latter argument than the former, neither fiscal austerity nor what passes for fiscal prudence nowadays will have much impact on our miserable economy. Why? In times of heavy indebtedness, such as those we are experiencing today, the traditional tools of fiscal, and even monetary policy, do not work well, if at all. Any money received from stimulative policy is either used to pay down gargantuan debt levels (individuals) or horded because of lack of overall confidence (individuals and businesses). Any confidence engendered by a demonstration of a determination by our public servants to follow a path of fiscal virtue (as if such a thing could ever happen, but I digress) will be more than offset by fear for one’s personal finances when one is confronted by the realities of a mountain of debt built up due to a sense of entitlement to a lifestyle that was clearly unsustainable.
You have heard the arguments outlined in the last paragraph; they are neither insightful nor fresh. But I would take it a step further into the realm of the real economy. Not only will the fruits of fiscal stimulus, or the engenderment (if that’s a word) of new confidence be blunted by a mountain of debt, but any actual increase in output, rather than funny money created by our ever wise “policymakers,” will have to be dedicated to the reduction of debt. We simply lived way over our heads for the last twenty or so years and now have to face the music. We can’t enjoy the fruits of our labor; instead, our creditors will, of necessity, enjoy those fruits. Despite the earnest efforts of Obsequious Ben Bernanke and the Washingtonians to punish savers by keeping interest rates as low as possible, this ultimate transfer of wealth is a fact of life that cannot be avoided, nor should it be.
Not only did we go through the seed corn over the last twenty or so years, we borrowed even more to finance a lifestyle to which we thought we were somehow entitled. Now we have to pay back the debt and, if we are to survive as a society, begin rebuilding the seed corn. Though these efforts probably, the latter almost certainly, will prove ineffectual, even the feint at such efforts we will make will render the traditional tools of economic management largely ineffectual. Recovery, if it ever comes, will be a long, hard slog. More importantly, what will prove to be the ultimate futility of our efforts to get our personal and public fiscal houses in order will demonstrate that we are doomed as an economic going concern and probably as a society.
Market watchers, some very smart and some not so smart, have long argued, with some historical justification, that the time to buy stocks is when things look bleakest. If I really believed that, I would be backing up the truck on stocks and would borrow money to buy more. But I’m not going to do that. This time, I fear, things really are different, though those are very dangerous words.
Thursday, August 25, 2011
“…JUST ENOUGH TO WET MY BEAK…”
8/25/11
One of the justifications the Illinois Tollway board used for its 87.5% (!) increase in tolls is that, even after the increase, tolls in Illinois will be in the bottom third in the nation on a per mile basis.
One would think that having among the lowest tolls in the nation would be a point of pride and a useful, albeit limited, tool for attracting and retaining business and would be especially salient given our position as one of the nation’s key transportation hubs. Apparently, though, only the average voter or the typical businessman, the people who pay the bills, sees low tolls as an advantage and a selling point. The politicians see our being one of the most lightly tolled states as an opportunity to further wet their already drenched beaks; after all, the relatively low costs of traversing our area’s tollways is one of the few areas in which our politicians are not keeping up with their out of state brethren in reaching deeper into the citizenry’s pockets.
One of the justifications the Illinois Tollway board used for its 87.5% (!) increase in tolls is that, even after the increase, tolls in Illinois will be in the bottom third in the nation on a per mile basis.
One would think that having among the lowest tolls in the nation would be a point of pride and a useful, albeit limited, tool for attracting and retaining business and would be especially salient given our position as one of the nation’s key transportation hubs. Apparently, though, only the average voter or the typical businessman, the people who pay the bills, sees low tolls as an advantage and a selling point. The politicians see our being one of the most lightly tolled states as an opportunity to further wet their already drenched beaks; after all, the relatively low costs of traversing our area’s tollways is one of the few areas in which our politicians are not keeping up with their out of state brethren in reaching deeper into the citizenry’s pockets.
Wednesday, August 24, 2011
ME AND THE GODFATHER OF SOUL, HARDEST WORKING MAN IN SHOW BUSINESS, SOUL BROTHER #1, MR. DYNAMITE…
8/24/11
Knowing that I am a long time bull on gold, several people have asked how I feel about that ancient object of kingly desire now that the December future has fallen $113.30, or 7% from its $1898.40 high of just two days ago.
I still like gold for the reasons I’ve liked it since June, 2006: it is a bet against the political and monetary leadership of this country, the world, and the world economy. Gold is also a bet that the only way we can get ourselves out of the debt hole into which we have dug ourselves, all the while reassuring each other that what we had (have) was (is) a “housing problem” or a “sub-prime mortgage problem,” is to inflate, inflate, inflate. The more than tripling of the price of gold since I took my position has done nothing to remove the bullish rationale for holding it; in fact, developments since mid-2006 have only reinforced the notion that our country, and the world economy, is in the hands of poseurs and pompous, poltroonish popinjays.
But doesn’t a drop in gold, like the hair-raising plummet we have just witnessed, make me nervous? Maybe a little, but not enough to make me want to sell. Why?
First, I’m not smart enough to know what a commodity or a market will do over the course of a few days, weeks, or months. (Twenty years ago, of course, I was smart enough to know what a market would do over such short time periods, but, like most people, I seem to have gotten dumber with age. But I digress.) But I do know that nothing goes up in a straight line, so something like what we have seen was to be expected after the sharp run-up in gold over the last few weeks. I wouldn’t be surprised to see it fall further over the short run, and would be at least equally unamazed were gold to turn up again in the next few days.
Second, every time something like this has happened since I took my position in gold, I have been delighted when I resisted the temptation to get out. Yes, I could have gotten out and gotten back in again, but, again, I’m not that smart and maybe I’m a little lazy; it’s easier just to stay put.
Third, commentators were quick to proclaim that today’s drop was the largest since March, 2008. Suppose you were a gold holder in March, 2008, as was yours truly, and you panicked in the wake of a drop in gold similar to the one we saw today and got out. Or suppose that you were contemplating getting into gold during March, 2008 and decided, in the wake of its defenestration that month, that the rally had run its course and the best course was to stay out of gold and buy good old common stocks. How would you feel? On 3/31/08, gold was at $921.30. At its peak on St. Patrick’s Day of 2008, gold was at $1004. It closed after today’s debacle at $1,765.10. You tell me how you’d feel if you sold or postponed plans to get in, perhaps waiting for gold to fall a little more.
For my part, I feel good for having stayed long gold these last few years and am confident that I will feel equally good being equally long the next few years.
Knowing that I am a long time bull on gold, several people have asked how I feel about that ancient object of kingly desire now that the December future has fallen $113.30, or 7% from its $1898.40 high of just two days ago.
I still like gold for the reasons I’ve liked it since June, 2006: it is a bet against the political and monetary leadership of this country, the world, and the world economy. Gold is also a bet that the only way we can get ourselves out of the debt hole into which we have dug ourselves, all the while reassuring each other that what we had (have) was (is) a “housing problem” or a “sub-prime mortgage problem,” is to inflate, inflate, inflate. The more than tripling of the price of gold since I took my position has done nothing to remove the bullish rationale for holding it; in fact, developments since mid-2006 have only reinforced the notion that our country, and the world economy, is in the hands of poseurs and pompous, poltroonish popinjays.
But doesn’t a drop in gold, like the hair-raising plummet we have just witnessed, make me nervous? Maybe a little, but not enough to make me want to sell. Why?
First, I’m not smart enough to know what a commodity or a market will do over the course of a few days, weeks, or months. (Twenty years ago, of course, I was smart enough to know what a market would do over such short time periods, but, like most people, I seem to have gotten dumber with age. But I digress.) But I do know that nothing goes up in a straight line, so something like what we have seen was to be expected after the sharp run-up in gold over the last few weeks. I wouldn’t be surprised to see it fall further over the short run, and would be at least equally unamazed were gold to turn up again in the next few days.
Second, every time something like this has happened since I took my position in gold, I have been delighted when I resisted the temptation to get out. Yes, I could have gotten out and gotten back in again, but, again, I’m not that smart and maybe I’m a little lazy; it’s easier just to stay put.
Third, commentators were quick to proclaim that today’s drop was the largest since March, 2008. Suppose you were a gold holder in March, 2008, as was yours truly, and you panicked in the wake of a drop in gold similar to the one we saw today and got out. Or suppose that you were contemplating getting into gold during March, 2008 and decided, in the wake of its defenestration that month, that the rally had run its course and the best course was to stay out of gold and buy good old common stocks. How would you feel? On 3/31/08, gold was at $921.30. At its peak on St. Patrick’s Day of 2008, gold was at $1004. It closed after today’s debacle at $1,765.10. You tell me how you’d feel if you sold or postponed plans to get in, perhaps waiting for gold to fall a little more.
For my part, I feel good for having stayed long gold these last few years and am confident that I will feel equally good being equally long the next few years.
AS LONG AS YOU’RE PAYING, I’LL HAVE THE LOBSTER!
8/24/11
While mowing my lawn this morning and listening to WBBM Newsradio 78, I was treated to a seemingly mournful report from the Commonwealth Foundation that some people had (Horrors!) skipped an appointment with a doctor or stopped using a prescription drug because they had lost their jobs, and the health insurance that, under our goofy system, goes with it and couldn’t afford the insurance afforded them by the COBRA law. The Commonwealth Foundation’s preferred, indeed, demanded, response to these travails was to continue the subsidy for COBRA that was formerly provided as part of the Bush/Obama administration’s stimulus package.
We are, of course, supposed to wail and gnash our teeth that people are missing doctor’s appointments and/or not taking medication and call our congresspersons demand that subsidization of COBRA be immediately reinstated, perhaps when we are taking a break from demanding that “entitlements be reigned in.” (See one of today’s other posts, I’M ENTITLED TO MY ENTITLEMENTS.) But clear thinking people with even a rudimentary understanding of economics (I know, I know…only about 300 or so people in this country.) are applauding most of the instances in which people are finally missing doctor’s appointments and not taking their medication. Perhaps we are starting to dispense with the billions upon billions of dollars of unnecessary “health care” spending that takes place in this country every year.
How dare I say that so much of our “health care” spending is unnecessary when I have NO medical background? Simply because I understand economics and human nature, which are, after all, the same thing. So much health care spending is unnecessary because people feel free to dispense with it when they have to pay for it themselves. They will take it, or even “demand” it as “vital” when someone else (the insurance company, their employer, the government) is paying for it, but suddenly can do without that doctor visit or that prescription when they must pay for it, and give up, say a meal at a fancy restaurant, yet another flat screen TV, or a few weeks of Starbuck’s, in order to go for this all-important examination or some “life saving” or “life enhancing” drug.
The reason that health care is so expensive is not because doctors or hospitals or nurses are overpaid, which seems to be the underlying assumption behind the Bush/Obama administration’s all purpose solution to every budget/health care spending problem: stiff the health care providers. Health care is so expensive because those who consume it are not the same people as those who pay for it. When anything is free, or near free, demand is infinite, or near infinite. It is, therefore, heartening to see people who use “health care” services have a little skin in the game. They, and we, will doubtless spend our “health care” dollars more wisely when more of them are indeed our dollars.
While mowing my lawn this morning and listening to WBBM Newsradio 78, I was treated to a seemingly mournful report from the Commonwealth Foundation that some people had (Horrors!) skipped an appointment with a doctor or stopped using a prescription drug because they had lost their jobs, and the health insurance that, under our goofy system, goes with it and couldn’t afford the insurance afforded them by the COBRA law. The Commonwealth Foundation’s preferred, indeed, demanded, response to these travails was to continue the subsidy for COBRA that was formerly provided as part of the Bush/Obama administration’s stimulus package.
We are, of course, supposed to wail and gnash our teeth that people are missing doctor’s appointments and/or not taking medication and call our congresspersons demand that subsidization of COBRA be immediately reinstated, perhaps when we are taking a break from demanding that “entitlements be reigned in.” (See one of today’s other posts, I’M ENTITLED TO MY ENTITLEMENTS.) But clear thinking people with even a rudimentary understanding of economics (I know, I know…only about 300 or so people in this country.) are applauding most of the instances in which people are finally missing doctor’s appointments and not taking their medication. Perhaps we are starting to dispense with the billions upon billions of dollars of unnecessary “health care” spending that takes place in this country every year.
How dare I say that so much of our “health care” spending is unnecessary when I have NO medical background? Simply because I understand economics and human nature, which are, after all, the same thing. So much health care spending is unnecessary because people feel free to dispense with it when they have to pay for it themselves. They will take it, or even “demand” it as “vital” when someone else (the insurance company, their employer, the government) is paying for it, but suddenly can do without that doctor visit or that prescription when they must pay for it, and give up, say a meal at a fancy restaurant, yet another flat screen TV, or a few weeks of Starbuck’s, in order to go for this all-important examination or some “life saving” or “life enhancing” drug.
The reason that health care is so expensive is not because doctors or hospitals or nurses are overpaid, which seems to be the underlying assumption behind the Bush/Obama administration’s all purpose solution to every budget/health care spending problem: stiff the health care providers. Health care is so expensive because those who consume it are not the same people as those who pay for it. When anything is free, or near free, demand is infinite, or near infinite. It is, therefore, heartening to see people who use “health care” services have a little skin in the game. They, and we, will doubtless spend our “health care” dollars more wisely when more of them are indeed our dollars.
“EGAD…IT’S LON CHANEY, JR.!”
8/24/11
In the wake of yesterday’s temblor on the east coast, the news media went about their seemingly appointed task of making everyone think the apocalypse was nigh when what New Yorkers, Philadelphians, and Washingtonians were experiencing would not even be noticed, say, on the west coast or in Japan. But I am digressing before even making a point.
Many of the people who had microphones thrust into their faces yesterday had the same comment, something like
“I thought it was terrorists!”
My first thought, after hearing these panicked reactions, was that the government has indeed done its job well.
Ever growing, ever demanding government is in search of food and fuel to sustain its growth. Given that today’s citizenry has at the very best a passing familiarity with the Constitution but a well honed sense of fear and dread, the government needs a bogeyman, always, to break down resistance to or, increasingly, elicit full-throated support for, assaults on liberty and an ever expanding “defense” budget in the interest of “keeping us safe." As I said in my instantly seminal 5/4/11 piece, MY (SO FAR) TWO CENTS ON BIN LADEN’S LONG DELAYED DEMISE, if Osama bin Laden never existed, the government would have had to invent him. “Terrorists” have served this government purpose well since the Soviet Union was crushed under the weight of the inherent stupidity of its philosophical basis; now the government has us crying “terrorism” every time anything bad happens. Thank you, Department of Homeland Security.
One more note…
Judging from the Wall Street Journal’s editorial page of late and the e-mails I have been getting over the last few months (I, like many of you, am on the mailing list of legions of true believers on both sides of the political spectrum, but mostly from the side composed of those who consider Rush Limbaugh to be the result of an illicit union between George Washington and Margaret Thatcher, or perhaps Joan of Arc, were she not French. Time periods, and other complications of history, are of little consequence to such types.), the next time we get another earthquake, tornado, tidal wave, tsunami, sink hole, or bout of road construction, those in whose faces the media types will thrust microphones will blurt out
“I thought it was the Chinese!”
Mark my words.
In the wake of yesterday’s temblor on the east coast, the news media went about their seemingly appointed task of making everyone think the apocalypse was nigh when what New Yorkers, Philadelphians, and Washingtonians were experiencing would not even be noticed, say, on the west coast or in Japan. But I am digressing before even making a point.
Many of the people who had microphones thrust into their faces yesterday had the same comment, something like
“I thought it was terrorists!”
My first thought, after hearing these panicked reactions, was that the government has indeed done its job well.
Ever growing, ever demanding government is in search of food and fuel to sustain its growth. Given that today’s citizenry has at the very best a passing familiarity with the Constitution but a well honed sense of fear and dread, the government needs a bogeyman, always, to break down resistance to or, increasingly, elicit full-throated support for, assaults on liberty and an ever expanding “defense” budget in the interest of “keeping us safe." As I said in my instantly seminal 5/4/11 piece, MY (SO FAR) TWO CENTS ON BIN LADEN’S LONG DELAYED DEMISE, if Osama bin Laden never existed, the government would have had to invent him. “Terrorists” have served this government purpose well since the Soviet Union was crushed under the weight of the inherent stupidity of its philosophical basis; now the government has us crying “terrorism” every time anything bad happens. Thank you, Department of Homeland Security.
One more note…
Judging from the Wall Street Journal’s editorial page of late and the e-mails I have been getting over the last few months (I, like many of you, am on the mailing list of legions of true believers on both sides of the political spectrum, but mostly from the side composed of those who consider Rush Limbaugh to be the result of an illicit union between George Washington and Margaret Thatcher, or perhaps Joan of Arc, were she not French. Time periods, and other complications of history, are of little consequence to such types.), the next time we get another earthquake, tornado, tidal wave, tsunami, sink hole, or bout of road construction, those in whose faces the media types will thrust microphones will blurt out
“I thought it was the Chinese!”
Mark my words.
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