November 21, 2010

Whoda Thunk It?

The New York Times discovers the Law of Unintended Consequences:

Consumer Risks Feared as Health Law Spurs Mergers
When Congress passed the health care law, it envisioned doctors and hospitals joining forces, coordinating care and holding down costs, with the prospect of earning government bonuses for controlling costs ...

... Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses.

Yeah, nobody could have seen that coming ... except, you know, pretty much everyone who declined to buy into the Sparkly Flying Unicorn Rainbow Farts School of Magic Wand Waving. This falls squarely under the "perverse results" category of unintended consquences, and not the "unexpected" categories.

Not unexpected, that is, unless you're the New York Times, in which case you're completely flabbergasted at this "unexpected" turn of events.

November 13, 2010

Everything Looks Like A Hammer!

Shannon Love at Chicago Boyz almost but not quite notices Tully's Corollary in action:
The Keynesian idea of stimulus has no empirical basis, but the only active tool the government has in a time of economic downturn is its ability to borrow and spend. Surprise, surprise: during the Great Depression, governments fell all over themselves to embrace Keynes’s idea of borrowing and spending to “stimulate” the economy. They did so not because it was proven to work (then or since) but because it justified the one action that would make the government larger and more powerful and the political class larger and more powerful as well.

The Fed is now doing the same thing with inflation “Quantitative Easing”. There is no particular reason to believe that inflating the money supply will produce more real economic activity, indeed the history of the 20th century proves exactly the opposite. However, it is all the Fed can do right now so it is going to grab a convenient theory to justify inflating the currency.

The nail is growth-driven employment. Tully's Corollary applies because their first tool didn't work despite enthusiastic application, so they've moved on to another tool. First they tried using the drill press of borrow-and-spend, now it's the blowtorch of quantitative easing.

One hopes they find that hammer soon, but in the meantime they've screwed up both the nail and the receiving surface with the drill press and the blowtorch.

November 03, 2010

Election Reflections

My initial predictions for Congress over the last few weeks were GOP gains of 62-68 seats in the House and 6-8 seats in the Senate. As I write this, known GOP gains are 61 seats in the House with 12 seats still unreported, and 6 seats in the Senate with 3 still unreported.

One of those unreported Senate seats (Alaska) is somewhat problematic from the "GOP gain" standpoint, as it's down to Republican nominee Joe Miller versus incumbent GOP senator Lisa Murkowski running as an independent write-in. If Murkowski should win as an independent, no one is quite sure how she would caucus. I would suspect that she would continue to fall along the Snowe/Collins/Brown GOP moderate axis unless the GOP picked up both WA and CO, which would give the Dems incentive to offer heavy rewards to bring her into the fold.

WA and CO are both still out. In CO, the unreported precincts are in Arapahoe and Boulder counties, which to me would indicate a solid-if-slim Bennet (D) win when the dust settles. But there are a huge number of provisional ballots still to be counted, and if the margin is close we can expect that to drag on for a while, even head into court contests. Buck was definitely hurt by his constant veering from moderate-Republican-in-public to red-meat-rightie-in-private, as well-documented by a Bennet-friendly media. (Hey Buck? You do your re-positioning BEFORE the race, not DURING. Word.) This race drew the most outside money of any Senate race this year.

In WA, Murray slightly leads Rossi on the strength of the (somewhat infamous) King County vote, with nearly a million votes still to be counted. Roughly a third of those uncounted ballots are from King County. Once again, if the margin stays close, expect litigation. In any case, Rossi finds himself once again fighting uphill within the "margin of cheat." If I had to bet, I'd bet on Murray keeping her seat, though I would not offer odds on doing so without a recount at this point.

Among the other Senate races, it's somewhat notable that (enormously popular) Democratic Governor Joe Manchin saved the Robert Byrd Memorial Seat for the Democrats in West Virginia for two more years by running on his strong center-right track record as Governor and his late reversal on ObamaCare ("I wuz tricked!" ). Raese's well-publicized missteps and Manchin's long-standing social conservatism carried Manchin through the rough spots for a solid win. Liberals rejoicing at a Manchin win for sheerly partisan purposes should be aware that this was actually a strengthening of the centrist faction in the Senate. And the GOP should note that the Dems managed to not throw away a seat by insisting on ideological purity. (Mike Castle, anyone?) Lesson: All other things being equal, fit the candidate to the constituency.

I'll skip the individual House races still unresolved, save to note that my months-ago wager on the "over" of GOP +38 was well-covered, and my 62-68 predictive spread looks pretty darn safe. I didn't wager on the Senate -- IMHO it looked entirely too uncertain for wagering, and events seem to have borne that out. My 6-8 spread is valid at 6 for the moment, but if CO and WA stay Dem (highly likely) a Murkowski flip to the Dem caucus would leave the technical seat gain at 5, with a new spread of 54-46 (counting indies by caucus). Even without a Murkowski defection, a 53-47 balance would not be close enough to strongly encourage Dem defections to the GOP at this point. Either balance still gives extra weight to the indie caucus and the party moderates on both sides, regardless of the outcome in Alaska. In any case, if I end up hitting that prediction, it's only by a micron or two.

In other results, the people of California voted to remove one of their most effective checks on taxation, passing Prop 25. In a state already plagued with capital flight (both human and business), massive debt, high taxes, high cost of living, and absolutely enormous unfunded pension liabilities, this does not bode well.

I spent the evening at an election watch party for some local Democratic candidates, and probably saw as much joy as was possible for any such party in my (very red) area. Some good "D" state legislators held onto their seats, a few others didn't, and those D's running uphill against the Tea Party wave seeking previously-"R" seats were disappointed.

[Subnote: Barack baby? Even though you got my phone number at that party you threw a coupla years back, there was no action and absolutely no magnetism, and we were never destined to make out. It ain't happenin', guy. You're pretty and all, but you're definitely not my type. SO QUIT CALLING AND TEXTING AND EMAILING ME. Nine texts yesterday on my cell phone alone, and God knows how many calls I didn't answer and emails caught by my filters. Double Cheezus on a stalker-burger! Do I have to get a restraining order?]