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2019-01-11 07:00 by Karl Denninger
in Politics , 402 references
[Comments enabled]  

Occasional Kotex has queefed forth an alleged Green New Deal plan, which is utterly stupid on its face.

But she's not alone; several apparent 2020 Presidential candidates have come out for part or all of her insanity.

A growing number of Democrats considering a presidential bid have signaled support for the sweeping "Green New Deal" pushed by Rep. Alexandria Ocasio-Cortez and other liberal lawmakers, underscoring how the 2020 field is being pulled further left by the influential progressive wing.

I've written many times on this general insanity before but stupidity bears underlining, so here we go again.

In no particular order:

  • "Green" energy is more expensive and environmentally disruptive.  It's not a little more expensive either; it's a lot more expensive, with few exceptions.  The biggest reason is that most "green" sources are intermittent -- that is, you can't rely on them.  Solar and wind are the two most-obvious examples.  In fact the only "green" energy source that tends to not be intermittent is hydroelectric, and the good places to obtain that are already in use.  Geothermal is one additional non-intermittent source but there are an insignificant number of places in the US where it is viable (this is not true in some other nations, such as Iceland.)

  • Intermittent energy sources must be fully backed up with non-intermittent ones or you get blackouts.  You must pay for the infrastructure of said backup source(s) and to man them so that when the intermittent event occurs you don't have to shut down electrical service.  The cost of this backup must be paid for whether it is in use or not and yet the green proponents never include that backup in their cost comparisons.

  • Green vehicles are a scam.  The batteries are both expensive and create a hellish amount of pollution and environmental damage in their production, they are range-limited which precludes trips of over 150 miles or so from home since that extends beyond their return range (there goes any sort of "road trip"), the batteries have a cycle life after which they must be replaced (at extreme cost, far beyond the cost of any internal combustion engine) and they involve multiple additional inefficiencies due to the power delivery and charge/discharge cycles.  Lithium cells are also entirely intolerant of below-freezing temperatures; they can discharge in such conditions but cannot be charged below 0C without critical damage that leads to fires being taken, so the in-car systems must prevent that from happening and away from "shore power" (a wall plug) the energy required to do so depletes the pack.  There is no economically-rational technology to recycle lithium batteries either, unlike traditional starting batteries for cars (lead/acid chemistry) which can be infinitely recycled at low cost.  Finally there are both partial hybrid and advanced ICE technologies available that make far more sense overall; the most-promising is the to-be-delivered-this-year Mazda HX (compression-ignition) engine that should return an honest 50mpg on the highway in a midsized car.

  • Forcing environmental controls on American homes sounds good but there's a reason few people do it now -- the net gain in expenditures on a discounted cash flow basis is smaller than the cost.  For example changing out windows does save energy.  However, the windows are expensive enough that it would be ten to twenty years before you saved enough to pay for them and by that time they'd be both worn out and the carrying cost of the debt would have doubled the expense.  On a discounted cash flow basis, in other words, it makes no sense whatsoever to do this.  Now if your windows are worn out and need replacement then the small additional expense of more energy-efficient models is worth the investment, since the extra cost is perhaps 10% of the total.  But ripping out perfectly-functional windows is another matter.  Home insulation is in the same category -- it's cheap and easy to add insulation to an unfinished attic.  It's extremely expensive to rip out the inside of all exterior walls and do the same thing for them, or to further insulate a finished attic space!  Putting solar panels and inverters in an existing home or mandating them for new homes will almost never pay for itself; both have a service life and again on a discounted cash flow basis the numbers do not work.

  • Eliminating "greenhouse gas emissions" from agriculture is virtually impossible.  Farm tractors, for example, typically run on diesel.  What are you going to replace those with?  Cows fart -- a lot.  Are we banning meat entirely?  It would appear so if the intent of this "proposal" is to eliminate greenhouse gas emissions from agriculture!

  • The premise of eliminating "global warming" is a farce.  Not only is America 330 million people against some 7 billion in the rest of the world most of those people are in much earlier industrial stages of development.  They are not going to keep living in the proverbial straw hut.  We could cut US CO2 emissions to zero and it would not change a thing in terms of actual outcomes.  Of course cutting CO2 emissions to zero would be impossible other than by killing all the people, since we all expel it ourselves.  Those who are suggesting such a path may begin with themselves, and don't forget that you may not have any children either.  Of course this results in the extinction of the nation and thus is idiotic on its face, but nobody seems to be willing to point that out.

  • The entire premise that man causes warming through CO2 emissions is not proved; if trillions are spent and do nothing, either because we're not the cause or we can't get the rest of the world to go along then we've flat-out wasted the money.

These people obviously support something "green" all right: They've been smoking something green and a hell of a lot of it at that.

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2018-12-26 07:00 by Karl Denninger
in Politics , 303 references
[Comments enabled]  

So the Democrats don't want a wall now, after saying they did back when there was no way they were going to get one.

Just like the Republicans wanted to repeal Obamacare knowing Obama would veto every bill (and did); as soon as they had someone who would sign such a bill in the White House they couldn't pass it.

In other words they're all liars.

There's a common chestnut in negotiation that many people hold dear but it's a lie; that is, you can never return above wherever you are at this moment.

Let's say you start negotiating with a $10 million price; that's your offer to sell.

To make a "deal" you must have a meeting of the minds; that if, an offer and acceptance of the same offer.  You also need, for it to be a binding contract, consideration (something of value on both sides) and mutual obligations (a contract cannot require someone to do something in exchange for nothing.) Finally, the parties have to be competent and capable of performance (you cannot, for example, enter into a contract to jump over the Empire State Building since that is a physical impossibility.  Note that political, personal or financial difficulty is immaterial; that an agreement will bankrupt you doesn't release you from it -- only physical impossibility does!)

You go back and forth and over time you now are at $8 million.  However, there has been no meeting of the minds; that is, while you seem to be in the same place on money you're not on the other elements of the deal. An "acceptance" that contains changes of any material sort is in fact a rejection and a counter-offer of the original proposal.

The salient point is this: Until all material elements are agreed in point of fact none are!

The common chestnut is that if you start at $10 million and get to $8 million you can't go back above $8 million, say much less $10.


A counter-offer or silence in response to an offer is legally identical to the original offer never having been made.  There is thus exactly nothing -- not in law or ethics that prevent you from saying "Not $10 million which you refused, but now the price is $15 million!"

The other side may freak out but that's tough crap.  If they wanted to take the $10 million offer they could have; their refusal now does not obligate you to take it later.  In fact that's one of the risks of saying "No" -- the other side may turn around and actually boost their deal terms, not reduce them.

If you negotiate frequently it is in fact a good practice to do this once in a while, just like you occasionally bluff at the poker table, literally throwing away money on a hand you know is a loser and intentionally let the other players see your losing cards.  Why?  Because if you only bet the cards you know you will win on at poker when you bet everyone knows you have the cards.  There is a great deal of value in placing in your opponent's mind uncertainty; it is in fact necessary for you to do so in order to obtain results that are better than chance because over enough time everyone at the poker table gets the same number of aces, kings, queens and deuces.  The only way to beat an equally-skilled player is for the other player to think you have crap when in fact you don't and thus he calls with a losing hand!

Trump made several promises to the electorate that got him into office.

One of them was The Wall; an end to Illegal Invasion and both the job theft and crime that comes with it.  It does not matter if illegals commit more or fewer crimes per-capita than Americans; what matters is that if all the illegals are gone none of the crimes they would otherwise commit will happen at all.  In addition there is a very significant financial drain, both directly and indirectly, placed on the Treasury and especially on state and local governments from these invaders.  All citizens pay for this through their taxes.  That illegals pay some taxes (e.g. sales tax, etc) is again immaterial; essentially none of them pay anywhere near their fully-laden cost of being here.

The other was to stop the Medical Monpolists.  Trump in fact had three platform planks on that issue, not just one (as with The Wall.)  All three disappeared on election night, never to be seen again.  This is the issue that is driving federal deficits, The Fed's malfeasance in pumping and maintaining bubbles and your cost of living, both directly and indirectly.  Not only has this murdered middle-class America in terms of health insurance costs and made starting new businesses outright stupid since the second $20,000 a single person makes has an effective tax rate (due to subsidy phase-out) of more than 70% it is also what has driven property taxes upward since those taxes pay pension and retirement medical costs along with those for incarcerated people, among others.

These machinations, which are now being forced to end 10 years after the crash in 2008, are why the market is in the tank.  If the games do not stop by 2024 Medicare will run out of money and be forced to curtail care for Seniors or attempt to throw the entire deficit in its spending into the Federal Budget.  At that point The Fed will lose control entirely as will Congress, since effectively shutting off Medicare for Seniors will prove politically impossible.  We are talking about $2 trillion a year deficits forever once this occurs and the market will not allow that to happen.

What Trump must do to win re-election is thus not only fulfill his promise on the Wall in its entirety but also blow up the game when it comes to the medical monopolists.  He has no choice and he must do it now; any "deal" that does not accomplish both is in fact capitulation on his part and a guaranteed loss in 2020.

Further, the longer the shutdown goes on without the world ending the more obvious it is that 25% of the Federal Government is actually unnecessary.  That adds yet another demand which I'll get to shortly.

In short to end the shutdown Trump must now demand a clean bill containing all of the above on his desk:

  • $30 billion for a complete wall.  No exceptions, no compromises.  Not $5 billion or $2.5 billion, $30.  Period.  This is less than (by a lot) we were spending in Syria and Afghanistan, both of which we're leaving.

  • 100% E-Verify with control numbers submitted on all 941s and a $50,000 per-person, per pay period fine to any employer without, plus a year in prison consecutively for each person employed without.  A one-year grace period for all existing employees (to be run through E-Verify) is reasonable, but "new hires" must be screened starting immediately.  No exceptions, including "domestic help" and similar.  Get caught, go to jail and pay the fine for each employee you illegally hire.

  • Nobody who comes into the country illegally is eligible for asylum or release into the United States -- no exceptions.  If you wish to attempt to claim asylum you must do so while honoring our laws.  If your first act in the United States is to dishonor our laws and claim immunity from same your claim is void.

  • Revocation of "birthright" citizenship for any person born here where both parents are not either permanent residents or citizens.  The 14th Amendment contains "and subject to the jurisdiction thereof"; an illegal invader or "tourist" who comes here and lies as to their intention has by their actions refused jurisdiction of US law while at the same time is subject to another nation's jurisdiction.  This should not need to be clarified but a simple bill will do so, and Trump must insist that it is.

  • All medical monopolies are prosecuted and all existing laws, particularly those on drug reimportation and free trade in prescription medications, are hereby repealed.  To actually solve the problem Trump could demand that this bill, or something substantially similar, be included.

  • Nobody gets paid for time not worked during a shutdown, ever, and Congress never gets paid for the time during a shutdown at all whether they work or not.  Period.

Again, since the Democrats refused Trump's offer of $25 billion he is under no obligation to let them take a lesser deal now.  In fact he not only should but must not -- instead he must make an immediate and very strong demand, from which he won't move, for a complete fiscal fix plus ending illegal immigration permanently.

Let's not kid ourselves though -- the medical monopoly collapse will temporarily cost jobs and the economy will suffer a deep, but spike-style recession.  This is good, not bad, as those employees laid off will be redirected into other pursuits while the cost of employing persons will drop like a stone.  At the same time property taxes and medical expenses for ordinary Americans will drop precipitously while the Federal Deficit will end and in fact go into surplus.

In other words the American people will benefit from:

  • Far lower state and local taxes (thus "SALT" is no longer an issue)
  • Far lower direct medical costs (especially if currently on a high-deductible plan)
  • The federal budget going into surplus means savings and earnings will go further every year instead of depreciating.

The latter is huge; instead of having your purchasing power damaged by 50% every six or seven years you will instead have it double every 20.  The difference over a working person's life will be extraordinary; it will literally multiply the wealth the average American accumulates over their working life by a factor of five to eight or more.

In addition it will make Medicaid unnecessary entirely (zeroing it from the budget; that's $300+ billion alone) and permanently resolve Medicare funding.

If it is done now the economy will be roaring back in the summer and fall of 2020; Trump will of course get credit for that and win reelection easily.

If it is not done now and the medical scam collapses instead into the maw of a large bear-market drawdown he not only loses in 2020 the resulting inability to fund what 3/4 of the people in the nation are dependent on may spark a civil war.

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2018-12-18 07:00 by Karl Denninger
in Politics , 325 references
[Comments enabled]  

It's math.

The election was held in 2016.  In Florida, in the last two years, 263,946 foreigners were granted permanent lawful residence in the State of Florida.  Exactly zero of them are interested in Republicans.

Donald trump won the State of Florida by 112,911 votes or fewer than half the number of migrants granted permanent residency in the last two years alone.

At some point most of those people will become citizens and vote.  But this is not a two-year trend.  The year prior 118,873 people obtained lawful permanent residency in the state.  2018 is likely to be similar; there is no reason to believe it has changed.  Certainly, our immigration policy writ large, when it comes to actual on the ground facts, has not changed despite all the bloviating from Trump.  It is thus entirely reasonable to expect that by 2020 Florida will have several times the number of new Democrat voters required due to migration to destroy any chance he has in this state.

In short Trump cannot win Florida in 2020 and without Florida he cannot win re-election.

Trump won by a large margin in Ohio -- nearly 477,000 votes.  However, will he win next time around with the GM plants all shutting down?  That's a good question; it's not just all the people employed at the plant (who won't vote for him) it is also all the people who provided goods and services to the plant and those who worked there that will also be screwed.

Is that enough to cost him the election there?  Maybe.

But this much is certain -- even if he hangs on to Ohio (which I think the GM move may have destroyed) he cannot win without both Ohio and Florida, especially considering that no other state is trending "Red" that has any sort of EV punch.

That's the electoral math folks.

The Republicans are looking for an "autopsy." They're idiots -- this is a math problem, pure and simple and the data is right here.

Put a fork in Trump; unless he dismantles all the medical monopolies, or something equally vital to virtually everyone in the nation (I remind you that for the 80% of people not employed in health care killing those monopolies would instantly boost their income by at least 15%!) the Democrats could run Snoopy and win.

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2012-10-04 17:19 by Karl Denninger
in Politics , 1692 references

Here's The Bill that either Obama or Romney could propose and demand be passed.

(For that matter so could Gary Johnson, and if he had a lick of sense, he would as this would be a "break the glass" moment for the Libertarians, but I digress...)


An Act to redress the imbalances in the economy related to health care products and services, enforce the law, improve patient outcomes, enhance access to treatment modalities, decrease costs and open competition in the Medical Industry.


Article I - Competition

  1. The Sherman, Clayton and Robinson-Patman Acts shall apply to medical commodities, services and related products without exception, including but not limited to pharmaceuticals, hospital services, clinical services, medical devices, implements, drugs and supplies, financial services such as payment plans and health insurance or any other service or good used or provided for the purpose of promoting health, treating or diagnosing disease, provided that said goods, products or services are marketed, sold, advertised or used anywhere inside the United States and its territories.

  2. Medical providers shall post via conspicuous method and bill at a level price for their services to all users of like kind and quantity without regard to the means of payment, subject only to reasonably-defensible discounts for volume of service or product rendered or sold.

  3. All State CON laws and other regulations that serve to prevent, deter, bar or impair medical good or service providers from entrance or exit to or from a market area, where said facilities do or may serve customers on an interstate basis, are hereby preempted and void under the Interstate Commerce Clause to the US Constitution.

  4. The doctrine of first sale shall be applied to all medical and health-related commodities, pharmaceuticals, supplies and goods, including but not limited to drugs, medical devices, implements and health-related products, provided that such goods are truthfully and lawfully labeled as to their origin, manufacturer and contents, irrespective of their point of original purchase.

  5. No manufacturer, distributor or other seller of medical goods or commodities may prohibit by contract or other provision the effects of Article I Section 4, and any such clause in existing contracts for sale are hereby declared void as a violation of public policy.

  6. Medical goods and commodities permitted or lawfully offered for sale in nations and territories other than the United States may be imported, marketed and sold for consumption and use in the United States irrespective of FDA approval provided that any drug, device, implement or commodity not approved by the FDA shall be conspicuously labeled that it does not have FDA approval in no less than 14 point white print on a black background on all bulk and, where applicable, individual use or dispensed packages.  All such unapproved drugs, devices, implements and commodities shall bear or have enclosed with their packaging truthful information as to their exact contents, purity, method of action, expected benefits and known risks and side effects of its use.  All such unapproved drugs, devices, implements and commodities shall be explicitly disclosed to the consumer before use or administration by any licensed medical facility or physician and an explicit release shall be obtained from said consumer in advance of the use of such unapproved drugs, devices, implements or commodities.


Article II -- Access To Medical Care And Records

  1. EMTALA is hereby repealed.

  2. Privately-run and operated medical clearing firms are hereby authorized who citizens and visitors to the United States may register with to document verifiable means of coverage or payment for potential medical services and products.  These firms shall be regulated only as to privacy of information maintained.

  3. Such registration shall include not only insurance coverage by traditional health insurance firms but also registration of escrowed funds or other unencumbered and liquid assets available for disbursement in the event of unplanned and emergency medical expense.

  4. Medical providers may query any such registry only for a bona-fide purpose of determining whether a proposed procedure is covered for payment, and shall not issue more than one query per patient, per medical incident without that patient or their agent's explicit approval.

  5. Registries shall not provide information on coverage or escrowed and liquid limits beyond a response indicating whether the explicit and queried amount proposed to be billed is or is not covered.

  6. Patients shall own all records in any such registry, including the record of all inquiries and shall have a right of inspection of any such records during reasonable business hours and by reasonable means.

  7. Medical records shall be the property of the consumer to whom they pertain, and shall be provided to and may be maintained by the consumer upon his or her reasonable request.  No provider shall provide access to or permit the copying of any such record to any third party without the explicit authorization of the consumer or his or her lawful representative, except where applicable statute mandates the disclosure of said records such as in the case of communicable disease or mandatory reporting statutes.

  8. A registry or medical provider that violates any provision of this section shall be liable for all damages that a consumer shall suffer, but not less than $25,000 (twenty-five thousand dollars US) per incident in liquidated damages if the actual amount of damages shall be less.

  9. EMS providers and systems shall maintain a registry of charitable hospitals and other providers of medical care willing to provide services to those who have no verifiable or actual means of payment so as to be able to expeditiously make decisions on transport of indigent patients, and shall update their listing of such available care facilities not less than once daily.


Article III - Enforcement

  1. Consumers, employers or other parties harmed by violations of this act shall have a private right of recovery for all harm sustained in triplicate, but not less than five thousand dollars ($5,000) for each occurrence.

  2. Each day that any such violation occurs shall constitute a separate and distinct civil offense.

  3. Willful and intentional violations of consumer privacy, or any act of conspiracy between parties to violate any provision of this act shall be a Federal Felony Criminal Offense punished by not less than 2 nor more than 20 years of confinement and a fine of not less than $10,000 or more than $100,000 for each count, except that if permanent physical injury shall occur to any person as a consequence of said violation the penalty shall be not less than 10 nor more than 25 years of confinement and a fine of not less than $50,000 nor more than $250,000 for each count, and if death to any person shall occur as a consequence of said violation the penalty shall be not less than 25 years to life of confinement and not less than $100,000 nor more than $2,000,000 for each count.


That would pretty much do it, I suspect (that is, cut the cost of medical care by about 80% -- if not more.)

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The piece sent "over the transom" taking a shot at Governor Johnson's possible motives for running as a Libertarian contains some interesting theories.

However, it also contains some disturbing claimed facts, and one thing I did do before publishing that piece was check them.

Unfortunately the facts cited are correct and Gary is being less-than-honest.

This is what his campaign web site claims on his record:

  • Left office with New Mexico as one of the only four states in the country with a balanced budget
  • Left New Mexico with a budget surplus
  • Used Line Item Veto thousands of times to trim the budget
  • Vetoed 750 bills during his time in office; more than all other governors combined
  • Cut over 1,200 government jobs without firing anyone
  • Created more than 20,000 new jobs
  • First New Mexico Governor to challenge education status quo and propose statewide voucher program
  • Restored State General Fund reserves to more than $222 million from a low of $28.1 million
  • Limited annual state budget growth to 5.0% during eight years in office
  • Cut taxes 14 times while never raising them—a first for New Mexico
  • Vetoed 32% of the total number of bills submitted for his signature

This all sounds good, right?

Well, no.  Yes, the budget rose 5% per year during his time in office.  Unfortunately that's a roughly 50% increase in the size of the State Government during those eight years.

That might be ok if the rate of increase was less than the rate of inflation.  So let's check the rate of inflation and see if Governor Johnson was telling the truth or if he's being less-than-honest with the public.

In 1995 the CPI index stood at 150.3.  In 2003 when Johnson left office it stood at 181.7.  That's a 20.9% increase over the same eight years.

In other words Gary Johnson increased spending in New Mexico at approximately 240% the rate of inflation -- or about double and a half as fast as prices rose.

Do you define that as "fiscally conservative" or "responsible"?  I do not.  Further, can you find any part of spending in this chart that he actually cut during his time in office or did every single one of these bars get bigger?

 by genesis 


Then there's the claim of a "balanced budget".   That's a nice claim.  Unfortunately it was achieved by lying, just as it has been in the other states, because the amount of debt the State Government had outstanding nearly doubled during those very same years.

 by genesis

That's a gross $2.78 billion increase in debt during those years.  The population of the state was (as of 2003) 1.87 million, so Governor Johnson added about $1,500 in debt to the financial responsibility of every man, woman and child in New Mexico during his administration and that's only for the state itself -- municipal governments added another billion, so the total was well over $2,000 per person.

Is that "fiscally conservative"?

Ron Paul has often been called "Dr. No" for his refusal to accede to more spending and bigger deficits.  While he's one man in Congress, you can rarely if ever find a bill that he has approved which increases spending and public debt. 

Gary Johnson, on the other hand, was the man with the pen who signed the spending bills in the end analysis.  He is the one who was responsible for approval of the budget and the actual spending and borrowing profile of the State.  And he has repeatedly claimed, and claims today, a huge number of vetoes.

It's true that Governor Johnson vetoed a huge number of bills.  But the implication he wishes you to believe, that he shrunk the size of government in New Mexico and thus that he also shrunk residents' responsibility, both directly in current government spending and in the debt that was left for both residents who voted for various policies and the children and unborn unable to vote for or against those policies is simply false.

Governor, you have some explaining to do if you expect me to support or vote for you, as I believe you have actively and intentionally misled not only myself personally but the Libertarian Party in general on the actual facts when it comes to your spending and debt record as Governor.

Nobody should vote for this man believing he will cut their debt load or actually shrink one single line item in the Federal Budget, as his history shows that over eight years as Governor of a small state he saddled every single resident with more than $1,500 worth of additional debt, sanctioned municipal and local governments adding roughly $1,000 more, and in fact added to State Spending in all of the categories he claims he will "control" or "cut" including pensions, health care and education. 

Not one of those areas was cut in size during his time in office.

And that, my friends, is a fact.

Ps: Before someone pipes up and tries to claim that population increases were responsible for this, the population of New Mexico in 1995 was ~1.7 million.   In 2003 it was 1.9 million, or 12% higher, an approximately 1.4% annual expansion.  It is thus immaterial to the expansion of the State budget and debt, and one cannot lay off these expansions on "growing population"; any such attempted claim is a futher lie.

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