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Generational Dynamics Web Log for 7-Apr-2014
7-Apr-14 World View -- President Obama declares 'Mission Accomplished!' on Obamacare

Web Log - April, 2014

7-Apr-14 World View -- President Obama declares 'Mission Accomplished!' on Obamacare

Pro-Russians riot in cities across eastern Ukraine

This morning's key headlines from

Pro-Russians riot in cities across eastern Ukraine

Pro-Russian protester breaks a window of a government building in Donetsk on Sunday (BBC)
Pro-Russian protester breaks a window of a government building in Donetsk on Sunday (BBC)

In Donetsk, Luhansk and Kharkiv in eastern Ukraine, pro-Russian protesters on Sunday stormed government buildings, clashed with police, hung Russian flags from the buildings and called for a referendum on independence similar to the one that led Russia to annex Crimea.

Russia's president Vladimir Putin has said that Russia has "no intention" of invading eastern Ukraine, despite the tens of thousands of Russian troops on the border, all active, well-trained, well-supplied with food and spare parts. However, Putin has also said that Russia WOULD invade eastern Ukraine if it became necessary to protect ethnic Russians.

Thus, Sunday's riots and protests are exactly the excuse that Putin needs to go ahead with the invasion. We'll have to see if he avails himself of that excuse. Itar-Tass and BBC

President Obama declares 'Mission Accomplished!' on Obamacare

President Obama was visibly gloating this past week when he declared that 7.1 million people had "signed up for" Obamacare. He claimed to have no information on how many of those had even made a single payment, or how many were subsidized, or how many of these were for free Medicaid. He declared that "Obamacare is here to stay!"

When I first wrote about the "Obama's health plan, a proposal of economic insanity" in 2009, I said that this plan would never be implemented because it would destroy markets and be economically disastrous. I compared it to President Richard Nixon's wage-price controls which were not as disastrous for the markets as Obama's health plan, but still wrecked the economy for close to a decade. I've repeated that many times since then, and I'm going to repeat it today: Obama's health plan will never be implemented.

Obama's health plan called for employer mandates, individual mandates, a working federal health care marketplace, and integration of all health records in the country into the IRS's data bases. None of these things has been implemented yet, and most will probably never be implemented. In just this past week alone, close Obama advisor Robert Gibbs sent out a trial balloon, saying in a speech that the employer mandate will be killed completely:

"I donít think the employer mandate will go into effect. Itís a small part of the law. I think it will be one of the first things to go."

Gibbs has a good sense of humor. The employer mandate is an essential core component of the law, not a small part of the law.

So the markets have been all but destroyed by Obamacare. The 7.1 million signups that Obama was gloating about are irrelevant to the markets. It's his economic philosophy that it's all right for a business to lose money, because they can make it up in volume.

Suppose President Nixon had announced something like, "Citizens, please sign up for NixonCarePriceControls, and if you sign up, you can buy as much Coca-Cola you want for just a penny a bottle." Then we can assume that many millions would sign up for NixonCarePriceControls, even more than 7.1 million. The problem is that the Coca-Cola company would go out of business. That in fact is what happened to many businesses. The one that I've always remembered was that chicken farmers were killing chickens, rather than bringing them to market, because chickens were price-controlled, while chicken feed was a commodity and could not be controlled, so it cost more to grow a chicken than the farmer could get under NixonCarePriceControls.

So the fact that 7.1 million signed up for unsustainably cheap insurance may be a victory to President Obama, but it's a disaster for the economy. The only thing that would have been worse is if 10 or 15 million people had signed up.

You'd think that an economist would have to be particularly incompetent and stupid to know nothing about an event as recent as Nixon's price controls, but incompetence and stupidity are available in abundance these days.

The public loved President Nixon's wage-price controls when they were first announced, but then the shortages started occurring -- gasoline, heating oil, red meat, soybeans, and numerous other products. Nixon did everything he could to save the controls, granting special exemptions and perks to favored people, announcing frequent rule changes to resolve each new problem as it arose, and so forth.

Nixon's wage-price controls were supposed to reduce inflation from 4% to 2%. That didn't happen. Instead, the economy was so screwed up with shortages and misallocations that the inflation rate rose to 12%.

In other words, Nixon's wage-price controls destroyed the economy, and not only accomplished nothing, but were much worse than nothing.

Now we have the same thing with Obamacare. It's hard to know what's going on with all the confusion and chaos, with Obama changing the rules every week and refusing to release any figures that he considers unfavorable. But apparently, the number of uninsured people today is comparable to the number of uninsured people before all this started. So nothing has been accomplished.

Obama has lied repeatedly and often. He's bribed cronies with perks, and extorted political enemies. Even among his ardent supporters, you'd have to be crazy to believe anything he says. He'll say one thing on Monday, and the reverse himself the next day and screw the country.

Insurance costs have significantly increased, people have lost their health insurance policies, people have lost their doctors, even people who have signed up are often not sure whether their next visit to the emergency room will be insured.

There's also a constitutional crisis on the agenda. Obama has simply ignored the constitution and changed his own Obamacare law repeatedly to suit his whims. That violates the constitution, and at some point in the next year or so, the Supreme Court is going to have its say, creating a legal and constitution disaster comparable to the IT disaster. There's apparently no law and no constitutional provision that Obama is unwilling to violate.

And the worst is yet to come, because there's a huge bill to be paid. Those 7.1 million people, as an aggregate, will incur far more medical costs than they will pay for in premiums. This means that when the bill comes due in the next few months, the insurance companies will have to be bailed out (which is apparently permitted by the Obamacare bill), and they'll have to substantially increase insurance premiums for next year. And so far, Obamacare has simply wasted something like a trillion dollars. (See "1-Dec-13 World View -- Obamacare: 500M lines of code, $500M, only 60% completed" from last year.)

And for what? What the hell was it all for? Obama announced "Mission Accomplished!", but what exactly was accomplished? What has Obamacare accomplished except to feed Obama's ego?

This brings up an important difference between Obamacare and NixonCarePriceControls. Nixon was a member of the G.I. Generation, and had fought in and survived World War II. Like most WW II survivors, he was willing to put the good of the country ahead of his own ego, because he understood how dangerous the alternative is. So when it became clear that Nixon's wage-price controls were a disaster, he ended them. It was the right thing to do, and it was for the good of the country. (Paragraph corrected. 8-Apr)

Obama is in Generation-X, whose people typically put their egos at the highest importance level, and put the good of the country about 50th down on the list. Obama is following the standard generational Nomad archetype. (See "The nihilism and self-destructiveness of Generation X" from 2008.) Obama is determined that to save something called "Obamacare" for his legacy, no matter how disastrous it is for the country. And that's just something the rest of us will have to suffer for. BenefitsPro and Forbes and Nixon's Wage and Price Freeze

(Comments: For reader comments, questions and discussion, see the 7-Apr-14 World View -- President Obama declares 'Mission Accomplished!' on Obamacare thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Apr-2014) Permanent Link
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