Congress Wants To Bring More Consumerism To Health Care

Americans aren’t thrilled with the fact that health care costs continue to eat away at their overall take home pay. For those who have insurance through their jobs, deductibles have risen by an average 12 percent in 2016, or four times more than premium increases. For those who don’t have employer-sponsored health insurance, out of pocket spending amounts to $6,000 for individual policyholders and upwards of $13,000 for families before their insurance company picks up the tab.

While it’s problematic that deductibles are rising six times faster than wages, paying out of pocket for health care isn’t a bad thing. Yet society has grown accustomed to being blinded from the actual cost of care – which makes insurance companies, not patients, the true customers of health care. Insurance carriers are the ones that are buying services from hospitals, physicians, medical equipment providers, and other professionals in the field.

Sure, patients who have insurance may be subject to co-pays and co-insurance. However, the lack of consumerism and the largess of government price controls over health care services and health insurance is what keep high health care costs alive and well.

Some members of Congress are trying to make health care more like other sectors of the economy; that is, having patients (consumers) control how they spend their health care dollars – even for big ticket items. Consumer power drives market competition. It spurs innovation, and it pushes businesses to appeal to those shopping for their goods and services.

So, how can there be more of this in health care? Watch the Capitol Hill briefing video on a bill recently introduced by Senator Jeff Flake (R-Az) and Congressman Dave Brat (R-VA) that would expand Health Savings Accounts (HSAs).

Clickbait website ranks NC 44th for teachers

Wallethub released their “2016’s Best & Worst States for Teachers” ranking and North Carolina jumped six spots to 44th in the nation.

The site’s ranking methodology never made any sense to me, so I refuse to link to the page.

Google it, if you are so inclined, or just wait for the politicos to begin dissecting the meaningless results.

Panthers should have in bed?

With protesters and police in riot gear outside Bank of America Stadium, the Carolina Panthers laid an egg against the Minnesota Vikings on Sunday.

Covering the game for the Greensboro News & Record, columnist Ed Hardin goes on–and on—and on— about how the game should never have been played:

The sanctimonious NFL should’ve taken a step back and honored the wishes of the city leaders who had the guts to stand up and tell presidential candidates Hillary Clinton and Donald Trump to please stay away. That the two were even considering coming Sunday showed the lack of understanding of what this city has gone through this week.

The leaders didn’t have to guts or the leverage to keep the NFL out.

The cost of playing this game Sunday was immeasurable in man-hours from our police, fire and emergency workers. It appeared most of the N.C. Highway Patrol was on duty.

From rooftops around the city and on balconies and through dark windows, people watched through binoculars for signs of trouble.

And in the middle of all that, more than 73,000 people were invited to drive downtown and risk everything for a damn football game.
Really? Didn’t someone see this was an inappropriate time to play? Couldn’t someone come up with a way to move this game away from these troubled streets or simply reschedule it or, God forbid, just cancel it?

Maybe I’m cynical—regular readers know Hardin’s not exactly my favorite sports columnist as it is—but why do I have the feeling that had the Panthers won, the spin would have been the exact opposite—that Charlotte needed the game to provide an escape from the harsh realities the city’s experienced over the past week?

Prof with stellar election prediction record sees Trump triumph

Ariel Zilber reports for the Daily Mail on the latest projections from an American academic with a great track record in predicting presidential election results. The results will please backers of Donald Trump.

An American professor who has devised a system that has helped him correctly predict the last eight US presidential elections says that Donald Trump will emerge victorious on November 8.

Allan Lichtman, a distinguished professor of history at American University, says that he judges candidates by certain criteria that he calls ‘the 13 keys to the White House.’

The professor told The Washington Post that the key are simple true-false statements built on the premise that presidential elections are a referendum on the performance of the incumbent in the White House and the party that he represents. …

… With the election less than two months away, Democratic nominee Hillary Clinton is slightly ahead in the latest polls.

Still, Lichtman says that Trump has the upper hand.

‘The keys are 13 true/false questions, where an answer of “true” always favors the reelection of the party holding the White House, in this case the Democrats,’ he says.

‘And the keys are phrased to reflect the basic theory that elections are primarily judgments on the performance of the party holding the White House.’

‘And if six or more of the 13 keys are false – that is, they go against the party in power – they lose. If fewer than six are false, the party in power gets four more years.’

The professor says that despite the fact that President Barack Obama will leave office with relatively high popularity numbers, that will not necessarily help Clinton since she lacks his charisma.

Another factor working against Clinton is the fact that the Democrats suffered significant losses during the most recent midterm elections.

The importance of presidential debates

Andrew Malcolm writes in The Sacramento Bee about the role of presidential debates in the election campaign.

American politics were forever changed with the first nationally televised presidential debate, exactly 56 years ago. …

As if to underscore debates’ enduring if dubious import in the country’s modern politics, this year’s pair of presidential wannabes will clash on Long Island for 90 minutes on the anniversary.

Donald Trump and Hillary Clinton each have much to prove – and disprove – during what was, in effect, a forerunner of reality TV. Initially, not much was expected of Trump, a rookie politician who turned that disadvantage around in the year of the outsider to defeat 16 far more experienced, qualified Republican Party opponents.

Trump arguably has the easier task, to appear well-behaved, informed, disciplined and, most importantly, presidential, as he did during a meeting with Mexico’s president early this month. The 70-year-old Trump needs to erase or at least dilute stark memories of outrageous, even crude, onstage comments and behavior last year.

No doubt Clinton, who has been practicing since midsummer, will attempt to bait him into missteps, as she promised during her July convention acceptance speech. …

… TV debates – with their 90-second opening statements, 30-second rebuttals and no aides at hand – have absolutely nothing to do with how a president operates.

Can you remember anything from past debates? Chances are, you recall one-liners, scripted and memorized in advance to make a candidate look quick.

And here’s a news flash to remember as you hear the winner and loser hailed and criticized in the aftermath: Debate winners are not necessarily election winners. Mitt Romney cleaned Obama’s clock in the Denver debate four years ago. As usual, the poll bounce was short-lived.

In 1984, Ronald Reagan blew all four tires in his first debate with Walter Mondale, appearing tired and all of his 73 years. He bounced back two weeks later with the disarming “quip” that he wouldn’t hold against Mondale the ex-vice president’s inexperience and youth; Fritz was 56 then.

Years later, Mondale told me that although he laughed on camera, he knew right then that he had lost. Indeed, he did. Reagan captured nearly 59 percent of the popular vote and the most electoral votes in history, 525 of 538. Mondale won but one state, Minnesota, and that by only 3,671 votes.

The sad death of decentralization

Peter Wallison of the American Enterprise Institute explores the implications of the growth of centralized government led by unaccountable federal administrative agencies.

Modern conservatism is closely linked to decentralization. Free markets are by definition decentralized markets, and the extraordinary growth of the United States economy over the last 200 years is a testament to the creative power of individuals when they are free to respond to market demands.

Also important to modern conservatism is the decentralization of government itself, allowing decisions to be made close to the communities they affect, while also encouraging policy competition and experimentation.

Both these forms of decentralization, however, are now increasingly challenged by federal administrative agencies, which are a growing force for the suppression of diversity among individuals, businesses, and state and local governments. Although the Constitution places the federal legislative power in Congress, it is now increasingly — and alarmingly — flowing to administrative agencies that, unlike Congress, are not directly accountable to the public affected by their decisions.

Unless we can find a solution to this problem—a way to curb and cabin the discretionary power of administrative agencies —decentralization and individual self-determination will eventually be brought to an end. The diversity of our society and the innovativeness of the U.S. economy will gradually come under the pervasive control of a vast bureaucracy, and an essential element of American exceptionalism will be irretrievably lost. …

… [I]n recent years — and particularly during the Obama administration— there have been many examples of members of the House and Senate sacrificing the institution in which they serve to partisan interests. Allowing the president to determine for himself when the Senate is in recess, abandoning the need for 60 votes to take up a presidential nomination, refusing to pass a budget for four years so as to protect vulnerable Democratic senators, and standing quietly by as a president stated he would not enforce existing immigration laws, are only some examples of partisanship overriding institutional interests. If this continues into another presidential administration, the precedents thus set will be difficult for any future Congress to overcome.

This kind of partisanship has been a major factor in the growth of the administrative state. Congressional majorities in both houses may be more willing to give substantial executive latitude to a president of the same party, and once these laws are on the books it becomes very difficult to roll them back legislatively. Private parties also take actions and make investments based on these laws, and thereafter resist reforms.

Barron’s ‘Economic Beat’ writer likes user fees for infrastructure needs

Gene Epstein of Barron’s offers ideas for addressing the nation’s infrastructure needs.

In his peer-reviewed study of waste and inefficiency of infrastructure spending on transportation (“On the Performance of the U.S. Transportation System,” 2013), Brookings Institution economist Clifford Winston cites a proposal he made in 1989 for an “axle weight” fee on trucks. The fee “would encourage truckers to shift to vehicles with more axles that do less damage to road pavement, thereby reducing maintenance expenditures and producing an annual welfare gain exceeding $10 billion.”

If your heart sinks every time you hit a pothole, you should love Winston’s idea. More than a quarter of a century later, however, his proposal is still being ignored by every policy maker in the country, in part because infrastructure spending warms the heart of anyone running for office. Damage to the roads creates more potential business for state and local government officials who manage projects, labor unions, and private firms that get the lucrative contracts, which often get more lucrative due to cost overruns.

Both major-party candidates for president want more infrastructure spending. The idea has been endorsed by Harvard economist Lawrence Summers, among others, who argues that more borrowing by the U.S. Treasury to finance the spending is justified because interest rates are so low. Nonetheless, as a former U.S. Treasury secretary, Summers acknowledges the Treasury’s immense debt burden. “I am as worried about the debt burden on my children’s generation as anybody,” he told the New York Times last week, “but deferring maintenance on the foundation of our economy is of much greater risk to them.”

Fair enough. But any steward of the government’s fiscal health would first ask whether the infrastructure itself could be managed more efficiently before committing to a path of large-scale spending and debt. In a telephone interview last week, Winston spoke of “the engineering mentality that has pervaded public management of infrastructure, which has one mantra: Spend, baby, spend. Just put more money out there, and throw cost-benefit economics out the window. That mentality has drained this nation of a fortune.” …

… Winston puts the annual social cost of waste and inefficiency in the government sector’s transportation systems at $100 billion a year, which he calls “an extreme lower bound estimate.” He believes there is enough low-hanging fruit in his detailed proposals without taking on more debt in the short run, while radically improving the functioning of the system and benefiting its users over the long run.

For starters, the Brookings economist would replace as funding sources the federal and state gasoline tax and weight-based landing fees at airports with a cost-based fee system for passenger and freight transportation. The new system would, for example, charge cars and trucks for their contribution to congestion on the roads and bridges; charge planes of all sizes for their contribution to congestion on runways; and would, as noted, charge trucks for the actual damage these vehicles do to the road pavements. Because underpricing in these areas is the current norm, this system should raise more funds, while properly shifting the costs to users rather than taxpayers.

Barron’s labels the first presidential debate ‘must-see TV’

Randall Forsyth of Barron’s gauges the importance of this year’s first presidential debate.

Pileup on the island.

Granted, it doesn’t have quite the ring of “The Rumble in the Jungle” or “The Thrilla in Manila,” but then again the combatants at Monday’s first presidential debate lack anything like the rhetorical jabs that Muhammad Ali used to sting his opponents before they even stepped into the ring. Still, the lead-up to the showdown between Hillary Clinton and Donald Trump at Hofstra University on New York’s Long Island has the feel of the hype preceding the heavyweight championship fights of yore.

The audience for the confrontation could exceed 100 million, not far short of the 112 million viewers for the biggest U.S. sporting event, the Super Bowl. And if folks get together for parties on Monday with chicken wings and beer, maybe this debate will match that total.

According to the Strategas political team led by Daniel Clifton, that would be about half again the 67 million viewers that Barack Obama and Mitt Romney drew in their first debate in 2012 and nearly twice as many as the 52.4 million who tuned into Obama’s first face-off with Sen. John McCain in 2008. Indeed, Monday’s face-off is likely to shatter the record set in 1980, when 80.6 million watched Ronald Reagan’s first bout with Jimmy Carter.

“With all that attention, the debate has the potential to shape not just political opinions, but also investor psychology,” writes Nicholas Colas, chief market strategist of Convergex. “Just look back to Secretary Clinton’s comments about the EpiPen pricing controversy last month and the subsequent drop in the Nasdaq Biotech Index for evidence that politics can touch asset prices as surely as the levers of a voting booth. And that was not an isolated case: One tweet from candidate Clinton last September had a similar effect on the sector,” he observes. …

… Another possible area of conflict is taxes, especially Clinton’s new proposal to boost the estate levy sharply, which contrasts with Trump’s call to eliminate the “death tax” altogether. Strategas’ Clifton calls Clinton’s plan a move by Democrats toward taxing wealth, now that income-tax rates are as high as 40%. He adds that they also might seek to tax capital gains and dividends at ordinary income rates.

Clinton’s proposal would surely please Bernie Sanders, the socialist Vermont senator who was her main rival for the Democratic presidential nomination.

She would cut the exemption to $3.5 million from the current $5.45 million, and replace the 40% tax on estates above that figure with a 50% rate over $10 million, 55% over $50 million, and 65% for more than $500 million. But here’s the real kicker: Clinton would also eliminate the step-up in basis, “which is a significant change in public policy by placing a new layer of double taxation on inherited assets,” Clifton adds. Under current law, the cost basis on inherited assets is increased, or stepped up, to current prices. That greatly reduces the capital-gains liability on older assets acquired at much lower prices—say, Apple stock bought when it was in single digits, adjusted for splits.

Clinton’s estate-tax plan would have zero chance getting through the House of Representatives, which is likely to remain controlled by Republicans. Trump’s plan probably wouldn’t be passed by the Senate, even if it stayed in GOP hands. But the dueling proposals could produce fireworks in Monday’s debates.