Health Care

The Depression may be here.

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I have believed for some time that we were entering another Depression. I have previously posted about it.

The Great Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932. The 1929 crash was a single event, much like the 2008 panic. It took major errors in economic policy to make matters worse. Some were made by Hoover, who was a “progressive” but they continued under Roosevelt.

I posted that statement earlier and it got a rather vigorous rebuttal. I still believe it, however. I think a depression is coming soon. What is more, I am not the only one. Or even only one of two.

The second article preceded the election of 2012 but is still valid.

When employment hit an air pocket in December, most analysts brushed off the dreadful jobs number as an anomaly, or a function of the weather. They chose to believe Ben Bernanke rather than their lying eyes. It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980:

fredgraph

In January, only 51% of manufacturers reported a rise in new orders, vs. 64% in December. Not only did the U.S. economy stop hiring in December, with just 74,000 workers added to payrolls; it stopped ordering new equipment. The drop in orders is something that only has occurred during recessions (denoted by the shaded blue portions of the chart). The Commerce Department earlier reported a sharp drop in December orders for durable goods. In current dollars, durable goods orders are unchanged from a year ago, which is to say they are lower after inflation.

So, the economy stopped hiring, even at the poor pace the past five years have seen, but business also stopped buying.

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More Obamacare News

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The CMS has a new contractor for Obamacare, not just the web site. The previous contractor, CGI Federal, has been replaced rather suddenly.

“Accenture, one of the world’s largest consulting firms, has extensive experience with computer systems on the state level and built California’s large new health-insurance exchange. But it has not done substantial work on any Health and Human Services Department program.
“The administration’s decision to end the contract with CGI reflects lingering unease over the performance of HealthCare.gov even as officials have touted recent improvements and the rising numbers of Americans who have used the marketplace to sign up for health coverage that took effect Jan. 1.”

CGI Federal is the company connected with Michelle Obama through her classmate, a fellow Princeton alumna.

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Is the Preferance Cascade Beginning?

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All during late November and December of last year, I began seeing internet discussions of the looming disaster that is Obamacare and yes, I will hang that name on the so-called Affordable Care Act, also known as the un-Affordable Care Act. The man behind the desk in the Oval Office pursued this as his singular achievement; his legislative allies rammed it through over protest, and his media allies have viciously abused those who advised caution. So it is only fitting and fair that his name get attached to it at every opportunity, especially if it brings down his whole political machine in a spectacular fashion, rather like a slow-motion Hindenberg collapsing.

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Obamacare, the Wisdom of Rose Wilder Lane, and Why Nancy Pelosi Was Sort of Right

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The “Affordable Care Act,” aka Obamacare, seems to be full of surprises.  For example, it seems that many Americans are being forced onto Obamacare exchanges where most plans provide only local medical coverage…a bit of a problem for people who travel, change jobs, or have vacation homes.  To take another example, this Washington Post article says Obamacare may make it impossible for people living in American territories (such as Guam and the Northern Mariana Islands) to purchase health insurance policies at all. “Unexpected!” results of Obamacare seem to be almost daily news.

These surprises especially strike those ordinary Americans who are the targeted users of Obamacare, of course…but  also, they seem to strike many of the creators of the program. Some members of the government classes, of course, simply lied about Obamacare’s effects…first and foremost this is notoriously true of Obama himself. But I also feel sure that there are many among those CongressCreatures who voted for this 2000-page bill who have been genuinely surprised by some or many of its outcomes. It is simply not possible to clearly predict in advance the effects of a piece of legislation so all-encompassing, so verbose, and so quickly pushed through.

Rose Wilder Lane, still at that point a Communist, visited the Soviet Union in 1919. After she explained the benefits of central planning to a disbelieving village leader, he shook his head sadly and said:

It is too big he said too big. At the top, it is too small. It will not work. In Moscow there are only men, and man is not God. A man has only a man’s head, and one hundred heads together do not make one great big head. No. Only God can know Russia.

Indeed, one hundred or one thousand or ten thousand heads together in the form of CongressCreatures or health care bureaucrats did not suffice to make one great big head that would fully grasp the implications of Obamacare. Nancy Pelosi was sort of right when she said “But we have to pass the bill so that you can find out what is in it”…she should have carried it further and said: “We have to pass the bill so that we can find out what’s in it.”

It is precisely this difficulty in predicting the outcomes of sweeping change, on a society-wide scale, that makes such sweeping and radical change something to be usually avoided..and when indeed necessary, to be conducted with caution and careful forethought. British statesman and political philosopher Edmund Burke made this point eloquently and famously. Nothing could be more anti-Burkean than Obama’s statement on October 30, 2008: “We are five days away from  fundamentally transforming  the United States of America.”

After coming to realize that the defects of Communism are inherent and not just due to problems with one particular implementation of it, Rose Wilder Lane also became convinced that:

Centralized economic control over multitudes of human beings must therefore be continuous and perhaps superhumanly flexible, and it must be autocratic. It must be government by a swift flow of edicts issued in haste to catch up with events receding into the past before they can be reported, arranged, analyzed and considered, and it will be compelled to use compulsion. In the effort to succeed, it must become such minute and rigorous control of details of individual life as no people will accept without compulsion. It cannot be subject to the intermittent checks, reversals, and removals of men in power which majorities cause in republics.

Note how this comment ties in with the Obama administration’s tendency to adjust the healthcare insurance program via quick and arbitrary administrative rulemaking, rather than via the legislative process. RWL would say that this kind of behavior is inherent in a program intended to establish government control over vast swaths of society.

She also notes that:

Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes. But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite diversity of human beings. The most slavish multitude of men that was ever called “demos” or “labor” or “capital” or”agriculture” or “the masses,” actually are men; they are not sheep. Naturally, by their human nature, they escape in all directions from regulations applying to non-existent classes. It is necessary to increase the number of men who supervise their actions. Then (for officials are human, too) it is necessary that more men supervise the supervisors.

…and discusses the temptations of power to a leader who believes in expansionist government:

If he wants to do good (as he sees good) to the citizens, he needs more power. If he wants to be re-elected, he needs more power to use for his party. If he wants money, he needs more power; he can always sell it to some eager buyer. If he wants publicity, flattery, more self-importance, he needs more power, to satisfy clamoring reformers who can give him flattering publicity.

 

My health care posts from 2013

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David has a good idea. I often read the archives of my personal blog to see how I did in forecasting the future or understanding the present. A major concern of mine is, of course, health care and what is happening. When I retired from surgery after my own back surgery, I spent a year at Dartmouth Medical School’s center for study of health care. My purpose was to indulge an old hobby. How do we measure quality in health care ? I had served for years on the board of a company called California Medical Review, Inc. It was the official Medicare review organization for California. For a while I was the chair of the Data Committee. It seems to have gone downhill since I was there. First, it changed its name in an attempt to get more business from private sources. Then it lost the Medicare contract.

Lumetra, which lost a huge Medicare contract last November, is changing its name and its business model as it seeks to replace more than $20 million in lost revenue.
The San Francisco-based nonprofit’s revenue will shrink this year from $28 million last fiscal year, ending in March 2009, to a projected $4.5 million, CEO Linda Sawyer told the Business Times early this week.
That’s in large part because it’s no longer a Medicare quality improvement contractor, formerly its main line of work. And in fact, the 25-year-old company’s revenue has been plummeting since fiscal 2007, when it hit $47 million.

I see no sign that it is involved with Obamacare which is being run from Washington with a state organization that seems no better run than the parent organization.

Beginning Jan. 1, 2015, the Affordable Care Act no longer will provide federal grants to fund state health exchanges. In addition, California law prohibits using the state’s general fund to pay for the exchange.

Anyway, for what it is worth, here are the links to the 2013 health posts.

The Lost Boys

Alternatives to Obamacare.

Why the Obamacare Site Isn’t Working.

Where Healthcare May be Going.

Conservatives Invented the Mandate; say the Democrats.

A Critical Insight.

A Rolling Catastrophe.

Why Health Care is in Trouble.

Where Do We Go Now ?

Building the Airplane During Takeoff.