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 Forecasting America's Destiny ... and the World's


Generational Dynamics Web Log for 16-Nov-2014
16-Nov-14 World View -- Obamacare and the 'stupidity of the American voter'

Web Log - November, 2014

16-Nov-14 World View -- Obamacare and the 'stupidity of the American voter'

Vladimir Putin eats lunch alone at G20 meeting

This morning's key headlines from

Vladimir Putin eats lunch alone at G20 meeting

An isolated Vladimir Putin eats lunch alone at G20 meeting on Saturday(Reuters)
An isolated Vladimir Putin eats lunch alone at G20 meeting on Saturday(Reuters)

Nobody wanted to eat lunch with Russia's president Vladimir Putin on Saturday at the G20 Leaders' Summit being held in Brisbane, Australia. It was supposed to be an economic summit, but most other leaders used the opportunity to blast Putin for Russia's repeated military intervention in Ukraine, for annexing Crimea, and for supplying the weapons and training to the Russians who shot down the MH17 airliner over Ukraine, killing hundreds of innocent passengers. Several leaders told Putin bluntly to "get out of Ukraine."

By lunch time, Putin was so isolated that no one wanted to be seen having lunch with him, so he sat at a lunch table alone. Later, his delegation announced that he would be leaving the G20 meeting early, calling the meeting "nonsense." Australian Broadcasting

Jonathan Gruber on Obamacare and the stupidity of the American voter

Obamacare supporters have been fleeing in droves from MIT professor Jonathan Gruber, who was the principal architect of Obamacare. But there's no getting away from him. A glowing article in the NY Times on March 28, 2012, made it clear that Gruber was the number one health care expert in the country, not only because he had been developing models for decades, but also because he was a prime architect for Romneycare in Massachusetts, on which Obamacare was based.

Gruber's lectures at MIT are available on videotape, and they've revealed everything from the contemptuous attitude of Obamacare officials, and also deception and fraud in the selling of Obamacare.

According to Gruber:

"This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. Okay, so itís written to do that. In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in Ė you made explicit healthy people pay in and sick people get money, it would not have passed.... Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass... Look, I wish Mark was right that we could make it all transparent, but Iíd rather have this law than not."

I'd like to point out that it's not people like me that Gruber is calling "stupid." The stupid people, in Gruber's view, are the supporters of Obamacare, who are presumably too stupid to see through the deception and fraud of Obamacare, as I was and many others were able to do. Gruber's remarks are an indictment of the Obamacare supporters, mostly Democrats who, in Gruber's view, were too stupid to see what was going on.

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, and I'll discuss if further below.

However, let's turn to another Gruber quote, this one revealing financial fraud on the part of the Obamacare officials.

Obamacare advocates have repeatedly made statements to the effect, "Romneycare worked in Massachusetts, which proves that Obamacare can work across the country." However, another Gruber videotape says that's not true, because Romneycare was essentially bailed out by the federal government:

"We had a pretty powerful senator you may have heard of named Ted Kennedy. Ted Kennedy had managed to figure out a way to rip off the federal Medicaid program to the tune of about $500 million a year through a series of strange manipulations.

Here was Mitt Romneyís dirty little secret that we donít like to talk about in Massachusetts, which is the way we passed our law is the federal government paid for it.

George Bush said why am I sending this Democrat $500 million a year, Iím taking it back. Mitt Romney to his credit went to George Bush and said, look, can we keep the money if we use it for universal coverage. And Bush to his credit said yes.

We realized that we canít do this at the state level anymore. The feds are going to have to get involved. ...

[Kennedy was] delivering about $400 million a year in slush funds to our SafeNet hospitals, basically ripping off the federal Medicaid program."

So Romneycare was never self-sustaining, as Obamacare supporters have said, but was actually "ripping off the federal Medicaid program" to survive, according to Gruber. We now know that Obamacare was based on deception and fraud on many levels:

Daily Caller and Washington Examiner and New York Times (29-March-2012)

Massachusetts health care site finally up -- for $254 million

It's almost impossible to even imagine the astronomical sums that have been spent on the greatest IT disaster in world history, the web sites. As I wrote a year ago, this would have been a $10 million project if implemented in the private sector. (See "1-Dec-13 World View -- Obamacare: 500M lines of code, $500M, only 60% completed" from last year.)

But let's say that it should have cost $20 million. Then triple that amount because everything the government does is inefficient, and wastes enormous amounts of money, due to corruption, public sector labor unions, and cronyism. So that would be $60 million paid to the government for something that the private sector could do for $10 million.

According to some estimates, implementation costs are now in the billions of dollars.

On Saturday, open enrollment began, and the Massachusetts Obamacare web site, known as the Health Connector, came up. The cost for this one state web site? $254 million. And that was $80 million over budget.

This is almost unbelievable. Where is all this money going? There's no way that this is simply IT development expenses. There must be hundreds of millions of dollars being skimmed off by the contractors implementing Obamacare, and those contractors are going to be big Obama supporters and Democratic party contributors. My guess is that Obamacare contractors skimming off hundreds of millions of dollars and kicking it back to Obama administration cronies, to pay for the 2016 elections. That's the most credible explanation, until someone tells me where billions of development costs have been going. Boston Business Journal

The implementation of Obamacare

As soon as Obamacare was proposed, I called it a "proposal of economic insanity," and compared it to Nixon's wage-price controls, which is the same kind of proposal as Obamacare, at its core. I said that Obamacare would never be implemented, and I've repeated that many times.

Has Obamacare been implemented? It was supposed to be universal health coverage, and it certainly is not.

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.

Nixon's wage-price controls were popular because they promised something for nothing. They promised price controls that would keep prices of everything low. 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.

Obamacare has followed the same path. People loved the promise of low-cost health care. But then shortages started showing up in the form of restricted networks. Skyrocketing insurance premiums are being ameliorated by federal subsidies that are a clearly in violation of the Obamacare law, and are being reviewed by Supreme Court, with a decision to be announced in June. (At least Nixon didn't try to reduce high prices with federal subsidies. That's an Obama invention.) And Obama has issued a wealth of rule changes and modifications to Obamacare to keep it from collapsing.

Obamacare supporters like to brag that there are 8 million more insured people now. That's a distortion of the situation. There are millions of "insured" people with deductibles of $5,000-$15,000. These millions of people are effectively uninsured, because they have to pay all of their medical expenses, in addition to the Obamacare insurance premiums. As a separate issue, millions of the newly insured are on Medicaid, and are unable to find doctors or hospitals that will accept Medicaid insurance. These people are also effectively uninsured. It's quite possible that there are fewer "effectively insured" people today than there were before Obamacare. (Paragraph modified. 16-Nov)

The heart of Nixon's wage-price controls were the mandates -- it was illegal to increase prices or wages by more than a certain amount.

The heart of Obamacare are the mandates -- the employer mandate that forces employers to provide insurance, and the individual mandate that forces people to purchase insurance.

Both of these have been eviscerated, for the time being. Because they were so unpopular, Obama was forced to effectively postpone them until 2015, under the assumption that Obamacare would be so wildly popular by 2015 that the mandates could be implemented then. Even so, millions of people with full-time 40 hour/week jobs have been forced into part-time 29.5 hour/week jobs by employers who can't afford to pay for health insurance for their employees. These mandates are at the core of Obamacare, just as wage/price mandates were at the heart of Nixon's controls, and without the mandates, both Nixon's controls and Obamacare become meaningless.

Nixon desperately did everything he could to save his wage-price controls, but in the end they were so unpopular and so disastrous that Congress forced them to be ended. They did enormous damage to the economy and accomplished nothing.

Similarly, Republicans are going to control both houses of Congress next year. My expectation is that some "compromise" will be found to weaken the mandates so much as to make them meaningless. In that case, both Obama and Republicans will be able to declare victory, and the only casualty will be the health care system which has been enormously damaged by Obama's "Obamacare" ego trip. But no matter. Obama will have his meaningless Obamacare legacy, and his cronies will have their hundreds of millions of dollars.

(Comments: For reader comments, questions and discussion, see the 16-Nov-14 World View -- Obamacare and the 'stupidity of the American voter' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Nov-2014) Permanent Link
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