Wednesday, December 27, 2017

Reality Check On The Donald

Something I wrote a year ago, but it seems to have weathered well.

Fundamental problems that no amount of ideology or belief in magic thinking can fix. That's what's on my mind.
If a guy's missing a leg or an eye, he's missing a leg or an eye, and you, the observer can get to grips with it or indulge in ideology: "This problem does not exist. We outlawed wooden legs and glass eyes." or you can take the magic thinking route and say :"He's fooling. It's an optical illusion to allow this fellow to cop benefits he's not entitled to." "We can grow new limbs and organs with green tea and baking soda."
Repeal the AHCA. The end result is that there will be 25 million or so without health insurance which they had. So what will they do when they get sick? Here's what.
They will be sicker when they show up at the emergency room. Treatment must be provided by law. It will be expensive. Instead of going to their primary care physician they will do this. They will not be able to pay for it. Then, they will declare bankruptcy as they did before Obamacare which brought this all about in the first place.
When they declare bankruptcy there will be no assets or accounts full of money. Ultimately this debt will end up in the hands of the government and the hospital which will have to raise rates for the rest of us. Or they'll just not pay and work off the books somewhere. Collecting money from these people is like pushing string. Ask the child support recovery staties how they're doing.
Here's a thought. The issue driving the efforts at health care reform like Obamacare is not better health or love of one's fellow man.
It is cost containment by managed care. That is what drives the process, that's where the legislation came from, and it's an effort to mitigate the $700 toilet seat syndrome.
And Obamacare may well be the low cost solution overall.
The health care problem is not going to go away because Trump snaps his fingers and sneers "Get him oudda here!"
Likewise the problem of immigration, whether stuffing up the cracks in the border or deporting the ones who got here already. Trump can entertain his rally goers with florid versions of "Build a wall! Make Mexico pay for it!" but the problem is structural and economically driven. For that reason I do not expect much from the incoming administration except a lot of sheep dip, because as people say "Trump's a businessman! He'll run the country like a business!" and taking this line he will see that it is unprofitable and abandon it in all but name.
Trade wars with the Chinese or Japanese or whomever. How long and how much stupid tariffs will it take for China Inc. to call its loans to the US, impose countervailing tariffs on American exports, and precipitate another great depression like what happened with the disastrous Smoot Hawley tariff of the early thirties?
These are all structural problems that ideology has nothing to do with. And we haven't even gotten to the subject of clean coal.
Suppose you're Warren Buffett and you own MidAmerican Energy (which Berkshire Hathaway does). You have a coal fired powerplant.
You have to pay to have the fuel dug out of the ground in Wyoming, cleaned, washed and loaded on unit trains that run east through Boone, Iowa. When they get to where they're going they have to be stockpiled. Then, they get burned to make steam, and you have to clean up the stack residue, and figure out what to do with the fly ash. Lots of fly ash.And you've also got lots of miners who have needs and want good paychecks.
Then the man comes from the pipeline company and says "We'll sell you natural gas at a lower price per therm than that Wyoming real estate you're burning. There's no ash, very little transportation cost, and the exhaust is clean. All you have to do is hook up to the pipeline and install burners. It's clean, quiet, environmentally friendly and you'll reduce your cost substantially."
What's Warren going to do? The answer is why coal is a legacy fuel source and those jobs are not coming back.
Keep thinking.

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