Economics at Work

July 24th, 2010

One of “laws” of economics that most politicians forget whenever they write a new piece of legislation is the Law of Unintended Consequences.  Here is another example from the Obamacare Bill.

Some major health insurance companies will no longer issue certain types of policies for children, an unintended consequence of President Barack Obama’s health care overhaul law, state officials said Friday.

…Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs.

…”We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims,” said Kammer. “Guaranteed issue means you could technically buy it on the way to the hospital.”

You can read the whole article here.  This is already a common problem in Massachusetts where insurance premiums are the highest in the country.

So What the Heck Can be in 2000 Pages of Legislation?

July 21st, 2010

A new series… Dave and I have been wondering what the heck can fill 2000 pages of legislation (healthcare, stimulus, Financial Reform, etc). So as we start to figure that out we will try to post that here.

And the first in the series… A ridiculous requirement for small business…

http://abcnews.go.com/Business/gold-coin-dealers-decry-tax-law/story?id=11211611

Shackled Enterprise

July 18th, 2010

In honor of the 2300 page financial “reform” bill.

Quote of the Day

July 13th, 2010

“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.”

Theodore Roosevelt said those words one hundred years ago at the Sorbonne in Paris in 1910.

Effects of Bush Tax Cut Expiration

July 7th, 2010

Nice quick read on the major effects of the expiration of the Bush tax cuts…

“The bottom line. The Bush tax cuts don’t just offer tax relief to the wealthiest Americans. They offer it to just about anyone who pays federal income taxes. Their scheduled demise next year will raise the tax bill of nearly every taxpayer, unless Congress makes changes and the president jumps on board.”

It will be interesting to see if Obama holds to his promise to “Raise takes on only the top 5%” because as it stands now its another campaign promise unfulfilled.

http://www.smartmoney.com/personal-finance/taxes/how-the-expiring-bush-tax-cuts-affect-you/

The Ant and the Grasshopper

July 4th, 2010

(I apologize for not taking the time to add some more modern personalities, but it still holds)

ORIGINAL VERSION:

The ant works hard in the withering
heat all summer long, building his
house and laying in supplies for the
winter. The grasshopper thinks he’s a
fool and laughs and dances and plays
the summer away. Come winter, the ant
is warm and well fed. The grasshopper
has no food or shelter, so he dies out
in the cold.

MODERN VERSION:

The ant works hard in the withering
heat all summer long, building his
house and laying in supplies for the
winter. The grasshopper thinks he’s a
fool and laughs and dances and plays
the summer away.

Come winter, the shivering grasshopper
calls a press conference and demands to
know why the ant should be allowed to
be warm and well-fed while others are
cold and starving.

CBS, NBC, ABC, and CNN show up to provide
pictures of the shivering grasshopper
next to a video of the ant in his
comfortable home with a table filled
with food. America is stunned by the
sharp contrast. How can this be, that
in a country of such wealth, this poor
grasshopper is allowed to suffer so?

Kermit the Frog appears on Oprah with
the grasshopper, and everybody cries
when they sing, “It’s Not Easy Being
Green.”

Jesse Jackson stages a demonstration
in front of the ant’s house, where the
news stations film the group
singing, “We shall overcome.” Jesse
then has the group kneel down to pray
to God for the grasshopper’s sake.

Al Gore exclaims in an interview with
Peter Jennings that the ant has gotten
rich off the back of the grasshopper,
and calls for an immediate tax hike on
the ant to make him pay his “fair
share.”

Finally, the EEOC drafts the “Economic
Equity and Anti-Grasshopper Act,”
retroactive to the beginning of the
summer. The ant is fined for failing to
hire a proportionate number of green
bugs and, having nothing left to pay
his retroactive taxes, his home is
confiscated by the government.

Hillary gets her old law firm to
represent the grasshopper in a
defamation suit against the ant, and
the case is tried before a panel of
Federal judges that Bill had appointed
from a list of single parent welfare
recipients. The ant loses the case.

The story ends as we see the
grasshopper finishing up the last bits
of the ant’s food while the government
house he is in, which just happens to
be the ant’s old house, crumbles around
him because he doesn’t maintain it. The
ant has disappeared in the snow.

The grasshopper is found dead in a
drug-related incident and the house,
now abandoned, is taken over by a gang
of spiders who terrorize the once
peaceful neighborhood.

Why Minimum Wage is a Bad Idea

June 20th, 2010

This should be really obvious to people but for some reason its not.

If my business brings in $100 an hour in revenue and I use all this money to pay my employees $5 an hour I can afford 20 employees.  However if the government mandates a higher minimum wage (say $5.50 an hour), I can now only employee 18 people.  Those 18 are definitely better off then they were before, however there are now 2 more people unemployed.

Here’s a video that also breaks this down.

Another Disease Panic Bites the Dust

June 15th, 2010

Check out the ending statistics on Swine flu for the last year. You know… that thing you heard about constantly for months, the one that specifically was killing young people and had a higher than average kill rate? Ya well results are in, dud, the whole thing reminded me of SARs and West Nile while it was happening and the results were the same. I’m not saying some weird disease won’t pop in the future and kill a lot of people I’m just not going to trust the media to report anything accurate about it.

http://www.cdc.gov/flu/weekly/

Deficits Since 1950 as a Percent of GDP

May 25th, 2010

This graph should make people vary nervous and is exactly what people mean by unsustainable deficits.  The really scary part is that under the President’s proposed budget we will be running continual TRILLION dollar deficits for the next few years.

I have an easy solution to the problem…shrink the government.



Key – Blue = Democratic Controlled Government
Red = Republican Controlled Government
Green = Split Control

HT:Carpe Diem

A New Definition of Entrepreneur

May 16th, 2010

Webster’s defines an entrepreneur as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.”

Apparently Nancy Pelosi believes that people should be quitting their jobs that society believes are more productive (since they pay more when including benefits) for those which society deems less productive.  That’s just what America needs as we try to turn our economy around.

I don’t have any issue with people who make a living doing music or photography, what I do have a problem with is subsidizing their lifestyle with other peoples money.