October 23, 2016

‘It’s All Rainbows and Puppy Dogs’: Bartiromo Zaps Zeke Emanuel on Obamacare, Weak Economic Growth

Filed under: Economy,Health Care,Taxes & Government — Tom @ 2:24 pm

Friday morning, Fox Business’s Maria Bartiromo had a tense one-on-one interview with Ezekiel Emanuel, one the two major architects of Obamacare (the other one is the infamous Jonathan “Lack of transparency is a huge political advantage because of the stupidity of voters” Gruber).

Bartiromo had a good grasp of Obamacare’s problems as she challenged Emanuel on its poor results and President Barack Obama’s misplaced priorities during his first two years in office. She also wasn’t afraid to get in Emanuel’s face with bitter sarcasm after he baldly and falsely claimed that health care costs — not health care inflation, health care costs — “have come way down compared to George Bush.”

But as has so often been the case in interviews with Zeke the Bleak — the name he earned several years ago when his “Complete Lives” system for rationing scarce medical resources was exposed — the falsehoods coming from Emanuel’s fast-moving mouth were far too frequent for Bartiromo to be able to adequately dispute them all.

In a previous portion of the interview seen here, Bartiromo challenged Emanuel on how Obamacare is working out, especially in regards to coverage availability:

MARIA BARTIROMO, FOX BUSINESS NEWS: A study finds that the Affordable Care Act exchanges are only going to offer one coverage option to 31 percent of the United States’ counties next year. Another 31 percent may only have two options.

What are the costs related to offsetting the loss of coverage with Obama’s public option?

EZEKIEL EMANUEL: I’m not sure I understand the question. But Maria, when you talk about coverage in terms of counties, if you include rural counties, that actually is a smaller number in terms of population.

Most of the American public will have, 80 percent of the public will have choices, and we do need to give people choices. That’s very important. The President’s been committed to that. That’s one of the reasons to consider the public option if you don’t have enough insurance companies in those markets.

Oh, for heaven’s sake. Emanuel was asked a straightforward question: What’s it going to cost to ensure that exchange participants have two or more options throughout the U.S.? He either wasn’t awake yet, or he pretended not to understand a question for which he didn’t have a answer not involving the spending of untold and undisclosed billions of dollars the government doesn’t have (my bet is on the latter, especially after considering the policy prescriptions he recommended later, including increased premium subsidies and “risk corridor” payments). So he didn’t answer it.

As to what Emanuel said about the coverage problem not being so bad, are we really supposed to be impressed that less than three years into Obamacare, 20 percent of the population not covered by employer plans, Medicare or Medicaid has only one coverage option (the flip side of the 80 percent he cited)? What’s really happening is that critics’ predictions that insurers wouldn’t be able to afford to stay on the exchanges after incurring huge losses have come true.

Before Obamacare, there were flaws in the system for people with pre-existing conditions, but virtually everyone else in the single-person, single-household and very small business markets in the U.S. had more than one insurance option. The pre-existing conditions problem could have been solved without ruining availability, as Obamacare certainly has, while covering up many of its other flaws with billions in new spending on subsidies.

The video clip which follows shows the final two minutes of the interview, as Bartiromo questioned the Obama administration’s priorities during its first two years and largely blamed Obamacare for the economy’s awful post-recession performance.

Though she did accomplish something rarely seen with Emanuel by stunning him into silence for several seconds with ruthless sarcasm, she then let him get away with his lame excuse for the economy’s weakness and his outright lie about healthcare inflation during the previous decade:

BARTIROMO: Okay final question, Dr. Emanuel. Look, when I think to the President’s first two years in office, he had both houses, both chambers. He could have done anything.

What does he do? He pushes Obamacare down everybody’s throats, even though there was a clear feeling that half of America did not want their health care changed. But he pushes Obamacare because he’s got the room to do it. He’s got both chambers.

What a mistake to focus on health care as opposed to economic growth. Here we are eight years later, and where are we? 1.4 percent economic growth and most people blame the cost of health care.

EMANUEL: Well that’s not — that’s a false claim. 1.4 percent economic growth because we’ve come out of this financial recession brought to us by our —

BARTIROMO: 10 years later, Dr. Emanuel.

EMANUEL: brought to us by our banks —

BARTIROMO: We’re 10 years after the financial crisis now.

EMANUEL: First of all, we’re not 10 years, we’re 8 years after the financial crisis.

BARTIROMO: Oh … (smiles at Emanuel’s ridiculous nitpicking, given that she said eight years earlier)

EMANUEL: And every economic analysis shows you that after a financial crisis of the one we had caused by banks and lending, it’s a very slow growth.

And it is not health care, because healthcare costs have come way down compared to George Bush. That’s just a fact.

BARTIROMO: I think it’s all rainbows and puppy dogs then. Sounds like it’s all rainbows and puppy dogs for the Affordable Care Act then.

EMANUEL (after a couple of seconds of blessed silence): Uh, the Affordable Care Act has been a big improvement. It’s not perfect, but that doesn’t mean that it hasn’t been a big improvement.

And you have a strong sense of amnesia forgetting how bad health care was before the Affordable Care Act, with 50 million people uninsured, people who had cancer or heart disease not able to get insurance, and the inflation rate at double digits. The inflation rate is much lower now than it’s been before.

BARTIROMO: All right.

EMANUEL: You’re just forgetting the facts and trying to forget how bad it was under George Bush.

BARTIROMO: Well, we’ve got the facts in front of us in terms of the Affordable Care Act, Dr. Emanuel. I don’t think there’s any question that there’s a huge disappointment across the country of this program. I appreciate you coming on and making the case. Thank you so much, sir.

EMANUEL: Thank you.

Those who believe that Bartiromo overreacted with her sarcastic “rainbows and puppy dogs” interruption need to realize that Emanuel was trying to claim that total spending on medical care — “healthcare costs,” in his phrasing — have come down. That’s such total nonsense that Bartiromo’s only other alternative was to fall out of her chair laughing hysterically.

Emanuel’s primary falsehoods relate to healthcare cost inflation during the Bush and Obama administrations — after Bartiromo forced him to get real and discuss “the (medical cost) inflation rate” after her “rainbows and puppy dogs” remark — and to the financial system-related excuse he gave for historically awful economic growth after the 2008-2009 recession.

As to medical cost inflation, the rolling 12-month growth in medical costs since the turn of the century, based on data at the government’s Bureau of Labor Statistics, shows that Emanuel was very wrong in claiming that there was an inflation rate “at double digits” while George W. Bush was president:

MedicalCostInflation2000to2015

The highest individual-month percentages listed above are the 5.0 percent to 5.2 percent figures seen in late 2002 and late 2007. That’s only halfway to double digits. The average annual increase of 4.3 percent in medical costs from 2001 to 2008 was 1.9 points higher than the 2.4 percent average December-to-December increase in the Consumer Price Index seen during those years. The comparable averages from 2009 to 2015 are 3.0 percent for medical costs and 1.7 percent for the CPI, yielding a barely lower 1.3-point difference.

Thus, Emanuel was trying to impress us with a 0.6-point improvement in the differential between medical cost inflation and overall inflation — 1.9 points from 2001 to 2008 during the God-awful Bush years vs. 1.3 points during Obama’s 2009-2015 “rainbows and puppy dogs” era. Reader should also note that the 4.9 percent figures seen during the most recently reported months in 2016 are very close to the highest levels seen during Bush’s presidency.

Emanuel’s defenders will point to other statistics like the Millman Index to say that Emanuel was right. No, he’s not. The Millman Index and other similar stats track medical spending, not medical inflation, which is the term Emanuel used. If spending is rising at a higher rate than the inflation seen in the BLS tables above, that simply means that American individuals and households are purchasing higher quantities of medical services.

As to Emanuel’s take on the economy, the most tired excuse we keep hearing is that coming out of a financial system-driven recession is so much harder than coming out of recessions based on other causes. First, Emanuel and Democrats must understand that honest history will show the following concerning the financial crisis of 2007-2008:

  • Democrat-driven housing policies going back to at least the late-1990s, based on interpretations of the Community Reinvestment Act mandated by the Department of Housing and Urban Development, dangerously loosened lending standards. This enabled millions of those who should not have been approved for mortgage loans to get them. As would be expected, their default rate was higher than lenders could handle.
  • Crony-corrupted, Democrat-dominated “government sponsored enterprises” Fannie Mae and Freddie Mac systematically deceived the credit markets about the quality of the loans supporting the hundreds of billions, if not several trillion, in mortgage-backed securities they issued, and similarly deceived investors in those enterprises concerning the loans they kept in-house.

Moving on from those fundamental truths, is it really the case that recovering from a financial system-driven recession, including the most recent one driven by Democratic Party policies and enterprises, is sooooo much more difficult? My answer is a question: Why was the recovery from the worst financial crisis ever, the Great Depression, so much stronger, despite New Deal and other regulatory impediments?

But first, here is how post-recession economies since World War II have compared, as seen in the following late-July chart at the Wall Street Journal:

ExpansionSinceWW2ChartTo2Q16

(Note: The size of the bar for the current recovery would be a tiny bit larger, but still smaller than all others, because of small upward revisions in August and September to second-quarter 2016 GDP.)

Many of the previous expansions were far shorter in duration, but had annual growth rates which were so much higher that they improved living standards by far more during their shorter time spans than the current “recovery” has.

I suppose Emanuel’s defenders will say, “Well, the other expansions followed ordinary recessions, and the 2008-2009 recession was different because of its financial system basis.” The problem with that argument is that the U.S. contraction with the most dominant basis in financial system failures was the Great Depression of the 1930s, which was largely caused by overly wild speculation in the stock market in the late-1920s, and eventually led to market and economic crashes of epic proportions.

And guess what? 19 quarters after their respective troughs, the percentage difference in the size of the Obama-era economy compared to when the “Great Recession” began was not that much greater than a similar metric measuring from the beginning of the Great Depression, despite horrible New Deal policies and regulations which held the economy back and depressed employment.

As seen in the graphic below, obtained from a column I wrote at another web site in mid-2014 based on data available then, the two economies’ performances were only an estimated 2.5 percentage points apart 19 quarters after their respective troughs, despite the fact that the economic hole dug during the Great Depression was seven times greater:

PostRecessionEconSizeVsPrevPeak1930sAndObama

By comparison, in the third quarter of 2006, 19 quarters after the end of the 2001 recession which had begun in March of that year, the God-awful economy of George W. Bush was 15.5 percent larger than it was at the end of the first quarter of 2001 — a performance well over double the 6 percent seen above with the Obama economy (revised data actually now shows the Obama economy’s performance at 5.0 percent, making the Bush vs. Obama difference even greater while narrowing the early 2014 Obama vs. Depression difference to 1.5 points).

More current data, which I intend to post sometime this week, will show that through seven years, the Depression-era and Obama-era economies are now in a virtual tie in this metric.

In defending the indefensible economy, Emanuel, who is not an economist, was merely mouthing the Keynesian party line with no discernible knowledge base of his own on which to base his argument — hence his bogus reference to “every economic analysis.” The real truth regarding contracting economies is that the harder they fall, the more strongly they should be able to get back up — unless fiscal and monetary and policy are poorly executed, which has certainly been the case during the Obama administration and at the Federal Reserve under Ben Bernanke and Janet Yellen.

Bartiromo performed admirably in challenging Emanuel on Obama in general, something almost no one else in the establishment press has done. But she fell down by not making sure that viewers knew the whole truth about both current and previous medical cost inflation and the historically dismal performance of the Obama economy.

Cross-posted at NewsBusters.org.

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1 Comment

  1. It doesn’t take a genius to realize that the increased premiums and deductibles charged to those who had the ability to pay will NO longer be able to invest their excess (seed money for investing) or buy things and that depresses growth and economic activity. Medical care is “consumption spending” which does NOT significantly spur investment in plant and equipment.

    Those getting the benefit of the subsidies taken from the premium payers are just re-directing any possible seed money and squandering the future (GDP). Eating the seed crop is the recipe for an economic famine.

    Remember the old Christian hymn? Bringing in the Sheaves. That was the spiritual allegory to the farmers saving their seed crop for next year’s planting and sometimes that meant going hungry until the first harvest. Eat the seed crop this year and you would starve next year.

    Comment by dscott — October 23, 2016 @ 2:59 pm

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