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Economy

Obamacare could be fully repealed if political considerations were erased

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In 2015, President Obama had a bill placed on his desk that fully repealed Obamacare. There was no replacement. Had he signed it, we’d be well on our way to the completely privatized health care system the nation deserves. He didn’t, of course, and the vast majority of GOP politicians pointed fingers and blamed the President for the failures that were developing in the legislation that was supposed to be his legacy.

In 2017, President Trump has not and likely will not see the same bill. In fact, he won’t see anything even close to it. Why? Because now that the GOP has complete control, they can’t bluff anymore. They are in a position to somehow not admit that they never wanted to fully repeal Obamacare in the first place. The result so far is the AHCA from the House and some variation the Senate can muster.

Whatever finally reaches President Trump’s desk will not be a repeal. It won’t even be a “repeal and replace” as they’ve been calling it since taking power. It will be a “tweak and rebrand” effort that leaves the damaging core of Obamacare fully intact, redirects how the mandates are delivered, redistributes penalties for citizens who do not comply, and throws in some easy-to-consume “conservative meat” like defunding Planned Parenthood to try to keep as many right-wing critics as possible at bay.

In the end, we will take one humongous government-run health care system and replace it with another humongous government-run health care system.

To those who believe that it’s not technically “government-run” because some autonomy is afforded to health insurance companies, health care providers, and even states, let’s be clear: if a program lays out guidelines for providers and consumers as both ACA and AHCA do, then it’s a government-run program.

Why would the GOP break their promise?

There are times when a party and the politicians representing them will do their best to “sell” an idea to the American people. They will go on news shows, perhaps speak at town halls, and even invest in television commercials to present their case to Americans in an effort to get them to help pressure the opposition into support. We’ve seen this since the birth of our nation. In fact, the reason for the Federalist Papers was to convince people that ratifying the United States Constitution was in the best interests of the nation and its citizens.

In recent years, we’ve seen it with welfare reform, Gang of 8, and even with Obamacare itself. In all of these cases, the group supporting pieces of legislation made their pitch to Americans because they believed they could convince enough people their ideas represented the right course for the nation. More importantly, they wanted to use the victory as a launching pad to expand their political standing and ensure future victories. This technique of selling an idea and then riding the wave of victory once it’s sold is only effective if you believe in what you’re selling.

It’s quite conspicuous that the GOP has not taken this approach with the AHCA. On the contrary, they want as little attention paid to the machinations of the bill as possible. It’s not that they don’t believe it’s a better solution than Obamacare. They simply don’t want more people pointing out that it’s not very different. They’d like to get it passed and signed quickly so they can then start focusing on midterm elections.

This is an important point. Their fear of losing in the midterms is the second biggest reason they’re unwilling to simply repeal Obamacare with either no replacement at all or one that pushes for privatization over time. They know there will be repercussions if they repeal Obamacare; if one person dies as a result of losing health care, Republican strategists believe the Democrats will have a chance of taking the House and the Senate in 2018.

It’s not necessarily true, of course. Both parties still embrace the old concept that Americans are too simple-minded to be shown the truth. They think that we’re only interested in what affects us directly and any attempt by the government to act responsibly will result in major losses. They can’t accept that Americans have more access to information than ever before. They play the news cycle and pull the heart strings. If they were correct, there’s no way Ted Cruz should have won Iowa after declaring that he wanted to end ethanol subsidies. There’s no way Bernie Sanders should have won Oklahoma after being on the wrong side of many liberal issues near and dear to Sooners.

People may be misinformed by mainstream media and fake news outlets, but we’re not stupid. If they lay out the facts and put together a compelling case, the GOP could repeal Obamacare. All they’d have to do is inform the people about why things will be much better in the not-too-long-term. Unfortunately, they’ve calculated that the benefits of repealing Obamacare would not be realized before the 2018 election and they’re unwilling to take the risk.

Instead, they’re hoping to insert Trumpcare and hope for the best. It’s a disgusting strategy for two reasons. First, it’s a lie. Presenting it as a repeal and replace is false as I mentioned above. Second, it won’t work. They will be blamed for health care failures regardless of whether it comes from the AHCA or from a full repeal. Taking this “safe” approach is still a losing effort.

The other reason

As I previously mentioned, the second biggest reason they don’t want to repeal Obamacare is fear of losing in the midterms. The biggest reason is because they like what government-run health care gives them. It’s not across the board; there are a handful of Senators and a small group of Congressman who truly want government out of the system. However, they are a tiny minority compared to the bulk of GOP lawmakers who see ACA and AHCA as a boon for big government and big budgets.

The more money that’s in the federal government’s pot, the easier it is to redistribute it based upon political considerations. More money muddles our economic system. As strange as it may sound, many in the federal government thrive in chaos. The more there is to draw the attention of the people, the easier it is for them to operate corruptly in other areas. This may seem like some conspiracy theory, but it’s not. This is really how the government operates in DC.

A better way

A blog post is not the right venue to lay out a comprehensive and detailed plan, but it’s a great place to give a 30,000-foot view of how things should be. Put simply, we need to privatize health care once again.

There are those who will point to challenges that existed before Obamacare. These challenges will return if Obamacare is repealed, but they won’t return in the same form. Things have changed. Now that we’ve experienced rising premiums that yield higher deductibles while delivering worse results, we have empirical data behind which we can rebuild the privatized market.

The sticking point for many Americans who might fear a full repeal is care for those with pre-existing conditions. As Michael Nolan noted on DailyWire:

One argument against privatized health care (and for Universal Health Care) is that insurance companies will continue to discriminate against those with pre-existing conditions. What the argument fails to take into account is that 90 percent of health care policies cover pre-existing conditions, as shown by health care expert Avik Roy. The free market has created a system by which those with employer-based coverage don’t need screening because the insurance is purchased in bulk by the employer. For those with employment-based coverage (currently roughly 50 percent of those with insurance), pre-existing condition exclusions can only be triggered if the client has had health insurance for less than 12 months. This encourages and rewards those who buy long-term medical coverage (which promotes good life choices and planning) as opposed to those that only purchase insurance when they get ill.

The other big advantage of having seen Obamacare is that we now have a better idea of what needs to be changed in order to make privatized health care work from economic, accessibility, and innovation perspectives. Daniel Horowitz came up with a cheat sheet at Conservative Review that gives us a great starting point to attack this beast. One of my favorites is his take on competition across state lines:

If insurance is enough of an interstate commerce issue to regulate people into oblivion at a federal level, then the federal government should be able to invoke the Commerce Clause to tear down the barriers to purchasing insurance across state lines. Indeed the Supreme Court has said as much [United States v. South-Eastern Underwriters Association, 1944]. This will foster massive competition, make insurance portable, and together with individualizing insurance through equal tax treatment and expanded HSAs, will save many individuals who get sick later in life after moving to different states from the problem of pre-existing conditions.

Not only will this reform create a more competitive national market, but it will induce states with a costly regulatory burden to get with the program and relax their regulations to compete with the more pro-consumer states. It will also create momentum for states to ease regulations on tele-medicine from out-of-state providers.

If we systematically repeal Obamacare, we can have privatized health care once again. A replacement plan that tries to predict what will happen is foolish. Instead, we should repeal, then monitor and analyze the market. Over time, we’ll find the holes that need to be plugged. States, charities, and other organizations can fill most of these holes. Whatever is left, if anything, can fall to the federal government. This way, DC becomes the final safety net instead of being the first line of defense. That’s the way it should be in health care and a plethora of other areas.

Christian, husband, father. EIC, NOQ Report. Co-Founder, the Federalist Party. Just a normal guy who will no longer sit around while the country heads in the wrong direction.

Economy

Trump expects Harley to lose money on his behalf one way or the other

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Trump expects Harley to lose money on his behalf one way or the other

American motorcycle motorcycle manufacturer Harley Davidson is in a tough spot. Tariffs imposed from Europe against imported motorcycles in response to President Trump’s tariffs on steel and aluminum have forced Harley to consider moving some production to Europe to avoid the tariffs. It’s a fair response, but the President is having none of it.

He has ratcheted up calls to boycott Harley over the potential move.

It’s imperative for President Trump’s reelection that these tariffs work. If they have the expected effect of bringing some jobs back while pushing others away, then they will be painted by the media as a failure. He knows this and therefore must do everything he can to keep jobs in America even if it means painting one of the most beloved American companies as the bad guys.

Trump backs boycott of Harley Davidson in steel tariff dispute

https://www.reuters.com/article/us-harley-davidson-tariffs-trump/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute-idUSKBN1KX0J9The Wisconsin-based motorcycle manufacturer announced a plan earlier this year to move production of motorcycles for the European Union from the United States to its overseas facilities to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminum imports.

In response, Trump has criticized Harley Davidson, calling for higher, targeted taxes and threatening to lure foreign producers to the United States to increase competition.

My Take

What does he expect them to do? They will lose tens of millions of dollars if they continue to try to export motorcycles to Europe. They will lose even more if they stop selling motorcycles in Europe. If they try to mitigate the damage by moving some operations to Europe, the President wants them to lose money as a result. This, too, will likely result in cuts to the workforce.

In other words, President Trump will make certain Harley Davidson, an iconic American company, loses money and cuts American jobs no matter which direction they go. If he has an alternative for them that does not hurt Americans, I’m sure they’re all ears.

Most tariffs are bad in the 21st century. It’s impractical to believe we can maintain our supremacy as the world’s consumer if we continue to slap tariffs on some of our best trading partners. He either lacks the understanding of how this all works or has chosen to ignore the facts for the sake of spinning it for votes when his term concludes.

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Economy

Tariffs on Turkey: Bad for the economy but damaging to a dangerous dictator

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Tariffs on Turkey Bad for the economy but damaging to a dangerous dictator

Say what you will about President Trump’s foreign and economic policies. Whether you support them or not, it’s hard to deny that they’ve made things much more interesting.

The latest move by the President to impose stiff tariffs on Turkish steel and aluminum may seem in line with how he’s been treating the national and world economies recently, but more is at stake with this move than previous ones.

There are two factors at play that make this move different from previous tariffs. First, it is not purely economic but is a response to Turkey continuing to hold pastor Andrew Brunson for allegedly supporting the coup attempt of 2016. Second, the tariffs come at a time when Turkey’s currency, the lira, is in free fall.

It was already starting to show signs of failure when leaders from both countries pushed it even further down. Turkish President Recep Tayyip Erdogan added more challenges for the lira when he asked his people to convert their foreign currency and gold, a sign of trouble that will likely have the opposite effect.

Erdogan calls on Turks to convert hard currency, gold into lira

https://www.reuters.com/article/turkey-economy-currency-erdogan/erdogan-calls-on-turks-to-convert-hard-currency-gold-into-lira-idUSA4N1TM024Turkish President Tayyip Erdogan on Friday called on citizens to convert their hard currency and gold into lira, after the local currency tumbled to a record low this week, reflecting investor concern about a widening diplomatic rift with the United States.

Erdogan, in a speech in Ankara, also said Turkey was diverting to the Chinese market to overcome what he said were “subjective evaluations” from ratings agencies. Erdogan has repeatedly railed against credit raters, saying their downgrades of Turkey’s sovereign debt to “junk” status were politically motivated.

Seizing on the free fall, President Trump made matters worse for for the lira with the sanctions:

Trump authorizes doubling of metals tariffs on Turkey

https://www.cnbc.com/2018/08/10/trump.html“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” Trump wrote.

Losses in the the Turkish lira deepened on Trump’s tweet, falling as much as 20 percent vs. the U.S. dollar in Friday trading.

Erdogan is now calling this an economic war with the United States and claims he will not back down. Meanwhile, the Euro and other currencies are also feeling the heat:

Euro tumbles as investors fear bank exposures to Turkey

https://www.reuters.com/article/uk-global-forex/euro-whacked-on-turkey-turmoil-as-investors-scramble-for-safety-idUSKBN1KV07M“You’ve had a fairly sharp move lower in the euro and it’s broken through key technical levels as well,” said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York.

The euro dropped below technical support at $1.15 to $1.1421, down 0.91 percent on the day and the lowest since July 2017. Against the yen, the euro slid 1 percent to 126.79 yen, a two-month low.

Now, the criticism and praise of President Trump’s moves will be debated for days, maybe weeks.

My Take

As I’ve stated on many occasions, I’m not a fan of tariffs. They are misunderstood by most, particularly the President, and no longer yield the results they did in previous centuries. From an economic perspective, I oppose this move.

The bigger picture is how this is being used as a pressure tactic against Turkey. Currently, I like it a lot. That opinion could change based on how things go, but moves like these that apply pressure against a dangerous dictator of the false ally that Turkey has become are welcome. It isn’t just about securing Brunson’s release, though that’s extremely important. Turkey is a rising power on every spectrum that is increasingly turning to Russia and China for help instead of their “friends” in NATO.

The strategic importance of Turkey as a hub that connects Europe, west Asia, and the Middle East cannot be understated. In an ideal situation, Turkey would still be a good ally as they once were. Erdogan has taken advantage of two past U.S. Presidents and seemed poised last year to start taking advantage of President Trump. That doesn’t seem to be happening anymore.

Is this the right way to handle Erdogan? Probably not. Whether it is or not will be revealed in coming weeks. One thing is certain: we’re seeing things being done from the White House that we’ve never seen before and may never see again. It’s troubling, but at least it’s entertaining.

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Economy

Can Trump keep Element Electronics from closing a South Carolina plant over tariffs?

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Can Trump keep Element Electronics from closing a South Carolina plant over tariffs

For full transparency, I’m not a fan of tariffs. I know that in the end it’s not the target countries or their companies but rather the American consumers who pay for these tariffs in the form of higher prices. It’s also American countries who rely on imports to thrive that get hurt. An example of the latter is Element Electronics, the last US assembler of televisions.

According to The Hill, layoffs are planned to start in October.

South Carolina manufacturer says it’s closing plant over Trump tariffs

http://thehill.com/policy/finance/400761-south-carolina-manufacturer-says-its-closing-plant-over-trump-tariffsElement said “the layoff and closure is a result of the new tariffs that were recently and unexpectedly imposed on many goods imported from China, including the key television components used in our assembly operations in Winnsboro,” in a letter to the state’s Department of Employment and Workforce obtained by the local paper.

The company said in the letter that it hopes the closure will be temporary and added that it could reopen the plant in “three to six months, but we cannot predict this with any certainty at this time.”

This puts the administration in a pickle. Perhaps it’s better to look at it as a catch-22. They could exclude the parts needed by Element from the tariff list and save the jobs. Doing so could signal to other US companies affected by the tariffs to threaten closures and layoffs in hopes the White House will also exclude the parts and materials they import.

If the President sticks to his guns, he will gain the benefits associated with tariffs such as expanded use of domestic materials and the potential for jobs to be created in America. Of course, he’ll also have to face media backlash for every negative effect of the tariffs, including Element Electronics’ challenge.

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