July 31, 2005

STATURE: The Tale of the Tape (Guest Cartoon)

Filed under: OH-02 US House — Hebe D. Feetid @ 1:57 am

Seal

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UPDATE: Enquirer endorsement of Schmidt

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July 30, 2005

Varifrank Hits Back-to-Back Home Runs

Filed under: News from Other Sites,Taxes & Government — Tom @ 11:16 pm

Isn’t there a blogosphere rule about this? Two unforgettable posts on two successive days?

Thank goodness, NO. VariFrank nails two issues, terrorists’ “rights” and military withdrawals, perfectly. Nothing but net.

NUMBER 1: I’ve got rights…

During the arrest, a witness said: “I heard one of them say ‘I’ve got rights’.”

Rights. Don’t talk to me about rights. You leave your country, you come to the UK, they open their arms and allow you in.

And then you kill them. And when they track you down like the rat that you are, you now cry ” I’ve got my rights”.

And what about the rights of Catherine Johnson? She lost a husband. Her husband leaves behind two kids Christopher, aged nine, and six-year-old Rebekah.

They will live with a hole in the fabric of their lives where their father used to be. When they graduate from school, when they marry, when they go on to have kids of their own, there will always be a moment when they stop to think how much they wish that their dad was there with them. They will go through Christmas after Christmas, birthday after birthday only to be quietly reminded of the horror that you gave them in trade for their father’s life. And somehow you think taking their father’s life makes you a “big brave Jihadi hero”…..

NUMBER 2: Pullout

Now that the cause is lost, America is pulling troops out of occupation duty. The foreign policy established by a President that many once considered being illegitimate and has inflamed many countries including former allies to break publicly against the nation, is finally at an end.

Of course, I’m talking of the US Army leaving Germany.

Read both in their entirety. Please.
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UPDATE: Ed Driscoll notices our hosannas to VariFrank. Welcome to Mr. Driscoll’s readers.

UPDATE 2: Moderate Mainstream makes an important distinction between Martyrs, Murderers, and (suicidal) Fanatics.

This Weekend’s Unanswered Questions (073005)

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4) this inquiring mind would like to have answers for (some links included may require free registration):

QUESTION 1: Do you think anyone at Newsweek makes a connection between their bogus Quran flushing at Gitmo item, a steep advertising drop in their magazine, and need to cut back on content?

Here’s the story:

Due to low ad pages during late summer, Newsweek is trimming the number of issues it publishes by one, opting for a double issue dated Aug. 29-Sept. 5, Mediaweek reports.

Through July 19, Newsweek’s ad pages have fallen 15.6 percent this year, to 970. It’s not alone. A lack of spending in the technology and automotive sectors has hurt the whole newsweekly category with ad pages falling 10.5 percent, to 6,332 through July 19.

QUESTION 2: How many people believe the hospitality industry’s stated reason for cutting back on changing bedsheets?

NOT bringing in the sheets (bolds are mine):

A USA TODAY survey of the policies of 25 hotel brands reveals that most do not require a daily change of sheets during a guest’s stay. All said they would change them daily for no charge if a customer makes a request. Eleven said they provide a daily change, nine said they change sheets a few times per week or weekly and five said polices vary at their lodgings.

More than one-third of the hotels of Crowne Plaza, InterContinental, Holiday Inn and Holiday Inn Express – four brands with various policies – say they participate in an environmental program called “Conserving for Tomorrow” and change sheets every three days.

…. Marc Caron, a sales manager for a machinery company in Greensboro, N.C., says he usually doesn’t ask for clean bedsheets each day. “It’s no different than my bed at home,” he says. “Those sheets don’t get cleaned every day.”

Caron says he shares hotels’ concern for the environment and doesn’t ask for fresh sheets daily. But he’s certain it’s being done to cut laundry and labor costs. “Ultimately, as with any publicly traded company, they have to protect the interests of shareholders, continue to increase profits and watch over their financial health,” he adds.

I don’t mind the move personally; the fewer people I don’t know that enter my hotel room while I’m away, the better. I do mind the irritating pretense that it’s about the environment. Zheesh. Are they afraid we’ll ask for a room rate reduction if they tell us it’s to cut costs (fat chance)?

QUESTION 3: How transparent is this fight over technology?

A fight over how TV ratings is collected has absurdly escalated to the halls of Congress:

Nielsen Media Research is blasting proposed legislation that it says would extend government oversight of TV ratings and could force it to shut down its rating service in markets across the USA. But broadcasters say Nielsen is overstating the impact of the bill, which would place the company under fresh scrutiny in the wake of charges that its new ratings system undercounts minorities.

A Senate Commerce Committee hearing Wednesday will spotlight the controversy and examine the bill, introduced this month by Sen. Conrad Burns, R-Mont.

The measure would require Nielsen, or any other TV ratings service, to be accredited by the Media Ratings Council, a non-profit group run by broadcasters, advertisers and other industry players. Today, Nielsen seeks accreditation but does so voluntarily and the council has no power to require changes.

The controversy stems from Nielsen’s decision to roll out Local People Meters, or LPMs, in the nation’s top markets despite council warnings that the new system is flawed. Since last year, LPMs have been added in New York, Los Angeles and Chicago, among other cities.

LPMs are designed to more accurately capture which local programs are on in Nielsen sample homes and who is watching them. Each family member is told to punch a unique code into the TV remote control when they watch a particular show. LPMs have been used since 1987 to determine national TV ratings. But in most cities, demographic data for local shows are captured by diaries that viewers often fail to update.

Yet broadcasters say local LPMs often undercount viewers. They can be knocked out when viewers briefly unplug the TV or fail to log out from the LPMs. Failures occur at disproportionately higher rates in big cities and in the homes of minorities, large families and younger viewers, broadcasters note.

This is a classic case of an entrenched group running to the government to avoid the impact of the real world on their businesses, and using political correctness (undercounting minorities? Please) as part of their defense. The LPMs work for national surveys, so there’s no reason to believe they won’t work for local ones. If the broadcasters don’t like it, they can always try to find another metering company, or start up a new one if Nielsen is currently the only game in town. But nooooo–it’s easier to run crying to Uncle Sam.

For crying out loud, the government should not be involved in this dispute at all. Giving the “Media Ratings Council” anything beyond advisory power looks like a recipe for guaranteeing that the TV ratings process (of all things) will be politicized for the foreseeable future. I think Congress has more important priorities; I certainly hope so.

Official Hackett Campaign Seal (Guest Cartoon)

Filed under: OH-02 US House — Wade Tillie Loozes @ 12:17 am

Seal

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July 29, 2005

Paul Hackett’s Security Blanket (Guest Cartoon-UPDATED)

Filed under: OH-02 US House — Betty Loozes @ 9:08 pm

Blanket

BizzyBlog supplement:
- Second Hackett Video STILL opens with SAME Bush footage: HERE (at Dem Bloggers)
- Cease and Desist Request Made by Ohio GOP
- USAT article on Hackett (quote is halfway through; BizzyBlog has previously noted the second half of the quote — “but I’d put my life on the line for him” — but that doesn’t change the fact that Hackett pretends to support George Bush unconditionally in his TV ads).

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Lending and Credit: “Universal Default” is Out of Control

As much as I keep up with goings-on in the credit industry, I did not know all of this, and I’m stunned–not that I didn’t know, but at the sheer audacity of the virtually unregulated lending industry.

From the indefatigable CardWeb.com’s CardTrak online publication (bold is mine):

A new study has found that some credit card issuers will jack-up your interest rate to 30% or more if they become aware you have opened a new card account or applied for a car loan or mortgage. The “universal default” business practice, unique to the USA, can send just about any consumer to the penalty box for very insignificant reasons. The annual study by San Francisco-based Consumer Action found that a declining credit score is the most common reason a cardholder’s rate is sent to the stratosphere. Paying a mortgage, car loan or other credit obligations late came in second. About one-third of the issuers who have “universal default” policies said that getting a new credit card could be considered a “default.” CA also found that the average penalty rate this year is 24.23%, up from the 2004 average of 21.91%. For more information visit: http://www.consumer-action.org.

TOP TEN REASONS WHY YOUR CREDIT CARD RATE WENT UP
1. Credit Score Declines
2. Paid Mortgage Late
3. Paid Car Loan Late
4. Exceeded Credit Limit
5. Bounced a Payment
6. Too Much Debt
7. Too Much Credit
8. Got a New Card
9. Applied for Car Loan
10.Applied for a Mortgage

Of course I’ve known about universal default, and blogged about its outrageousness several times during the runup to the what has become known as “BAPCPA” (The Bankruptcy Abuse Prevention and Consumer Protection Act, so-called “bankruptcy reform,” which BizzyBlog opposed) that became law in April and will take effect October 17.

I did NOT know about reasons 4, 8, 9, and 10. In my opinion, as standalone reasons to move to penalty rates, they are indefensible:

  • No. 4 (going over limit)–We all know that if you try to purchase anything that costs more than your available credit, the transaction won’t be authorized. The ONLY reasons you can go over your credit limit are if finance charges at statement time take you over the limit (and if that happens, it’s never by more than a couple of hundred dollars, usually much less), or if the issuer’s system allows you to go over the limit during the month in the hope that you won’t be alert enough to pay your balance down sufficiently before the next statement prints (this is rare, but MBNA, recently bought by Bank of America, is notorious for this). The over-limit trap is therefore nothing more than a sophisticated and cynical game of “gotcha” that in a sane regulatory environment would be illegal. Consumers who exceed their limit should not be moved into penalty rates, or even charged an over-limit fee, unless they fail to pay the balance down sufficiently by the next payment due date, PERIOD.
  • No. 8 (got a new card)–Even if you haven’t charged anything on it, let alone gotten to the point of having to pay interest? It would appear that this is the case. Getting too many new cards can eventually affect Reason No. 7 (too much credit), but using the fact that a consumer got one new card as the sole justificiation for assessing penalty rates, which is how it’s presented, is simply inexcusable.
  • No. 9 (applied for car loan)–If this factor, in and of itself, gives lenders the RIGHT to move to penalty rates, almost all of us are exposed, and are literally at lenders’ tender and (if a serious recession ever hits) non-existent mercies.
  • No. 10 (applied for a mortgage)–That’s rich. You could do the mortgage loan app, get approved based on current finances, move in, and find out your rates were jacked up SOLELY because you had the nerve to want to own a house. Or if the closing process dragged out too long, I suppose a lender who found out that a buyer has been moved into Penaltyland might be forced by underwriting standards to pull the plug for no objectively defensible reason.

One of my main objections to BAPCPA was that there was not even an attempt to rein in abusive lending practices and contractual garbage like universal default. What we heard from some of BAPCPA’s congressional supporters was “we’ll get around to that.” 3-1/2 months later, we can see that those promises were so much hogwash (to my knowledge, nothing with a chance of passage is pending), and no one with a brain would want to bet that they get anywhere on meaningful lending reform this year. Congress had their chance to reform lending when they “reformed” bankruptcy (y’know, quid pro quo?), and didn’t.

BAPCPA was a primarily Republican bill (but there were noteworthy and frankly shocking supporters on the Democrat side, which shows what political contributions “liberally” doled out by the financial services industry can do). Any negative repercussions from continued abusive lending practices, which I predict will become more outrageous thanks to the safety-net-fraying effects of misnamed “bankruptcy reform,” will come back to bite the GOP, which will deserve all the injuries that occur.
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UPDATE: Jeff at Credit/Debt Recovery caught me missing a word (Abuse) in the name of the bankruptcy law, and that means the abbreviation is really BAPCPA. All of that has been changed in the above. Thanks for the catches, Jeff.

July 28, 2005

CAFTA–A Close Call

Filed under: Economy,Taxes & Government — Tom @ 5:52 pm

The Central American Free Trade Agreement (CAFTA) passed last night in the House by the barest of margins. From a political perspective, it’s both a major victory and a narrow avoidance of what could have been a bigtime embarrassment for George W. Bush.

To me, it was also a close call on whether to support it. On balance, I am more relieved than anything else that it passed, and still have some reservations. I’m not happy with the “side deals” that “protected” the sugar and textile industries and will continue to make products containing them cost more than they should (though, in my opinion, the Reuters article I linked to exaggerates their impact on negotiations with the rest of the world).

The economic justification for free trade, even when other countries can produce everything more cheaply than your country, is solid and more than just theoretical, as Torrens and Ricardo showed so many years ago when they explained comparative advantage.

So what are the problems? Simply that as with sugar and textiles, entrenched industries, workers, governments often resist the resource allocations, capital flows, and admittedly often-difficult dislocations involved in making free trade work.

It’s messy, it’s disruptive, and it’s easy to point the finger at free trade as the problem when it’s really something else. For example, it’s easy to blame depressed wages, to the extent they exist, on free trade, when the problems are really lack of control over borders and lax employment law enforcement. It’s easy to blame loss of national sovreignty on free trade, when it’s usually the lack of will to exert it that’s the issue. It’s easy to look at another country that is prospering while yours is struggling and blame free trade, when it’s probably your government’s tax and economic policies that are making a mess of things.

There are other complaints. It’s very contentious, and very understandable that it is. So it may be useful to look at what happens when trade barriers go up.

It’s almost always not good. The best example is this one: The consensus among historians and economists is that the Hawley-Smoot tariffs of 1930, rather than mitigating the effects of The Great Depression that began in 1929, only made its effects much worse, as retaliatory tariffs went up around the world. One could argue that Hawley-Smoot inadvertently set the stage for the near-total turnover of the US Government in 1932 from Republican to Democrat control of Congress that went virtually unbroken for 60-plus years.

Here’s a less-understood example that is more recent. The informal quotas imposed on Japanese car imports in the 1980s, while they bought The Old Big Three in Detroit some time to get their act together (though GM never really did, which is the subject of this previous post), caused Honda, Toyota, and then others to decide to build plants here. Twenty years later, the Japanese car companies are as strong and competitive as they have ever been, and have transformed themselves from mere exporters into true multinationals, side effects that were totally unanticipated at the time the informal quotas were imposed.

Which is I suppose why it’s ironic that the vast majority of opposition to CAFTA came from Democrats who initially benefitted politically from ill-advised tariffs way back when, and who more recently, despite the help of the government, saw hundreds of thousands of mostly Democrat-supporting UAW jobs disappear in the 1980s and 1990s.

But I digress: If free trade and the comparative advantage principles behind it work out in the long run, countries that have never been able to emerge from basket-case status and grinding poverty may actually do so. Though it’s a bit chicken-and-egg, economically more prosperous countries tend to have representative rather than dictatiorial governments; economically backward ones tend to be dictatorships. Emerging economies tend to become more representative in their governments as they grow.

That isn’t to say there aren’t a lot of messy details to work through and constantly monitor. But on balance, a prosperous world whose various national governments represent the collective wills of their people is at least possible with free trade, and is virtually impossible without it.
__________________

UPDATE: American Thinker and Polipundit point to an Investors Business Daily editorial (no longer available without a subscription) that boldly (and hopefully correctly) predicts some pretty impressive long-term improvements as a result of CAFTA, including reverse migration of illegal immigrants back to their economically improved homelands. Seems a bit overdone, but IBD’s editorialists have a pretty good track record.

UPDATE 2, July 29: The Wall Street Journal (link requires subscription) notes the party divide, and provides this graphic to show how isolationism, once the reserve of the GOP, is now firmly entrenched in Donkeyland (graphic copied to ensure availability for education and discussion purposes):

Blanket

UPDATE 3, August 1: Wow–It may be hot outside, but it’s chilly in the halls of the out of power. The Democrat leadership, particularly Nancy Pelosi, is on a recriminations jihad against the 15 Democrats who voted for CAFTA. A Wall Street Journal editorial (link requires subsdcription) reports today that:

The San Francisco Democrat called a caucus gripe session in the wake of last Wednesday’s vote, and an article in the Capitol Hill newspaper Roll Call suggested that Democrats who voted yes may lose their favorite committee assignments. Our John Fund reports on OpinionJournal.com that Democratic leaders are especially mad at two Black Caucus Members from New York, Edolphus Towns and Gregory Meeks, for voting aye. Apparently if you’re from the financial capital of the world, you’re not supposed to favor free trade.

Facing Some Flak: Hackett (Guest Cartoon)

Filed under: OH-02 US House — Ken Knotdrau @ 3:54 am

Band
Background behind Mr. Knotdrau’s efforts:
Re Hackett’s TV Ad

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July 27, 2005

Hackett TV Ad Truth Detector (Guest Cartoon, UPDATED with BizzyBlog Commentary)

Filed under: OH-02 US House — Par T. Crasher @ 11:55 pm

hlist

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JULY 27, 11 PM BIZZYBLOG UPDATE: Thanks to Par T. Crasher for the quick cartoon revision.

The fourth question above relating to Hackett’s combat involvement was (finally) addressed by Hackett in part of a report by WKRC Channel 12 in Cincinnati on July 27 (video will not be available indefinitely). Hackett’s characterization of legitimate questions raised by a fellow veteran as a “personal vitriolic attack at all of the veterans who served over there” is a deliberate and unfortunate misrepresentation of the questioner’s concerns, which only related to one man–Paul Hackett. Mr. Hackett missed a golden opportunity to show some class and help himself at the same time, and we are all poorer for it.

The three falsehoods from the TV ad noted above (detailed commentary and TV ad are posted here) remain firmly in force and uncorrected by Hackett and his campaign.
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2nd District (OH) August 2 Congressional Ballot (Guest Cartoon)

Filed under: OH-02 US House — Henrietta T. Hack @ 1:37 pm

party

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Case Study in Refusal to Accept and Fully Report Positive Business News (Intel’s New Plant and New Jobs in AZ & NM)

Filed under: Economy,MSM Biz/Other Bias — Tom @ 1:32 pm

Intel is building a new chip plant in Arizona, and taking another building out of mothballs in New Mexico.

USA Today, specifically Michelle Kessler, treats it like a narrowly-averted disaster instead of impressive news (bold is mine; my heckling is in italics):

Not all high-tech manufacturing is leaving the USA. (Who said it was?)

No. 1 chipmaker Intel (INTC) on Monday announced plans to build a cutting-edge semiconductor plant in Chandler, Ariz., near Phoenix. The plant, which will cost $3 billion, will employ about 1,000 workers when completed in 2007.

Intel also said it would spend $105 million to revamp an old factory in New Mexico that is now idle. About 300 jobs will be created there.

Other tech firms are building U.S. plants, too. (Wait, I thought Intel was the exception, and that everyone else was leaving.) No. 1 PC maker Dell (DELL) recently broke ground on a giant factory in Winston-Salem, N.C. Computer memory-maker Infineon Technologies (IFX) expanded its Richmond, Va., plant last year. And giant IBM (IBM) opened a huge chipmaking plant in East Fishkill, N.Y., in 2002.

That may seem counterintuitive as the tech industry becomes increasingly global. The Semiconductor Industry Association (SIA), a trade group, estimates that two-thirds of the newest kind of chip factories will be built in Asia. (Duh, that’s where two-thirds of the world’s people and the fastest-growing emerging economies are.) Tech companies, including Motorola (MOT), Nokia (NOK) and Google (GOOG), have recently opened new facilities there.

But Intel Senior Vice President Robert Baker says the USA is the best place for Intel’s new plant. “Arizona offers some unique advantages,” he told reporters.

I had to go to Reuters (of all places) to pick up this quite-relevant contextual fact:

The Chandler plant will hire 1,000 high-skilled, permanent workers. Intel will employ a total 10,000 staff in Chandler after the third facility is built. (Imagine. That’s 9,000 other high-tech (largely) manufacturing jobs that haven’t “left the USA.” Nothing like leaving out things that blow up your basic premise, Michelle. Zheesh.)

You might also think from reading Ms. Kessler’s piece that there won’t be any meaningful economic impact from the plant until 2007. Au contraire. But I had to go to The Arizona Republic (link probably requires registration) to pick up this relevant economic fact that shows that the good news starts NOW:

Construction, which will start Aug. 2, will create about 3,000 jobs.

Most of the rest of the USAT article brings up an issue that I’ve been bothered about for some time, and that I intend to deal with at another time, namely tax subsidies and breaks for new manufacturing and jobs (or to keep jobs in place when plants threaten to shut down), which (obviously) are given at the long-term expense of other businesses and the taxpaying public in general.

But the bottom line at this post is that high-tech jobs are staying here, growing here, and providing meaningful immediate benefit, even when the lead times to build are long. Too bad I had to go to three different places to get the full story.
_________________

UPDATE: To get to the Reuters info, I had to endure this snarky sentence: “Political leaders around the world have a history of pre-announcing Intel factory investments that often turn out to be either premature or misguided. First, I don’t recall reading statements like this in 1990s business coverage when Intel actually completed and then had to mothball plants because of volatile chip prices, and second, I see this as a subtle hint to the reader to discount the good news, because it may not come to pass (again, something I don’t recall seeing in 1990s coverage).

UPDATE 2: Welcome to Don Luskin’s poorandstupid.com readers, who thanks to Mr. Luskin are anything but.

Did the Liberal Talk Network Really Steal from Kids and Seniors?

In my posts about the state of talk radio (here, here, and here), I’ve concentrated on audiences and trends at stations with noticeable audiences (and yes, at this point, they are predominantly center-right and conservative).

That has meant that I have rarely mentioned Air America, simply because (depending on who you talk to) it needs time to build its audiences and markets from scratch, or it doesn’t have a prayer of ever generating enough of an audience to matter. As a non-expert observer, I’ve chosen to stay in the wait-and-see camp.

But the legal repercussions implied in Brian Maloney’s national breakout blogpost (which Michelle Malkin, the bad guys’ worst nightmare, has also jumped on), about alleged misuse of government grants and alleged unpaid loans to Air America from a New York City Boys and Girls Club that have led to a narrowly-averted financial crisis at the esteemed not-for-profit, makes me wonder if the liberal network will even be around six months from now (note, I’m not predicting, I’m wondering).

Read Brian’s whole jaw-dropping piece and ask yourself:

  • How has it stayed almost completely out of the New York papers and shielded from national visibility for the 3-plus four weeks it has been known?
  • How invisible would this have been if some conservative host or radio network had shady transactions like this (excuse me, allegedly shady transactions) that almost ended programs for kids and seniors (again, alleged)?

Stay with Brian (The Radio Equalizer) and Michelle on this. There is almost certainly more to come.
_____________________

UPDATE: It is totally unfair to expect me to resist noting this–Paul Hackett appeared on Air America’s (in your dreams) “Majority Report” on Tuesday (HT OH02 Blog).

UPDATE 2: The Captain weighs in, and Michelle has meaningful additions at her original post.

UPDATE 3, August 1: A blogswarm has ensued in the past four-plus days, with investigators and opinion-staters on the left and right going at it with gusto. In essence, it looks like Air American corporately “reorganized” in a way that gave it the ability, by forming a new company, to leave its obligation to the Gloria Wise Center behind if it wishes, AND if it doesn’t succumb to pressure to do the right thing and repay what it morally (but not necessarily legally) owes. Since my “wonder if it survives another six months” question is out there, let me make a couple of things clear:

  • “Wonder” does not mean the same thing as “predict.”
  • From experience with moribund enterprises, first as an auditor and then as a consultant (who fortunately never failed to get paid), I can tell you that these outfits, especially ones that pull reorganization and new-entity tricks as Air America appears to have, can survive for many years without giving up the ghost, even though they are for all practical purposes business zombies.
  • How long corporate zombiehood can continue will heavily depend on two things:
      – How aggressive regulatory, law enforcement and/or creditors are in looking out for the interests of taxpayers, victims, and their own interests, respectively.
        – How much money any investor groups are willing to throw into the enterprise (or sinkhole, as the case may be), and for how long.

    UPDATE 4: You just knew someone would do this–The Air America Telethon (HT PoliPundit).

    UPDATE 5: The Captain (and others) note that the amounts involved tote up to about $800,000 now, according to today’s New York Sun. Meanwhile, in “totally unrelated” news, a New York Times search (requires registration) on “Air America” (in quotes) as of 10PM on August 1 yields no article more recent than June 15, six weeks before the AAR scandal broke locally.

    July 26, 2005

    Opinion Journal Supports National Health Care…Market

    Filed under: Business Moves,Economy,Taxes & Government — Tom @ 5:47 pm

    No, it’s not HillaryCare, or Canadian-style “single-payer,” and the people at OpinionJournal.com haven’t flipped. This idea is actually something very sensible a free market supporter can mostly get behind (link may require free registration):

    The idea behind the legislation, sponsored by GOP Representative John Shadegg of Arizona, is disarmingly simple: Allow Americans to buy health insurance from vendors in any one of the 50 states.

    Right now Americans who aren’t lucky enough to get insurance from large employers or poor enough to qualify for Medicaid find themselves at the mercy of the legislators and insurance commissioners of the state in which they happen to live. This can be OK in states that exercise this regulatory function judiciously. But in others, the young and working poor find themselves effectively priced out of the market by special-interest regulations dressed up as consumer protections.

    New York requires every insurance policy sold there to cover podiatry. Acupuncture coverage is mandated in 11 states, massage therapy in four, osteopathy in 24, and chiropractors in 47. There are an estimated 1,800 or so such insurance “mandates” across the country, and the costs add up. “It is always the providers asking for the mandate; it is never the consumer,” says health policy guru John Goodman, who has testified before legislatures considering such rules.

    What’s more, states like New Jersey and New York add two more ultra-expensive requirements: “Guaranteed issue” allows people to wait till they are sick and then buy insurance; “community rating” prevents insurers from charging different prices to people of different ages and health status. These may sound like compassionate ideas, until you realize they make insurance so expensive that millions of people are exposed to financial ruin because they aren’t allowed to buy basic policies focused on catastrophic costs.

    ….. The best analogy for what to expect here is probably our experience with interstate banking, which has indeed resulted in operators moving to friendly climes like Delaware and South Dakota but which has also proven nothing but a boon to consumers. A national market has allowed the growth of big, financially stable institutions that have earned consumer trust.

    …. As a major side benefit, interstate commerce in health insurance would remove a huge barrier to the efficient allocation of human resources in our economy. Right now untold numbers of Americans fear moving, switching jobs or starting their own businesses for fear of losing their health insurance. That would change if they were able to shop nationwide for policies that would follow them wherever they go.

    Note that I said “mostly.” The Journal’s ever-present blind spot, ignoring the ill effects of too much concentration, is on display. The industry it held up as the exemplar, interstate banking, worked out very well for for consumers for quite a while, but has been detrimental to conumers recently because of excessive concentration.

    Proof: Assuming the recent Bank of America-MBNA merger and other deals go through (and there’s unfortunately little doubt that they will), the top three credit card issuers (Citi, Chase, and Bank of America, henceforth to be known as “The New Big Three”) will have 70% of charge volume and 58% of all card receivables, according to CardTrak.

    The effect of the wave of consolidations has been to limit consumer choice. This has hit those who have fallen behind in their payments especially hard, because with fewer options, the big banks know they can charge their statospheric penalty rates of 25% or more and lose very few cardholders in the process.

    I would be for national markets in health care if some kind of hard cap on what percentage of the total business any one company can have were built in to the legislation. We can’t afford to have monopolistic or oligopolistic health care, whether it comes from the government or just a few companies.

    July 25, 2005

    Five-Star Restaurant in Downtown Cincinnati Closes

    Filed under: Business Moves — Tom @ 7:11 pm

    America’s longest-running five-star restaurant (41 consecutive years) closed today, and may or may not reopen. Cincinnati News has the news.

    I am stunned that the owners are going to allow a full year of closure to take place before reopening, and that the prospect of reopening where they would like is still dependent on resolving zoning issues. I would have expected better planning.

    I am also surprised at the Post article’s characterization of the location (one block from Fountain Square, considered the center of downtown) as “inner city.” But then again, anyone who has stood on 6th Street between Vine and Walnut after dark would probably agree that doing so has an “inner city” feel that is none too pleasant.

    Quote of the Day: A Liberal and a Conservative

    Filed under: Quotes, Etc. of the Day,Taxes & Government — Tom @ 6:52 pm

    Great story from the Club for Growth Blog about Democrats, Republicans, and responsibility (though I would replace “Democrats” with “Liberals” and “Republicans” with “Genuine Conservatives”).

    Hat Tip to the ever-vigilant Porkopolis.