ObamatellsAmerica’sCEOstoquitcomplainingabout

Obama tells America’s CEOs to quit complaining about those stifling regulations

posted at 12:01 pm on August 4, 2014 by Noah Rothman

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America’s corporate officers and CEOs are deeply concerned about a variety of new financial and industrial regulations imposed on them by the administration. In a recent interview with The Economist, President Barack Obama addressed the concerns of American corporate officers and others in a compelling and comprehensive fashion when he told them, essentially, to shut up.

From new regulatory regimes imposed by legislation, like the Affordable Care Act and the Dodd-Frank financial reforms, to executive actions like those which recently allowed the Environmental Protection Agency to regulate carbon emissions, many are sounding the alarm. The president, however, does not think these captains of industry have any standing to complain.

“If you look at what’s happened over the last four or five years, the folks who don’t have a right to complain are the folks at the top,” Obama said.

“I would take the complaints of the corporate community with a grain of salt,” he continued. “They always complain about regulation. That’s their job.”

Reuters noted that Obama has “toned down” the populist rhetoric he appealed to in his first term, including using inflammatory terms like “fat cats” to describe Wall Street-based financial professionals. This new tone Obama displayed in his interview with The Economist is, however, not all that dissimilar from the excessive bombast employed by Occupy’s agitators at the height of that leftist protest movement:

“Oftentimes, you’ll hear some hedge-fund manager say, ‘Oh, he’s just trying to stir class resentment’. No. Feel free to keep your house in the Hamptons and your corporate jet, etcetera. I’m not concerned about how you’re living,” Obama said.

“I am concerned about making sure that we have a system in which the ordinary person who is working hard and is being responsible can get ahead,” he said.

What is fascinating here is the president is using language laced with hostility toward American corporate culture while simultaneously defending the federal institutions which many conservatives have claimed dole out undue corporate welfare.

“There is no doubt that a thread has emerged in the Republican Party of anti-globalisation that runs contrary to the party’s traditional support for free trade,” Obama said of the debate surrounding the reauthorization of the Export-Import Bank.

How the Export-Import Bank and the Overseas Private Investment Corporation (OPIC) became targets for Tea Party wrath is a little strange to me. But I do think there remains a consensus within the American business community that ultimately we benefit from trade. I am confident that we can get AGOA reauthorised and refined, given the lessons learned from the first round of AGOA. And the truth is that the amount of trade between the United States and Africa is so small relative to our overall economy that in no way should it be perceived as a threat.”

As conservatives like Sen. Ted Cruz (R-TX) have noted, the Export-Import Bank is anything but a majoritarian institution that promotes free and fair global trade. Writing in USA Today last week, Cruz accused the bank of enriching foreign firms and those large corporations with the biggest lobbying footprint in Washington.

Contrary to the values that keep America strong, safe and free, the Export-Import Bank has facilitated lending to governments in Congo and Sudan, countries with horrific human rights records. It has financed Chinese power plants and backed Russian billionaires buying luxury planes. And, it has provided lots and lots of financing to oil companies in Russia, Brazil, the United Arab Emirates and Saudi Arabia that compete directly with America’s energy companies.

“The paradox of Obama’s position is made even more explicit in question posed by The Economist interlocutor, who seems to think that China can do a better job of engaging in free trade — so much so, that it ends in a joke about how nice it would be if Obama were a dictator,” National Review’s Joel Gehrke observed.

Obama’s populist rhetoric is perfectly untethered to any ideological commitment to populism; the president can shift seamlessly from People’s Revolutionary to calculating monopolist. For its part, the press seems unconcerned with Obama’s blatantly contradictory rhetoric. For many, it seems, the desired end justifies even dishonest means.

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Tags: Barack Obama, Export-Import Bank, regulation, Ted Cruz

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IRSbacktrackson501(c)4ruleafterfloodof

IRS backtracks on 501(c)4 rule after flood of negative comments

posted at 10:41 am on May 23, 2014 by Ed Morrissey

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Will the IRS retreat from managing political speech through the tax code? One might have thought that the scandal that erupted a year ago this month would have discouraged the tax agency from pressing forward again, but they still proposed a more extensive enforcement mechanism for 501(c)4 groups just months after the targeting of conservative groups was exposed. After an avalanche of negative comments in the public-review period, though, the IRS is rethinking their approach (via Instapundit):

The U.S. Internal Revenue Service said today that it will revise proposed rules governing nonprofit groups’ involvement in politics.

The rules, released last year, were an attempt to provide guidance for how much political activity groups organized under section 501(c)(4) of the U.S. tax code could engage in without risking loss of their tax exemption or being forced to reveal their donors. …

After the IRS released the new rules, groups across the political spectrum objected with more than 150,000 comments, calling them too broad and an attack on free speech. Opponents included the American Civil Liberties Union and the American Family Association.

Republicans called on the IRS and the Treasury Department to start over. Until today, the IRS had said it was planning a public hearing in the next few months.

“It is likely that we will make some changes to the proposed regulation in light of the comments we have received,” the IRS said in a statement today. “Given the diversity of views expressed and the volume of substantive input, we have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation.”

Note that they’re not dropping the matter altogether, either. The flood of criticism has only forced them into a tactical retreat, not into a full surrender. A delay buys them more space between the scandal and the expanded enforcement that new rules will bring, and hopefully (from their perspective) short memories will allow them to proceed in time for the 2016 cycle rather than the 2014 cycle.

The Wire’s congratulatory message may therefore be premature:

The IRS proposed deleting the clause’s reference to “direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office,’’ and replacing it with the supposedly clearer “[t]he promotion of social welfare does not include direct or indirect candidate-related political activity.’’ Similarly, the agency wants to replace ‘‘participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office,” with “‘candidate-related political activity.”

Apparently, people are not happy with the changes. Last month, IRS CommissionerJohn Koskinen told the Washington Post that the high volume of comments was making it difficult to forge ahead with the proposed rule …

Finally, an issue the right and left both hate enough to try to successfully derail. Good job, team.

It’s not derailed, at least not yet. It’s merely sidetracked until the political winds shift in a more favorable direction.

The underlying problem isn’t really at the IRS anyway, but in Congress. By erecting a Byzantine structure for campaign and issue donations and mixing them with tax-free statuses, Congress has forced IRS into the speech-police business. The real solution to this would be to eliminate the hard/soft money categories altogether, allow for unlimited donations with full and immediate disclosure over an aggregate amount to campaigns and political parties, and to eliminate tax-exempt status for all political donations. That would get the IRS and the federal government out of the speech-police business and put an end to the massive hypocrisy of the incumbency-protection racket that “campaign finance reform” has become.

Don’t expect the next formulation of 501(c)4 rules to fix anything, so the lesson is to stay vigilant.

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Tags: 501(c)(4), campaign finance, IRS, regulation

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ObamaadminofficialsoddlynotdownsizingFannieMae/Freddie

Obama admin officials oddly not downsizing Fannie Mae/Freddie Mac like they proposed to do

posted at 1:21 pm on May 15, 2014 by Erika Johnsen

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As recently of his State of the Union address this past January, President Obama was reaffirming the support he announced last August for bipartisan plans making their way through both chambers of Congress to drastically reduce and/or eliminate the two lending giants’ outsized footprint in the housing market, pressuring lawmakers to “send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive” by shifting the market more toward private lending. Opposition to the plan’s practical implications from some highly interested parties in the housing sector, as well as the upcoming midterm elections, have put Congress’s legislative role in the Fannie/Freddie drawdown in fuzzy and protracted territory — so in what will doubtless be the long interim before we see any major Congressional action on that front, the Obama administration is now planning to use their regulatory authority to… ramp up their role in the mortgage market and basically promote more risky lending? What? Via the NYT:

The federal overseer of Fannie Mae and Freddie Mac on Tuesday announced a shift in policies intended to maintain the mortgage finance giants’ role in parts of the housing market, spur more home lending and aid distressed homeowners.

“Our overriding objective is to ensure that there is broad liquidity in the housing finance market and to do so in a way that is safe and sound,” Melvin L. Watt, the new head of the Federal Housing Finance Agency, said in a speech at the Brookings Institution in Washington. …

Mr. Watt’s changes would perpetuate the presence of the two government-sponsored enterprises in mortgage finance, rather than shrinking it. …

Mr. Watt laid out several specific measures. For example, rather than reducing current limits on the size of the loans they guarantee, as previously proposed by the former overseer, Fannie and Freddie would keep the current, relatively loose, limits in place. The two enterprises back about two-thirds of all new mortgages.

The White House, via Jay Carney, applauded “the Federal Housing Finance Agency for issuing certainty and clarity on the rules of the road for loans backed by Fannie Mae and Freddie Mac” on Tuesday, and as Bloomberg notes:

Watt’s policy decisions will play an increasingly pivotal role in the nation’s housing finance system as bipartisan efforts to wind down Fannie Mae and Freddie Mac appear to be stalling in the Senate.

The Senate Banking Committee is expected to vote Thursday on a measure that would replace the two companies with a reinsurer of mortgage bonds that would suffer losses only after private capital was wiped out. The bill doesn’t have enough Democratic support to advance beyond the committee and legislative efforts to remake Fannie Mae and Freddie Mac are unlikely to continue before next year.

Well. So much for that, and in the meantime, it looks like the Obama administration just couldn’t resist the urge to keep getting the federal government increasingly involved in the economy.

For what it’s worth, here’s what the former top regulator of the Federal Housing Finance Agency preceding Watt had to say on Fannie/Freddie at another event this week, via the WSJ:

A few hours later, his predecessor, Edward DeMarco, offered some parting reflections on housing policy at a banking conference in Charlotte, N.C. …

In his talk, Mr. DeMarco made an impassioned plea to abandon the housing-finance system dominated by Fannie Mae and Freddie Mac, the companies he oversaw as the FHFA’s acting director for the past five years. “Rather than striving to preserve a system that failed so spectacularly and in so many ways, we need to find our courage and our creativity to build a new system,” he said in prepared remarks. …

“Restoring Fannie Mae and Freddie Mac is not the solution. They failed and their business model failed,” he said. “Going backwards to an obviously failed model cannot be dressed up with some promise of higher capital or explicit rather than implicit guarantees.”

Mr. DeMarco pushed back against the idea, made repeatedly by critics of the House and Senate bills, that “something new is ‘risky’ or that we cannot do better than what we had,” he said. “Often you will find someone protecting an existing interest…in preserving the status quo.”

Finally, he warned against calls for the government to help unqualified borrowers buy homes. “A government effort to assist families with limited resources and poor credit history take on increased leverage seems a curious public policy,” he said.

 

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Tags: Fannie Mae, finance, financial crisis, Freddie Mac, housing, Obama administration, regulation

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SupremeCourtupholdsEPA’scross-stateairpollutionauthority

Supreme Court upholds EPA’s cross-state air pollution authority

posted at 6:01 pm on April 29, 2014 by Erika Johnsen

Over the past few years, the green lobby has put a lot of its collective energy into making a gigantic fuss over the Keystone XL pipeline and pushing President Obama to make climate change more of a priority — but in the grand scheme of things, the proposed pipeline is really just a symbolic battle about refusing to enable fossil-fuel development by building the requisite infrastructure (because, these eco-radicals hope and pray, we’ll start leaving more of our resources in the ground in favor of heavily subsidizing renewables and forcing behavioral changes). As the NYT rather aptly pointed out last week, the carbon emissions that Canada will unleash in developing their old sands aren’t even a drop in the bucket compared to the impact that the Obama administration’s many regulations can/will have:

Experts say that Mr. Obama’s eventual decision on the pipeline will have a marginal impact on global warming emissions, while those dull-sounding E.P.A. rules and treaty talks will determine his enviromental legacy.

Consider the numbers: In 2011, the most recent year for which comprehensive international data is available, the global economy emitted 32.6 billion metric tons of carbon pollution. The United States was responsible for 5.5 billion tons of that (coming in second to China, which emitted 8.7 billion tons). Within the United States, electric power plants produced 2.8 billion tons of those greenhouse gases, while vehicle tailpipe emissions from burning gasoline produced 1.9 billion tons.

By comparison, the oil that would move through the Keystone pipeline would add 18.7 million metric tons of carbon to the atmosphere annually, the E.P.A. estimated. In other words, the carbon emissions produced by oil that would be moved in the Keystone pipeline would amount to less than 1 percent of United States greenhouse gas emissions, and an infinitesimal slice of the global total.

Within that context, “the Keystone pipeline is a rounding error,” said Kevin Book, the founder of ClearView Energy Partners, an energy analysis firm.

Which means that the Obama administration’s recent regulations on new power plants in conjunction with forthcoming regulations on existing power plants (read: squashing coal out of the picture) are the real power players in Obama’s climate-change agenda, and the Environmental Protection Agency was further enabled in carrying out that mission through the Clean Air Act with a Supreme Court decision released today. In 2012, a lower court ruled that the EPA was taking too much leeway with the “good neighbor” provision of the act in determining how much upwind emitters should be required to reduce their emissions to compensate for the pollution that drifts to downwind states (namely, via the EPA appointing itself with the unwritten authority to selectively consider several factors including what it would cost the individual state and how much the individual state has already done to cut pollution, rather than just considering how much the state is actually emitting). SCOTUS, however, decided that the EPA’s broader interpretation of the rule does indeed make practical sense, via Reuters:

By a 6-2 vote, the court said the U.S. Environmental Protection Agency acted reasonably in requiring 28 states to reduce emissions from coal-fired power plants of sulfur dioxide and nitrogen oxides, which can lead to soot and smog.

Writing for the majority, Justice Ruth Bader Ginsburg called the EPA rule a cost-effective way to allocate responsibility for emission reductions among so-called upwind states, and that the EPA need not consider each state’s proportionate responsibility for the emissions in question.

She also called the rule a “permissible, workable, and equitable interpretation” of the “good neighbor” provision of the federal Clean Air Act.

This provision limits cross-border emissions that make it harder for downwind states to comply with federal air quality standards, or national ambient air quality standards (NAAQS).

“The Good Neighbor Provision requires EPA to seek downwind attainment of NAAQS notwithstanding the uncertainties,” Ginsburg wrote. “Required to balance the possibilities of under-control and over-control, EPA must have leeway in fulfilling its statutory mandate.”

Alito recused, while Scalia and Thomas were the two dissenters, emphases mine:

Too many important decisions of the Federal Government are made nowadays by unelected agency officials exercising broad lawmaking authority, rather than by the people’s representatives in Congress. With the statute involved in the present cases, however, Congress did it right. It specified quite precisely the responsibility of an upwind State under the Good Neighbor Provision: to eliminate those amounts of pollutants that it contributes to downwind problem areas. But the Environmental Protection Agency was unsatisfied with this system. Agency personnel, perhaps correctly, thought it more efficient to require reductions not in proportion to the amounts of pollutants for which each upwind State is responsible, but on the basis of how cost-effectively each can decrease emissions.

Today, the majority approves that undemocratic revision of the Clean Air Act. The Agency came forward with a textual justification for its action, relying on a farfetched meaning of the word “significantly” in the statutory text. That justification is so feeble that today’s majority does not even recite it, much less defend it. The majority reaches its result (“Look Ma, no hands!”) without benefit of text, claiming to have identified a remarkable “gap” in the statute, which it proceeds to fill (contrary to the plain logic of the statute) with cost-benefit analysis—and then, with no pretended textual justification at all, simply extends cost-benefit analysis beyond the scope of the alleged gap. …

The statute ad­dresses solely the environmental consequences of emis­sions, not the facility of reducing them; and it requires States to shoulder burdens in proportion to the size of their contributions, not in proportion to the ease of bearing them. EPA’s utterly fanciful “from each according to its ability” construction sacrifices democratically adopted text to bureaucratically favored policy.

Perhaps the individually-evaluated approach for which the EPA argued does make the process more workable for its ostensible emission-reducing purposes, but I’d be a little more inclined to give the agency the benefit of the doubt if it hadn’t already established such a brazen habit of expanding its own power at every possible turn.

Tags: emissions, Environmental Protection Agency, Obama administration, regulation, Supreme Court

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TheFDAwantstoregulatespentgrains,and

The FDA wants to regulate spent grains, and the beer industry is not having it

posted at 6:41 pm on April 14, 2014 by Erika Johnsen

In case any of my fellow beer-lovers out there are not already aware, thanks to auspices of both federal and state governments, Americans generally pay quite a bit more for their favorite alcoholic beverage than what it really costs brewers to produce and distribute. An estimated national average of 40 percent of what we pay for beer is actually just various taxes, via the Tax Foundation:

There isn’t much consistency on how state and local governments tax beer. This rate can include fixed-rate per volume taxes; wholesale taxes that are usually a percentage of the value of the product; distributor taxes (usually structured as license fees but are usually a percentage of revenues); retail taxes, in which retailers owe an extra percentage of revenues; case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).

The Beer Institute points out that “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.” They cite an economic analysis that found “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price” …

The federal government, however, is looking to potentially jack those government-imposed costs up ever further — all for our own good, of course. Last October, the Food and Drug Administration proposed a potential new rule via the Food Safety Modernization Act that would regulate brewers’ spent grains the same way as pet food, requiring that the grains be dried and packaged to ward off contamination before they come into contact with other humans. Seeing as how this would completely mess up the mutually beneficial arrangement between many brewers and ranchers wherein ranchers come and pick up brewers’ spent grains and then productively and inexpensively recycle them as a feed source for their livestock, this rule poses something of a problem.

The U.S. Food and Drug Administration today issued a proposed rule under the FDA Food Safety Modernization Act (FSMA) aimed at improving the safety of food for animals. This proposed regulation would help prevent foodborne illness in both animals and people and is open for public comments for 120 days. The proposal is part of the Food Safety Modernization Act’s larger effort to modernize the food safety system for the 21st century and focus public and private efforts on preventing food safety problems, rather than relying primarily on responding to problems after the fact.

The proposed rule would require makers of animal feed and pet food to be sold in the U.S.to develop a formal plan and put into place procedures to prevent foodborne illness. The rule would also require them to have plans for correcting any problems that arise.  The proposed rule would also require animal food facilities to, for the first time, follow proposed current good manufacturing practices that address areas such as sanitation.

“The FDA continues to take steps to meet the challenge of ensuring a safe food supply,” said FDA Commissioner Margaret A. Hamburg, M.D. “Today’s announcement addresses a critical part of the food system, and we will continue to work with our national and international industry, consumer and government partners as we work to prevent foodborne illness.”

But the beer industry is arguing that they have no idea what exactly these foodborne illnesses are supposed to be, since the grains are already declared fit for human consumption before they start the brewing process and because they have been working with ranchers for decades without problems. A bunch of brewers are currently protesting the proposed rule, arguing that the equipment and processes they would need to install would make the whole thing too expensive, and that they’ll just end up trashing their spent grains into landfills — while ranchers are worried that they’ll lose a valuable source of feed, via HuffPo:

The controversy surrounds the rule’s effect on the longtime practice of beer brewers giving their spent grain, the malted barley left over after the beer brewing process, to neighboring ranchers and dairy farmers. The practice serves two purposes: to help the brewers get rid of millions of tons of leftover product, and to provide a free, nutritious food source for animals at local farms.

Under the new regulation, the practice would be outlawed, unless breweries go through expensive and time-consuming measures to ensure the grain is up to regulation. …

Since the grains are used to brew beer, they have already been deemed safe for human consumption. But the FDA fears the lack of oversight from the time of brewing to the time the grains are fed to the animals could lead to contamination. …

But though the move could be a problem for brewers, some say it could deal a fatal blow to small ranchers and farmers.

“If I were to purchase feed, it would be an extra $300-400 per day,” said Rick Olufs to HuffPost.

Olufs is the owner of Olufs Ranches in Windsor, Calif., and has been feeding spent grain to his cattle for over 30 years. For the past 18, he estimates, he’s gotten his grain from Cilurzo and her husband at Russian River Brewing Company. “We’ve worked together a long time,” he said.

I realize this seems like something of a niche issue, but it is exactly this sort of regulatory death-by-a-thousand-cuts that is largely preventing our economy from the robust rebound that the Obama administration is still trying to convince us is actually happening — and niche issue though it may be, it’s plenty important to the many craft brewers in, say, Colorado, for instance. Ahem.

In one of those intersections of economic clout, linking Colorado’s craft breweries with the need to shore up U.S. Sen. Mark Udall’s (D-CO) shaky reelection prospects, spent grains are suddenly right up there with health care and traffic congestion as statewide issues.

Udall fired off a letter Monday to FDA Commissioner Margaret Hamburg demanding that she put the proposed animal food rule aside until a “risk assessment” can be completed on the reuse of spent brewery grains as animal feed.

“I support a robust framework of smart regulations that minimize unnecessary risk and keep our nation’s food supply safe,” Udall wrote. “This particular part of the Animal Food (Rule), while well intentioned, does not seem based on evidence of risk or hazard. I hope FDA will reconsider its initial interpretation and formally review the body of evidence that exists in abundance on this particular topic to determine if in fact spent brewers grains warrant designation as ‘animal food.’”

Udall claims new regulatory treatment of brewer’s grains is not justified, adding, “Perhaps most relevantly, the U.S. Department of Agriculture has decades worth of data that demonstrates the history of spent brewers grain used as animal food. This information does not reveal to my knowledge any evidence that dedicating spent brewers grains for agricultural use has ever compromised food safety to animals or humans.”

Tags: beer, bureaucracy, Food and Drug Administration, food regulation, regulation, taxes

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Video:CriminalprobeopeninginGMrecall?

Video: Criminal probe opening in GM recall?

posted at 10:41 am on March 13, 2014 by Ed Morrissey

Did political considerations within the federal government delay a recall of defective GM ignition switches? This issue has been percolating for a few weeks, when the automaker finally initiated a recall of over a million vehicles after years of complaints and more than a dozen deaths. The defect had been known to GM since at least 2004 — and to the NHTSA since 2007. Now a wide recall is in effect, but criminal investigators have begun probes into the delay and the deaths, according to this CNN report from earlier today:

General Motors Co. faced new pressure from a powerful member of Congress to explain why it took nearly a decade to recall 1.6 million vehicles for faulty ignitions linked to 13 deaths, even as the auto maker hired a high-profile lawyer to lead its internal investigation and stepped up warnings to customers.

Late Monday, the House Energy and Commerce Committee said it would launch an investigation into the slow recall and hold hearings. …

On Monday, GM launched a website to provide customers with information about the recall, warning owners of the affected vehicles to remove extra weight off their car ignition keys. The National Highway Traffic Safety Administration has given the auto maker until April 3 to answer 107 questions about its handling of the problem.

GM employees knew about the defect as early as 2004. The company has released a chronology sketching out in broad terms how the faulty switch was discovered and how the issue bounced around within its engineering division. The company’s disclosures to date don’t reveal who was responsible for the timing of the recall.

The NHTSA has its own questions to answer:

Meanwhile, the NHTSA hasn’t said why it didn’t take action after one of its own officials pointed out the potential problem during a March 2007 meeting. NHTSA officials have declined to comment on the meeting or provide any documentation about it.

Small wonder that Congress wants its own probe.  Rep. Fred Upton (R-MI) chairs that committee, and he wants to look at both GM and NHTSA for its failures.

Liz Peek, my colleague at The Fiscal Times, wonders whether politics played a role in keeping this quiet in the first place:

By 2011 there had been 204 complaints lodged. In 2010 then-Congressman Barney Frank inquired on behalf of a constituent about the multiple accidents apparently brought on by the random deceleration issue. He was told by NHTSA that it had “insufficient evidence to warrant opening a safety defect investigation.”  By that time, there had been several fatalities related to Cobalts’ stalling. Still, NHTSA did nothing.

At the same time, after the Obama administration had orchestrated a government takeover of General Motors, NHTSA hit Toyota with its largest-ever fine and demanded a recall of some 9 million cars and trucks. Over several years, NHTSA had received more than 3,000 reports of sudden acceleration in Toyotas; there had been some 75 fatal crashes. Though the incidents of problems continued to mount, it was not clear at the time of the recall what exactly accounted for the mishaps. The Wall Street Journalannounced that a report attributing most of the accidents to driver error had been “temporarily blocked” by safety officials, acting under the direction of Secretary of Transportation Secretary Ray LaHood. …

Meanwhile, back in Detroit, evidence of problems in various GM cars – and especially the Chevy Cobalts — continued to mount. To date, the auto maker has reported 13 deaths   related to sudden deceleration in various GM models. While the government is now questioning why the Detroit firm delayed initiating a recall of the troubled vehicles, one can also challenge NHTSA’s hands-off attitude.

According to The Times, there were only 260 complaints specifically mentioning stalling, but almost 8,000 reports of problems that could be tied to the same defect – plenty of complaints to alert safety watchdogs. In all, the vehicles recalled have been involved in 78 deaths and 1,581 injuries.

If so, though, the sequence of events suggest that any protectionism would have started in the Bush administration, which was in office for almost two years after NHTSA’s first recorded acquaintance with the problem. In those two years, GM nearly collapsed and Chrysler all but did during the financial crisis of 2008. Perhaps both administrations felt it best to tread carefully to keep from shuttering GM, if there was any political machinations going on at all. Certainly, though, the NHTSA will have to explain why it got so tough with Toyota at the same time people were dying from GM defects that they were doing their best to ignore.

The problem is that, these days, we can believe all too well that the institutions of regulatory control can be exploited for political gain:

Unhappily, after the IRS targeting of right-wing groups, the manipulation of jobs numbers by census workers, the misleading accounts of the Benghazi tragedy and the deceptive marketing of Obamacare, we have lost trust in President Obama’s White House. Anything seems possible.

That is, as always, a great argument for limited government in the first place. Power corrupts, absolute power corrupts absolutely, and trust is the first casualty.

Tags: auto bailout, Barack Obama, crony capitalism, GM, regulation, Toyota, transportation

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Obamacare’slatesttalkingpoints:“Badapples”androad

Obamacare’s latest talking points: “Bad apples” and road apples

posted at 9:21 am on November 5, 2013 by Karl

To the surprise of no one, President Obama has been busy deflecting criticism of his “If you like your plan” lie by blaming insurance companies:

“Just shop around in the new marketplace,” he said. “You’re going to get a better deal.”

***

“Remember, before the Affordable Care Act, these bad-apple insurers had free rein every single year to limit the care that you received, or used minor pre-existing conditions to jack up your premiums, or bill you into bankruptcy,” Obama said.

Similarly, the New York Times’ widely-mocked Sunday editorial (claiming that Obama “misspoke” when he promised Americans who liked their insurance that they could keep it) referred to existing plans as “Insurance Policies Not Worth Keeping.” In contrast, under O-care:

Starting next year, all plans sold in this country will be required to provide 10 essential benefits, including some, like mental health and substance abuse treatment and maternity and newborn care, that are not now part of many policies.

How do these new talking points stack up against reality? Not so well.

One of the few things Obamacare supporters like Josh Barro and opponents like Mark Steyn agree upon is that governments (state and federal) have had their mitts all over the health insurance industry for decades. By 2004, the high cost of health services regulation was responsible for more than seven million Americans lacking health insurance, or one in six of the average daily uninsured. Obama’s latest talking point tries to pretend otherwise.

As Robert Laszewski, president of Health Policy and Strategy Associates (an expert even acknowledged by Ezra Klein and his ilk), points out, individual health insurance policies have been regulated for decades by the states. Almost every state in the union has dozens of health insurance mandates (Texas has 62 such mandates). The most common mandates, adopted in almost every state, cover mammography, maternity stays, mental health parity, and alcohol & substance abuse — i.e., the sorts of mandates the NYT thinks are so revolutionary. (Incidentally, Laszewski is one of those who likes his plan and can’t keep it — and by no stretch of the imagination could it be called “junk” insurance. But I digress.)

When the President refers to these “bad apples,” to whom is he referring? No doubt there are some; it is not difficult to find anecdotes on the ‘net. But why didn’t Obama name names? Doesn’t he have a list, much like Joe McCarthy?

The first major story on mass insurance cancellations was published by Kaiser Health News (and seen widely via NBC’s site). That story had a list:

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh [a non-profit, the largest health insurer in Pennsylvania and West Virgina -K] is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.

Other stories detailing Obamacare’s sticker shock refer to Humana and Blue Cross Blue Shield of Michigan. And if you look at the letters posted at MyCancellation, it appears most are from various branches of Blue Cross/Blue Shield, along with Aetna, United Healthcare, and the like.

In short, Obama’s latest talking point largely depends on convincing people that Blue Cross/Blue Shield is a “junk” insurer. But the 7-16 million people being kicked off their plans (not to mention their families and friends) know Blue Cross is not a “bad apple.” And as much as Obama’s senior adviser Dan Pfeiffer might wish otherwise, neither he nor his boss will have much luck painting United Healthcare as a villain after paying $1.2 million on behalf of stage IV cancer survivor Edie Sundby. Obama’s “bad apples” whopper will fail as badly as “If you like your plan,” because both are disconnected from the reality of the situation.

And what of Obama’s claim that people are going to get a “better deal” in “the new marketplace,” once the Administration gets it to work? As Jake Tapper (via the Allahpundit — I am such a suck-up) reported, the Obama administration’s Obamacare ‘War Room’ is concerned consumers will be disappointed by sticker shock and limited choice in “the new marketplace.” The Administration’s fears are well-founded. Again, Laszewski explains the problems in all their wonkery, with examples, summarized as follows:

Consumers will be faced with a dilemma — accept *** lower benefits and limited provider networks for the lower prices (benefit shock) or buy a more expensive plan and pay the difference out of pocket (rate shock).

Moreover, as Ed Morrissey (again — I am such a suck-up) notes, these problems ultimately may affect up to 93 million Americans, if the employer mandate ever goes into effect.

Of course, none of this is to say the health insurance sector, particularly the individual market, was not in need of reform. You can completely disagree with Obamacare as policy and still recognize that. However, what has become impossible for public — and even the media — to ignore in the past month is that the Administration was profoundly dishonest in how it campaigned for Obamacare. The President’s latest talking points, even if echoed by the New York Times, demonstrate only that the bait-and-switch continues.

Tags: bad apples, cut rate, health care, insurance, obama, ObamaCare, regulation

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Source from: hotair