Wednesday, July 23, 2014

The Incredible Stupidity of the Western Statist - Let's CRUSH Russia!

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Western statists in government and the media view the entire world as one big chess board wherein they only have to make a few brilliant moves to economically crush annihilate their perceived enemies to control the planet and its resources.

Matthew Yglesias at exhibits such a mentality and arrogantly believes his own delusion that the US and Europe can so economically impair Russia that Russia can be blasted back to the Stone Age. Aside from the genocidal insanity that deliberately hurting and harming folks is indeed a desirable foreign policy goal, the stone cold reality of actual facts dismisses such dangerously juvenile aspirations, despite the best efforts of Yglesias to believe his own warped rant and he isn't focused on merely punishing Russia (who did nothing to earn punishment) but he's thoroughly focused on CRUSHING Russia.

One fact that explains how Europe could crush Russia's economy by Matt Yglesias 

Yglesias is convinced that if Europe sanctions Russia that Russia will surely end up burning in the sanctions toaster. He validates his position by asserting that the trade relationship between Europe and Russia is far more valuable to Russia and even implies that Europe doesn't even need to trade with Russia. Yglesias then proceeds to defend EU statism as if it's a force so powerful that no nation state can escape it dictates.

The fly in the ointment is that while Russia is a nation-state, the European Union is a confederation of separate countries. The EU has incredible clout when it speaks with one voice....

The European economy presently sucks, especially southern Europe, so cutting off trade doesn't just hurt Russia, it also hurts Europe because trade is always a 2 way streak. Just how much is EU-Russia trade worth? It's worth a whopping $412 billion according to a CNN infographic, yet Yglesias dismisses $400 billion in trade as if it's really nothing, a most bizarre assumption considering that Europe is Russia's largest trading partner and Russia is Europe's 3rd largest trading partner.

The price of 'crushing' Russia economically would be quite steep for Europe but there is much more to the Russia-EU economic alliance and mutual dependency.  Europe is also dependent upon Russia for gas.

Map: Europe's thirst for Russian gas

30% of the EU's gas comes from Russia - in Germany it's 40% and Germany is the Europe's powerhouse economy.

Europe gets very cold in the winter, especially its frigid northern nations like Germany.  Does anybody really think that Europeans and the Germans are about to risk freezing in the winter and risk losing over $400 billion a year in trade to appease the US Empire?   Well, some believe that it's no problem and that the US can supply Europe with all the gas it needs. (formerly reports, here:

Europe's reliance on Russia is temporary. By 2020, the U.S. could become a major energy exporter, supplying Europe with about half of the gas that Russia supplies now, according to the Obama administration. If the EU and the U.S. can agree upon an "energy policy," then Europe could rely on the U.S. as one of their main energy suppliers. That endangers Russia's grip over the EU, but it also means that Europe would only have to manage the next few years under Russian dominance.
The bold assumption that the US can supply Europe with all its gas needs begs the question: Who controls the largest natural gas reserves on the planet and who has the infrastructure to deliver it?  It's not the US.

Top Natural Gas Reserves by Country 2014

Russia has 1,688.00 trillion cubic feet
Iran has 1,193.00 trillion cubic feet
Qatar has 885.29 trillion cubic feet
Turkmenistan has 265.00 trillion cubic feet
US has 308.44 trillion cubic feet


Gas as a resource is worthless without a delivery system and pipelines are indeed the main delivery source. While Russia and Europe are linked by a complex network of pipelines, the US can't deliver gas to Europe because there is no infrastructure in place to accomplish such deliveries, forgetting momentarily that Russia has more than 5 times the natural gas reserves of the US.

Any efforts by the US to deliver gas to Europe will be expensive, require a huge infrastructure investment (probably one that isn't even close to being economically viable) and will also drive up energy costs across Europe, all of which will negatively impact Europe's already ailing economy.

The bottom line is that nobody can meet Europe's natural gas needs more efficiently and cost effectively than Russia, despite the grand delusions of US media foreign policy wonks preaching the hallucinations of USG policy wonks.

If you were a citizen of Europe, would you risk freezing in the winter and suffering more economic hardship just to appease the US Empire?

While the USG and its media hacks may be suffering from an acute case of inhaling way too many summer vapors, at the end of the day Europe will tell the US to take a hike with a polite "Thank you very much but we rather like our $400 billion plus trade with Russia, we very much like Russian gas and we aren't about to commit economic suicide or freeze or genuflect before DC, and by the way we still remember the NSA, YES, America can go straight to hell and we are totally fed up with the damn Yanks."

Tuesday, July 22, 2014

Obamacare Taxes, Subsidies and Mandates: Why Obamacare is getting legally interesting.

Obamacare is probably headed back to SCOTUS.  Today, 2 different federal courts made conflicting rulings on the issue of subsidies. Politico reports:
First, the U.S. Court of Appeals for the D.C. Circuit in a 2-1 decision said the insurance subsidies can’t be awarded through the 36 federal-run exchanges, that they can only flow through the state-run markets. Hours later, the Fourth Circuit court ruled 3-0 that people can draw on the subsidies in both kinds of exchanges. The divergent opinions set up a clash that could eventually end up at the Supreme Court — and reverberate through the fall campaign.

The ruling against the subsidies is the second Obamacare strike against the White House in less than a month, after it lost in the Supreme Court’s Hobby Lobby ruling on birth control coverage. But unlike the contraception rule, which is a small piece of the health law, the subsidies go to the heart of coverage expansion in the Affordable Care Act.....

Unlike other major Obamacare challenges, this controversy hinges on just a few words in a lengthy law. The D.C. Circuit concluded — “frankly, with reluctance,” as one judge wrote — that the statute narrowly but explicitly authorizes only state-run exchange subsidies, no matter what Congress may have intended. The Richmond court saw ambiguity in the text, but said the IRS had the power to interpret the statute broadly as it set the rules.

Read the rest here.
Obamacare is an expensive and complicated maze of subsidies, taxes, mandates and Medicaid expansion but the subsidies are indeed the mother's milk of Obamacare because without the subsidies health insurance costs will soar for tens of millions of Americans who depend on them.  Right now, the only endangered subsidies are the subsidies for health insurance policies bought on federal exchanges.  Subsidies for state run Obamacare exchanges remain in tact. 

Thus far, the only major Obamacare SCOTUS case, besides the Hobby Lobby case, was the 6/13 SCOTUS decision upholding Obamacare.  While conservatives went ballistic and would have preferred that SCOTUS strike down the entire legislation as unconstitutional, that SCOTUS decision was embraced as constitutional by many Libertarian jurists who claimed that Justice Roberts got it constitutionally right. 
Yes, there was conservative mass hysteria over the SCOTUS 6/13 Obamacare decision but does Chief Justice Roberts deserve the thrashing he got from conservatives? While conservatives were moaning the decision with fear and loathing, liberals were probably uncorking the Champagne. As sane observers took another look at the decision from the jurisprudence perspective, it's believed by some who embrace conservative-Libertarian politics that the Roberts decision was indeed the right decision and for the reasons outlined in an interesting article from the Testosterone Pit.
Conservatives should be ecstatic that Chief Justice of the Supreme Court John Roberts sided with the four liberal Justices in ruling the Affordable Care Act (Obamacare) is constitutional as a tax, while siding with the four conservative Justices that the law is un-constitutional under the Commerce Clause. Roberts just humiliated President Obama, gutted the social welfare and regulatory state, and appears to have set-up the entire Obamacare law to be constitutionally invalidated.

Chief Justice Roberts Gutted Congressional Power And May Still Have Invalidated Obamacare

Those are very powerful words:  "Roberts just humiliated President Obama, gutted the social welfare and regulatory state, and appears to have set-up the entire Obamacare law to be constitutionally invalidated."

The Obamacare decision is not a simple cut and dry decision.  It's got several critically important moving parts.  Justice Roberts did uphold the power of the Federal government to tax even though he also opposed the mandate.   Yes, the federal government does have the constitutional authority to tax.  More importantly, he did not uphold Obamacare under the Commerce ClauseAnother very important aspect of the decision involved the constitutional authority of the federal government to force the states to tax its citizens to fund increased Medicaid enrollments.  While the federal government does have the power to tax, Justice Roberts indicated that the federal governments' powers of taxation do not extend to the states.  In other words, the federal government does not have the constitutional authority to force the state to tax its citizens to fund Obamacare.

Medicaid expansion is the heart and soul of Obamacare because it not only forces folks into Medicaid, it forces taxpayers at the state level to fund it.

I wondered how long it would take liberals to recover from the fog of their celebratory hangovers and realize what really happened.  Not long!
Of all the ways President Obama’s health care law is poised to alter the U.S. medical system, the extension of new health insurance coverage to some 32 million people has been billed as its most important.....
But thanks to the Supreme Court's decision on the Affordable Care Act (ACA) last week, which upheld the law's basic architecture and the controversial individual mandate, fixing the problem of the uninsured could be a lot more difficult that Democrats were hoping. In a move that surprised court watchers and progressive advocates, the Supreme Court, by a 7-2 vote, ruled that states don’t have to participate in a huge expansion of Medicaid, the state-federal insurance program for the poor, called for in the ACA. (The ACA was written so that states that decided not to expand their Medicaid programs would lose their existing Medicaid funding, but the court said funding already in place should not be affected by states' decisions on the ACA changes.)
Whether states want to participate in the Medicaid expansion isn't just a matter of dollars. Republicans governors across the country, who have been vocal critics of the Affordable Care Act since it passed, are now signaling they may not opt into the Medicaid expansion. (Similarly, many of them turned down federal stimulus dollars.) Gov. Rick Scott of Florida has said he won't support a Medicaid expansion, although the state legislature might feel otherwise. New Jersey Gov. Chris Christie said after last week's ruling that he was glad the Medicaid expansion was ruled optional, but didn't say whether his state would participate. Other Republican governors, like Nikki Haley of South Caroline and Bobby Jindal of Louisiana, have said they will not make moves to implement the ACA in their states, although it's not yet clear if this means they intend to reject billions in Medicaid funding.
Medicaid Ruling Endangers Universal Coverage

While liberals perceived Obamacare as a backdoor to universal healthcare coverage, Chief Justice Roberts stuck a stake straight through the heart of that dream and yes Medicaid was the superhighway for forced universal government controlled healthcare. The Roberts roadblock has infuriated the left.

In fact, the issue of Medicaid expansion has so upset the Obama Administration that the the website of the White House ( is moaning that 24 states have refused to expand Medicaid.

24 States Are Refusing to Expand Medicaid.

Here's What That Means for Their Residents: Nearly half of states are so locked into the politics of Obamacare that they're willing to leave nearly 5.7 million of their own people uninsured. Take a look at our map -- and make sure you share it.

Clearly, the Roberts ruling opened up whole new cans of worms in the continuing saga of America's healthcare nightmare.  How it will ultimately shakeout is an issue of pure conjecture.  Moreover, the courts have not seen the last of Obamacare.  The only issue that was settled in the 6/13 SCOTUS decision was that the federal government has the power to tax and we already knew that.  The fact that the federal government does not have the power to force the state to tax folks to fund Obamacare is incredible relevant.  What is even more relevant is that while Roberts did uphold federal powers of taxation, he did stun America when he refused to uphold Obamacare under the Commerce Clause.  Exactly how that will play out in future decisions remains to be seen.

The far dicier issues of Obamacare are nowhere near resolved and now the subsidy issue is on the judicial table.

For more information on the absurdity known as the US healthcare system, see:

The Absurdity of US Healthcare and OMG, the Hysteria over SCOTUS upholding the Obamacare Tax! Under What Circumstances Would This Government Hating Libertarian Reluctantly Support a Single Payer Healthcare System?

America Already Has Socialized Medicine - A Trillion for Medicare & Medicaid and Another Trillion for Obamacare Subsidies 

The Bad Boss Tax and Yes Corporations Do Lobby for Entitlements and Yes it's a Form of Corporate Welfare

Image source:,_Philip_Leung,_Chinese,_Marcell_Webb,_Negro,_and_an_unidentified_White_worker_adjust..._-_NARA_-_196335.tif

The liberal leaning  Nation of Change had an interesting article titled The Bad Boss Tax.  Effectively it smacked corporations who pay low wages and then shifts the social cost to the taxpayers who are forced to pay for Medicaid, food stamps and other entitlements for the working poor.  The article even advocates for taxing these low wage paying corporations to reimburse the public for having to pony up with tax dollars to subsidize the working poor.

While I don't endorse increasing corporate taxation and would simply prefer that the corporate tax be totally abolished, the rational response is: what would happen if entitlements for the workers were also abolished?  What if corporations were forced to compete in the labor market as they once did before they figured out that they could bribe politicians to pass entitlement legislation for workers and shift the social costs of labor to the taxpayers?

Anyway, The Bad Boss Tax article does indeed raise some very interesting and valid points.

Vampire businesses

Just how much money are low-wage businesses draining from local, state and federal coffers? A study released in April by Americans for Tax Fairness, a coalition of more than 400 organizations that advocate progressive tax reform, estimated that Wal-Mart alone costs taxpayers $6.2 billion annually in public assistance. That report draws from a 2013 study by the Democratic staff of the US House Committee on Education and the Workforce, which estimated that Wal-Mart cost taxpayers, on average, between $3,015 and $5,815 per worker.

Americans for Tax Fairness used the House Democrats’ study to extrapolate Wal-Mart’s public-assistance burden on each state. In Minnesota, for example, where Wal-Mart has 20,997 employees, the public burden totaled $92.7 million per year. That’s $92.7 million Wal-Mart isn’t paying in wages or benefits, but that instead is being borne by taxpayers — taxpayers who, of course, include Wal-Mart workers.

The study also notes that Wal-Mart profits from food stamps on the consumer end. According to the company’s own estimates, Wal-Mart captures 18 percent of the SNAP market, some $13.5 billion annually...

Wal-Mart isn’t alone; there are thousands of other low-wage employers...

Most of those minimum-wage workers are in the service industry, particularly in food service. And not coincidentally, taxpayers are also shelling out to prop up food industry wages. Studies last year from the National Employment Law Project and the University of California, Berkeley, showed that fast-food companies cost taxpayers an additional $7 billion per year in public assistance, with McDonald’s accounting for $1.2 billion. The Berkeley study notes that fast-food companies pay cashiers and other frontline workers a median wage of $8.69 an hour, and more than half of those workers rely on one or more public programs, compared to 25 percent of the workforce as a whole.

It's a damn poor reflection on our economic system that folks who work full time need public assistance.  Libertarians and free market proponents may scream about increasing the minimum wage as an assault on the poor and businesses but until they can convince Americans that free labor markets can and do deliver a level of non-entitlement dependent workers then all the sympathy will indeed be with statist solutions to mandate wages.

A long time ago I was a minimum wage worker and survived quite nicely - had enough money to fund a modest lifestyle complete with an apartment, a car, food on the table and even enough money left over for booze, clothes and entertainment.  But the dollar bought a whole lot more when I earned the minimum wage.

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