Two of the most dysfunctional areas of the American economy are healthcare and education, not coincidentally, two of the areas of the economy that the government has the most control and influence.
In healthcare, while there is ostensibly some private elements to it, the reality is that government regulations control almost every aspect of it. From the HIPAA forms about sharing your information you sign at the doctor’s office to what services insurance must cover to how much doctors can charge – or more accurately, get reimbursed for – Medicare patients. As much as one might want to point the finger at Obamacare, the reality is, healthcare was a mess long before Barry gave us the disaster that fittingly bears his name.
Much of that dysfunction stems from the fact that in healthcare there is little correlation between what people pay and the services they get. Why? The main reason is because insurance covers almost all of the cost for healthcare, and most Americans get their insurance through their employer, tax free. And why is that? Why isn’t health insurance like car insurance or homeowner’s insurance? Because of the government, of course. It largely started during WWII when wages and price controls were implemented and in 1943 the IRS made health insurance a tax free benefit to employees… and thus employers could offer insurance benefits to attract employees when they had little control over what they could pay. After the war Congress codified the There are other reasons of course, including government regulations that prohibit insurance companies from offering insurance across state lines, a broken tort system, and the general dysfunction in the Medicaid and Medicare programs.
In education the story is a bit different. Government directly controls in excess of 90% of the education spending in the country. Although most of the dollars are spent at the state and local level, the federal government has been seizing more and more control for the last 40 years, particularly after the establishment of the US Department of Education under Jimmy Carter. Add to that the fact that the Democrat party is almost a wholly owned subsidiary of the teacher’s unions and you understand that most large cities, school systems are not about education, but rather they are a jobs program for Democrat politicians and union donors. And the result is an education system that is more expensive than virtually any in the world on a per capita basis, but one that produces students who trail much of the developed world in testing and keeps the most challenged students in the worst performing schools.
The bottom line is that government does very little well, whether it’s education, healthcare or and we’ve come to see, choosing business outcomes. Just look back at Barack Obama’s green energy boondoggles, from Solyndra to Fisker… they are big versions of the failures states and local governments have been making for decades with their various sports stadium financing failures. Government deciding how businesses should be run and getting choosing winners and losers in business is just as much of a failure of what they’ve done with education and healthcare.
But change is in the air. We have a businessman who will be running the country, who will fix things, starting with business… Um… not so much.
Donald Trump, already known as a fan of big government and eminent domain has, even before he’s been sworn in, taken steps to show that we may be looking at four more years of the same thing… only with different oxen being slayed or spared the ax. Rather than talking about making America a place where companies want to invest, hire and operate, rather than talking about America being a place that all companies can make a profit, Donald Trump has been threatening companies who might have the audacity to try and escape America’s confiscatory tax rates by moving jobs overseas. Indeed last week he “saved 1,000 jobs” by meeting with Carrier and… giving them tax breaks from the state that other businesses can’t get!
So here we have a new president who uses the bully pulpit to threaten companies who don’t do what he wants and he uses tax breaks to get others to do so. That sounds very much like Barack Obama eight years ago… and we know how that turned out with lots of debt, failures and a GDP that has averaged under 2%. With Trump, rather than targeting coal and energy companies the bullseye will be on companies who want to make money for shareholders by escaping an uncompetitive business environment in the heavily regulated United States.
Of course Trump hasn’t even been sworn in yet. Maybe this was just a one off with Trump trying to fulfill a very specific campaign pledge. But then again, maybe not. Either way, it doesn’t say much for Donald Trump’s appreciation for free markets or limited government.
Showing posts with label Carrier. Show all posts
Showing posts with label Carrier. Show all posts
Monday, December 5, 2016
Sunday, May 1, 2016
Ted Cruz's Only Hope for Indiana and Beyond: "The Government didn't build the American Dream..."
This has been a tough week for Ted Cruz. He lost 5 states by double digits. Of course they were all northeastern states which means there’s a snowball’s chance in Hell that they will be landing in the red column in November. Nonetheless Trump won them fair and square and he appears to have momentum.
So now there’s Indiana. The numbers are such that if Cruz does not win Indiana, it becomes almost impossible for him to stop Trump from getting to 1237. Given the glowing coverage that Trump gets from the mainstream media, as well as his cheerleaders in the erstwhile conservative media such as Drudge, Rush, and Hannity, Cruz finds himself very much fighting an uphill battle.
He can’t outTrump Trump. He can’t accuse Trump of lying – despite the fact that he is. He can’t accuse Trump of seeking to intimidate delegates – which he is doing. He can’t make nonsensical appeals to uninformed voters’ base instincts – because that’s not who he (Cruz) is. No, the only chance Ted Cruz has to win Indiana – and California beyond that – is to make his pitch for the American Dream.
Basically, it's that Dream that is behind so many voters flocking to Trump in the first place… that along with our celebrity worship culture where many elevate celebrities to a demigod state, regardless of their less than godlike behavior. Americans are angry that opportunities for advancement are disappearing. Americans are angry that every widget found in Wal-Mart is manufactured in China and every tee shirt in Pakistan. Americans are angry that an American icon, Ford, would reduce production here just to add production in Mexico. And Indianans are angry that Carrier would close a plant in Indiana just to open one in Mexico. The bottom line is, many Americans wonder what happened to a country where hard work and innovation were rewarded and where half the population was not on welfare of one sort of another.
One guy seems to be harnessing their anger and making it so they don’t feel like no one is listening… and that guy is Donald Trump. Ted Cruz needs to jump into the scrum. Ted Cruz needs to be crystal clear that he understands what they are feeling… but he shouldn’t pander while doing so… or he’ll be seen like Hillary trying to use an MTA card. No, Cruz has to talk about their issues, but do so in the context of what is causing them. Manufacturing is indeed moving the Mexico and China… but it’s not because companies like Ford and Carrier hate Americans… it’s because the government has made it so difficult for them to operate and earn a profit in the United States. And it’s not just labor costs, because Ford could have saved half its labor costs simply building the Focus in Alabama or Kentucky rather than Michigan. No, the much bigger problem for companies trying to manufacture and keep jobs in the United States is regulation.
Ted Cruz needs to point out that it’s not malice that encourages American companies to build products outside our borders… it’s government. Federal regulation costs the US $2 trillion a year… Looked at in jobs, just half that total would translate to 10 million new jobs at an average salary of $75,000 each. Unfortunately, this regulatory burden not only makes it more difficult for American companies to build here, it scares off international companies who might otherwise invest in the United States. Fundamentally, if the government would loosen the regulatory yoke and unleash American industry, our economy would once again dominate the world.
And then there is the IRS. Because at 40%, the United States has the highest corporate income tax rate in the developed world, companies find it less competitive to invest in the United States. Not only that, American companies have $2 trillion in profits sitting in subsidiaries around the world that they can’t bring home because it would cost them too much in taxes. That $2 trillion alone would provide 2 years of paychecks for 15 million Americans at $50,000 a year. By eliminating the IRS and implementing the Fair Tax – which Cruz likes but doesn’t push – a President Cruz would welcome trillions of dollars of investment in the United States from around the world. Cruz's 10% income tax would have a similar, albeit a somewhat smaller impact.
At the end of the day, the only chance Cruz has to win Indiana and keep Trump from becoming the nominee is to clearly and forcefully articulate that the enemy of prosperity is not Carrier moving a plant to Mexico or Burger King moving its headquarters to Canada… it’s government strangling the American Dream one regulation at a time, it’s tax rates that handicap the country relative to the rest of the world. And in setting up that argument, he has to highlight the fact that Donald Trump’s solution of trying to tax Carrier back into the country is not the answer because for every Carrier that makes the news, there are hundreds of other companies around the world that aren’t located here and never will be because taxes and regulations simply make it too expensive to invest in the United States and create American jobs.
Donald Trump wants to scare companies into staying in the United States and employing Americans. Ted Cruz wants to inspire companies, both American and foreign, to invest in the United States and employ American workers. That’s a big difference and Cruz has to make that clear to voters. Trump wants to use the government to coerce companies to do what he wants while Cruz wants to lighten the government burden and allow American companies and American workers do what they do best, which is innovate and build their way to prosperity. The government did not invent the air conditioner, Willis Carrier did. The government did not bring the assembly line to the automobile, Henry Ford did. But government regulations have sent the companies those two men founded scurrying south of the border to build products in their names. That is the shame of America in 2016... America used to be a place for entrepreneurship, innovation, invention and most of all, prosperity. It's not today because of government. The American Dream used to inspire both Americans and the rest of the world. It doesn't do that much today because the government has smothered it...
And that's the message Cruz needs to get out: "The government needs to get out of the prosperity killing business and out of the dream killing business... I understand that and I'll make it happen... Lifelong crony capitalist and John Boehner's golfing and texting buddy Donald Trump won't."
So now there’s Indiana. The numbers are such that if Cruz does not win Indiana, it becomes almost impossible for him to stop Trump from getting to 1237. Given the glowing coverage that Trump gets from the mainstream media, as well as his cheerleaders in the erstwhile conservative media such as Drudge, Rush, and Hannity, Cruz finds himself very much fighting an uphill battle.
He can’t outTrump Trump. He can’t accuse Trump of lying – despite the fact that he is. He can’t accuse Trump of seeking to intimidate delegates – which he is doing. He can’t make nonsensical appeals to uninformed voters’ base instincts – because that’s not who he (Cruz) is. No, the only chance Ted Cruz has to win Indiana – and California beyond that – is to make his pitch for the American Dream.
Basically, it's that Dream that is behind so many voters flocking to Trump in the first place… that along with our celebrity worship culture where many elevate celebrities to a demigod state, regardless of their less than godlike behavior. Americans are angry that opportunities for advancement are disappearing. Americans are angry that every widget found in Wal-Mart is manufactured in China and every tee shirt in Pakistan. Americans are angry that an American icon, Ford, would reduce production here just to add production in Mexico. And Indianans are angry that Carrier would close a plant in Indiana just to open one in Mexico. The bottom line is, many Americans wonder what happened to a country where hard work and innovation were rewarded and where half the population was not on welfare of one sort of another.
One guy seems to be harnessing their anger and making it so they don’t feel like no one is listening… and that guy is Donald Trump. Ted Cruz needs to jump into the scrum. Ted Cruz needs to be crystal clear that he understands what they are feeling… but he shouldn’t pander while doing so… or he’ll be seen like Hillary trying to use an MTA card. No, Cruz has to talk about their issues, but do so in the context of what is causing them. Manufacturing is indeed moving the Mexico and China… but it’s not because companies like Ford and Carrier hate Americans… it’s because the government has made it so difficult for them to operate and earn a profit in the United States. And it’s not just labor costs, because Ford could have saved half its labor costs simply building the Focus in Alabama or Kentucky rather than Michigan. No, the much bigger problem for companies trying to manufacture and keep jobs in the United States is regulation.
Ted Cruz needs to point out that it’s not malice that encourages American companies to build products outside our borders… it’s government. Federal regulation costs the US $2 trillion a year… Looked at in jobs, just half that total would translate to 10 million new jobs at an average salary of $75,000 each. Unfortunately, this regulatory burden not only makes it more difficult for American companies to build here, it scares off international companies who might otherwise invest in the United States. Fundamentally, if the government would loosen the regulatory yoke and unleash American industry, our economy would once again dominate the world.
And then there is the IRS. Because at 40%, the United States has the highest corporate income tax rate in the developed world, companies find it less competitive to invest in the United States. Not only that, American companies have $2 trillion in profits sitting in subsidiaries around the world that they can’t bring home because it would cost them too much in taxes. That $2 trillion alone would provide 2 years of paychecks for 15 million Americans at $50,000 a year. By eliminating the IRS and implementing the Fair Tax – which Cruz likes but doesn’t push – a President Cruz would welcome trillions of dollars of investment in the United States from around the world. Cruz's 10% income tax would have a similar, albeit a somewhat smaller impact.
At the end of the day, the only chance Cruz has to win Indiana and keep Trump from becoming the nominee is to clearly and forcefully articulate that the enemy of prosperity is not Carrier moving a plant to Mexico or Burger King moving its headquarters to Canada… it’s government strangling the American Dream one regulation at a time, it’s tax rates that handicap the country relative to the rest of the world. And in setting up that argument, he has to highlight the fact that Donald Trump’s solution of trying to tax Carrier back into the country is not the answer because for every Carrier that makes the news, there are hundreds of other companies around the world that aren’t located here and never will be because taxes and regulations simply make it too expensive to invest in the United States and create American jobs.
Donald Trump wants to scare companies into staying in the United States and employing Americans. Ted Cruz wants to inspire companies, both American and foreign, to invest in the United States and employ American workers. That’s a big difference and Cruz has to make that clear to voters. Trump wants to use the government to coerce companies to do what he wants while Cruz wants to lighten the government burden and allow American companies and American workers do what they do best, which is innovate and build their way to prosperity. The government did not invent the air conditioner, Willis Carrier did. The government did not bring the assembly line to the automobile, Henry Ford did. But government regulations have sent the companies those two men founded scurrying south of the border to build products in their names. That is the shame of America in 2016... America used to be a place for entrepreneurship, innovation, invention and most of all, prosperity. It's not today because of government. The American Dream used to inspire both Americans and the rest of the world. It doesn't do that much today because the government has smothered it...
And that's the message Cruz needs to get out: "The government needs to get out of the prosperity killing business and out of the dream killing business... I understand that and I'll make it happen... Lifelong crony capitalist and John Boehner's golfing and texting buddy Donald Trump won't."
Subscribe to:
Posts (Atom)