President Obama dumped on the free market again last Friday. The free market progressively (pun intended) became a little less so with Friday’s presidential decision.
In response to Catholic agencies complaints against the Department of Health & Human Services health care regulations which required that those agencies supply health insurance coverage for birth control products and services for their employees, the Obama administration announced that it was shifting gears and no longer requiring those Catholic agencies to provide, and pay for, this type of coverage in their health insurance programs.
The delivery of another government-imposed burden on business.
Instead, President Obama announced today that he was requiring health insurance companies to provide the birth control products/services coverage free of charge. In other words, the health insurance companies must pay for birth control related products and services consumed by employees of Catholic agencies. By requiring health insurance companies to provide these products and services free of charge to employees of Catholic hospitals, universities, and other Catholic sponsored organizations, the White House has defused charges that its health care mandate was “prohibiting the free exercise” of religious beliefs by Catholic organizations, an American right granted in the First Amendment to the U.S. Constitution.
As of the time of this post, the reaction to Mr. Obama’s decision is mixed and undecided. A consensus may form within a few days. However, what is not undecided is the effect on capitalism.
The effect is not good.
There is a Constitutional amendment protecting the rights of individuals in the practice of their religion. But there is no amendment protecting the right of a business to offer products and services of its own choosing, and at a price that is mediated by market forces. And since there is no such amendment protecting the rights of business in this area, the president found it politically expedient to defuse the freedom of religion issue by shifting the responsibility for the provision of the products and services in question directly into the lap of health insurance companies.
Now of course, there are very few persons out there today weeping for this additional burden placed upon health insurance companies. There’s a meme out there that many people absolutely hate insurance companies, although not one health insurance company appeared on a recent list of the ten most hated companies in America. The question of that list’s accuracy not withstanding, the existence of this meme may be because there is a belief that health insurance companies are among the most wealthy companies on the face of the Earth.
This belief is false. As I’ve written on this blog previously, health insurance companies are not among the most profitable of companies around. Because of their low profitability, I would not hold stock in one even on a dare. And let’s not forget that many health insurance plans (e.g., some Blue Cross organizations and certain divisions of Kaiser Permanente) are not-for-profit
Continue reading Obama Dumps on Free Market . . . Again.
A meme floating around on the Web is that the QE2 (quantitative easing) stimulus of 2011 caused the Arab Spring uprisings of that same year.
A sloppily-produced Telegraph article from economic consultant Andrew Lillico reflected this meme last year. In “How the Fed Triggered the Arab Spring Uprisings,” Mr. Lillico theorizes that the Fed’s quantitative easing lead to an increase in food prices in critical nations. His implication is that the higher prices acted as a inducement to the rioting that overthrew several Middle Eastern governments.
By way of explanation, quantitative easing is a process where the Fed’s purchase of U.S. Treasury instruments introduces more money into circulation. The increased money supply causes the value of that national currency to fall on global markets, igniting inflation, and making products and services more expensive in the affected currency.
Mr. Lillico’s theory is that because the value of the American dollar fell after QE2 certain nations also moved to devalue their currency in an effort to obtain international purchasing parity with the U.S. greenback, avoiding a loss of national revenue because their products were suddenly more expensive on the world stage. The decrease in national currency value led to inflation and higher prices for food in various countries. That, Mr. Lillico claims, led to unrest, dissatisfaction, rioting, and revolution.
By his own admission in the article, Mr. Lillico admits his theory is controversial. “The exact contribution of QE2 to these rises will be debated in PhD theses for decades to come,” says Mr. Lillico. But even though he has overlooked other possible contributors to Arab Spring, some of which are unique to the times in which Arab Spring occurred such as social media technology, Mr. Lillico overlooks one important and simple consideration.
Quantitative easing has occurred several times throughout American history and as a result of those previous monetary policy exercises there was no Arab Spring, nor anything akin to it.
Activist action is the result of many different and often interactive factors. And to attempt to reduce the cause of the Arab Spring uprisings to one governmental action is simplistic and does a disservice to those studying the capitalistic process.
Recently a new Chevron TV commercial hit the airwaves. You may have seen it; it’s entitled “Chevron We Agree: Science is Cool.”
Now, perhaps I’m nitpicking here. I have been known to pick a nit now and again. But I think that in that commercial there’s a bit of anti-capitalism going on. Shocking? Anti-capitalism in a Chevron commercial? I know. That would be odd for a commercial from a major American corporation. But it happens, and probably more often than you would realize.
If you think I might be imagining things, then please read the rest of this post and review the video, which is only 31 seconds in duration. After that, if you think my nit-picking skills are approaching the Olympic level, then just go ahead and make a comment below.
Here’s my rationale on why eleven words in this video are subliminally part of the war on capitalism.
In this latest entry in Chevron’s “We Agree” campaign, the energy giant tells us how they’re helping science education programs around the country and to the tune of $100 million. I agree. That’s a good thing, and we’re all better for Chevron’s efforts to enrich science learning specifically and education in general. Business philanthropy is one of capitalism’s greatest contributions to society. But it’s not the philanthropy with which I take issue. In defense of capitalism, here’s where I see a problem.
Each of the speakers in the video tells us about their role in science education; the student as absorbent and enthusiastic sponge and the Chevron geologist as zealous assistant to science educators. The geologist’s zealousness is obvious and apparently exists because of what he says at the very beginning of the video, at second number 4:
“My high school science teacher made me what I am today.”
Yeeeouch. So much for the essential personal responsibility factor required in capitalism.
No, your high school teacher did not make you what you are today.
You made yourself what you are today, Dr. Geologist.
Your high school science teacher didn’t take your SATs for you. He didn’t fill out your college applications, nor did he pay the application fees. He didn’t help you navigate through that scary week of freshman orientation. Your high school science teacher didn’t help you navigate through a befuddling college catalog to select your courses. He didn’t help you through the long all-nighters, nor did he buy the pizza that fueled your study on those cold nights. Your high school science teacher didn’t sit in the seemingly endless exams filled with other wanna-be geologists, nor did he write the papers you handed in. He wasn’t there when you worked sweaty, grimy, sticky summer jobs, from scooping ice cream to cleaning out toilets, to finance your tuition.
Your high school science teacher, Dr. Geologist, wasn’t there when you one day felt like switching majors to something less technical, like political science, where the math demands were less
Continue reading Eleven Words in the War on Capitalism
In a February 2012 Gallup Poll, 53% of Americans said that China was the leading economy on the planet today.
You are wrong, oh, doubtful ones. Why? Let me show you.
Economies are measured by Gross Domestic Product (GDP) which is the total output of goods and services in a given country.
Per the CIA World Factbook which reports GDPs, among other things, the 2011 GDP for China is US$11.3 trillion (in 2011 US dollars). The CIA reports that this number represents China’s GDP as shown on a purchasing power parity (PPP) basis, rather than on a national currency basis. They use a PPP number as a more accurate representation of total Chinese output because China’s exchange rate does not float but rather is determined by legal fiat. Therefore, a Chinese GDP on a PPP basis represents a more accurate picture.
Meanwhile, the CIA World Factbook shows that for 2011, also in 2011 US dollars and on a PPP basis, the GDP for the United States is US$15.04 trillion.
It’s not even close.
Now, this is not to say that China’s GDP won’t surpass that of the United States someday. Common wisdom out there puts this as a distinct possibility.
But for right now, the United States has the largest GDP on the planet, one-third larger than that of China.
It’s time to stop the economic self-flagellation, America. Negative attitudes don’t help capitalism, and in the long-run those lousy attitudes may help China lap us on the economic racetrack of life.
Here’s another jab to the chin of Western capitalism and the hope of a free market in China.
Per an article in China Daily, the Chinese movie sector has become the second largest on the planet, recently displacing the Japanese movie sector. Last year, China added about eight movie screens per day across the country.
Does this sound like a great market for foreign business?
Perhaps in content, with a primary supplier like Hollywood, but perhaps not in hardware.
Another article in China Daily, published a few days after the article mentioned above, said that the new Chinese DMAX movie technology, a wide-screen 3D technology, which uses “autonomous intellectual property,” was put into use in Chinese theaters on April 15, 2012. In the article, a director of the China Research Institute of Film Science & Technology said
“The successful establishment of the Chinese huge screen movie system will end the foreign technique and its brands monopoly.”
My comments.
First, the deliberate characterization of a technology as “autonomous intellectual property” makes me think of the line from Hamlet, “Me thinks thou dost protest too much.” If the technology ownership was without question Chinese, then they likely wouldn’t feel the psychological need to point this out.
Second, DMAX, instead of IMAX?
Third, consider the words “will end the foreign technique.”
China may have the fastest growing market for films, but as far as the hardware that displays those films goes, it would seem that this market is going the same as many others in China, protectionist.
|
