Culturalism · Federal Government

Of Masks and Men

Perhaps the most amusing aspect to the coronavirus panic has been the complete chaos in messaging around masks, varying from the fiercest concerns to passive indifference, at least until a change occurs. The government refers to it as “science-based evolution,” but we know better. Now masks are being required to enter public places, as if things suddenly shifted in that direction.

What makes it so fascinating is how authorities adapt and weave to escape responsibility. You might recall that I pointed out back on February 11th how a suspicious number of Chinese were being spotted wearing safety masks in public in response to the Rona. The normal reaction was to claim it was due to their experience with SARS, or simply a sense of precaution.

In the United States, our Surgeon General actually made the following tweet on February 29th:

Adams’ rage can be explained by considering the projected supply shortage, yet at the same time American firms were shipping MILLIONS of masks to China to help with their response. Of course it only took about a month for our man Jerome to produce this video:

Oh so now masks are more effective, or per chance he just wanted to demonstrate his mad KonMari skills with cloth origami. Around the same time, the CDC updated their own guidelines in support of wearing masks, I suppose because production might have picked up by that point.

Now that all is well in the world, we can go out, only face masks have become a requirement at most stores, because science. The same science that had no evidence before, but now does, because the government decided it exists. Maybe the next advisory will recommend wearing Trojans over the tongue to prevent ingestion of particles from a TikTok celeb.

Do you still trust science?

Federal Government · investing · Personal Finance

That Kind of Hertz

In an eleventh hour weekend move, the car rental company Hertz filed for bankruptcy, sending its shares for a lovely ride:

“Give you a lift?”

I’m curious what stands to follow, especially as many states continue their draconian frighten in place orders despite the economic bleeding. The travel industry and airlines might raise particular concern, but even some restaurants could hit the chopping block due to their brick and mortar ways. And that’s all excluding oil, which has a lot of livelihoods attached to it throughout various parts of the U.S.

If nothing else, this crisis should inform politicians of how fragile the financial web remains in our country. Sending over thirty million to the welfare rolls in order to save them from the invisible enemy strikes the mind as nanny state idiocracy, which we surely don’t have in America. After all, this is the greatest country on earth.


Federal Government · investing · Personal Finance

Can Free Market Healthcare Work?

One of the silliest debates in the last ten years has been that surrounding healthcare. Progressives screech about the need for broader Medicare coverage, and conservatives extol the virtues of “free market reforms” to bring down medical costs. In both cases, they miss the mark by fixating on the delivery of insurance rather than an elimination of health issues in the first place.

For the purposes of this post, let us consider conservative arguments. They will typically join libertarians in advocating a rollback on insurance regulation and hospital restrictions, along with less government intervention in the economy. Many will note that in 2013, government spending was already 48 percent of the total for healthcare, and yet costs do not seem to be coming down. They might even point to the historical example of Nelson Rockefeller, who tried to expand government coverage of people under Medicaid, but had to abandon the program after it became too expensive.

These are all valid concerns, yet we run up against several problems. To begin with, as long as hospitals find it difficult to deny care to those who cannot pay, fellow travelers will end up footing the bill. Private insurance already acts like a placeholder of sorts for the government in these situations, but they simply amp up premiums on others to support the weaker links. Further complicating matters on the insurance side is the McCarran-Ferguson Act of 1945, which granted sweetheart exemptions to the insurance industry from federal antitrust laws, making it harder to prevent price gouging.

At least for the purer conservatives and libertarians, antitrust restrictions are a troubling question, appearing to some as a needless restriction on liberty. Others term them “anticompetitive,” and claim such legislation was only implemented to benefit industry actors who were losing market share. The front is thus not unified, although the House did vote overwhelmingly to approve a repeal of McGarran-Ferguson in 2010, only to see it die in the Senate.

The bigger issue being left out of the free market argument is the effect which lifestyle has on personal health. It’s easy enough to note that people must take responsibility for their own diet and exercise regimen, but this view fails to acknowledge contributing health factors sourced in other areas. If we fail to properly regulate food production, for example, we might well have hog waste getting into the water supply, if not the ham itself. The consequences have been algal blooms and massive fish casualties, yet who knows how many humans might already be affected.

Permitting high levels of added sugar in cereals or snacks is another problem. Sure, people are responsible for their own actions, but children will be capricious over what they want. In some cases, those kids might have been raised consuming junk, and not know any different. The mere availability of unhealthy foods might also result in them being consumed because of convenience, particularly if there is no existing market for healthier alternative in close proximity.

Sensible regulation is an obvious solution, with the EU providing baselines, but conservatives and libertarians will often come out against any further government control – while also demanding free market healthcare. Clearly this poses a problem. If people are eating garbage products because “it’s good for the economy,” then they will likely drive up costs after developing conditions like heart disease, diabetes, and cancer. Unless care is entirely individualized, with people “only paying for what they need,” and those unable to pay getting denied service, even private sector insurance will end up subsidizing them through risk pools and higher premiums. In other words, everyone gets charged more.

Thus we are left with a conundrum. Either we must overhaul food production and environmental protections to prevent disease in the first place, or make everyone pay out of pocket for their needs alone. As long as insurance plays a leading role however, the latter idea remains a wistful thought.

Federal Government · Uncategorized

The Truth About Congressional Pensions

“Congressmen serve just one term and get their full salary for LIFE!”

Any denizen of the internet dot com has surely seen a claim of this nature, or perhaps even received one of those chain emails ranting about the travesty of our political system. The idea is so widespread that most people refuse to question it. Even people running for Congress, such as this “decolonized madre,” accept the notion at face value:

Sema sounds like a great human organism, but she’s woefully incorrect, just like everyone who spits this talking point without so much as a fact check. In reality, congressional pensions are not nearly as lavish as people claim, and certainly fall short of the quote’s mark.

Most existing members of Congress are party to the FERS system, a modified version of the earlier CSRS model which was phased out in 1984. Under this program, participants enjoy access to a tripartite system which includes a small pension, a 401k with matching, and Social Security. The highest percentage of their total salary ($174,000) for a pension is about 34 percent, and the average FERS pension in 2014 was $42,048. That’s decent, but nothing close to “full salary for life.”

The 80 percent idea holds some water, but data available suggests it only kicks in after 32 years of service. To put things in perspective, former representative Howard Coble of North Carolina retired in 2015 after thirty years of service. His pension would have been $130,500, but he turned it down. Nothing miserable about such a figure, but it took three decades to accrue, not a single, two-year term.

As for the one-term pension argument, let us keep in mind that a person must serve five years to even be eligible for a federal pension. In the case of former senator Kay Hagan, she served one six-year Senate term and was in line for a whopping $16,000 annual pension. That amount is certainly not chickenfeed to the working class, but hardly an extravagant offering.

I admit to disliking Congress more than the next person, yet that doesn’t excuse blatant ignorance. Do a Google search and find the facts, not a popular opinion.

Federal Government · Personal Finance

Our Man In D.C.

I tend to deliver a lot of realist commentary, which can come off at times as “black pill” or “depressing” to different people. While I disagree with the characterization, from time to time we encounter brilliant rays of hope to uplift the broader gloom of the time. In this case, the glimmer comes in the form of Mark “The Rejector” Calabria.

Mr. Calabria is the director of the Federal Housing Finance Agency, and the strongest line of defense against further corporate rescues by the federal government. Just to place it in perspective, Fannie Mae and Freddie Mac already have their hands in over half of the $11 trillion mortgage market,  and advocates are clamoring for a lot more.

No dice for them so far. Calabria has continued to block their hopes, and even suggested he would have not permitted the 2008 rescues which handed cash to select industry failures. Imagine that.

It remains to be seen how long he can hold out before someone higher up (read: McPelosi) overrides the move and dishes out money, but for now the horizon is splendid.

Here’s hoping for more Calabrianism.   

Federal Government

The SBA’s Dramatic Failure

For all the desperate hand-wringing about the need for Congress the pass SOMETHING, the outcomes are usually pretty poor. Several weeks ago our federal legislatures enacted the CARES Act, a $2 trillion juggernaut meant to prop up the flailing economy. In its assorted blubber they inserted the Economic Injury Disaster Loan program, designed to provide up to $2 million in working capital for small businesses.

Thus far, it’s not working too well. Instead of that magic number, firms are being promised closer to 25-35k, with strains making the current disbursement around 15k, at least for the time being.

It’s truly remarkable. The government capable of mass printing and borrowing to fund gigantic programs and nation-building wars is bumbling where the fate of its own business owners are concerned. The Small Business “Administration” has been swamped by requests in a heartbeat, despite having over 3,000 employees and a budget of $710 million.

Is the solution an increase in their budget, which Trump has already attempted as recently as February? Perhaps an even larger stimulus is needed, because money appears to be the magic solution for every problem Congress faces.

Or, we could structure programs in a manner that makes sense, and not demand an archaic application process which many cash-based companies will inevitably struggle to complete.

Just a suggestion.