A business plan that will make you want to puke!

I could only find data on how much US companies spend on advertising per year for the year 2009. I was unable to find anything more recent. It was a whooping $86 billion. Americans are inundated with advertisements. They are clever, for the most part, and some are quite entertaining. But few of us think about how the advertising agency is trying to lure us to a product. Today we will take a brief look at health insurance advertisements and the effects that ObamaCare has had on this industry.

When we see advertisement for casualty insurance companies, they are generally straightforward. Your house burns down. We’ll replace it. You crash your car. We’ll fix it. And we’ll do it at a lower price than the other guy.

[Sources: How ObamaCare is destroying health insurance, by John C. Goodman and Insured but not covered, by Elizabeth Rosenthal]

The health insurance market is changing. And the changes are not good. Even before there was Obamacare, most insurers most of the time had perverse incentives to attract the healthy and avoid the sick. But now that the Affordable Care Act has completely changed the nature of market, the perverse incentives are worse than ever.

Writing in the New York Times Elizabeth Rosenthal gives these examples:

  • When Karen Pineman of Manhattan sought treatment for a broken ankle, her insurer told her that the nearest in-network doctor was in Stamford, Connecticut – in another state.
  • Alison Chavez, a California breast cancer patient, was almost on the operating table when heir surgery had to be cancelled because several of her doctors were leaving the insurer’s network.
  • When the son of Alexis Gersten, a dentist in East Quogue New York, needed an ear, nose and throat specialist, the insurer told her the nearest one was in Albany – five hours away.
  • When Andrea Greenberg, a New York lawyer, called an insurance company hotline with questions she found herself speaking to someone reading off a script in the Philippines.
  • Aviva Starkman Williams, a California computer engineer, tried to determine whether the pediatrician doing her son’s 2-year-old checkup was in-network, the practice’s office manager “said he didn’t know because doctors came in and out of network all the time, likening the situation to players’ switching teams in the National Basketball Association.”

But aren’t these insurers worried that if they mistreat their customers, their enrollees will move to some other plan? Here’s the rarely told secret about health insurance in the Obamacare exchanges: insurers don’t care if heavy users of medical care go to some other plan. Getting rid of high-cost enrollees is actually good for the bottom line.

… Casualty insurers know you don’t care about insurance until something bad happens. And the way they are pitching their products is: Once the bad thing happens, we are going to take care of you.

Virtually all casualty insurance advertisements carry this message, explicitly or implicitly… Now let’s compare those messages to what we see in the health insurance exchange…

If the health insurers followed the lead of the casualty insurers, their ads would focus on what could go wrong and how good they are at treating the problems. After all, why do you need health insurance? Because you might get cancer, heart disease, or some other expensive-to-treat condition. And when that happens, you would like to be in a plan that gives you access to the best doctors and the best facilities for your condition.

But in fact, this is what you never see in a health insurance commercial… There is never a mention of cancer, heart disease, diabetes, AIDS or any other serious health condition. Instead, what you see are pictures of young healthy families. The implicit message is: if you look like the people in these photos, we want you.

What explains the difference between the health insurance and casualty insurance markets? In the latter people pay real prices that reflect real risks. In the former, no one is paying a premium that reflects the expected cost of his care. The healthy are being overcharged so that the sick can be undercharged. So insurers try to attract the healthy and avoid the sick.

But the perverse incentives don’t end after enrollment. The incentive then is to under-provide to the sick (to encourage their exodus and avoid attracting more of them) and over-provide to the healthy (to keep the ones they have and attract even more)…

Just add the above to the list of reasons that federal intervention into the health care market breeds less than “altruistic” incentives. Yet it is the progressive/statist/altruists that insist it is the better way.

Roy Filly

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Demographics, demographics! Have I said this before?

My readers are frustrated that the last election – which unambiguously denounced Obama – has not resulted in immediate changes. As conservatives we cannot be “for” the Constitution and then be irritated that the balance of powers in the Constitution frustrate our efforts. This is especially galling when one of the “co-equal” branches considers itself more “equal” than the others. I am confident I don’t need to mention which branch that is, Mr. President (if you happen to be reading my post today)!

[Source: The ‘next America’ is now, by Robert J. Samuelson]

Democrats like to describe Republicans as obstructionists (perhaps they never met Harry Reid). But suffice it to say the Democrat Party gets a lot of mileage out of that accusation. The Republicans describe president Obama as arrogant. They definitely got some mileage out of that during the last election. I find it interesting that Republicans must rely on elections while the Democrat Party relies on the predictable left-wing media. Elections come at painstakingly long intervals. The left-wing media bombards the public on a daily basis.

Mr. Samuelson posits that both parties have had a hard time creating agendas that appeal across ideological, racial and ethnic lines. This is especially true as the demographics in America change. I found some of these demographic changes quite fascinating and illuminating. My readers know that I consider these statistics as driving forces in modern politics. You may judge for yourself.

An interesting report issued last month describes the changing nature of the American electorate. Of the many things that demographics dominates is it also the origin of the our current political impasse. “If democracy responds to voters, then voters preoccupied with their own narrow agendas inhibit the creation of durable coalitions capable of legislating.”

[Directly from the Samuelson article.]

The report, “States of Change: The Demographic Evolution of the American Electorate, 1974-2060,” was sponsored by three think tanks of differing politics: the conservative American Enterprise Institute and the liberal Brookings Institution and Center for American Progress. The study identifies 10 transforming trends, which — considering the overlap — I’ve condensed to five.

Here they are:

1) The rise of minorities — and decline of whites . In 1980, 80 percent of the U.S. population was white. Now, that’s 63 percent; by 2060, it’s projected to be about 44 percent. Meanwhile, Hispanics have gone from 6 percent in 1980 to 17 percent and are projected to reach 29 percent by 2060. Asian Americans (and “others”) are expected to double from 8 percent now to 15 percent by 2060. The proportion of African Americans, now 12 to 13 percent, is estimated to stay stable.

2) A graying America. People age 50 and older now represent one-third of the population, up from one-fourth in 1980. By 2060, their share is forecast to exceed two-fifths. By contrast, those age 18 to 39 are then expected to be about a quarter of the total.

3) Generational shifts. These are inevitable, of course. The World War II generation is mostly gone (it’s 1 percent of the population). And baby boomers, born from 1946 to 1964, no longer dominate. They’re 24 percent of today’s population, slightly behind “millennials,” born from 1981 to 2000, at 27 percent, and slightly ahead of Generation X, born from 1965 to 1980, at 21 percent. (Something I seldom point out to my readers is that these statistics are weighted by the “baby boom.” But importantly, the “baby boom” was followed by the “baby dearth.” After 2060 when the “baby boomers” will be all but gone these statistics on the “graying of America” and “generational shifts” will be turned on their head – RF.)

4) The rise of unmarried voters. This is perhaps the most surprising finding. In 1974, 70 percent of eligible voters were married, 30 percent unmarried. Now, the split is 52 percent married, 48 percent not, reflecting fewer and later marriages, more divorces and more widowed elderly.

5) The gap between voters and the population. In 2012, slightly more than one-fourth of voters were minorities — well below their population share of about 37 percent. The reasons are clear. Many immigrants aren’t eligible to vote, either because they’re children or not citizens. Also, turnout is low among eligible voters. With time, this gap should close.

None of these groups, of course, is a monolith.  But if power ultimately derives from the people, then these changes are not just electoral curiosities.

Roy Filly

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Would you believe it?

I received an email from my son who is currently chief radiologist at the Community Hospital of the Monterey Peninsula. As such, he is required to attend meetings with hospital management personnel. He had an interesting meeting the Information Technology (IT) group. I won’t embelish. Here is the email he sent.

I was in a meeting at the hospital yesterday with IT. They just installed wireless internet at the breast care center… They were deciding whether or not to place a password on it because they wanted people in the waiting room able to check email, etc….

The problem was…. wait for it….. the reason they needed to password protect it is because of the large homeless population in the area…. my first question was of course… why on earth would that be a problem.

Apparently it is well know that they all have internet connected devices (smart phones) and they search for places with unsecured internet and then start to congregate in those areas. Couldn’t believe it!!

The program of which my son is apparently unaware is euphemistically called the Obama phone. So, is that a hotline to the Oval Office? Not really!

The Obama Phone program gives low income Americans free cell phones, voice minutes and texting. Who is more “low income” than a homeless person? As well, cell phone providers were found to be enrolling large numbers of ineligible people into the program. Since the crackdown on the ineligible recipients over $600 million has been saved (political speak) – translation: for several years we, the taxpayers, we being bilked of hundreds of millions of dollars.

 “The program has nearly tripled in size from $800 million in 2009 to $2.2 billion per year in 2012,” the senior Republican on the Energy and Commerce Committee wrote. More than half of welfare-receiving adults have smart phone service.

This appears to be an iteration of the “law of unintended consequences” that few would have guessed.

Roy Filly

 

 

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Welfare spending. It is out of control!

The New Deal divided America into ‘those who work for a living and those who vote for a living.’

H.L. Mencken

The explosion of means-tested federal dollar recipients (i.e., welfare recipients) under this President has been breathtaking. Food stamps, and “disability,” and medicaid recipient numbers have all shot into the stratosphere. “Disability” spending is often not included as this falls under Social Security.

America spent a whopping $412 billion in 2013 on federal welfare programs. That number is staggering, but especially so compared to welfare spending just 15 years earlier: in 1998, spending on federal welfare programs cost $225 billion in today’s dollars. Between 1998 and 2013, the United States saw an 83 percent increase in federal welfare spending.

[Source: Diana Furchtgott-Roth, Welfare in America, 1998-2013: The Case for Further Reform]

These numbers come from a new report from Diana Furchtgott-Roth, senior fellow at the Manhattan Institute and director of Economics21.

What costs the most? Just four programs are responsible for 92 percent of all welfare spending. Medicaid, which takes up 64 percent of total spending, was the most expensive, followed by the food stamp program (SNAP) at 19 percent. The Temporary Assistance to Needy Families (TANF) program and the Section 8 Housing Choice Vouchers program each were responsible for 4 percent of federal spending.

While Medicaid was responsible for the largest amount of spending, the food stamp program saw the biggest spending increase, tripling from 1998 to 2013.

Furchtgott-Roth says states should be given more flexibility to rearrange funds and spend federal dollars in ways that best suit their states. She offers the example of a state that may have low food prices but high housing costs — if that state could transfer funds from the food stamp program to housing programs, it could be more efficient in its use of resources. Similarly, giving states more leeway in spending could allow them to direct resources to programs that function better than others.

Moreover, she writes that allowing states to funnel welfare savings towards other uses would encourage state governments to be more efficient and incentivize them to cut costs.

A list of all 83 federal welfare programs examined by CRS follows: 

Family Planning

Consolidated Health Centers

Transitional Cash and Medical Services for Refugees

State Children’s Health Insurance Program (CHIP)

Voluntary Medicare Prescription Drug Benefit—Low-Income Subsidy

Medicaid

Ryan White HIV/AIDS Program

Breast/Cervical Cancer Early Detection

Maternal and Child Health Block Grant

Indian Health Service

Temporary Assistance for Needy Families (TANF) (cash aid)

Supplemental Security Income

Additional Child Tax Credit

Earned Income Tax Credit (refundable component)

Supplemental Nutrition Assistance Program (SNAP)

School Breakfast Program (free/reduced price components)

National School Lunch Program (free/reduced price components)

Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

Child and Adult Care Food Program (lower income components)

Summer Food Service Program  Commodity Supplemental

Food Program Nutrition Assistance for Puerto Rico

The Emergency Food Assistance Program (TEFAP)

Nutrition Program for the Elderly

Indian Education

Adult Basic Education Grants to States

Federal Supplemental Educational Opportunity Grant

Education for the Disadvantaged— Grants to Local Educational Agencies (Title I-A)

Title I Migrant Education Program

Higher Education—Institutional Aid and Developing Institutions

Federal Work-Study

Federal TRIO Programs

Federal Pell Grants

Education for Homeless Children and Youth

21st Century Community Learning Centers

Gaining Early Awareness and Readiness for Undergraduate Programs (GEARUP)

Reading First and Early Reading First

Rural Education Achievement Program

Mathematics and Science Partnerships

Improving Teacher Quality State Grants

Academic Competitiveness and Smart Grant Program

Single-Family Rural Housing Loans

Rural Rental Assistance Program

Water and Waste Disposal for Rural Communities

Public Works and Economic Development

Supportive Housing for the Elderly

Supportive Housing for Persons with Disabilities

Section 8 Project-Based Rental Assistance

Community Development Block Grants

Homeless Assistance Grants

Home Investment Partnerships Program (HOME)

Housing Opportunities for Persons with AIDS (HOPWA)

Public Housing

Indian Housing Block Grants

Section 8 Housing Choice Vouchers

Neighborhood Stabilization Program-1

Grants to States for Low-Income Housing in Lieu of Low-Income Housing Credit Allocations

Tax Credit Assistance Program

Indian Human Services

Older Americans Act Grants for Supportive Services and Senior Centers

Older Americans Act Family Caregiver Program

Temporary Assistance for Needy Families (TANF) (social services)

Child Support Enforcement

Community Services Block Grant

Child Care and Development Fund

Head Start HHS

Developmental Disabilities Support and Advocacy Grants

Foster Care

Adoption Assistance

Social Services Block Grant

Chafee Foster Care Independence Program

Emergency Food and Shelter Program

Legal Services Corporation

Supplemental Nutrition Assistance Program (SNAP) (employment and training component)

Community Service Employment for Older Americans

Workforce Investment Act (WIA) Adult Activities

Workforce Investment Act (WIA) Youth Activities

Social Services and Targeted Assistance for Refugees

Temporary Assistance for Needy Families (TANF) (employment and training)

Foster Grandparents

Job Corps

Weatherization Assistance Program

Low-Income Home Energy Assistance Program (LIHEAP)

Progressive/Statist/Altruists are running out of acronyms! Whatever will they do?

Roy Filly

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Amateur hour.

When I must agree with Nancy Pelosi about anything the Earth will stop its rotation from west to east and begun rotating in the opposite direction. So sadly the sun will rise in the west today!

Pelosi described the latest shenanigans of the Republican Party with regard to funding of Homeland Security as “amateur hour.” Even Pelosi could spot the innumerable fallacies in the Republican position.

The Republicans would like to put a dent in the President’s unconstitutional amnesty for 5 million persons who illegally crossed our borders. Personally, I see their goal as an excellent one. But, their methodology to accomplish their goal is “amateur hour” in spades!

1. Defunding a portion of Homeland Security only means that the Secretary will end up spending dollars where he will and think of a ploy to hide the “funneled dollars.” (Or perhaps the Republican leadership hasn’t heard about Planned Parenthood.)

2. The part of Homeland Security that the Republicans wish to “defund” is largely self-supporting and “defunding” it won’t even slow it down.

3. Just pronounce the name of the agency they are trying to defund – HOMELAND SECURITY! It’s about the same as defunding a cancer ward in a children’s hospital.

3. The Republicans have lost the war of public opinion on this issue for many reasons – BUT THEY LOST! When the MEANINGLESS shutdown occurs Americans will be led to believe they are at risk and will BLAME Republicans! (And “yes” I know it is nonsense but the left wing media will sell it, nonetheless, as callous and stupid.)

4. The alternative is to pack up 5 million illegals and ship them “home.” Even the Nazi’s had a hard time shipping that many people they had a grudge against.

5. What is their solution? They kicked the can down the road for one stupid week so that they can be the source of ridicule for seven more days – lose again – and end up funding Homeland security anyway.

I will continue to vote Republican – but, damn, it is hard sometimes! Learn to pick your battles more wisely Speaker Boehner and Majority Leader McConnell.

Roy Filly

 

 

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Missed opportunities to have changed the course of Middle East history.

Retired Admiral James Lyons points out some facts of which I was unaware. He served in the U.S. Navy for thirty-six years, including as Commander-in-Chief, US Pacific Command (CINCPAC), Senior U.S. Military Representative to the United Nations and Deputy Chief of Naval Operations.

It is sad to think of the missed opportunities we had to cut radical Islam off at the knees. I remember each of these events. I remember as well that Secretary of Defense Rumsfeld wanted to send a smaller force into Iraq in 2003 while the Joint Chiefs wanted a larger force. We sent a total of approximately 200,000. We should have sent 300,000. After the fall of Baghdad we should have moved 150,000 troops to the border of Iran and 100,000 troops to the border of Syria – and left them there. I don’t think we would be dealing with ISIS today had we done that.

Why do politicians think they no more about war than generals and admirals – Barack Hussein Obama being a prime example.

http://www.liveleak.com/view?i=bc0_1423721020

And thanks to BC for sending this to me.

Roy Filly

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A “shutdown” of Homeland Security?

The President and his minions have been telling us that the security of the homeland is in serious jeopardy because Republicans are not prepared to fully fund the Department of Homeland Security. Only a small part of the intelligence and security budget is made public; the bulk of the overall spending is hidden within the Department of Defense budget. Also, the FBI, CIA, and NSA are not “shutting down.” Local and state police forces are not “shutting down.” But will even Homeland Security “shut down” if the funding bill does not pass?

The “fact checker” at the Washington Post (Pravda on the Potomac), a newspaper with a definite left-wing flare, penned a treatise on the Homeland Security “shutdown” and what it will mean for Americans.

[Source: The Fact Checker: What exactly would happen during a DHS shutdown? by Michelle Ye Hee Lee]

(The President and a host of left-wing lackeys have stated most emphatically) that a shutdown would jeopardize national security operations. Some Democratic lawmakers, including Sen. Barbara Mikulski, have warned about a national security “crisis” that would hit at midnight Friday.

On the other end of the debate were comments such as Blunt’s and that of Rep. Mario Diaz-Balart (R-Fla.), who told Politico late in January: “In other words, it’s not the end of the world if we get to that time because the national security functions will not stop — whether it’s border security or a lot of other issues. … Having said so, I think we should always aspire to try to get it done.” A look at what happened during the October 2013 federal government shutdown (shows us what will actually happen).

About 31,295 DHS employees were placed on furlough during the shutdown, according to the Congressional Research Service (CRS). But about 85 percent of its more than 200,000 civilian and military employees were deemed essential to the agency’s operations and continued to work without pay. (Of course, they were eventually paid in full with interest – RF) These “essential” employees were in the agency’s core functions that relate to protection of life and property, including border security programs, immigration and customs enforcement, homeland security investigations, Transportation Security Administration’s passenger screening, military/defense operations, maritime security and safety, cybersecurity and DHS intelligence operations. Even some furloughed FEMA employees were recalled to work for emergency response operations.

The furloughs came from the management, research, training and operational functions of DHS. But these were smaller administrative departments… DHS had a small percentage of furloughs relative to its size, and its core functions relating to national security continued…

Even if the department shuts down and its funding runs out, it would not affect core homeland security and public safety functions that are essential to national security. As shown in the last federal shutdown, the vast majority of employees were deemed essential to protecting property and life, and some employees who were placed on furlough were recalled into work for responding to federal emergencies.

So, as the saying goes, “big whoop!”

Roy Filly

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What Patricia Arquette didn’t know.

I am reposting the article below that I originally shared with you in September 2012. I’m pretty sure that Patricia Arquette never read it. I am also certain she never reviewed Professor Thomas Sowell’s research on the subject. All of this is to be expected of progressive/statist/altruists who have forever and always thought they knew everything and we conservatives were troglodytes.

What are the facts about “equal pay?”

What follows is a series of four articles that dispel the Democrat party assertion that “equal pay for women” does not exist in America. I believe that Americans overwhelmingly agree that women should receive equal pay. I am among those that concur. But, as you will see, when apples and apples and oranges and oranges are compared, typically women are paid very similarly to men and, in many instances, women make more money than men.

(Patricia Arquette rekindled the) “equal pay” for women (debate at this year’s Oscars ceremony). Lilly Ledbetter, whose fair-pay U.S. Supreme Court case inspired the first bill President Barack Obama signed into law, noted that women make “77 cents for every dollar that men earn.”

The phrase “women make 77 cents for every dollar that men earn” has been bandied about for years. As stated above, I agree with and support equivalency. The calculus of whether an individual has two X chromosomes or one X and one Y chromosome should never enter into the computation of “pay.” However, the notion of “equal” was never intended with regard to “pay.” Indeed, the concept is ludicrous. “Equal pay for equal work” is a computation that would be daunting to a super computer. For the moment let’s forget about “men” altogether and concentrate on “equal pay between women.” Take as an example two women playing in a professional golf tournament. They both walk an equal number of yards. They both swing golf clubs. Both have practiced long hours. Both are talented. But the one that does the lesser amount of work (i.e., swings the golf club the fewest number of times) gets more “pay” – a lot more “pay” – tens of thousands of dollars more “pay.” Everyone thinks this is fair. Why is that, ask you? Because, answer I, the reward – the pay – in dollars is for talent, not “work.”

Perhaps a more telling example is this. Let’s say that you own a medium size business. You have no partners or stockholders. Every cent of profit is yours. You employ 250 men who all make widgets. They all do the same tasks or, alternatively, rotate through the tasks. You pay them each $30,000 per year including benefits. Thus, your annual expense for labor is $7,500,000, the largest expenditure in your annual budget. It so happens that you are a greedy SOB republican… Are you telling me that it would be possible to cut your labor costs by 23% and all you need do is fire every man and replace each one of them with a woman who would do EXACTLY the same amount and caliber of work with no loss in productivity? That puts $1,725,000 dollars directly into your pocket and your business sails on without a hitch. I assure you, if that were possible, there wouldn’t be a man with a job until women were no longer available to be hired – every woman who wanted to work would be working. That women earn 23% less than men is only true if you can convince everyone that an apple is an orange.

Enjoy the following four articles (I have edited some portions to avoid repetition, although some repetition could not be avoided and still keep an appropriate flow to the article):

[From: The ‘Equal Pay Day’ Myth, by Carrie Lukas] “The Department of Labor’s Bureau of Labor Statistics reported in the fourth quarter of 2011 that the median full-time working woman made 81.6 percent of the wages of the median fulltime working man (the 73% number used by Ledbetter is an older figure – RF).  Since then, big government, feminist organizations and liberal politicians repeat this “wage gap” statistic, implying that discrimination is its cause…

“This, however, is simply not the case.  Rather, the publication and intense focus on this presented wage gap is an exercise in statistical manipulation, espousing a conclusion that is unreal.  Aggregately comparing full-time working men and women without holding other factors constant is disingenuous — an analysis that accounts for hours worked, education and industry type would be more enlightening.

“Incorporating the number of hours worked variable, it can be found that while both men and women in the original analysis were vaguely labeled “fulltime,” this fails to capture hours put in.

“The Department of Labor’s 2011 Time Use Survey shows that fulltime working men spend… more time at work each day on the job. Therefore, it should hardly be a surprise that workers who work more do in fact earn more. Similarly, the sectors that men and women tend to dominate have to be taken into account:

  • Men dominate fields like construction, manufacturing and trucking — jobs with higher personal risk (both in job security and safety), but with salary premiums to compensate.
  • Women cluster in service industries, teaching, health care and the social services — jobs with fewer risks, more comfortable conditions, regular hours and greater flexibility.
  • While radical feminists argue that women are socially pressured into these low-paying positions, the same argument can be made that men, pressured to be the bread-winner, sacrifice comfortable positions to make a better salary.

“Finally, children create an important variable.  Two new parents tend to respond oppositely to having a child.  The mother tends to seek a position with greater flexibility and time off (sacrificing salary in the process), while the father actually seeks further salary gains.  When these and other factors are taken into account, the wage gap usually disappears and sometimes even reverses.”

[From, The Real war on Women, by Thomas Sowell] “The old — and repeatedly discredited — game of citing women’s incomes as some percentage of men’s incomes is being played once again, as part of the “war on women” theme.

“Since women average fewer hours of work per year, and fewer years of consecutive full-time employment than men, among other differences, comparisons of male and female annual earnings are comparisons of apples and oranges, as various female economists have pointed out. Read Diana Furchtgott-Roth of the Hudson Institute or Professor Claudia Goldin of Harvard, for example.

“When you compare women and men in the same occupations with the same skills, education, hours of work, and many other factors that go into determining pay, the differences in incomes shrink to the vanishing point — and, in some cases, the women earn more than comparable men.

”But why let mere facts spoil the emotional rhetoric or the political ploys to drum up hysteria and collect votes?

“The farcical nature of these ploys came out after House Minority Leader Nancy Pelosi declared that Congress needed to pass the Fair Pay Act, because women average 23 percent lower incomes than men.

“A reporter from The Daily Caller then pointed out that the women on Nancy Pelosi’s own staff average 27 percent lower incomes than the men on her staff. Does that show that Pelosi herself is guilty of discrimination against women? Or does it show that such simple-minded statistics are grossly misleading?”

[From, The Myth of Unfair Paychecks, by Steve Chapman] “As any debater knows, defining the issue is a major part of the battle… Democrats failed to persuade the Senate to approve the Paycheck Fairness Act. What are we to conclude from that outcome? That paychecks will be unfair, to the detriment of America’s working women.

“That’s the claim of those supporting the legislation. President Barack Obama said it would merely mandate “equal pay for equal work.” Senate Democratic Leader Harry Reid of Nevada warned beforehand that failing to pass the bill would send “the message to little girls across the country that their work is less valuable because they happened to be born female.”

“On Rachel Maddow’s blog, the complaint was that women are ‘still only making 77 cents for every dollar men earn in similar jobs,’ but Republicans ‘seem indifferent to the problem.’

“’This is a myth resting on a deception. The Washington Post’s official Fact Checker faulted Obama’s claim, noting that… depending on how the data are viewed, in some cases it barely exists.’

“A difference, in any event, does not prove discrimination…

“‘The gender gap shrinks to between 8 percent and 0 percent when the study incorporates such measures as work experience, career breaks and part-time work,’ Baruch College economist June O’Neill has written…

“A fact sheet from the American Association of University Women (which favors the bill) acknowledges that ‘10 years after graduation (from college), 23 percent of mothers in our sample were out of the workforce and 17 percent worked part time. Among fathers, only 1 percent were out of the workforce, and only 2 percent worked part time.’ It’s safe to assume that men who make similar work decisions experience similar consequences.

“You could argue that oppressive social conventions saddle mothers with the main responsibility for (the) task (of child rearing). But given the drastic changes in sex roles and expectations over the past half-century, why should we assume that this one is being forced on women? If they tend to place greater importance on child-rearing than men, they will be more inclined to interrupt their careers, even at a sacrifice in long-term earnings.

“Pay differences stemming from factors within the control of females are a ‘problem’ only if you define them as one. By that logic, we need a Higher Education Fairness Act because men earn only 43 percent of all bachelor’s degrees and 40 percent of master’s degrees.

“If universities are taking steps to discourage guys from enrolling, it’s a problem that may be amenable to government action. But if the imbalance is the result of males skipping college in favor of other options, there is no social injustice to undo.

“What the alleged gender pay gap reflects is the interaction of supply and demand in a competitive labor market. Even in a slow economy, companies that mistreat women can expect to lose them to rival employers.

“The Paycheck Fairness Act would upend these processes, with the government and courts assuming responsibility for what each worker should be paid, according to Harry Reid’s standards of justice and fairness. Every salary decision would be fraught with the dread prospect of litigation — promoting rigid pay scales simply to minimize the liability risk.

“The result would be a less nimble and efficient economy, which over time dampens productivity improvements and stifles wage growth. The effect on paychecks? Not fair, but foul.”

[From, Equality or Inequalityby Walter Williams] “Kay S. Hymowitz’s article ‘Why the Gender Gap Won’t Go Away. Ever,’ in City Journal (Summer 2011), shows that female doctors earn only 64 percent of the income that male doctors earn. What should be done about that? It turns out that only 16 percent of surgeons are women but 50 percent of pediatricians are women. Even though surgeons have many more years of education and training than do pediatricians, should Congress equalize their salaries or make pediatricians become surgeons?

“Wage inequality is everywhere. According to the Bureau of Labor Statistics, Asian men and women earn more than white men and women. Female cafeteria attendants earn more than their male counterparts. Females who are younger than 30 and have never been married earn salaries 8 percent higher than males of the same description…

“There are other inequalities that ought to be addressed. With all of the excitement about New York Knick Jeremy Lin’s rising stardom, nobody questions league domination by blacks, who are a mere 13 percent of our population but constitute 80 percent of NBA players and are the highest-paid ones. It’s not much better in the NFL, with blacks being 65 percent of its players. Colleges have made diversity their primary calling, but watch any basketball game and you’d be hard-put to find white players in roles other than bench warming. Worse than that, Japanese, Chinese and American Indian players aren’t even recruited for bench warming.

“There’s inequality in most jobs. According to 2010 BLS data, the following jobs contain 1 percent female workers or less: boilermaking, brickmasonry, stonemasonry, septic tank servicing, sewer pipe cleaning and working with reinforcing iron and rebar. Maybe the reason female workers aren’t in these occupations is that too many are in other occupations. Females are 97 percent of preschool and kindergarten teachers, 80 percent of social workers, 82 percent of librarians and 92 percent of dietitians and nutritionists and registered nurses.

“Anyone with one ounce of brains can see the problem and solution. Congress has permitted — and even fostered — a misallocation of people by race, sex and ethnicity. Courts have consistently concluded that “gross” disparities are probative of a pattern and practice of discrimination. So what to do? One remedy that Congress might consider is to require females, who are overrepresented in fields such as preschool and kindergarten teaching, to become boilermakers and brickmasons and mandate that male boilermakers and brickmasons become preschool and kindergarten teachers until both of their percentages are equal to their percentages in the population. You say, ‘Williams, that would be totalitarianism!’ But if Americans accept that Congress can make us buy health insurance whether we want to or not, how much more totalitarian would it be for Congress to allocate jobs in the name of social equality and the good of our nation?

“Nobel laureate Milton Friedman said: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” Equality before the general rules of law is the only kind of equality conducive to liberty that can be secured without destroying liberty.”

Roy Filly

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Why wasn’t Walter E. Williams our first black president?

I have posted articles by Walter E. Williams before. I am confident that most of my readers have read some of his engaging and informed, learned, scholarly and erudite publications.

He recently penned a beauty entitled, Shame. I would like to reproduce some of the article here.

Liberalism is a moral manipulation that exaggerates inequity and unfairness in American life in order to justify overreaching public policies and programs. Liberalism undermines the spirit of self-help and individual responsibility. For liberals in academia, the fact that black college students earn lower grades and have a higher dropout rate than any group besides reservation Indians means that blacks remain stymied and victimized by white racism. Thus, their push for affirmative action and other race-based programs is to assuage their guilt and shame for America’s past by having people around with black skin color. The heck with the human being inside that skin.

Shelby Steele (Footnote 1) argues that the civil rights movement’s goal was a free society — one not necessarily free of all bigotry but free of illegal discrimination. After that, we minorities should be simply left alone, as opposed to being smothered by the paternalism, inspired by white guilt, that has emerged since the 1960s. On that note, I just cannot resist the temptation to refer readers to my Proclamation of Amnesty and Pardon, which grants Americans of European ancestry amnesty and pardon for their own grievances and those of their forebears against my people so that they stop feeling guilty and stop acting like fools in their relationship with Americans of African ancestry.

Amen to that, Brother Williams! The Rugged Individualist is with you all the way. If we want to help Black Americans then constantly making them feel like they have been victimized is exactly the wrong way to do it.

Dr. Williams opening statement is profound, “Liberalism is a moral manipulation.” That thought never occurred to me and it explains everything about progressive/statist /altruists. Brilliant!

Roy Filly

Footnote 1.

Shelby Steele (born January 1, 1946) is an American author and documentary film-maker. He is the Robert J. and Marion E. Oster Senior Fellow at Stanford’s Hoover Institution (where Thomas Sowell also holds a professorship). Steele specializes in the study of race releations, multiculturalism and affirmative action. Steele was born in Chicago to a black father and a white mother.

Footnote 2.

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America is losing corporations – and not just a few.

Disappointment is the nurse of wisdom.

Sir Boyle Roche

Our president speaks out frequently about corporations that shelter profits abroad and refuse to bring the money back to an America where Barack Obama is in charge. Of course, what they are doing is entirely legal, but just another “unfair” practice – so speaks the custodian of fair play. Personally, I don’t blame them. He also rales against corporations that plan to move their headquarters to countries with more favorable corporate tax policies – which means just about any country outside of the United States (see graph below).

US corporations currently face the highest statutory corporate income tax rate in the world at 39.1 percent. This overall rate is a combination of our 35 percent federal rate and the average rate levied by U.S. states. Corporations headquartered in the 33 other industrialized countries that make up the Organization for Economic Cooperation and Development (OECD), however, face an average rate of 25 percent.

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[Source: William McBride, “America’s Shrinking Corporate Sector,” Tax Foundation]

Progressive/statist/altruist pundits have focused on the rise in corporate “inversions” — when American corporations move abroad and reincorporate in OECD countries other than our own to reduce their tax burdens. But is that really America’s biggest corporate problem? There were just 14 inversions in 2014. However, America loses 60,000 corporations every year. William McBride of the Tax Foundation shows that it is due to restructuring.

Traditional corporations are taxed on their income (via the corporate income tax). However, after they distribute profits to their shareholders, those shareholders are taxed on the dividends they receive, and they are also subject to the capital gains tax when they sell their stock. This is just one of many examples of “double taxation.” It’s hard to believe that the Boston Tea Party was begotten by a 3 penny tax on tea!

All corporations face this tax system, but not all businesses are corporations — many businesses are partnerships, sole proprietorships or what are known as “Subchapter S corporations” (a form that carries the liability benefits of a corporation, but in which business income is taxed at the individual level, not the corporate level). In his report, McBride explains that one of the major differences between these business forms and the traditional corporation is how their profits are taxed: these non-corporate forms are known as “pass-through” entities. Rather than being forced to pay the corporate income tax and face double taxation, their income “passes through” to owners and shareholders, where it is taxed once.

According to McBride, the number of corporations in the United States has shrunk, because more corporations have chosen to structure themselves as pass-through entities to avoid the tax consequences of the traditional corporate form. This trend took off after 1986, when Congress passed the Tax Reform Act, which reduced both corporate and individual taxes but ultimately made the individual tax rate lower than the corporate rate. The results?

  • Since 1986, The United States has lost a total of one million corporations.
  • There were 1.6 million traditional corporations in 2011, the lowest number in the United States since 1974.
  • Since 2006, the United States has lost 60,000 corporations annually.

McBride calls this trend “self-help tax reform.” Today, over 90 percent of American businesses are pass-through businesses. Is this a problem? McBride says yes, calling the corporate structure “the most efficient” for investment. When the tax code limits that efficiency and pushes companies to structure themselves in other ways, the economy loses valuable economic activity.

Nothing being talked about in the hals of Congress is more important than tax reform. Our tax code is overburdensome and needs simplification. Nearly all of the nonsense in the tax code got their so that one politician could get the vote of another politician or so that a politician could aid a political crony or favorable voting block.

Roy Filly

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