Wow, that was fast!

The health care bill was just signed into law two days ago, and we already have this:

Caterpillar Takes Hit On Health Care

Caterpillar Inc. said Wednesday it will take a $100 million charge to earnings this quarter to reflect additional taxes stemming from newly enacted U.S. health-care legislation.

The world's largest construction equipment manufacturer by sales, warned last week that provisions in the legislation would subject the company to federal income taxes on the subsidies it receives for providing prescription drug benefits for its retirees and their spouses.

I wonder how many more of these stories we'll be seeing in the near future?

Why I love my job

Our station produced this video as an entry to the National Association of Broadcasters Service to America awards. Next week we'll find out who won. Even if we don't win, it sums up why I love my job. I work with a great group of people, we have a lot of fun, and we make the world a better place. And they pay me to do it!

A Fiscal Train Wreck

A couple days ago, Bloomberg reported:

The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

We have a crisis looming. It seems likely that the politicians will react to the crisis the way irresponsible governments usually do, by printing money. Interest rates will soar. The alternative will be to raise taxes substantially, until the tax rate as a percentage of GDP will reach levels that are common in Europe but have never been seen in the U.S.

Was he lying then, or is he lying now?

"Every year, the problem gets worse. Every year, insurance companies deny more people coverage because they've got pre-existing conditions." -- Barack Obama, March 8, 2010

"You can't demand insurance companies... take somebody who's sick, who's got a pre-existing condition, if you don't have everybody covered, or at least almost everybody covered. And the reason, if you think about it, is simple. If you had a situation where not everybody was covered but an insurance company had to take you because you were sick, what everybody would do is they'd just wait till they get sick and then they'd go buy insurance. Right? And so the potential would be there to game the system." -- Barack Obama, Feb. 3, 2010

Obama clearly understands why insurance companies cannot afford to take on customers with pre-existing conditions, yet he still uses it to paint them as villains.

Is the health care bill a plot to destroy the insurance companies?

When I hear questions like the one above, I think someone has their tin-foil beanie screwed on too tight. But on the other hand, if one wanted to create a law that would destroy the insurance companies, he could hardly have done a better job.

It's a basic concept in economics that people act rationally in ways that serve their own best interest. Let's look at some of the incentives in the health care bill, and the rational response to them.

First, there is the individual mandate that requires everyone to have a minimum level of insurance, or pay a penalty. In the Senate bill, this penalty starts at $95 per year and increases to $750 per year by 2016. Since no one can buy health insurance for $95 per year, or even $750 per year, the incentive is actually to NOT buy insurance. Especially combined with:

Mandatory coverage for pre-existing conditions. Both the House and Senate bill prevent insurance companies from denying coverage for pre-existing conditions.

Imagine a young couple, just out of college. Money is tight. Both are healthy. They can pay a $750 penalty at tax time, or they can spend $1,000 per month for insurance. It's pretty easy to see what the rational choice is. Even if they are planning to start a family, why buy insurance now? They can wait until the wife is pregnant and then get insurance that will cover the pregnancy. If one of them becomes ill, they can buy insurance then, so why bother with it now?

And what about employers? They will face essentially the same choice: provide medical insurance for all employees, or pay a $750 per employee penalty. Guess which choice is cheaper? Guess which choice they are going to make?

The insurance companies will have a huge adverse selection problem. The only people who buy insurance will be those who are going to use a lot of expensive medical services, and the healthy will just pay the penalty.

Pass the bill to find out what's in it?

When I saw the headline on the Drudge Report, I thought he must be misquoting her. Or taking her remarks out of context. "PELOSI HEALTHCARE: 'We have to pass the bill so that you can find out what is in it'..."

Excuse me? The only way to find out what's in the bill is to pass it? Surely Nanci Pelosi is too smart to make such an asinine comment.

But no, there it is, right on her own website. As part of her remarks to the 2010 Legislative Conference of the National Association of Counties, Pelosi actually said "But we have to pass the bill so that you can find out what is in it. . ."

Or maybe we could just read the bill and decide if we want it passed or not? Hey, it's just an idea.

Al Gore says global warming causes snowstorms

Al Gore has published an op-ed in the New York Times claiming that the record-setting snowstorms in February were caused by global warming. "...scientists have long pointed out that warmer global temperatures have been increasing the rate of evaporation from the oceans, putting significantly more moisture into the atmosphere — thus causing heavier downfalls of both rain and snow..."

So global warming causes increased rainfall. Got it.

But wait... what happened to the prediction that global warming would cause less rainfall?

Global warming to cause massive drought

"Global warming is predicted to be the cause of a massive drought that will threaten the lives of millions and take over half the land surface on our planet in the next 100 years, according to Britain's leading climatologists."

So if we have a massive drought, then that's what the theory predicted; but if we have increased precipitation, that's also what the theory predicted. No matter what happens, the proponents of the theory claim they predicted it.

That's not how science works. Science is based on the idea of theories that are falsifiable. A theory that cannot be proven wrong under any circumstances is, by definition, not a scientific theory. It's a religion.