Daniel Hannan Sums Up The US Political System In 140 Characters (Or Less)

Outspoken MEP Daniel Hannan summed up the day’s political machinations rather aptly

 

 

 

Of course, as is the “rule” it would seem in US politics, what one has said in the past is irrelevant compared to what one needs now…

 

 

 

But back to Daniel to explain…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_DO58hu0SlU/story01.htm Tyler Durden

Have Larry Summers And Paul Krugman Just Had Their Dimon/Dudley Moment?

Submitted by F.F.Wiley of Cyniconomics blog,

With my kids getting older, I no longer get much chance to play “What’s wrong with this picture?” This is the game you’ll occasionally find on a children’s menu that’s based on a picture with, say, a guy holding an upside-down umbrella while pulling a child on a leash and pushing a dog in a stroller.

A new opportunity arose, though, with Larry Summers’ recent speech at the IMF and Paul Krugman’s follow-up blogging. The two economists’ messages are slightly different, but I’ll combine them as if they came from the same person, whom I’ll call SK. And then I’ll try to figure out what’s wrong with their “picture,” which SK might boil down like this:

The fact that CPI inflation was subdued in the last decade tells us there’s something missing in our understanding of the housing bubble. Without inflation, there couldn’t have been excess demand or irresponsible monetary policy. But how is this reconciled with the recovery’s inadequacy? If demand was normal and policy responsible, why is the economy in such bad shape? [Dramatic pause.] Well, maybe, the “natural” real interest rate is about -2 or -3%! And because the zero lower bound prevents us from achieving this rate, we need even more stimulus (of all types) than we thought. Essentially, we need to manufacture bubbles to achieve full employment equilibrium.

With this new line of reasoning, SK have completely outdone themselves, but not in a good way. Think Jamie Dimon’s infamous “that’s why I’m richer than you” quip. Or, Bill Dudley’s memorable “but the price of iPads is falling” excuse for increases in basic living costs. (Dudley needed to be reminded that you can’t eat an iPad.) Dimon and Dudley managed to encapsulate in single sentences much of what’s wrong with their institutions. Yet, they showed baffling ignorance of faults that are clear to the rest of us.

Being academic economists, SK haven’t managed to reduce their Dimon/Dudley moment to a one-liner. But in the argument above, they’ve collected in a single place a remarkable number of the flaws in their approach. I’ll take a crack at listing them below, or at least a few of the more obvious ones. Here are five possible problems with SK’s “picture”:

#1: Low inflation does not equal reasonable demand and responsible policies

As we discussed here, the Fed misinterpreted the consequences of disinflation throughout the boom. Greenspan and Company lowered interest rates when inflation threatened to fall below their target of 1 to 2%, and this only worsened the malinvestment that continues to hold back the economy today. But inflation was subdued because a certain country lifted hundreds of millions of people out of poverty by building new factories and paying wages of a few dollars a day. And this country then loaned us the proceeds from its cheap exports, adding to our credit boom.

In other words, the Fed’s interpretation of inflation was more flawed than usual, even backwards. Disinflation was explained by cheap imported goods, which meant abundant foreign capital, which meant a larger credit boom, which meant too much demand. Contrary to SK’s narrative, policymakers made huge errors by not only failing to recognize that this dynamic is unsustainable, but by encouraging it with cheap money.

#2: The Phillips curve? Really?

In addition to applying the faulty logic of the Fed’s inflation target, SK revert to early Keynesian misconceptions. They rely on the idea that inflation becomes a problem if and only if stimulus continues beyond full employment (and even in the short-term). This Phillips curve thinking was discredited in the 1970s. We saw then that high inflation can coexist with high unemployment and weak demand. We saw more recently that low inflation can coexist with low unemployment and excessive demand. In either case, inflation is clearly more complicated than SK believe it to be.

#3: Mandating Keynesian planners to achieve “equilibrium” is just asking for trouble

As part of their embrace of the Phillips curve in the 1960s, Keynesians estimated that the unemployment rate could be pushed as low as 4% without triggering inflation, and set out to do just that. In other words, 4% was said to be a “full employment equilibrium.” But this notion of equilibrium is deeply flawed, as is the Keynesians’ confidence in achieving such a target. Their first instance of active policymaking – in the Kennedy and Johnson administrations – led eventually to the Great Inflation that was said to be impossible, while we’re still waiting on that 4%. Since the Great Inflation, Keynesians redesigned their theoretical models while concocting many variations, but none of them explain the economy’s true behavior.

One fundamental problem with the Keynesian approach is this: The benefits of policy stimulus are invariably followed by costs that the models fail to capture and planners fail to consider. In the world of Keynesian theory, for example, an economy can cruise along at its full potential without ever suffering the consequences of a reversal of past stimulus. In the reality of a modern credit-based economy, on the other hand, good times lead to imbalances that accumulate like dead wood in a dry forest, which then ignites after stimulus turns to restraint. And not only have Keynesian (including monetary) stabilization policies repeatedly led to instability, but there’s an enormous pile of dead wood at the Treasury Department (public debt) that’s yet to catch fire.

There are many other dimensions to this topic, but I’ll leave it alone for now to address other specifics in SK’s hypothesis.  I do recommend reading Arnold Kling’s ”PSST” theory, though, which is a quicker and more current counter-argument to Keynesian equilibrium concepts than, say, the two volumes and 1095 pages of Joseph Schumpeter’s Business Cycles.

#4: Your father’s natural interest rate doesn’t fit the SK narrative

While there are different notions of “natural interest rates” embedded in specific Keynesian models, Krugman claims that his use of the term matches Knut Wicksell’s classic definition from 1898. Wicksell’s natural rate arises from the preferences of private borrowers and lenders in the absence of central bank interventions, or even money, for that matter. In other words, it’s a purely market-driven rate for private, not public borrowers. Although Wicksell theorizes that several different formulations equate to the same figure (for example, his natural rate is also the marginal return on capital), none of these could plausibly b
e said to have been negative through the last cycle, as SK speculate.

Worse still, Wicksell held that prices are neither rising nor falling at the natural rate, implying that SK’s logic is upside-down.  Under Wicksellian thinking, positive inflation suggests that natural real rates would have to be higher, not lower, than observed market rates, in order to come closer to his stable price criterion.

#5: Umm, bubbles are really not a sensible route to full employment

We’re clearly in Dimon/Dudley territory here, and Tyler Durden already posted the ultimate rejoinder. I’ll just add an observation.

Recall that Krugman was widely lambasted for this housing bubble recommendation he offered in 2002:

[My] basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. (By “moribund,” I mean that investment falls chronically short of savings at the existing interest rate, which is higher than the natural rate, and this prevents the economy from reaching full employment equilibrium.) And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Okay, full information: That’s not the exact excerpt. I added the sentence in parenthesis, just to show that Krugman’s latest call for bubbles uses the same logic as the 2002 recommendation.

Now, Krugman tried with all his might to convince us after the bust that he didn’t really mean what he wrote. But it’s easy to see through these denials – there’s no other way to interpret the 2002 article. And today, he’s making virtually the same recommendation once again.

These inconsistencies beg the question: What does Krugman really want us to believe? Does he recommend bubbles for a stagnant economy, or not?

To explore possible answers, I’ll turn to my usual speculation about personal incentives and motives. As soon as I saw the renewed call for bubbles, I wondered what was behind it. At first, I saw nothing more than a refreshed case for more stimulus. But maybe there’s more to it?

Consider that both economists take regular hits for their complicity in the mess we’re in today – Krugman for his housing bubble advice and short-termism, Summers for blocking financial regulation while leading the charge against those who suggest our banks are a tad unsafe.

Consider also Krugman’s observation that “[Summers] says, a bit fuzzily but bravely all the same, that even improved financial regulation is not necessarily a good thing – that it may discourage irresponsible lending and borrowing at a time when more spending of any kind is good for the economy.”

Can you see where I’m going with this?

If SK convince their peers that a bubble was actually needed in 2002, while regulation would have been counterproductive, they can pull off a 180° on their legacies. Instead of being “bums who brought us the housing bust,” they can be “heroes who delivered full employment despite a negative natural real interest rate.” Even without broad acceptance of their new idea, they can at least rationalize past decisions in their own minds.

Now, I have no idea if this is really what’s driving them. They may themselves be unaware of their motivations. But it seems reasonable to point out that their new narrative overturns past errors. You can almost imagine SK in zebra stripes, emerging from a booth review to inform the crowd there was no foul on the previous play. Thanks to the notion that bubbles are not only within the rules, but encouraged, Keynesians retain the ball with their field position intact.

And up in the luxury boxes, by the way, sits Jamie Dimon, as he’s richer than you. His guest, Bill Dudley, quietly gnaws on an iPad.

Welcome to today’s economy.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gcayd_PWkbQ/story01.htm Tyler Durden

SEC Compliance Examiner Arrested For Non-Compliance, Misreporting Stock Holdings

Perhaps this should have been a “Humor” post but in possibly the most ironic news story of the day, New York-based SEC employee Steven Gilchrist was charged with three counts of making false statements regarding the nature of his personal financial holdings. As WSJ reports, the 48-year-old compliance examiner at the agency, allegedly certified that his stock holdings were in compliance with the agency’s ethics rules, when in reality he had held shares of six companies that agency staffers are barred from holding. The SEC is “very disappointed that an employee allegedly made false statements to conceal prohibited holdings after being told by our ethics office to divest.” Gilchrist, unlike Cohen, faces a maximum 15 year sentence!

 

Via WSJ,

Mr. Gilchrist was arrested Tuesday morning and released on his own recognizance after a court appearance, according to the Manhattan U.S. Attorney’s Office.

 

The arrest is tied to a recent probe of the personal financial holdings of some SEC employees in New York by U.S. prosecutors and the SEC’s internal watchdog, which The Wall Street Journal reported on last week.

 

 

As an SEC examiner, Steven Gilchrist had a duty to avoid conflicts of interest that might compromise or even appear to compromise his integrity,” Manhattan U.S. Attorney Preet Bharara said in a news release. “Instead, as alleged, he violated the SEC’s internal rules about stock ownership and repeatedly lied to the SEC about his holdings.”

 

 

Mr. Gilchrist allegedly told the agency that he no longer held the stocks and also certified using the agency’s computer compliance system that his holdings were in keeping with the rules when neither was true, the complaint said. Mr. Gilchrist also allegedly bought 100 shares of J.P. Morgan Chase & Co. stock online through the joint account without getting the required approval for purchase with the SEC.

 

 

The release said Mr. Gilchrist faces a maximum sentence of 15 years in prison.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Wr9DlmxArew/story01.htm Tyler Durden

Philly Cop With History of Brawling Gets Into Fight With Teenage Daughter’s Classmate

cop might think she belongs hereOfficer Tamika Gross of the
Philadelphia Police Department had at least one complaint filed
against her for fighting on duty, in 2009, and was also the subject
of an internal affairs report in 2012 that noted she had “a history
of getting in off-duty incidents involving her own children when
they engage in disputes with area juveniles,”
according
to the Philadelphia Daily News.

Gross, however, is apparently back at it, being investigated for
jumping into a fight between her 16-year-old daughter and another
14-year-old girl, Tashiyya Higgins, at the high school. Gross’
daughter saw a picture of the other girl with her ex-boyfriend and
the two girls exchanged messages over social media. The boy was
actually Higgins’ cousin. Gross went to the school to complain that
her daughter was being harassed by Higgins but Higgins’ mother says
school officials decided it was actually the other way around,
suspending the cop’s daughter.

Is this where the officer decided to step it up as a mom and
teach her daughter a lesson about bullying? Not quite.
Via the

Daily News
:

When Haggins and her friend walked outside the main
door later that day [after Gross came to the school to complain and
had her daughter suspended], she said, she saw Gross’ daughter jump
out of a silver Dodge Charger.

“She said, ‘Mom, that’s her right there!’ ” Haggins recalled. “Her
mom got out of the car and said, ‘Sure, you all want to fight over
an autistic boy, go ahead and fight.’ “

Haggins-Montgomery said the boy is not autistic.

Haggins said she and the other girl “got to fighting” and were
“throwing punches” while Gross and her son watched by the
car.

Haggins recalls hearing Gross’ son say during the brawl: “Mom,
don’t jump in there, it’s not your fight.”

Gross didn’t listen, Haggins said. “I was beating her up, and her
mom jumped in and hit me in my eye,” she said. “That’s when
everyone else started breaking it up.”

During the fight, one of Haggins’ friends called her mother.

“I hear her girlfriend say ‘They jumpin’ Tashiyya, they jumpin’
Tashiyya!’ ” Haggins-Montgomery said. “All I can do is panic
because I can hear my child screaming ‘Her mom, her mom hit me!’

Haggins-Montgomery said she learned from a police supervisor who
responded to the fight that Gross is a cop.

“Even if she didn’t want to be a cop that day, she could have been
a parent and been like, ‘No. You don’t do stuff like that,’ ”
Haggins-Montgomery said. “You don’t jump in a kids’ fight. What
gave you the gall to do that? You’re a police officer. I’m sure
they train y’all on different things like this.”

“More training” may likely be the exact response of the police
department to the case. Might
zero tolerance

work better for cops

from Hit & Run http://reason.com/blog/2013/11/21/philly-cop-with-history-of-brawling-gets
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Medical Marijuana Raids in Colorado Raise Questions About Federal Forbearance

Today
federal agents, assisted by local police, staged the biggest
crackdown on marijuana dispensaries in Colorado since the state
legalized cannabis for medical use in 2000. The Denver
Post

reports
that the raids hit more than a dozen dispensaries in
the Denver area, plus businesses in Boulder and elsewhere.

Jeff Dorschner, a spokesman for John Walsh, the U.S. attorney
for Colorado, said the operation “comports with the
Department’s recent guidance regarding marijuana
enforcement matters.” The August 29 memo
to which Dorschner refers indicated
that the feds would not interfere with marijuana businesses that
comply with state law unless their activities implicated one or
more of these eight “enforcement priorities”: 1) “preventing the
distribution of marijuana to minors,” 2) “preventing the diversion
of marijuana from states where it is legal under state law in some
form to other states,” 3) “preventing drugged driving and the
exacerbation of other adverse public health consequences associated
with marijuana use,” 4) “preventing the growing of marijuana on
public lands,” 5) “preventing marijuana possession or use on
federal property,” 6) “preventing revenue from the sale of
marijuana from going to criminal enterprises,” 7) “preventing
violence and the use of firearms in the cultivation and
distribution of marijuana,” and 8) “preventing state-authorized
marijuana activity from being used as a cover or pretext for the
trafficking of other illegal drugs.”

Which of those concerns triggered today’s raids? Walsh’s office
won’t say, at least not yet. “Although we cannot at this time
discuss the substance of this pending investigation,” Dorschner
said in a written statement, “there are strong indications that
more than one of the eight federal prosecution priorities
identified in the Department of Justice’s August guidance memo are
potentially implicated.”

The raids come just six weeks before Colorado’s state-licensed
pot shops are scheduled to start selling marijuana for recreational
use. But industry leaders seem to be viewing their competitors’
legal troubles with equanimity. “Really, I see enforcement actions
happening as a sign our industry is maturing and this program is
working,” Mike Elliott, president of the Medical Marijuana Industry
Group (MMIG), told the Post, although he did add that
“it’s important to remember people are innocent until proven
guilty.” MMIG board member Andy Williams, who runs Denver’s
Medicine Man dispensary, appeared pleased as well. “I want the bad
actors gone, quite honestly,” he said. 

Mason Tvert, who co-managed Colorado’s legalization campaign and
now works for the Marijuana Policy Project, was a bit more wary.
“The Justice Department said it would respect states’ rights to
regulate marijuana, and that it would not go after businesses as
long as they are complying with state laws,” he said. “We hope they
are sticking to their word and not interfering with any
state-regulated, law-abiding businesses.” Rob Corry, a Denver
attorney and marijuana activist, told the Post: “That is
true to form, the DOJ, behaving like the classic schoolyard bully
picking on the little guy….The DOJ needs to explain in a logical
fashion why they are picking and choosing, going after only some of
these entities when every one of them selling marijuana is running
afoul of the federal law.”

These raids are an unusually aggressive move by Walsh, who until
now had mostly contented himself with shutting down dispensaries he
deemed too close to schools by sending them threatening letters.
But the Justice Department’s new policy regarding state-legal
marijuana businesses leaves
a lot of leeway
for prosecutorial discretion. If I were a
dispensary owner planning to get into the newly legal recreational
market, I would pay careful attention to Walsh’s explanation,
assuming he ever offers one, of exactly how businesses such as
VIP Cannabis crossed the
Justice Department’s faintly marked red lines.

from Hit & Run http://reason.com/blog/2013/11/21/medical-marijuana-raids-in-colorado-rais
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Thousands of Child Abuse Reports in Arizona Ignored

At Reason, we’ve reported on
any number
of cases where state child-protective service
employees have
abused their authority
to take children away from families. But
in Arizona, officials of their child welfare services have
discovered the opposite: There are thousands of child abuse claims
called into the state that have not been investigated.

The Associated Press
reports
:

Thousands of cases of suspected child abuse that were reported
to a statewide hotline have gone uninvestigated over the past four
years, putting children across Arizona at risk, state officials
disclosed Thursday.

The cases were misclassified as not requiring investigations
starting in 2009. The number rapidly escalated in the past 20
months as caseloads increased and changes were made to the hotline
team, said Clarence Carter, head of the state’s child welfare
system.

Five thousand of the 6,000 cases that were not investigated
happened in that time, and all will be reviewed, Carter said. At
least 125 cases already have been identified where children
subsequently became the subject of another child abuse
investigation.

Read the whole story
here
.

Follow this story and more at Reason
24/7
.

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here
. If you have a story that would be of
interest to Reason’s readers please let us know by emailing the
24/7 crew at 24_7@reason.com, or tweet us stories
at 
@reason247.

from Hit & Run http://reason.com/blog/2013/11/21/thousands-of-child-abuse-in-ariz
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Suburban Squabble Erupts Over Backyard Chicken Coops

Many major U.S.
cities
and surrounding suburbs have tight regulations, or even
outright bans, on whether residents are allowed to keep small
chicken coops in their backyards. Several of the counties
surrounding Washington D.C. have regulations so stringent that the
practice is
virtually impossible
. As planning boards in two of these
counties—Arlington and Montgomery—have discussed relaxing their
zoning codes to allow small chicken coops, activists on both sides
of the aisle have come forward with petitions to protest or
encourage the change.

The debate has been spurred by
proponents of the
urban agriculture
movement, which emphasizes a “return
to sustainable living
.” Hugh Bartling, an associate professor
of public policy at DePaul University in Chicago,
said
the movement is one of people who are searching for more
local, fresh foods and are trying to improve their relationship
with the Earth. For many, raising chickens is a core part of the
lifestyle. However, regulations are preventing many of these simple
life aficionados from using their backyards as they like.

In order to help promote urban agriculture, Arlington’s planning
board is considering “loosening rules that require a chicken coop
to be at least 100 feet from a property line,” because it is “a
difficult standard to meet in the densely populated community,”
according to The
Washington Post
.

In Montgomery County, which currently has similar regulations in
place, officials are also considering whether to allow chicken
coops. Francoise Carrier, the chair of the county Planning Board,
supports the changes. “People who keep chickens clearly love
[them],” she said. “We had a woman who cried because she’s so
attached to her chickens and couldn’t bear the thought of them
being restricted.”

However, not everyone is happy about the proposed changes. The
group Backyards,
Not Barnyards
, has developed a website and petition opposing
the right to raise chickens in Arlington. Their reasons? Well,
there’s the public health explanations: Small chicken coops will
apparently lead to an “increased risk of salmonella exposure” and
“explosion of pest population, including both insects and rats.”
There’s also the dreaded “need to transport unsustainable amount of
chicken feed.” And of course, “The smell! Oh, god, the smell!”

Chicken raisers have touted
the benefits
of allowing chicken coops, which they say range
from the pesticide-free eggs to the educational value for children.
The Institute for Justice, a public interest law firm supporting
the regulatory changes, claims that clean and properly maintained
chicken coops
do not cause a rise in pest populations.

In the meantime, some residents continue to raise chickens
illegally. From the
Washington Post
:

One Arlington homeowner — who spoke on the condition that only
her first name be used because having hens and a henhouse on her
residential property violates the county’s laws — said she
solicited the approval of her neighbors before adopting hens two
months ago.

from Hit & Run http://reason.com/blog/2013/11/21/fight-in-dc-area-suburbs-should-resident
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Obama's Flip-Flopping In Shambles As California Rejects Proposed One-Year Plan Extension

When Barack Obama, floundering in the endless humiliation from the disastrous rollout of Obamacare, gave the country’s insurance  companies the “put option” to reject the one-year “cancellation” extension fix stemming from the whole “if you like your plan, you can keep it, period” fiasco, he committed a cardinal sin – he lost control of the situation, because from that point onward the decision was no longer in his court. Furthermore, due to the syndicate nature of insurance companies and state insurance commissioners implementing Obamacare, suddenly the decision was subject to game theoretical facets including cooperation and defection, or rather just defection since at this point the biggest spoils would go to whoever had the initial leverage or rather, defiance of the president. Sure enough, California just flopped on Obama’s most recent flip when the state, moments ago, rejected Obama’s proposed fix to allow legacy plans to survive for one additional year.

  • CALIFORNIA REJECTS OBAMA’S INSURANCE CANCELLATION FIX
  • CALIFORNIA REJECTS 1-YEAR EXTENSION OF CANCELED INSURANCE PLANS

More from Bloomberg:

California officials implementing President Barack Obama’s health-care overhaul rejected a one- year extension of insurance plans that are to be canceled under the law.

 

The president has urged states to give people with substandard medical plans an additional year to meet the law’s requirements after hundreds of thousands  received cancellation notices and were told new policies to meet minimum rules for coverage would cost more. “That’s making the best of not-great options, but I think it’s the best option and then we can focus in the coming months on the enrollment we need,” Peter V. Lee, the executive director of Covered California, the health exchange, said today at a meeting in Sacramento.

 

California’s decision is critical to the roll-out of Obamacare nationwide. The most populous U.S. state, which received almost $1 billion in federal grants to implement the Patient Protection and Affordable Care Act, led the U.S. in signups last month. The law requires all Americans to be covered next year or pay a penalty.

 

It’s up to state regulators and insurance companies to decide whether to delay the cancellations, which conflicted with Obama’s promise that consumers who liked their existing plans could keep them.

 

The exchange said 79,891 Californians had selected a health plan through Covered California as of Nov. 19. Enrollment began Oct. 1.

And from AP:

The board overseeing California’s health insurance exchange has voted to stick with its current approach of phasing out by year’s end health insurance policies that do not meet current benefit requirements. The Covered California Board of Directors voted 5-0 on Thursday to hold steady on its current approach, defying President Barack Obama’s recent flip on one crucial aspect of the Affordable Care Act.

 

The state insurance commissioner had said that 1.1 million Californians are receiving notices that their current individual health insurance policies will be discontinued in 2014 because they do not meet the benefit requirements of the federal health care overhaul.

 

That has angered some policy holders, many of whom will see their monthly premiums and deductibles rise sharply with the new plans being offered. It also flies in the face of promises Obama made repeatedly when he said people who liked their current health insurance policies could keep them under his health insurance reforms.

 

The president has since backtracked and has asked states to allow insurance companies to extend those older policies.

 

But many insurance companies oppose that, saying doing so would undermine the new markets being set up under Obama’s law. They also said they did not have enough time to rebuild policies they already had discontinued.

And while Calirofnia’s decision certainly makes sense financially for the insolvent state (if not any other more prudent states), it merely adds to Obama’s political crucifixion as now it will appear as if he has lost all control over not just the website enrollment process, but also the entire onboarding process and is unable to even keep beneficiary states under control.

Welcome to socialist central planning 101 – where everything that can go wrong, sooner or later does.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Q4YK1Itn2Xo/story01.htm Tyler Durden

Obama’s Flip-Flopping In Shambles As California Rejects Proposed One-Year Plan Extension

When Barack Obama, floundering in the endless humiliation from the disastrous rollout of Obamacare, gave the country’s insurance  companies the “put option” to reject the one-year “cancellation” extension fix stemming from the whole “if you like your plan, you can keep it, period” fiasco, he committed a cardinal sin – he lost control of the situation, because from that point onward the decision was no longer in his court. Furthermore, due to the syndicate nature of insurance companies and state insurance commissioners implementing Obamacare, suddenly the decision was subject to game theoretical facets including cooperation and defection, or rather just defection since at this point the biggest spoils would go to whoever had the initial leverage or rather, defiance of the president. Sure enough, California just flopped on Obama’s most recent flip when the state, moments ago, rejected Obama’s proposed fix to allow legacy plans to survive for one additional year.

  • CALIFORNIA REJECTS OBAMA’S INSURANCE CANCELLATION FIX
  • CALIFORNIA REJECTS 1-YEAR EXTENSION OF CANCELED INSURANCE PLANS

More from Bloomberg:

California officials implementing President Barack Obama’s health-care overhaul rejected a one- year extension of insurance plans that are to be canceled under the law.

 

The president has urged states to give people with substandard medical plans an additional year to meet the law’s requirements after hundreds of thousands  received cancellation notices and were told new policies to meet minimum rules for coverage would cost more. “That’s making the best of not-great options, but I think it’s the best option and then we can focus in the coming months on the enrollment we need,” Peter V. Lee, the executive director of Covered California, the health exchange, said today at a meeting in Sacramento.

 

California’s decision is critical to the roll-out of Obamacare nationwide. The most populous U.S. state, which received almost $1 billion in federal grants to implement the Patient Protection and Affordable Care Act, led the U.S. in signups last month. The law requires all Americans to be covered next year or pay a penalty.

 

It’s up to state regulators and insurance companies to decide whether to delay the cancellations, which conflicted with Obama’s promise that consumers who liked their existing plans could keep them.

 

The exchange said 79,891 Californians had selected a health plan through Covered California as of Nov. 19. Enrollment began Oct. 1.

And from AP:

The board overseeing California’s health insurance exchange has voted to stick with its current approach of phasing out by year’s end health insurance policies that do not meet current benefit requirements. The Covered California Board of Directors voted 5-0 on Thursday to hold steady on its current approach, defying President Barack Obama’s recent flip on one crucial aspect of the Affordable Care Act.

 

The state insurance commissioner had said that 1.1 million Californians are receiving notices that their current individual health insurance policies will be discontinued in 2014 because they do not meet the benefit requirements of the federal health care overhaul.

 

That has angered some policy holders, many of whom will see their monthly premiums and deductibles rise sharply with the new plans being offered. It also flies in the face of promises Obama made repeatedly when he said people who liked their current health insurance policies could keep them under his health insurance reforms.

 

The president has since backtracked and has asked states to allow insurance companies to extend those older policies.

 

But many insurance companies oppose that, saying doing so would undermine the new markets being set up under Obama’s law. They also said they did not have enough time to rebuild policies they already had discontinued.

And while Calirofnia’s decision certainly makes sense financially for the insolvent state (if not any other more prudent states), it merely adds to Obama’s political crucifixion as now it will appear as if he has lost all control over not just the website enrollment process, but also the entire onboarding process and is unable to even keep beneficiary states under control.

Welcome to socialist central planning 101 – where everything that can go wrong, sooner or later does.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Q4YK1Itn2Xo/story01.htm Tyler Durden

New: Daisy Ad 2013: Senate Nuclear Option Remix

 

Just eight years ago, Senate Democrats – including Barack Obama
– were dead-set against the so-called nuclear option, which would
have disallowed filibusters on judicial nominees. What a difference
being in the majority makes!

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from Hit & Run http://reason.com/blog/2013/11/21/new-daisy-ad-2013-senate-nuclear-option
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