Wednesday, September 29, 2010

More on tariffs

Wall Street Journal:

For the better part of three decades, John Williams made a good living netting shrimp from the Gulf of Mexico. These days, he is landing a different catch: cash payments from foreign rivals.

Mr. Williams, executive director of the Southern Shrimp Alliance, co-founded the group in 2002 to help American shrimp fishermen fight competition posed by cheap, pond-raised shrimp from Asia and Latin America. The alliance petitioned the U.S. government to slap tariffs on shrimp imports from six countries at the end of 2003, arguing they were dumping crustaceans in the U.S. at unfairly low prices.

But after winning the case -- which both raised tariffs and eventually netted $100 million in compensation for U.S. shrimpers -- Mr. Williams and his alliance wanted even more. With the help of their New York law firm, the shrimpers filed a special appeal with the U.S. government that threatened the overseas shrimp producers with even higher tariffs. The action spooked more than 100 foreign shrimp suppliers into paying millions of dollars to the U.S. shrimp alliance in return for its promise to drop the action.
For nearly 100 years, U.S. law has protected domestic businesses from aggressively low-priced imports. Current law allows domestic businesses to seek tariffs to mitigate the price advantages of foreign competitors when they ship to the U.S. at below production costs in order to grab market share.

More controversial is the Byrd amendment, which since 2000 has enabled the government to funnel antidumping tariffs to U.S. companies that had complained about low-priced imports."
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The US has over 12,000 tarriffs

Like 'free trade?'

Carpe Diem:

Most Americans think of the U.S. as a free-trade country with open markets, and countries like China and Japan as protectionist countries with closed markets. And yet the U.S. is quite protectionist, when we consider that there are more than 12,000 tariffs (i.e. taxes) on imported products that are sometimes as high as 350% in the case of tobacco (pictured above); 164% on peanuts; 100% on jam, chocolate and ham; and 48% on sneakers, see the 25 American Products That Rely On Huge Protective Tariffs To Survive, and read a short accompanying article.
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Thursday, September 23, 2010

Medicaid's effect on state budgets

National Review:

The State of New York is a poster child for how decades of irresponsible management of Medicaid can drive a state treasury into a ditch. On Monday, New York lieutenant governor Richard Ravitch published a thoughtful and distressing report that details the depth of the problem. Medicaid is “the largest single driver of the State’s growing expenditures,” writes Ravitch. “The current State budget crisis,” in turn, “is threatening New York’s ability to handle the growth of this program without dramatically raising taxes or cutting other essential government services.”

Ravitch notes that nearly one-quarter of all New York state residents — 4.5 million people — are on Medicaid. In the 2010 fiscal year, local, state, and federal parties spent more than $50 billion on Medicaid in New York, far more than any other state in the union, and nearly 40 percent of New York’s 2010 budget of $132 billion. New York spends more on Medicaid per capita than any state — double that of neighboring New Jersey and Connecticut, and 2.3 times that of California, the second-largest state in total Medicaid expenditures.

But the near future makes 2010 seem paradisiacal by comparison. Over the next four years, as the federal bailout of spendthrift states expires, Albany expects its Medicaid spending to increase by 18 percent a year. Then, in 2014, Obamacare forces the state to increase the number of people who are eligible for Medicaid, expanding the state’s fiscal liabilities and constraining its latitude to institute needed reforms.

In his 17-page report, Ravitch traces the recent history of how New York’s Medicaid program came to this pass. Most important, New York has been one of the most aggressive states in taking advantage of federal matching funds in order to expand its Medicaid program, making it one of the most lavish in the country. Unfortunately, it has been politically easy to expand Medicaid during good times, but impossible to rein it in during bad times; indeed, during the financial crisis of 2008–09, the state actually expanded its Medicaid coverage, and Medicaid enrollment increased by 600,000.

Another problem, the transformation of Medicaid from a welfare program to an entitlement program, was a result of the passage of federal welfare reform in 1996. When Medicaid was first instituted in 1965, nearly everyone eligible for Medicaid was already on welfare: that is, they were receiving direct cash assistance. After 1996, New York’s welfare rolls shrank dramatically, while its Medicaid rolls continued to expand. “Today,” writes Ravitch, “only one out of six New York children and adults receiving Medicaid services also receives cash assistance,” because most people on Medicaid are employed, albeit with below-average incomes.

[...]A third problem is that Medicaid provisions such as “spend-down” rules and the doctrine of “spousal refusal” allow higher-income individuals to game the system and gain Medicaid eligibility, by rearranging their assets. (John Hood discusses this problem in the Summer 2010 issue of National Affairs.)

[...]A fourth problem is that New York’s methods of reimbursing doctors and hospitals for Medicaid services is specified line-by-line in state law. Ravitch writes:

For most areas of Medicaid payment in New York — in-patient hospital care, freestanding ambulatory care centers, home health agencies, nursing homes — the basic formulas for reimbursing Medicaid providers are set directly by the State legislature as part of the annual negotiations over the budget. Even minor adjustments require legislative action. As a result, the State has found it exceedingly difficult to control Medicaid costs by improving and updating payment methods.

For example, until recently the State was required by law to reimburse hospitals for most in-patient care under a complex inflation-adjusted formula devised in 1981. Since that time, there have been revolutions in hospital operations, staffing, and technology — changes for which the inflation rate is a grossly inadequate proxy. But because the formula was embedded in statute, it took almost 20 years, until 2009, for the methods to be updated.

[...]A fifth problem is administrative fragmentation: In New York, responsibility for coordinating Medicaid is spread out between the Office of Health Insurance Programs, the Department of Health and Mental Hygiene, and the Office of Long Term Care. In addition, administration of Medicaid in New York is divided between the state government in Albany and 57 county governments. This allows clever patients to game the system, and leaves others in need to fall through the cracks.
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Wednesday, September 22, 2010

What is the CLEAR Act?

I had no idea this was so serious.


“It’s too late; it’ll just have to be stopped in the Senate,” Tom, the young male answering the phone in U.S. Rep. John Boehner’s (R-Ohio)Washington D.C. office, said about HR 3534 (CLEAR Act). This is the globalist bill designed to give away our land, oceans, adjacent land masses and Great Lakes to an international body, and makes us pay $900 million per year until 2040.

HR 3534 is a thinly disguised permanent roadblock to American energy which drives American companies out of the Gulf, delays future drilling, increases dependency on foreign oil, implements climate change legislation and youth education programs; but most important, it mandates membership in the Law of the Sea Treaty without the required two-thirds vote to ratify it in the U.S. Senate. Read more at LOST below

The House passed the CLEAR Act (HR 3534) 209-193, July 30, 2010. This bill was originally introduced July 8, 2009, but was resurrected by the recent Deep Water Horizon oil spill crisis. According to, a debate may be taking place on a companion bill in the Senate, rather than on this particular bill. This bill was read for the second time Aug. 4, 2010, and placed on the Senate Legislative Calendar under General Orders, Calendar No. 510. No official Senate Bill number exists as of yet.

Some have said this bill would be a long shot to be approved in the Senate or it will take a while to surface. Similar assessments were made about the health-care bill. Past precedent reflects how a 2,200+-page bill can be created, printed, members held hostage, and that same bill voted on within hours to facilitate holiday recess.

This bill assesses a Conservation Fee of $2 per barrel of oil and 20 cents per million BTUs of natural gas for all leases on Federal onshore and offshore lands (Section 802). This will jettison America’s energy prices for oil and gas through the roof!

Truth is, HR 3534 could have been stopped in the House and wasn’t. Why? Because 21 absent Republicans chose not to show up for this critical vote, while another REP just voted Present: U.S. Rep. Gary Miller (CA-42). This legislation was so egregious; more than a handful of Democrats voted “nay” which makes the Republicans’ absence in the House chamber for the vote even more questionable. Be reminded that 193 + 17 absent votes would have killed the bill.

The Consolidated Land, Energy, Aquatic Restoration Act of 2009 (aka: CLEAR Act, HR 3534) gives away ownership of America’s oceans to the United Nations, and sectors America into nine geographic areas. This bill possesses a cap and trade/climate change component as well.

America will be forced to become a member of the UN Law of the Sea Treaty (aka: LOST), circumventing the normal two-thirds U.S. Senate vote necessary for ratification of any treaty. This was accomplished surreptitiously via Section 106 of the bill, which specifies that Executive Orders, rules, regulations, directives or delegations of authority that precede the effective date of this act are applicable to the CLEAR Act.

It just so happens two important documents did precede the CLEAR Act. Documents that contain the deleterious intent and scope of the bill: Obama’s Stewardship of the Oceans, Our Coasts and the Great Lakes Executive Order, July 19, 2010, and the Interim Report of the Interagency Ocean Policy Task Force, July 10, 2009.

[...]The true intent of the CLEAR Act and its associated documents will change the way we do business with regard to our land, oceans, coastal areas and Great Lakes. All air space above the oceans, what operates in, through, on or is derived from underneath the water, will be subject to taxes as a world resource to the United Nations – Agenda 21. These areas will no longer be owned and managed solely by the United States, as they are newly defined as a global revenue, “social justice” source per the Law of the Sea Treaty.

[...]Those Republicans in the House that let America down by not being present and voting:

Parker Griffith (R-AL) C.W. Young (R-FL) Michael Rogers (R-MI)

John Shadegg (R-AZ) John Linder (GA) W. Akin (R-MO)

George Radanovich (R-CA) Stephen Buyer (R-IN) Roy Blount (R-MO)

Devin Nunes (R-CA) Jerry Moran (R-KS) Henry Brown (R-SC)

Kevin McCarthy (R-CA) Todd Tiahrt (R-KS) James Barrett (R-SC)

Howard McKeon (R-CA) Geoff Davis (R-KY) Zach Wamp (R-TN)

John Campbell (R-CA) Pete Hoekstra (R-MI) Samuel Johnson (R-TX)

Voting Present: Gary Miller (R-CA-42)
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Monday, September 20, 2010

9 cases when a country turned around its economy

Guess what? They mostly have to do with reducing the size of government. Shock!


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Wednesday, September 15, 2010

Health insurance costs increase under 'Obamacare'


How is this not bigger news? More here.

National Review:

In a typical statement, President Obama asserted last December that the proposed health-care plan was “deficit-neutral; it bends the cost curve; it covers 30 million Americans who don’t have health insurance.”

That pretense survived, battered but mostly intact, until last week, when a new Centers for Medicare and Medicaid Services (CMS) report found that, post-Obamacare, health-care costs are rising: The annual rate of growth is now 6.3 percent, up 0.2 percentage point.

When asked about this finding at his Friday press conference, Obama said, “Bending the cost curve on health care is hard to do. . . . We didn’t think that we were going to cover 30 million people for free.”

In plain English: “You should have read the fine print.”

[...]As it is, CMS may be underestimating the costs — the report’s numbers rely on wobbly assumptions, the most implausible of them being that Congress will allow doctors’ Medicare payments to be cut by 23 percent in December. Considering that Congress has overridden such reductions every time they have been scheduled to happen, there is no reason to believe that this will actually occur.

The report also assumes that the excise tax will be implemented on schedule in 2018, which assumes, in turn, that future congressmen will stand up to the unions that vehemently oppose it. It assumes that the new Medicare board will cap spending — we imagine the seniors will have something to say about that.

Take all these factors together, and it looks very likely that the true annual growth of health-care costs will be even higher than currently anticipated.
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Federal subsidies lead to higher taxes

Downsizing Government:

A new study from economists Russell Sobel and George Crowley finds that federal subsidies to the states results in higher future state taxes. Specifically, the authors find that future state taxes increase by between 33 and 42 cents for every dollar the states receive in federal subsidies. A similar effect was found for federal and state aid to local governments.

[...][S]pending programs create their own new political constituency, in that the government employees and private recipients whose incomes depend on the program, and their families, will use political pressure to fight against any discontinuation of the program…With more government funds comes additional fights over political resource allocations, and an expansion in the rent-seeking industry occurs…[F]ederal grants may result in an expansion in state lobbying activity that is successful in gaining influence over future state spending.
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Sunday, September 5, 2010


I was curious about OSHA (Occupational Safety and Health Administration), so I decided to do some reading this morning.

Cato (2000):

Even using the most optimistic estimates, OSHA would be responsible for lowering workplace injuries in the United States by no more than 5 percent.

[...]A back-of-the-envelope calculation, using the range of estimates of OSHA's effectiveness in reducing injuries and the implicit value workers place on safety, indicates that OSHA produces annual safety benefits of from $0 to $4 billion. A study by Robert Hahn and John Hird published in 1991 in the Yale Journal on Regulation places the annual cost of OSHA's current health and safety standards at $11 billion, based on either changes in input productivity or expenditures on OSHA-mandated capital equipment. Using cost figures provided by OSHA, Harvey James of Washington University's Center for the Study of American Business recently estimated that the cost of complying with OSHA's regulations in 1993 was about $34 billion. Even with the most favorable of the above estimates, the benefits of OSHA, which may very well be zero, fall far short of its costs.

[...]The Commission de la Santeaa et de la Seaacuriteaa du Travail, Quebec's equivalent of OSHA, spends over four times more per worker on prevention activities than does OSHA. Even with more innovative safety measures and a much greater level of enforcement, the new Quebec system of workplace regulation has been no more effective in improving worker safety and health than was the old.

[...]As the frequency of claims rises, the price of workers' compensation insurance increases, thereby penalizing firms for poor safety records. Michael Moore of Duke University and W. Kip Viscusi of Harvard University estimate that, without workers' compensation insurance, the number of fatal accidents and diseases would be 48 percent higher in the United States.

[...]In 1993 firms paid more than $55 billion for workers' compensation insurance and an estimated $200 billion in wage premiums to workers for accepting some job hazards. OSHA, both federal and state, assessed fines of only $160 million in 1993. At a ratio of 1,594 to 1, the economic incentives to improve safety by reducing compensating wage differentials and workers' compensation insurance expenses far surpass the safety-enhancing incentives of the relatively small fines imposed by OSHA for violating its standards.

Cato (1995):

OSHA originally cited Pymm [thermometer company] in 1981 for mercury-fume levels five times greater than normal, levels that could cause severe neurological damage or death. The agency fined Pymm $1,400 and ordered it to eliminate the mercury-fume hazard within six months. Five years after the original elimination order, by which time three additional OSHA inspections had taken place, the company still had not installed the ventilation equipment necessary to reduce mercury exposure to permissible levels.

The Pymm situation would have continued unchanged, except for the negative publicity that resulted when the company fired Vidal Rodriguez. After doctors treated Mr. Rodriguez for a fractured elbow, they reported to the health departments of both New York City and New York State that Mr. Rodriguez suffered from mercury poisoning. [...]OSHA still did nothing. Eventually, an article describing the agency's dismal enforcement record goaded OSHA into reinspecting Pymm in 1985.

[...]The safety inspectors searched the building for more than a day to find the hidden mercury-recycling room; although the inspectors said that the working conditions were a "nightmare," they fined the Pymm Thermometer Company only $30,100 for 16 violations of federal workplace safety and health standards.

[...][R]ecent inspection rates mean that the typical American worker can expect to see an OSHA inspector once every 75 years, or once every 13 years if working in a hazardous job. And if they are inspected, firms can avoid paying severe fines by simply agreeing to abide by OSHA's regulations in the future.

[...]More interestingly, the BLS also found that 40 percent of recent workplace fatalities were from transportation accidents (almost half the fatal transportation accidents were highway accidents), and about 20 percent of workplace fatalities
were from assaults and other violent acts (over 80 percent were homicides and 15 percent were suicides). In other words, only 40 percent of workplace fatalities were caused by dangers thought by most to be unique to the workplace, such as the classic example of falling into a machine.

[...][A] third of all inspections have resulted in fines.

[...]By law, OSHA must evaluate every formal worker complaint. A majority of complaints are groundless, eating up staff resources without producing any improvement in worker health and safety. Since 1989 more than half of the complaint-initiated inspections uncovered no serious violations of OSHA regulations, and nearly a third of such inspections uncovered no violations whatsoever.

[...]Since 1980 real government expenditure per worker on safety-standards enforcement at both the state and federal levels has fallen by a third.

[...]Economist W. Kip Viscusi estimates that about one-third of all workers leaving jobs do so upon learning of risks associated with the job.


OSHA's respiratory protection Standard 1910.134 mandates that interior structure fire operations not commence until two backup firefighters are assembled as a rescue team. Known as the “Two In / Two Out” rule, this regulation attempts to harness the benefits of rescue teams designated to assist interior firefighters in trouble. However, under osha’s directive, fire departments must now assemble the standby team prior to commencing interior fire attack.

At some fires, the best strategy to protect firefighter health is to extinguish a fire immediately before it grows into a less manageable and more dangerous size. Yet, because of osha’s mandated “Two In / Two Out” rule, fire department officers cannot exercise discretion over when an immediate attack is warranted prior to the establishment of a rescue team.

[...]Three years after osha’s mandated safety and training standards were issued, the number of volunteer firefighters in America reached a record high. But from that point in 1983 to now, the number of volunteer firefighters has steadily decreased. From 1983 through 2001, the last year of data, the number of volunteer firefighters in America has fallen by 11 percent to a total of 784,700. Volunteer firefighters represent 73 percent of all firefighters.

A press release published by the National Volunteer Fire Council succinctly summed up the causes for the decline:

The biggest factor contributing to the decline is increased time demands on the volunteer. This results from increased training hours to comply with more rigorous training requirements, [and] increased fund raising demands [to purchase mandated equipment]…. In addition, expectations of the fire service have changed over the years due to perception and [osha] standards development. In many cases, this is
a positive change; however, it has caused many to leave the volunteer service. These factors equate to a tremendous loss of talent each year.
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