The Good News of 2020

 

Stossel - Expertise has its limits

Great historical context here regarding the gap between what expert models predicted and what actually happened.  Also interesting background regarding the massive failure of models predicting mad cow, swine flu, and avian flu.

 

Stossel - How to Save Social Security

So...Democrats would rather cut benefits or 'tax the rich' (which won't raise enough money and will depress economic growth) than use the long-term benefits of investments to help erase the shortfall.  This 'privatization' is what every pension fund does - without investment, the obligations would be unsustainable.

 

Tips + Minimum Wage

To further strengthen Stossel's argument, the minimum wage for restaurant workers is the same as all other workers - if tips don't raise the server's wage to the minimum, the employer must make up the difference.

Stossel - Worry About Budget Deficits, Not Trade Deficits

Worry About Budget Deficits, Not Trade Deficits

Next year's $1 trillion federal government budget deficit will bankrupt us. Trade deficits are trivial.

John Stossel | March 14, 2018

Maybe Donald Trump is such a powerful communicator and pot-stirrer that other countries, embarrassed by their own trade barriers, will eliminate them. Then I will thank the president for the wonderful thing he did. Genuine free trade will be a recipe for wonderful economic growth.

But I fear the opposite: a trade war and stagnation—because much of what Trump and his followers say is economically absurd.

"(If) you don't have steel, you don't have a country!" announced the president.

Lots of things are essential to America—and international trade is the best way to make sure we have them. When a storm blocks roads in the Midwest, we get supplies from Canada, Mexico, even China. Why add roadblocks?

Steel is important, but "the choice isn't between producing 100 percent of our steel (and having a country) or producing no steel (and presumably losing our country)," writes Veronique De Rugy of the Mercatus Center.

Today, most steel we use is made in America. Imports come from friendly places like Canada and Europe. Just 3 percent come from China.

Still, insists the president, "Nearly two-thirds of American raw steel companies have gone out of business!"

There's been consolidation. But so what? For 30 years, American steel production has stayed about the same. Profits rose from $714 million in 2016 to $2.8 billion last year. And the industry added nearly 8,000 jobs.

Trump says, "Our factories were left to rot and to rust all over the place. Thriving communities turned into ghost towns. You guys know that, right?"

No. Few American communities became ghost towns. More boomed because of cheap imports.

It's sad when a steelworker loses work, but for every steelworker, 40 Americans work in industries that use steel. They, and we, benefit from lower prices.

Trump touts the handful of companies benefiting from his tariffs: "Century Aluminum in Kentucky—Century is a great company—will be investing over $100 million."

Great. But now we'll get a feeding frenzy of businesses competing to catch Trump's ear. Century Aluminum got his attention. Your company better pay lobbyists. Countries, too.

After speaking to Prime Minister Malcolm Turnbull of Australia, Trump tweeted: "We don't have to impose steel or aluminum tariffs on our ally, the great nation of Australia!"

Economies thrive when there are clear rules that everyone understands. Now we've got "The Art of the Deal," one company and country at a time.

I understand that Trump the developer liked to make special deals, but when presidents do that, it's crony capitalism—crapitalism. You get the deal if you know the right people. That's what kept most of Africa and South America poor.

But Trump thinks trade itself makes us poorer: "We lose ... on trade. Every year $800 billion."

Actually, last year's trade deficit with China was $375 billion. But even if it were $800 billion, who cares? All a trade deficit shows is that a country sells us more than we sell them. We get the better of that deal. They get excess dollar bills, but we get stuff.

Stossel: Free Market Health Care

Free Market Health Care
Government involvement in health care drives prices up.

John Stossel|Mar. 29, 2017 12:01 am

President Trump and Paul Ryan tried to improve Obamacare. They failed.

Trump then tweeted, "ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!"

But I do worry.

Trump is right when he says that Obamacare will explode.

The law mandates benefits and offers subsidies to more people. Insurers must cover things like:

• Birth control.
• Alcohol counseling.
• Depression screening.
• Diet counseling.
• Tobacco use screening.
• Breastfeeding counseling.

Some people want those things, but mandating them for everyone drives up costs. It was folly to pretend it wouldn't.

Insisting that lots of things be paid for by someone else is a recipe for financial explosion.

Medicare works that way, too.

When I first qualified for it, I was amazed to find that no one even mentioned cost. It was just, "Have this test!" "See this doctor!"

I liked it. It's great not to think about costs. But that's why Medicare will explode, too. There's no way that, in its current form, it will be around to fund younger people's care.

Someone else paying changes our behavior. We don't shop around. We don't ask, "Do I really need that test?" "Is there a place where it's cheaper?"

Hospitals and doctors don't try very hard to do things cheaply.

Imagine if you had "grocery insurance." You'd buy expensive foods; supermarkets would never have sales. Everyone would spend more.

Insurance coverage -- third-party payment -- is revered by the media and socialists (redundant?) but is a terrible way to pay for things.

Today, 7 in 8 health care dollars are paid by Medicare, Medicaid or private insurance companies. Because there's no real health care market, costs rose 467 percent over the last three decades.

By contrast, prices fell in the few medical areas not covered by insurance, like plastic surgery and LASIK eye care. Patients shop around, forcing health providers to compete.

The National Center for Policy Analysis found that from 1999 to 2011 the price of traditional LASIK eye surgery dropped from over $2,100 to about $1,700.

Obamacare pretended government controls could accomplish the same thing, but they couldn't.

The sickest people were quickest to sign up. Insurance companies then raised rates to cover their costs. When regulators objected, many insurers just quit Obamacare.

This month Humana announced it'll leave 11 states.

Voters will probably blame Republicans.

Insurance is meant for catastrophic health events, surprises that cost more than most people can afford. That does not include birth control and diet counseling.

The solution is to reduce, not increase, government's control. We should buy medical care the way we buy cars and computers -- with our own money.

Our employers don't pay for our food, clothing and shelter; they shouldn't pay for our health care. They certainly shouldn't get a tax break for buying insurance while individuals don't.

Give tax deductions to people who buy their own high-deductible insurance.

Give tax benefits to medical savings accounts. (Obamacare penalizes them.)

Allow insurers to sell across state lines. Current law forbids that, driving up costs and leaving people with fewer choices.

What about the other "solution" -- Bernie Sanders' proposal of single-payer health care for all? Sanders claims other countries "provide universal health care ... while saving money."

But that's not true.

Well, other countries do spend less. But they get less.

What modern health care they do get, they get because they freeload off our innovation. Our free market provides most of the world's new medical devices and medicines.

Also, "single-payer" care leads to rationing.

Here's a headline from Britain's Daily Mail: "Another NHS horror story from Wales: Dying elderly cancer patient left 'screaming in pain' ... for nine hours."

Britain's official goal is to treat people four months after diagnosis. Four months! That's only the "goal." They don't even meet that standard.

Bernie Sanders' plan has been tried, and it's no cure.

If it were done to meet American expectations, it would be ludicrously expensive. In 2011, clueless progressives in Bernie's home state of Vermont voted in "universal care." But they quickly dumped it when they figured out what it would cost. Didn't Bernie notice?

It's time to have government do less.

Basic Economics for Politicians

Economic Myths John Stossel | Jan 20, 2016




Hillary Clinton: "Of course we want to raise the minimum wage!"

Donald Trump: If we trade with China, "they suck us dry ... take everything. We get nothing!"

Bernie Sanders: "Ordinary Americans are working longer hours for lower wages."

But it's not true! Politicians are so ignorant about economics.

On his blog, Cafe Hayek, George Mason University professor Donald Boudreaux says his main job is showing students that much of what they believe about economics is wrong. I wish he taught presidential candidates.

Sen. Sanders simply gets facts wrong. Today Americans work fewer hours -- down from about 2,000 hours per year to 1,800 over the past 60 years -- and earn more. It's true that the rich got even richer, but the poor and middle class have done better, too, with about 40 percent higher salaries for the middle class and 48 percent more for the poor over the past 35 years. Politicians lie.

Donald Trump doesn't understand trade. Even if China "dumps" goods on America, we don't "get nothing" -- we get the goods. As Trevor Woolley posted on my Facebook page, "The fact that the free market is based on consensual transaction means that no trade can decrease anyone's wellbeing."

Right. Since trade is voluntary, no trade happens unless both sides think they will gain. Trade may eliminate jobs in some industries, but it creates jobs elsewhere, more jobs, and creates wealth for the vast majority.

Helping some American companies by restricting foreign imports, as Donald Trump vows to do, sounds nice, but you can't restrict goods available to American consumers without reducing competition. Protected from competition, companies get lazier, less productive. They innovate less. Prices rise.

Hillary Clinton's minimum wage will help some workers, but overall, it should be obvious it's a job killer. If a minimum really could increase wages without harm, why are politicians so cheap? Let's have a $1,000 minimum wage! But it's just basic economics: If you increase the price of something, people buy less of it. That applies to workers hired, not just goods.

More myths:

--Prices and wages are simply "set" by businesses.

--The rich get richer at the expense of the poor.

--Price increases after natural disasters are caused by "greed" and should be stopped by laws against "gouging."

--Rent control makes housing affordable.

--Business taxes are paid by business.

--Supporters of free markets are "pro-business" and (hence) "anti-consumer."

These are simple notions about economics into which our brains lazily fall. But none is true.

For example, supporters of free markets (like me) don't necessarily support business. I won 19 Emmy awards criticizing businesses. Corporations can be enemies of free markets because they don't want competition. They routinely lobby politicians to squelch it.

Boudreaux says his students arrive on the first day of class thinking businesses just "set" prices and wages. But businesses can't do that. Companies lose customers if they price goods higher than competitors do.

Wages can't be set at will either. Sure, what boss wouldn't like to pay a workforce one dollar per year? But other companies need laborers too, and those that underpay lose good workers. So the bidding process continues endlessly -- it's why the median household income in the U.S. is more than $50,000 a year. That wouldn't happen if bosses could just wake up and decide, "Let's pay workers less!"

The credit for good wages doesn't go to labor unions or politicians' passing a minimum wage, though they sure hog the credit. The credit goes to market competition and a growing economy. After all, 95 percent of workers earn more than minimum wage, and most jobs aren't unionized.

Politicians can't see the wonders that the market provides, but they somehow see everything government does as a blessing -- taxes that cut into people's pay and regulations that make it more expensive to produce. They don't see that their well-intended "pro-consumer" rules raise prices and reduce choice.

I wish more Americans learned basic economics from economists like Boudreaux -- or from me! At StosselintheClassroom.org, I offer teachers free videos that illustrate economic principles and debunk myths like the ones listed above.

Politicians, on the other hand, are lousy teachers.

Bake me a cake, or else!

Congratulations to John Stossel.  During the recent 'conversation' regarding Indiana's law, so many pundits were focused on 'religious' freedom.  This isn't just about religious freedom, but freedom in general.  Freedom to have opinions which which others disagree.  Freedom to use your property/skills/talents as you wish (or to not use them at all).  Don't use government to force people to do things you want - how can you do that and at the same time claim to be fighting 'intolerance'?  

I think it is silly to deny service to customers because a business owner doesn't like the customer, their behaviors, or their lifestyle.  But I do believe the business owner has the right to run his/her business as she sees fit (after all, she is the owner), even if they run it poorly.  

Discrimination and the New ‘Inclusive’ America

John Stossel | April 8, 2015

Bake me a cake, or go to jail!

Sadly, that is the new message from "inclusive" America. If you don't want to cater, photograph, preside over, sell pizza at, sell flowers to or otherwise participate in a gay wedding, you will be punished. If you don't want your business to pay for a kind of birth control that you consider murder, you will pay fines until your business is bankrupt.

Personally, I think both birth control and homosexuality are just fine, and gay marriage is as valid as straight marriage. But forcing everyone to act as if they think that way is just wrong. We have moved from "inclusion" to totalitarianism.

The list of people you must treat carefully keeps getting longer. Protected classes now include sex, race, age, disability, nationality, citizenship status, pregnancy, family status and more. I'm in two of those groups. You better treat me well!

Why force someone who disapproves of your actions to bake you a cake? Lots of other bakers would love the business. This debate has moved from inclusion to demanding that everyone adopt your values.

In a free country, bigots should have the right to be bigots. Americans should also have freedom of association.

American lawyers talk about special protection for religious freedom, and in the Hobby Lobby case the Supreme Court said you could escape onerous parts of Obamacare by paying lawyers a fortune and convincing judges that you are a closely-held corporation with religious objections. But why must you be religious to practice what you believe? This should be about individual freedom.

Of course, government must not discriminate. The worst of American racism and homophobia—slavery, segregation enforced by Jim Crow laws, bans on interracial marriage, anti-sodomy laws, etc.—was government-enforced discrimination. That was wrong, and it was right for the federal government to intervene.

But private actions are different. If I start a business with my own money, I ought to be allowed to serve only libertarians, people who wear blue shirts, whatever. It's my business!

My customers have choices. If I am racist or anti-gay, the free market will punish me. Enough people would boycott my business that I would probably lose money quickly.

It would actually be useful to see which businesses refuse to serve one group or another. Tolerance is revealed by how people behave when they are free. American law fosters the illusion that everyone is unbiased, while their real feelings remain hidden, making them harder to boycott, shame or debate.

Punishment from the market is enough. The heavy hand of law is not needed here.

However, given America's history, I accept that there are a few exceptions. In the South, people banned from a lunch counter had few other choices. The Civil Rights Act's intrusion into private behavior was probably necessary to counter the damage done by Jim Crow laws.

But today such coercion is no longer needed. Even in the difficult days of Reconstruction, after the Civil War, business began to bring together whites and blacks who might not always have liked each other but who wanted the best deals. It took several years for racists to get Jim Crow passed so they could put a stop to that erosion of the old racist ways. Government helped keep racism going for several more decades.

Individuals should be allowed to discriminate. I discriminate all the time. I favor people over others when I choose my friends, jobs, hobbies, clubs, religion, etc. So do you.

Elizabeth Taylor married nine times. Had she married again, should the EEOC have ordered her to marry someone from an ethnic minority?

A homophobic baker shouldn't stop a same-sex couple from getting married. Likewise, a gay couple shouldn't force a baker to make them a wedding cake. No one should ever force anyone to bake them a cake.

Gov. Lending for Housing Risks Another Crash

Government’s reckless lending putting US on track for another housing bubble


By John Stossel Published April 01, 2015
FoxNews.com



They're doing it again!

When the last housing bubble burst, politicians blamed "greedy banks." They said mortgage companies lent money recklessly, making loans to people with dubious credit, for down payments as low as 3 percent.

"It will work out," said the optimistic bankers. Regulators didn't disagree. Everyone said, "Home prices will keep going up." And home prices did -- until they didn't.

The bubble popped in 2007. Lots of people were hurt, and politicians took more of your tax money to bail out Fannie Mae and Freddie Mac along with reckless banks. They also gave the Federal Housing Administration a $2 billion bailout.

Then the politicians said, "We'll fix this so it doesn't happen again." Congress passed Dodd-Frank and a thousand new regulations. The complex rules slowed lending, all right. It's one reason this post-recession recovery has been abnormally slow.


But -- April Fools! -- the new rules didn't solve the problem of reckless lending, and it's happening again.

Because our government subsidizes home purchases, recklessness is invited. Somehow, Americans buy cars, clothing, computers, etc., without government guarantees, but politicians think housing is different.

Both parties support the subsidies.
The new rules didn't solve the problem of reckless lending, and it's happening again.

The left wants government to help struggling families, and the right thinks home ownership sends a wholesome cultural message. Both parties have cozy connections to home-builders and lenders.

At the time of the housing crash, most high-risk loans were guaranteed by the government. Those banks wouldn't have been as reckless if they had their own money on the line.

But they knew they could grant a mortgage to most anyone and the FHA would back it or government-sponsored companies Fannie Mae and Freddie Mac would buy it. That fueled the frenzy of lending.

After the bubble popped, I assumed the political class would learn a lesson, but they haven't. Today, even more American mortgages are guaranteed by government. More than 90 percent of new loans are backed by taxpayers. After the crash, Fannie and Freddie did raise their minimum down payment -- to a measly 5 percent -- but a few months ago, they lowered it again to 3 percent!

Are they crazy? A sensible congressman, Rep. Jeb Hensarling (R-Texas), tried to get an answer from the administration's new mortgage regulator, asking in a hearing, "All things being equal, is a 3 percent down riskier to the taxpayer than a 10 percent down loan?"

A pretty basic question -- but one that director Mel Watt still dodged, responding, "Mr. Chairman, that is generally true. But when you pair the down payment with compensating factors ... look at other considerations ... you can ensure that a 3 percent loan is just as safe."

What? That's nonsense. This is what happens when pandering politicians get to dispense your money. Watt is among the worst. When he was a congressman, he pushed for mortgage subsidies for welfare recipients who made down payments as low as $1,000.

Edward Pinto, who studies housing risk for the American Enterprise Institute, says policies like this put us on the way to another bubble: "The government is once again ... saying, let's loosen credit, give loans to people that potentially can't afford them, and everything will be fine because house prices will go up."

On my show, former FHA commissioner David Stevens, who did improve lending standards a bit after the crash (before Watt and his cronies weakened them), responded that this time the government has new regulations that will prevent things falling apart: "I think in the effort, post-recession, to make sure we never go down this path again, we have created more rules than ever existed in the history of this country."

But more rules aren't a solution. Government's regulators didn't foresee the problems last time. Fannie and Freddie got a clean bill of health right up until the collapse.

The solution is less government involvement. Canada doesn't have a Fannie, Freddie or FHA. Canada didn't have the trauma of a housing bubble. In Canada, lenders and homeowners risk their own money.

Does that mean Canadians cannot afford homes? No! Without all that government help, Canada's homeownership rate is higher than ours.