Tag Archives: Government Regulation

More On The Laws Of Economics

I’m reading an article for an upcoming post when I came across this:

We have a shortage of every kind of doctor, except for plastic surgeons and dermatologists.

It strikes me that plastic surgery and dermatology are both examples of medical “care” not subject to insurance and the accompanying government regulation.

And the prices of plastic surgery?


From the report:

Cosmetic surgery is one of the few types of medical care for which consumers pay almost exclusively out of pocket.  Even so, the demand for cosmetic surgery has exploded in recent years.  According to the American Society of Plastic Surgeons, 1.7 million cosmetic surgical procedures were performed in 2008.  That is more than 40 times the number performed two decades ago (for example, 413,208 in 1992).

Despite this huge increase, cosmetic surgeons’ fees have remained relatively stable.  Since 1992, medical care prices have increased an average of 98 percent. The price of physician services rose by 74 percent.  [See the figure.] The increase in the price of all goods, as measured by the consumer price index (CPI), was 53 percent. Yet, an index of cosmetic surgery  prices only rose only about 21 percent. Thus, while the price of medical care  generally rose almost twice as fast as the CPI, the price of cosmetic surgery went up less than half as much. Put another way, while the real price of health care  paid for by third parties rose, the real price of self-pay medicine fell.

When exposed to the free market, commodities and services will respond with cheaper prices and higher quality.

Libertarianism in Hungary: Who Knew

How cool to find a sympathetic voice in Hungary:

I will only give you a job if:

  1. I can fire you, when and if I want to.
  2. If VAT goes down to at most 20%, but better yet 15%.
  3. If the state takes away “only” 30% of your money.
  4. If higher income is not exponentially punished.
  5. If the state punishes corruption instead of decent companies.

Until these things change, I won’t give a job. Until the state ferrets out corruption in every possible aspect, I won’t start a business, and I won’t create jobs.

There are things that contribute to people giving people jobs and then things that discourage such activity.

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Government Mandates

For those of us who support the government intervening in the insurance market only to make things more expensive to make things better for everyone, I have a question:

If you support the government forcing Americans to buy insurance AND you support the government forcing insurance companies to offer free birth control, why don’t you support the government requiring people to purchase fresh fruit AND support the government forcing insurance companies to offer free broccoli?

Youth, Labor, Recessions and Minimum Wages

One of the most frustrating aspects of being conservative is that it’s too easy for the other side to fall back on a “you hate X” where X is any group that you are really, in fact, trying to assist.

An easy example to consider is a school child and her homework.

When I was a teacher I could very easily “give” the student an A on her blank homework.  However, I felt that it would do her more good in the short term, the long term and in other character building aspects if she actually worked for and earned that grade.

In today’s liberal dialogue, I would be said to “hate kids”.  Or, if the individual liberal were truly on his game he could claim that I “hate girls”.

Silly example?  Perhaps.  But consider modern day minimum wage laws.

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Government Regulations: Costing Jobs

I have long held the position that incentives matter.  Further, I hold that government cannot completely control all reactions to incentives.  That is, when a government body imposes regulations upon a population with the desire to guide correct action, the government body cannot anticipate all reasonable reactions.

Incentives matter.

And so, in an effort to regulate mortgage originators, the government is forcing corporations to leave that segment of the business:

MetLife, the nation’s largest life insurer, announced Tuesday that it would close its home mortgage-origination operation, costing the company at least $90 million. Most of the 4,300 employees at the unit will lose their jobs.

“The majority will no longer have a position,” said John Calagna, a spokesman for MetLife. Most of the workers at the business are based in Irving, Tex., Mr. Calagna said.

MetLife said in October that it was seeking a buyer for its mortgage unit after announcing plans to sell deposit-gathering operations to reduce federal oversight. The company reached a deal last month to sell about $7.5 billion of its bank’s deposits to General Electric.

The Federal Reserve, which oversees MetLife because of its size and banking operations, rejected its plan last year to raise its dividend and resume share buybacks.

Because of the Federal Government and the regulations it imposes, MetLife will now shed 4,300 jobs.

To be clear:  Government regulations cost the economy 4,300 jobs.  No outsourcing.  No downsizing.  No automation.  No nothing.  Pure and simple regulation avoidance.

And for added enjoyment, the NYT article goes on to mention the dollar amount that this will cost MetLife:

MetLife will continue to service current home-loan clients and offer reverse mortgages, the company said. The wind-down may cost as much as $110 million, according to the statement.

In addition to shedding 4,300 jobs, MetLife is WILLINGLY taking an action that will cost it $110 million dollars.  The cost of the regulation is AT LEAST $110 million!  AT LEAST!

Is there any legitimate argument that can be made that this administration is building an environment conducive to business and the free market?



Government Regulation: Equal Opportunity Basher

Not surprisingly. as President Obama is trying to create jobs all across America, the government is working just as hard as it can to make it as hard as possible to hire and keep people employed.  See, it turns out that there is an amount of work that American’s don’t wanna do.  In order to allow business who need that work done, the government has a program, a program called H-2B:

The H-2B non-agricultural temporary worker program allows U.S. employers to bring foreign nationals to the United States to fill temporary nonagricultural jobs. A U.S. employer must file a Form I-129, Petition for Nonimmigrant Worker, on a prospective worker’s behalf.

To qualify for H-2B nonimmigrant classification:

  • The employer must establish that its need for the prospective worker’s services or labor is temporary, regardless of whether the underlying job can be described as permanent or temporary. The employer’s need is considered temporary if it is a one-time occurrence, a seasonal need, a peak-load need, or an intermittent need
  • The employer must demonstrate that there are not sufficient U.S. workers who are able, willing, qualified, and available to do the temporary work
  • The employer must show that the employment of H-2B workers will not adversely affect the wages and working conditions of similarly employed U.S. workers
  • Generally, a single, valid temporary labor certification from the U.S. Department of Labor (DOL), or, in the case where the workers will be employed on Guam, from the Governor of Guam, must be submitted with the H-2B petition. (Exception: an employer is not required to submit a temporary labor certification with its petition if it is requesting H-2B employment in a position for which the DOL does not require the filing of a temporary labor certification application)

So, how does this impact us today?

After years of complaints from employers that the program was inefficient and cumbersome, the administration of President George W. Bush sought to streamline the application process, putting new regulations into effect in January 2009. Farmworker organizations sued the Labor Department to reverse them.

In August 2010, a federal court in Pennsylvania hearing one of those lawsuits ordered department officials to issue new rules on how employers should determine wages for H-2B workers. The new wage rules were issued in January, but department officials, acting under court order, announced only last month that they would go into effect Sept. 30.

So, a year ago, the courts ordered the administration to issue new rules.  Rules that, in essence, will replace the old rules issued under Dubya.  Rules that objected to by … Farmworker organizations.

These new rules?

Starting Sept. 30, they would have to pay guest workers at crawfish and shrimp processors wage increases that range from 51 percent to 83 percent of current hourly rates, according to the suit.

And the result?

The employers said these sudden increases would be crippling and would expose them to unwinnable competition from foreign imports and from other businesses that hire illegal immigrants.

Again, no one in the Obama administration seems to have learned Econ 101.

Finally, a lasting testament to the angelic intentions of government that lead us down a road populated with devils, we have this little gem:

Many here cannot afford to lose year-round government benefits if they take seasonal, piece-rate jobs with Mr. Guillory, he and several of his full-time American employees said.

Perfect.  The government is providing benefits such that people don’t wanna work for fear that they lose ’em.

Keep on keepin’ on baby.

Global Warming and Science

I was watching the debate tonight and heard the questioning surrounding the science of global warming.  Admittedly I’m biased, but it sounded to me like the moderators were laughing inside as they were questioning the candidates about global warming.

The questions were led with the fact that scientists overwhelmingly support the fact that mankind is contributing to the warming of the globe.  Now, given that fact, do you reject that science?

It’s the Left’s trick question.

The words aren’t what they’re asking.  What they are asking is:  “Do you deny catastrophic anthropomorphic global warming?”  But the questions are always phrased in such a way as to mask the true nature of the question.

For example, if I asked you this question, how would you respond?

If you were to piss in the ocean, would the level of the ocean by higher than it would have been had you not decided to piss in the ocean?

Who can deny the science?  When you add “water” to a body of water, can you argue that the volume of water actually decreased?  Certainly not.

The question should be:

If you were to piss in the ocean, would the level of he ocean be higher by any meaningful measure?

If THAT question were asked, the answers would make more sense.

And so it is with global warming.  Any reasonable person would argue that we DO contribute to the warming of the planet.  However, the degree to which we contribute is not of such significance that we need to take the actions that the far-left would ask us to take.

Unintended Consequences

It turns out that this global economy has implications. Namely that money is movable and flexible. The other implication is that government is seen as damage and as much as possible people will avoid it; even uber-liberal ones like George Soros.

“It emerged that George Soros is to close his hedge fund to outside investors and will refund $1 billion to those who have put in money. The prominent financier blames new regulations that require investment advisors to register with the SEC.”