Background:

Currently, the Federal government blocks grants aid to stays to cover their Medicaid eligible residents. This does NOT include money for the uninsured who may have incomes beyond those allowed for Medicaid.

Romney wants to change this.

He now wants to provide aid to the states to provide for the uninsured.

In his own words: (Just two days ago, in his editorial in USA Today):

“I favor giving each of the 50 states the resources and the responsibility to craft the health care solutions that suit their citizens best.”

Well, if you give the states the Resources (read Federal Dollars) but ALSO the “responsibility”  to produce health care solutions how do we not end up with RomneyCare in every state?

This is a big expansion in government.

In his position paper on the issue he states:

Romney’s proposal is based upon the “federalist” model, which means the state governments would have the most say in how they would provide coverage for their uninsured residents.

Most say… but Not all?   What role does he want the Feds to take and how do you keep Washington from expanding its role?

In this same policy paper, he says

“His plan would redirect federal money that is currently being used to help states pay for the care of uninsured residents.

Those funds would instead be given to states to help residents purchase their own plans in the private market”

This is exactly what Romney did in Massachusetts.

YEAH! RomneyCare for everyone!

Note: The following phrasing was removed from Romney’s website in the last couple of weeks, but I found it elsewhere: 

“Give states the responsibility, flexibility and resources to care for citizens who are poor, uninsured or chronically ill.”

So expand the Fed’s responsibility to fund the states? They will be given the responsibility? And the Fed will give them the “resources” without any strings attached, without any requirements for making sure X percentage of people are covered? I seriously doubt it. Then they will also mandate what must be covered and like they did in Massachusetts what prices they must charge.

Who will make sure the states live up to Romney’s expectation of  what their responsibility should be?

More Romney Quotes: (In Case Romney Tries to Say He “Mis-spoke” or was “Misunderstood”

“We can empower states to expand health care access to low-income Americans by block-granting funds for Medicaid and the uninsured. My reforms also offer the states resources to help the chronically ill . — both to improve their access to care and to improve the functioning of insurance markets for others.

So Romney will expand the Federal Government to also provide for the chronically ill—how nice. And what defines chronically ill?

 So the Federal Government instead of insurance companies will provide for chronic illness?

Can you say Public Option?

Finally, I will remind everyone that Romney implied Perry was not compassionate for allowing over a “million kids” to be without health insurance.

“We (Massachusetts) have less than 1 percent of our kids that are uninsured,” Romney told Perry. “You have a million kids uninsured in Texas. A million kids.”

 Never mind the fact that the state of Texas provides for clinics and other measures (but not insurance) to help those without insurance.

Like any good liberal,  Romney’s view is that getting health care is not enough everyone must have health insurance.

In Today’s USA Today, Romney describes why he will repeal ObamaCare, but he also calls for its replacement. He then defends his Massachusetts program with two falsehoods:

When I was governor of Massachusetts, we instituted a plan that got our citizens insured without raising taxes and without a government takeover.

RomneyCare Did Increase Taxes

The first falsehood is, as Peter Suderman in Reason points out in his article RomneyCare: Exploding Costs, Higher Taxes, RomneyCare has raised taxes:

In the wake of budget overruns in the Massachusetts health care overhaul Mitt Romney signed in 2006, Romney’s successor, Democratic Gov. Deval Patrick, has already raised business and cigarette taxes in order to help fund the program. Problem solved? Hardly. In fact, Gov. Patrick is now proposing yet more tax hikes to help pay for the program (emphasis mine)

RomneyCare is the government takeover of healthcare.

The second falsehood is that RomneyCare is not the government takeover of healthcare. If the government dictates what must be covered in insurance plans (as it does in Mass.) ,  then the government must specify exactly what must be covered, how it should be covered, what price you can be charged and the quality of care that must be provided. (As it does in Mass.)  

(Update Note: This is not just the normal action a state. A state might pass a law saying that health insurance plans must offer, for example prenatal care. But in Mass. it goes far beyond these types of mandates,  because they are forcing people to buy something they really do not want to buy. When people are forced to do something against their will, they will try to find ways to cheat. Knowing this, Mass. had to specify EXACTLY what every policy must cover to avoid people cheating on the government mandate. This is complete government control of health insurance) 

The inevitable ending is, as the Wall Street Journal points out in its editorial from May of last year:

“Once government takes on the direct or implicit liability of paying for health care for everyone, the only way to afford it is through raw political control of all medical decisions.”

RomneyCare has led to the government takeover of healthcare in Massachusetts.

But then, in is often used defense, he declares his dedication to the Constitution and the Founding Fathers. Instead, he shows his complete lack of understanding of Federalism.

In line with the intentions of our Founding Fathers, I favor giving each of the 50 states the resources and the responsibility to craft the health care solutions that suit their citizens best. (emphasis mine)

The Constitution does not give the power to Washington to decide what resources go to the states and it does not give the power to the Federal government to dictate to the states what their responsibilities should be for healthcare.

This is the problem with Romney. He plans to have Washington provide resources (funding) to the states to provide care to the “uninsured” 

Once the Federal government is providing the “resources” to insure the uninsured, they will pressure the states to adopt THEIR view of what should be done:

Could they demand each state must cover x % of their population or not receive their Federal grant?

Could they  demand each state must cover X procedure if they want their grant?

No. Romney will lead us to government control and many Republicans will go along with him because ‘he’s our guy’

I am reminded of the phrase “Only Nixon Could Go to China”

The phrase “Nixon goes to China” or “Nixon in China” is a historical reference to United States President Richard Nixon’s 1972 visit to the People’s Republic of China, where he met with Chairman Mao Zedong. The metaphor is often expressed as the observation “Only Nixon could go to China” or “It took Nixon to go to China”.

As a political metaphor, it refers to the ability of a politician with an unassailable reputation among his supporters for representing and defending their values to take actions that would draw their criticism and even opposition if taken by someone without those credentials.
.

Americans are fighting against ObamaCare. If a Democrat proposed what Romney is proposing, Republicans would be up in arms. However, ‘Romney is the only guy who can beat Obama’ in the minds of many moderates and so they turn a blind eye to his plans. American resistance will fall and the Federal Government will have control over your health care.

In the end, it will take a Republican to give the Democrats their long-sought goal of government control of healthcare. It will start with the seemingly innocent action of the Federal government “providing resources” to the states for the uninsured, but it will end in the end of private health care.

And when people look back and wonder how this happened, they will say with remorse:

 ”It Took Romney to Kill Private Healthcare”

Just for fun:

The Etch-A-Sketch Chicken Mascot! Santorum or Gingrich should bring him with them everywhere they go!

STEP RIGHT UP: WATCH OUT! If you SHAKE HIM, his policies on ANY issue will vanish before your eyes AND new ones will appear. Just as bold and “severe” as his last positions.

But don’t challenge him to a debate….. AFTER ALL he IS a CHICKEN.

What fun this would be. Supporters of Gingrich or Santorum could come up give and give the Etch-A-Sketch Chicken a gentle shake…..and PRESTO! Out comes a new position.

Careful….Challenge him to a debate and he will run and hide.

Fun for kids of all ages.

He is Etch-A-Sketch Chicken. Here to take any position he thinks will get him elected.

I will donate to whichever campaign does this first!! (not including Obama)

Warning: The following is Satire.

I am an economists and now I must admit after reading an CBS/AP story that the oil industry is unlike any other market. In other markets, increasing the supply of a good decreases its price because of increased competition. But according to a statistical analysis by the Associated Press, this does not apply.

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

Of course politicians have been using our false understanding of economics to persuade us that drilling would actually reduce prices. But as the AP points out:

If more domestic oil drilling worked as politicians say, you’d now be paying about $2 a gallon for gasoline. Instead, you’re paying the highest prices ever for March.

In fact, U.S. oil companies have been fooling us. Not only does increasing supplies NOT reduce prices, it ACTUALLY INCREASES THEM! (Who knew??)

Sometimes prices increase as American drilling ramps up. That’s what has happened in the past three years. Since February 2009, U.S. oil production has increased 15 percent when seasonally adjusted. Prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more.

And they prove the point by indicating how much we have been increasing our production compared to the past:

U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon when adjusted for inflation. But that’s not what prices are now.

WOW! Oil production has increased so MUCH we are producing more oil than we ever have. We now are….producing…eh….the same as…..2003? The rest of their evidence is just as convincing.

When you put the inflation-adjusted price of gas on the same chart as U.S. oil production since 1976, the numbers sometimes go in the same direction, sometimes in opposite directions. If drilling for more oil meant lower prices, the lines on the chart would consistently go in opposite directions. A basic statistical measure of correlation found no link between the two, and outside statistical experts confirmed those calculations.

There you have it conclusive statistical analysis that domestic production has no influence on price (other than as already stated to actually increase it) Actually, thinking about it, this behavior may even occur in other markets. I remember how production of SUVs went up dramatically in the 1990s…and guess what???? So did prices!!! Will the greed of U.S. companies never end? I mean not only do they get an increase in sales but geez then to put a price increase on top of it to boot!

Of course the AP, determines the root of these mistaken theories about increased supplies lowering prices and as you might have guessed it is those Republicans:

Drill, baby, drill has nothing to do with it,” said Judith Dwarkin, chief energy economist at ITG investment research. Two other energy economists said the same thing and experts in the field have been making that observation for decades.

The statistics directly contradict the title of GOP presidential candidate Newt Gingrich’s 2008 book “Drill Here, Drill Now, Pay Less,” as well as the campaign-trail claims from the GOP presidential candidates.

The AP shows that many Republicans continue to poison the political debate with this nonsense:

Earlier this month, GOP front-runner Mitt Romney said of his solution to higher gas prices: “I can cut through the baloney … and just tell him, ‘Mr. President, open up drilling in the Gulf, open up drilling in ANWR (the Arctic National Wildlife Refuge). Open up drilling in continental shelf, drill in North Dakota, drill in Oklahoma and Texas.’”

Senator Lisa Murkowski, clearly giving aid to these clearly greedy oil companies, tries to sell this idea:

Sen. Lisa Murkowski, R-Alaska, said on the Senate floor last week, “With oil prices above $100 a barrel and gasoline soaring toward $4 a gallon, greater production is not a political opportunity, it is a legislative imperative.”

Shame on you Senator! Have we not paid enough for oil with your crazy ideas to increase supply?

We tried Senator Murkowski’s way just last year. As the AP indicates, domestic oil production increased in one month last year ‘as much as the Keystone XL pipeline would produce each month. Guess what happened?

You guessed it! Prices increased by 10 cents per gallon!

In fact, statistical analysis by several current and former college professors even using “several complicated formulas” came to the same conclusion. As one of these professors concluded:

When U.S. production goes up, the price of gas “is certainly not going down,”

The AP even points out the greed of Former President George Bush and his former oil executive vice President campaigned in 2000:

When Bush and running mate Dick Cheney campaigned in 2000, they argued that as oil executives they could get oil prices down, with Bush saying, “I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply.”

Ah oil buddies. Sure prices fluctuated between a high of $3.11 (of course oil executives claim this was a result of the domestic “supply disruption” due to Hurricane Katrina but we now know if that had been true prices would have fallen with the reduced supplies!) and a low of $2.11 with an average over his term of less than $2.86. But Bush and Cheney were being very clever. They kept prices low until it was clear that they would not be re-elected. As the AP shows:

Yet it was during the last few months of Bush’s term in 2008 that gas prices hit their highest: $4.27 when adjusted for inflation.

I cannot believe how foolish I have been thinking that increasing supplies reduced prices and thinking that suppliers supplied more when prices went up. Clearly, it is increased supplies that cause prices to rise.

Now the world makes so much more sense to me. No wonder electricity prices go up in the summer: Electricity companies are producing more of it! And Disney should be ashamed of how they have expanded the number of attractions at Disney World (EPCOT, Hollywood Studios, Animal Kingdom) I’m sure the price has gone up a result. And we all know how expensive airline travel is around certain holidays…now we know why: I remember reading about how airlines increased the number of flights around certain holidays. Have they no shame?

Clearly, there is only one thing to do. We know how dirty oil is to produce and the environmental damage it can do. We need to ban all domestic drilling. We can save the environment and as the AP analysis shows prices will probably go down!

A stunning new poll by Rasmussen:

Santorum leads the president 48% to 44% in the so-called Core Four states.

BUT….

Obama remains ahead of Romney 46% to 42%

Does this Mark the Beginning of the End for Romney’s Campaign?

For a candidate whose main base of support comes from Republicans who believe he is best able to beat Obama, but have never been enthusiastic about him as a candidate; this news is simply devastating. Republicans supporting Romney to beat President Obama, have tolerated many of Romney’s moderate views and liberal actions as governor.

However, satisfaction with the leading candidate for the Republican nomination has never been great. Many conservatives in the Republican party are deeply dissatisfied with Romney as their potential nominee. Concerns have been raised not just over his skills as a candidate, his record, but also over his wooden, John Kerry like personality.

Economic conservatives distrust Romney partly because Romney as governor worked with Ted Kennedy to push through a government directed health plan in Massachusetts that mandated not only that everyone must purchase health insurance (the individual mandate) but that also directed what must be covered by these insurance policies.

Social conservatives are particularly distrustful of Romney perhaps explaining Santorum’s rising support. In particular, abortion opponents question Romney’s action as governor that forced Catholic hospitals to provide abortion procedures over the objection of his state’s health agency that had determined Catholic hospitals were within the law to not provide abortions.

Illinois: A Test for Romney’s Strength?

We may get an indication of the damage these new polls have created as early as Tuesday when Illinois votes in the Republican primary. Romney had been expected to win by a margin of at least 20 points but recent polls only show him up on Santorum by only 11%. A smaller than expected Romney victory may be yet another indicator that the Republican race is far from over and may yet experience another lead change.

As a professional economist that me state that the parts of the mistakes in logic by mbecker908 in his Diary “Santorum is Wrong on His “Manufacturing Zero Tax” is understandable. It is common, even for economists, to only examine one part of a complicated system and come to completely wrong conclusions.

First, while mbecker is correct in stating that environmental restrictions (or more accurately the time and cost of compliance) is very harmful to manufacturers locating in the US, He (or she) is completely mistaken when he states: “Federal taxes, by and large, don’t impact manufacturing in a way that will accomplish an expansion of the manufacturing base and create jobs.” You sound like Obama who recently stated that increasing the supply of oil will have no impact on price. (so basically he is showing either bias or a complete lack of knowledge of basic economics)

I am going to explain why Santorum’s plan may make sense. First, let me provide some economic insight into two key issues of establishing a lower tax rate on one sector of the economy. There are two economic issues here that are well known in economics:

1) Misallocation of resources– Favoring one sector of the economy over another with lower taxes may cause a misallocation of resources away from more profitable industries to lower profit ones (Perhaps in his view manufacturing).

2) Tax distortions. This is the point he misses. Taxes change peoples’ behavior. However, each market/firm/industry is harmed to different degrees by high taxes. Taxes on some markets may cause little change in the behavior in those markets. The result is few lost jobs, little output lost, and little harm to consumers. In these markets, the government obtains tax revenue with little harm to the economy.

However, not every market is so unaffected. Some markets are very sensitive to tax policy and taxes in these markets can cause significant job losses (or transfer of jobs/firms/industries to other locations)

For example, one city whose travel market is made up mostly of business people flying for business meetings might find that it is able to collect significant revenue with little damage by taxing air travel. While another city’s travel market might be made up mostly of people traveling for pleasure. A tax on airline travel in the pleasure seeking travel market might cause serious reductions in air travel by budget conscious vacationers— causing layoffs, reduced airline travel, and reduced happiness among city residents.

In the latter case, the city might choose to reduce or even eliminate taxes on air travel–not to pick winners or losers but simply recognizing that in their particular market, taxing airfare is a poor method of collecting tax revenue.

Santorum is simply arguing that manufacturing is an industry that is sensitive to high corporate tax rates–thus causing firms to relocate outside the country.

Here is the conservative economics behind Santorum’s thinking.

Re-industrialization 101: “Get Government Out of the Way”

Allowing people to keep more of what they earn is a fundamental principle of conservatives. Manufacturing is a very competitive business. High taxation can cause companies to leave the country unlike other types of businesses. So simply allowing them to keep more of what they earn will promote the re-industrialization. From an economic viewpoint goods that are cheaper to produce, ship and deliver here in the US are now, instead, being produced overseas because of our high taxation (and as mbecker points out paperwork intensive/ time consuming EPA regulations.) This is not subsidizing or preventing competition like others have proposed. This is getting government out of the way.

This is sensible tax policy. The same way I support Gingrich and most conservatives who supporting lowering taxes on capital gains. Ssome think this is unfair, but it is smart economic policy to encourage people to invest in the creation of new businesses. Santorum simply applies this logic to the manufacturing business. Not a subside..simply a recognition that our economic performance might be enhanced.

Do I know how many jobs will come from this? No. But I know many companies have been looking to locate here in the US. I have heard corporate executives say that are not locating in the US because of our high corporate tax rates. I also know there are 7 million more working age people not working today than 4 years ago that could be utilized by companies to produce goods.

If they can do so profitably, companies will come. In fact, the more profitable they are, the more likely they are to come. (since only those companies that have really high profits will benefit from a 0% tax rate) Therefore, it is likely that these will be high paying jobs. Because while many people think of industry as low skill, this is not true. Many manufacturing jobs are now done with more automation and these require very high skill / high wage workers.

Besides the focus on regulations by mbecker, there are other issues keeping manufacturing out of the US as well. Many manufacturers actually pay the individual rate and not the corporate rate. Santorum’s reduction in these rates to 28% will help all companies who pay the individual rate including manufacturers. Additionally, the Obama administration’s failure to make appropriate trade agreements with other nations is also a big deterent to jobs here in the US. Moreover, our legal environment also discourages companies from locating here (Santorum also plans to address this problem as well)

Finally, if you are a Romney supporter, Romney’s suggests a plan that is likely to start a trade war with China. This is a far more dangerous proposition— A position that is far more likely to lead to economic catastrophe than simply allowing people to keep more of what they earn.

Speaker Gingrich. You are an incredible leader. You are an incredible thinker. I have supported your campaign with words and with donations. I believe you would make a great President. We could talk about what should have happened. What would have happened if Romney had not thrown mud, mud and more mud at you and out spent everyone 5-1. I wish things had turned out differently. I was thinking what I would write if you managed to pull of wins in Al and MS tonight, but that did not happen.

Santorum has shown that he has appeal across the country and can even out perform you in southern states (TN, MS, AL) You needed to show that you could win outside of your home state. It did not happen. This has been a crazy race and may yet turn again. As your supporter, I wish I could think of a way you might pull this out, but that will not happen unless something strange happens yet again.

Therefore, I respectfully ask you to either: 1) postpone 2) Suspend 3) Delay your campaign. I know it is not fair. However Santorum deserves a shot at Romney one on one and he cannot do it without your support. Santorum will listen to your advice. He will listen to your ideas. He and you can make this country great again.

UPDATE(2):  Santorum has won both Alabama and Mississippi—contrary to Drudge Report’s Exit Polls that showed Romney walking away with both states.

Why I am Suspicious: I am an impatient person. I want to know results NOW. So on election days I have searched for exit poll data to give clues how the race is going. In every race to date, the only exit poll data that was available on Drudge (or elsewhere) was general information about what issues were important, etc. BUT NEVER actual race projections..UNTIL TONIGHT. I believe could have been an attempt by Drudge to surpress conservative voter turnout (I do not blame CBS, polls sometimes are wrong) But it is strange that the results of these exit polls was released.

Drudge is reporting exit polls that suggest Romney walking away with both Alabama and Mississippi. HOWEVER….

These exit polls indicate a big night for Santorum then Gingrich…..We will see what the truth is in a few hours. But

DO NOT LET DRUDGE REPORT KEEP YOU FROM VOTING. THERE IS A STRONG REASON (AS SHOWN BY EXIT POLLS BELOW) TO BELIEVE THESE REPORTS ARE WRONG AND IN FACT, THE EXACT OPPOSITE OF THE ACTUAL RESULTS.

Exit Poll Mania, Southern Style

In February 2008, 88.1 Million people were working in the provider class (Workers 25-54 years of age working 35 or more hours per week) Then the financial crisis hit and by the next February only 82.9 Million people in this group were employed.

By February 2010, only 79.9 Million. So in a period of just 2 years, 8.2 Million providers no longer had work.

It has been 4 years now since Feb 2008. How are we doing in recovering these lost jobs?

Today, it was reported that 80.7 Million providers are working. This means of the 8.2 Million jobs lost, 7.4 Million are still unable to find full time work.

In the last year, only 353 Thousand jobs have been recovered. Since the bottom in 2010, only 773 Thousand jobs out of the 8.2 Million provider jobs lost have been recovered.

Some may wonder why I have not mentioned the unemployment rate for this group, 7.3% versus 3.8% in 2008. The unemployment rate can be very deceptive. First, it does not count as unemployed people who are employed even part time! Second, if a person gets so discouraged that they stop looking for work, this causes the unemployment rate to go down. While there are measures of unemployment that try to adjust for these discouraged and part-time workers , these measures miss many people who would be working if the economy were better.

While the recovery in jobs is not happening yet, at least it is not getting any worse. Last month’s decline in durable goods orders, the largest drop since 2009, may indicate that the job market may continue to bounce around the bottom for months to come.

Note to Posters: The number of comments is making following new discussions difficult. Please post new comments at the end

Santorum has the power to make this a two man race in 6 5 4 3 days. Here’s How:

Win Kansas on Saturday.   Update (Stage 1 Complete): Santorum Wins Kansas! Over 50% of Vote!
Beat Gingrich on Tuesday in Alabama and Mississippi.

He does that and Newt is out of the race.

Then to gain momentum, he needs to win Missouri on the 17th and Illinois on the 20th so he can win Wisconsin on April 3rd. April 24th is the North East and Romney wins everywhere but Pennsylvania (maybe Delaware)

But the month of May would then belong to Santorum (if Newt is gone):

Indiana, North Carolina, West Virginia, Nebraska, Oregon (Romney’s best chance), Arkansas, Kentucky, Texas.

But if Gingrich wins Alabama and Mississippi, Gingrich stays in and he then has a chance to show he can win outside the South.

Santorum gave a good hard hitting speech and his attack on Romney was fantastic!

SANTORUM: I’ve never passed a statewide government-run health care system when I was governor, because, well, I wasn’t governor, but Governor Romney did. And now we find out this week not only did he pass it in Massachusetts, he advocated for it to be passed in Washington, D.C., in the middle of the debate on health care.

(BOOING)

It’s one thing to defend a mandated top-down government-run health care program that you imposed on the people of your state. It’s another thing to recommend and encourage the president of the United States to impose the same thing on the American people. And it’s another thing yet to go out and tell the American public that you didn’t do it.

(BOOING)

We need a person running against President Obama who is right on the issues and truthful with the American public.

And love this quote:

“We are in this thing not because I so badly want to be the most powerful man in this country. It’s because I want so badly to return the power to you in this country.”

I have been watching and been involved in discussions regarding whether drilling for oil can drive down the price of oil (and gasoline) I am amazed how many conservatives buy into the view that:

‘Gee, producing more oil will not drive down the price’. And then they proceed to quote this or that study that says ‘increasing oil production will have very little impact on price’

For those of you who buy this argument (including Obama). You have just earned an ‘F’ in economics.

Let me fill you in on how academic research is done. Most academic studies are conducted in a static framework. That is, they assume the world today is how the world will be tomorrow, or how the world operated in the past is exactly how it will operate in the future. If this method of analysis were correct, then the economist Malthus would have been correct and today all the world’s population would be suffering from tremendous starvation. (after all, Malthus showed that food production was linear function while population growth was exponential. Thus showing we were doomed)

However, anytime the price of a resource is high, people figure out better ways to conserve on that resource or improve the methods of obtaining that resource (Malthus did not consider improved per acre crop yields which is why the world population enjoys more food per person than anytime in history).

Oil fields previously thought uneconomical are now very profitable and this oil is being brought to market. This increase in oil supplies has tended to keep prices lower than they would have been. Keep in mind that we have pumped a tremendous amount of dollars into the world economy creating tremendous disruptions in financial markets and commodity prices such as oil.

I have no idea where oil/gas prices will be in the future. Here is why…

Demand from developing countries may continue to increase, but so might production not just in the US but also around the world.

China’s bubble in real estate may finally come crashing down killing the global demand for oil.

New North Sea oil finds may or may not be brought quickly to market.

Refining capacity may not be enough to meet potential increases in world demand/supply.

US production potential that is greater than all the oil in Saudi Arabia, but will it continue to be developed?

There is not particular reason why gasoline prices in real, inflation-adjusted prices cannot get down to $2.50 again. Somehow we believe that the same mechanisms that drove prices up quickly do not work in reverse. (Gee, people once thought housing prices would increase forever too) But recent history has shown us that it is folly to make such conclusions. The following chart shows the inflation adjusted price of gasoline. But what it really shows is that gasoline prices fluctuate (They go up and they go down)

Notice how real gas prices in 1981 were almost as high as today. Just 5 years later, they were lower than they had been for the previous 70 years!

Real Inflation Adjusted Gasoline Prices:

I like Santorum. I like Newt. I would be happy with either as our nomineee. In Tennessee, I had been planning to vote for Santorum when it appeared he was the only alternative to Romney. But polls now show Newt, Santorum and Romney all within margin of error, so I had to finally make a decision of who I prefered.

I decided on one issue and for one reason:

People have not been paying attention to what has been happening in the last 3 years.

We need someone who can most effectively explain what the Obama administration has been doing and do so in an effective political way. So my decision came down to:

Who do you want giving the nomination speech when the whole country is watching? Who can best articulate and attack the left for their nutty policies and viewpoints?

To me the answer was clear. One man. Newt Gingrich.

Sure some people may not like Newt but this election will not be a popularity contest. Voters need to be informed and Newt is the best one to explain what has been going wrong and why Obama cannot be trusted with the future.

Some will point out Newt’s flawed conservative record but he fought for years and moved the ball further than any candidate in modern history.

That is why I support Newt.

This is a repost, but given the recent discovery that Romney urged Obama to institute RomneyCare Nationwide, I believe it is important revisit the problems associated with RomneyCare…

The Health Care reforms instituted by Governor Romney increased administrators by 18.4% compared to 8% for country but non-administrative positions grew at same rate as states without health reform. according to a report in the New England Journal of Medicine

From 2005–2006 to 2008–2009, employment per capita in administrative occupations grew by 18.4% in Massachusetts, as compared with 8.0% in the rest of the country (P=0.015). These administrative occupations include management, business and financial operations, and office and administrative support (including medical records and health information technicians). In contrast, employment levels in nonadministrative positions in Massachusetts increased by 9.3% after health care reform, an increase similar to that of 8.6% in the rest of the United States (P=0.796).

These data suggest that enactment of reform in Massachusetts was associated with more rapid growth in health care employment, primarily in administrative occupations and (perhaps) patient care support occupations rather than among physicians and nurses

Obviously, government health care requires lots of paperwork:

More important, our analysis supports physicians’ concerns about the administrative burden of health care reforms, an issue that will have to be addressed as the ACA is implemented.

So what happens when you add 400,000 people to health roles but not any more doctors/nurses as the rest of the country? It is no wonder that according to the Cato Institute:

As goes choice, so goes quality. Statistics on waiting times for specialist care in Massachusetts read like a dispatch from Canada. (emphasis mine) In 2004, Boston already had the longest waits among metropolitan areas. By 2009, waits had generally shortened in other metro areas (outside of Mass.) (average wait: less than three weeks) but lengthened in Boston (average wait: seven weeks), according to the Merritt Hawkins survey.

Really seven weeks!!! OK. So wait times increased but surely the quality is the same?

Voters who believe the Massachusetts law reduced the quality of care outnumber those who believe it helped by nearly 3-to-1 (29 percent to 10 percent).

OK. So more administrators, lower quality, and long wait times but at least it made health care more affordable and reduced costs?

“Premiums are growing 21 to 46 percent faster than the national average, in part because Massachusetts’ individual mandate has effectively outlawed affordable health plans.

OK. So longer waits, more administrators, lower quality, and reduced affordability of private insurance. But surely the government by being a bulk purchaser of health care can purchase at lower costs?

Since Massachusetts has covered just 432,000 previously uninsured residents, the cost of covering a previously uninsured family of four — at least $20,000 — is well above the average cost of an employer-sponsored family policy (about $13,000)

OK. So longer waits, more administrators, lower quality, reduced affordability, and greater cost; but according to Romney the people of Massachusetts know the costs and US taxpayers are not helping to pay for Romney’s experiment?

Had state officials not done their level best to hide those costs — the individual mandate pushed 60 percent of the cost off-budget, while expanding eligibility for Medicaid pushed another 20 percent onto the federal budget — no one would be hailing Massachusetts as a model.

OK. So longer waits, more administrators, lower quality, reduced affordability, greater cost, hidden costs to taxpayers in Mass and US taxpayers; but at least this will keep Massachucetts from going down the path to European single payer system that rations care?

To cope with the cost of its reforms, Massachusetts created a legislative commission that has recommended moving the entire market to a single, Canadian-style payment system that would encourage doctors and hospitals to ration care.

The mainstream media do not seem to understand why so many conservatives do not want Romney. My reason is simple: I want my parents, my kids, and my fellow Americans to have the best health care possible. Liberals and some Republicans like Romney have argued that we will not end up with the long lines and bureaucracy of europe with health reform. I hope this post helps people understand why I do not support Romney.

I went to hear Senator Santorum speak today in Chattanooga, TN. I am on the fence about Gingrich or Santorum so I thought it would be good to hear both in person. (I’ve heard Gingrich before)

Santorum’s speach was good and well-delivered. He is more impressive in person than on TV (which is the opposite of Gingrich). Athough he needs to incoroporate more applause/attack lines and this speech did not move me like his Iowa victory speech did, the biggest disappointment had nothing to do with Senator Santorum.

Santorum arrived a few minutes early and his speech started early and he finished on schedule, but when he asked if there were any questions, he was quickly cutoff by the local tea party organizer. He told the audience that he wanted to allow time for more local speakers!!! This did not sit well with many in the audience who proceeded to leave the auditorum rather disgusted.

This is the one problem with the tea party movement–lack of political experience. Santorum was the headline speaker of the event, he should have been allowed to answer questions. He flew in from campaigning in Michigan and the audience would have appreciated more of his time to allow him to answer some of our questions. We will not get another chance to hear directly from Senator Santorum before we vote on Super Tuesday–So with all due respect: Chattanooga Tea Party–You Blew IT.

Last month, I wrote about my belief that Fox News has moved left. Today, Politico wrote about this subject and, in addition to quoting yours truely, they provided some interesting insight:

The grumblers were picking up on a strategy that has been under way for some time — a “course correction,” as Fox chief Roger Ailes put it last fall — with the network distancing itself from the tea party cheerleading that characterized the first two years of President Barack Obama’s presidency. Lately, Fox has increasingly promoted its straight-news talent in the press and conducted some of the toughest interviews and debates of the Republican primary season. Just last week, it hired the openly gay liberal activist Sally Kohn as a contributor.

They also describe the following incident:

After the Tucson shooting last year, when criticism rained down on Sarah Palin and Glenn Beck for their violent rhetoric, Ailes moved to lower the temperature, telling Russell Simmons, “I told all of our guys, ‘Shut up, tone it down, make your argument intellectually.’”

Politico then points to George Soros and Media Matters involvement:

He said that pressure went beyond the $1 million that Soros gave Media Matters in October 2010 “to hold Fox News accountable.”

“We talked to a private investigator who interviewed representatives or employees of News Corporation about the threats and intimidation against them for going after Soros,” he said.

The author then quotes Cliff Kincaid, president of America’a Survival, who had a whole booth at CPAC dedicated to questioning Fox’s programming choices:

“What happened is they buckled under pressure from George Soros and his operatives to get rid of Glenn Beck,” said Kincaid, who wants Beck back on the air so he can continue his “investigative journalism” into Soros’s influence on the media.

Of course being Politico, they could not resist quoting a birther group—nothing like painting conservative concerns about Fox programming as the rantings of the conspiracy minded. Nevertheless, they do show that Fox is making a “course correction” and conservatives should be concerned. Luckily, conservative websites, like Redstate, are filling part of the void created by Fox’s actions and this is creating an opportunity for these sites to increase their “viewership”.

Countries frequently believe that they can achieve prosperity by government aiding one particular promising industry over others. They promise increased growth and greater employment if only the government aids the chosen industry. But as the government supports one industry, it does so at the expense of other industries that might have been created. Money that would have flowed to a variety of potentially beneficial projects is redirected–either by force or “incentives”

Jobs are created in the subsidized industry. However, the prosperity government planners promise does not materialize because the industries that would have grown are deprived of funds and languish. The government planners could not foresee which industries will grow (and may not care if it serves a political purpose). Countries that choose this approach have seen few successes and far more catastrophes.

The reason centralized, government winner-picking approaches so frequently fail is not just because the government picks the wrong industry to support. No, when governments make their choice, the country’s leaders create bureaucracies and legislation directing the country’s limited resources into the government’s chosen path. Should circumstances change and the projections of the government experts prove to be incorrect, or other opportunities arise; the country is slow or unable to adjust. In economic theory, this is called “path dependency”.

Stalin’s Russia picked manufacturing over its other industries, Asian governments picked memory chip production over other goods, politicians in US picked housing over other sectors of the economy, and Obama picked one particular solar cell type over other energy sources. All these picks proved to be wrong. Industries deprived of funds were unable to create the future and the people suffered—Suffered at the whims of government officials who were supposed to serve them.

So is Santorum picking winners and losers like a central planner? I have read a lot of comments here on Redstate concerned that Santorum is doing just that. They believe that his proposed 0% tax on manufacturing corporations, favors manufacturers at the expense of other industries. The thinking is that by lowering taxes on manufacturers, taxes must be higher on other industries thus discouraging production in these other industries and forcing the US on one path (manufacturing) and inhibiting our ability to pursue more profitable industries. As we have seen, concerns over a country creating a path dependency by picking winners and losers are justified –if there were no other economic considerations.

If there were no other considerations, Santorum’s policy of focusing on manufacturing would be of grave concern. However, there are other factors to consider. While economists agree that discriminatory government policies may create dangerous path dependencies, they also agree that tax policy should be directed in a way that:

1) Generates revenue with the fewest distortions and
2) Creates the least amount of damages or unintended consequences.

Our high corporate tax rates have caused corporations around the world to avoid locating in the US, but some industries more than others. Certain industries are more sensitive to differences in world tax rates than others. Pharmaceutical companies still locate in the US because the access to research centers is worth the higher tax rates imposed. However, the benefits of locating in the US do not always outweigh the costs imposed by our tax system.

Manufacturing is, by its nature, very competitive and in our global marketplace the benefits of locating in one country over another may be very small. As such, our high tax rates may, be killing this industry. If this is true, lower (or even 0%) tax rates on manufacturing (even at the expense of higher rates on other industries), may result in stronger growth and even greater tax revenues than our current system (even though under Santorum’s plan the corporate rate is 0%, those who own the stock will pay taxes as will the employees) Santorum expresses this logic well when he states:

“Why are we going to treat retailers and Wal-Mart and restaurants and florists different than we treat manufacturers? Because retailers don’t move their operations to China. They don’t move them to Mexico. Because we have to compete for those jobs, and if we don’t effectively compete, we lose those jobs”

Additionally, manufacturing industries also create good paying jobs at all skill levels. People currently requiring public assistance might instead be employed in jobs that relieve the public doles. Thus, rather than harming the economy, Santorum’s plan could shrink the size of government and bring in greater tax revenues. Therefore, while some might consider Santorum’s plan unfair to non-manufacturers, we conservatives should remind ourselves of one simple principle:

Taxes should be imposed not for the purposes of fairness but to raise tax revenue in the most effective manner possible.

UPDATE: Several posters have asked these questions: 1)How are taxes damaging and what damage is done by taxes? 2) Don’t taxes harm every industry the same?

# 1

Taxes are damaging because they can create job losses, lost opportunities, and reductions in people’s happiness. Taxes can cause trades that would have taken place not to take place. Taxes artificially increase the cost to a firm (or consumer). These increased costs may cause the producer to decide not to produce the good or cause the consumer to not purchase the good resulting in firms not hiring as many workers and consumers not getting the benefit of the good.

Income taxes discourage people from investing in new businesses (or having the money to doing so) because if the government gets to keep a portion of those profits, the investor may decide the risk is not worth the reduced reward. Income taxes also discourage people from working as much because it reduces the reward to their labor efforts.

US corporate tax rates are the highest in the world and we even tax overseas earnings of companies that dare locate in the US. These taxes are VERY damaging. Companies that might have located here decide to locate elsewhere in the world. Jobs are not created in the US and more people are put on public doles.

So yes taxes are very damaging. Sometimes they are needed because the damage created by the tax are outweighed by the benefits received when the government spends this money wisely (We are better off because the government fought WWII even if it did damage the markets taxed)

#2

Taxes do not harm every industry by the same amount. Take an extreme example. Suppose a small country has two industries: Gold mines and manufacturing. Suppose we tax all corporations that in this small country at the same rate of 35%. (Liberal Mecha) Will the gold mines shut down? Probably not. The gold is only located within that country and while they do not want to pay the taxes, it may still be worth extracting the gold even at this high tax rate. But what about the manufacturing industries? Imagine that they produce goods that are sold around the world and not just within the taxing country. Manufacturing companies may have chosen to locate within this country because it offered a slight cost advantage. But now that the manufacturer has to pay 35% of their profits to the government. The slight cost advantage will now be overwhelmed by the increased tax rate. The manufacturers will leave causing unemployment, lost opportunites for trade, and if there is a social safety net more people on the public dole.

Such a uniform tax rate would not only be devastating but it would also be cruel to the people who were thrown out of work by the government’s actions. Since revenue needs to be raised, the question is what is the best way to raise that revenue doing the least harm to consumers, producers, and employees.

Of course the best option is to reduce government spending so taxes do not need to be as high and so burdensome. I believe both Santorum or Gingrich would reduce spending more than Romney. Thus taxes under either of them can be lower and less burdensome.

Romney voters support him because they think he has the best chance of winning.

N   O    T         A   N   Y         M  O  R  E  !

Rasmussen shows Santorum down by 4 to Obama but Romney DOWN BY 10!
I stated in earlier diary that Romney would be done if Republicans ever thought he did not have best chance to win. I will therefore stick with my original analysis and say:

R    O    M    N    E    Y       I   S       D    O    N    E ! !

This is a transcript regarding Romney’s actions as governor discussed by Rush:

Before reading, in fairness to Mr. Romney, he did oppose this provision originally and his veto was overridden. However, he overturned a ruling by the Department of Health that would have protected the Catholic institutions from being forced to violate their personal convictions. I believe you will agree that what is described below is very troubling. Read the account and commentary below.

Are you ready? Remember, now, this is seven years ago. December 9th, 2005. Sitting down, Snerdley? “In a shocking turn-around, Massachusetts’s Governor Mitt Romney announced yesterday,” which would have been December 8th, 2005, “that Roman Catholic and other private hospitals in the state will be forced to offer emergency contraception to sexual assault victims under new state legislation, regardless of the hospitals’ moral position on the issue. The Republican governor had earlier defended the right of hospitals to avoid dispensing the ‘morning-after pill’ on the grounds of moral dissent. The Boston Globe reported that Romney’s flip on the issue came after his legal counsel, Mark D. Nielsen, concluded Wednesday,” again, we’re talking 2005 here, “that the new law supersedes a preexisting statute related to the abortifacient pill.” The morning-after pill.

What we have here is another telling sign of just how similar, if you will, Romneycare is to Obamacare.

This last sentence is damning against Romney and one many of us here on Redstate have been asking again and again: How can we nominate a man who supported the government take-over of health care even if it was “just at the state level”?

Rush continues with the following Boston Globe story on the matter:

The Boston Globe story on this December 9th, 2005: “Governor Mitt Romney reversed course on the state’s new emergency contraception law yesterday, saying that all hospitals in the state will be obligated to provide the morning-after pill to rape victims. The decision overturns a ruling made public this week by the state Department of Public Health that privately run hospitals could opt out of the requirement if they objected on moral or religious grounds. Romney had initially supported that interpretation, but he said yesterday that he had changed direction after his legal counsel, Mark D. Nielsen, concluded Wednesday that the new law supersedes a preexisting statute…”

So to be clear: the state Department of Public Health that privately run hospitals could opt out of the requirement if they objected on moral or religious grounds. But Romney OVERTURNED THIS DECISION.

Romney needs to answer:

1) Did governor Romney reject protecting the Church’s freedoms based only one man, his legal council?

2) Did he check with the state’s Attorney General?

3) Did he seek alternate legal opinions or assistance from groups that seek to protect religous freedom?

4) Did he contact the Catholic church’s legal council for their views?

5) Did he consider acting to prevent the state running roughshod over deeply held religous freedoms in his role as governor?

6) Did he consider that the U.S. Constitution might prohibit a state from taking such actions and contact the US Attorney General?

This is very troubling…

I love winning. But what does winning mean in a political sense? Is winning just getting someone with an (R) next to their name? Does winning mean just getting rid of Obama?

We know we do not want to go down the direction Obama wants us to go. We know Obama believes in state control and this creates a lot of fear in common sense people. We fear what will happen if we lose this election: ObamaCare will become part of everyday Americans’ lives. People will come to depend upon it. And so, yet another government program is created. One that cannot be opposed because any change might harm some people.

These are reasonable fears. Romney voters correctly figure that anything designed by Democrats must lead to big government. But where Romney voters are different is that they believe systems designed by Republicans and designed to be carried out by the states will all be–wonderful market-driven solutions making everyone’ lives better with government not interfering in vital decisions.

Government, Romney voters believe, will not be intrusive under a Romney designed system. And they believe even if Romney’s plan is not very good—the Democrats’ plan would be much worse. There is an amount of truth in this belief. For example, Bush’s Medicare part D designed with market incentives rather than government run directives, for all its faults, actually came in under cost projections (first time I can recall for any government program)

So is Romney care designed in the same fashion as Medicare part D?

Under Medicare part D:

“The standard benefit is defined in terms of the benefit structure and not in terms of the drugs that must be covered”

Is this how ObamaCare is structured? RomneyCare?

No. Both ObamaCare and RomneyCare specify exactly WHAT must be covered. In recent days, we have seen the failure of this type of approach—Catholics who do not believe it is ethical to use birth control are being FORCED to purchase plans that include this coverage. At this moment, Catholic churches are risking huge fines by refusing to agree to this ObamaCare provision. But this is just one example. There are hundreds of other decisions about what will be covered or not covered. So there are decisions about who will get care and who will not.

Who decides this and is RomneyCare any better?

“RomneyCare calls for the state’s Connector to specify which benefits must be included in health plans (Section 101)”

Gee, under RomneyCare a government official tells you what you get when you buy insurance. You have no say. Does that sound market oriented to you? Is this like Medicare Part D, that leaves the decision of what drugs are covered to the plan chosen by the customer? Does RomneyCare enable people to get the coverage THEY want? NO and NO.

So how do we convince Romney supporters to change their mind? That a man who deisgned this type of system and does not speak out against this government intrusion is not right to be a Republican President?

I am afraid Romney voters are so afraid of Obama that even after reading the above they will just simple say ‘Still, he is better than Obama and maybe we can sway his views’

SO WHAT CAN BE DONE TO STOP ROMNEY IF HIS VOTERS ONLY CARE ABOUT WINNING?

The answer is simple: We must show them that Romney is likely to lose. That is the only thing that will convince them. So what this means is that we must show them the attacks the left will make on Romney. This does not mean we agree with these types of attacks but Romney voters must be shown that Romney is not likely to win–otherwise they will keep supporting Romney.

I suggest a series of ads based upon what Democratic consultants tell you they will attack him on. Once Romney voters are no longer confident that Romney can win, taking a chance with Newt or Santorum will not seem so scary since they know these men are fighting for something worth believing in–less government control over our lives. Not just winning for winning sake.

Duplicate Post. Please See this post in the Recommended Diaries section: “Oh MY! Gingrich Really Did Save the Reagan Revolution!!!”