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The “Real” News About Healthcare Reform

The Providence Journal and Rhode Island progressives are doing a disservice to the people of our state by advancing a biased and non-realistic perspective on the federal healthcare reform debate.

There are few issues that are more personal or important than planning for the care that can preserve the health of ourselves and our families. But what governmental approach best helps us accomplish this?

Currently, our state is following the federal Obamacare approach of seeking to insure more people with government-run Medicaid or with a one-size-fits-all government-mandated private insurance plan. This approach is in a death-spiral.

Continue reading at Rhode Island Center for Freedom and Prosperity.

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The Economics of Giving Stuff Away

As is typical, Kevin Williamson is worth reading on the practical economics of government policy:

We are a very, very rich country. We can afford all sorts of things: food for the hungry, health care for the indigent, education for children, and hearing aids for families that for whatever reason cannot manage to scrape together $1,000 a year to invest in the well-being of their own children. (Those $5,000 hearing aids last for about five years, meaning that their real cost over time is less than the $1,200 a year typical American family spends on cable television.) I myself am all for doing many of those things, though I do not think that government very often is the best instrument for getting them done. But if we are going to use government, then, by all means, let’s use government in the most honest, transparent, and straightforward way we can. Forget the insurance mandate and just write the check.

In that regard, Democrat Governor Gina Raimondo’s free tuition would be preferable to some other policy that tried to force somebody else to pay for it — homeowners insurance or something like that.  Of course, other basic economic lessons come into play, which struck me when WPRI’s Dan McGowan tweeted:

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“Affordability” is a measure of price against value.  Following Williamson’s price estimate for hearing aids, in-state tuition at the Community College of Rhode Island (CCRI) is less than the average family cable bill.  Rhode Island College (RIC) and the University of Rhode Island (URI) are substantially more, but both saving and borrowing spread out the payments.

Considering that the average monthly student loan payment for all years of all colleges is somewhere around $280, two years of in-state tuition in Rhode Island would be much less.  That means young adults are valuing a large number of other things — cable, cell phones, video games, weekly dinners out, and so on — more than they’re valuing education.

Pushing the price down for them doesn’t make them value the education any more.  What it will do, though, drive up tuition and hurt taxpayers.

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Governor Pitches Free College to More Kids Who Can’t Do Math or Read at Grade Level

Last week, Democrat Governor Gina Raimondo and Democrat Senate President Teresa Paiva Weed visited Rogers High School in Newport to promote the governor’s plan to buy votes by giving families taxpayer dollars for two years of public college:

“When I talk to people around the state like your parents, they tell me that they are kept up at night thinking about your future,” Governor Raimondo told the students. “I want you and Rhode Islanders like you to get the jobs companies are creating here. The number one barrier to a college degree is cost. Our Free College proposal is affordable and an investment we need to make in your future. I am so thankful for Senate President Paiva Weed’s leadership and partnership. Working with her, I’m confident that all of you will have a shot at a good job here in Rhode Island.”

The women didn’t mention that 96% of students at Rogers High School are not proficient in math, and only 21% are proficient in reading.  A more honest message would be:

In cooperation with your teachers’ union, we have ensured that most of you are not receiving the education that you deserve.  You’ll be excited to hear that rather than fix the problems that we’ve created for selfish reasons, we’re going to take tens of millions of dollars from your parents and neighbors and cut two to four years out of your adult life in order to try to get you to where you ought to be right now.

The reception that these politicians get when they abuse their power like this — using school time to campaign to children — ought to be more like a Tea Party town hall than a pep rally.  It would seem that keeping students under-educated has its benefits.

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The Key Paragraph of the ACLU UHIP Settlement

You may have read that the state government settled the lawsuit that the ACLU filed over the debacle of the Unified Health Infrastructure Project (UHIP; aka RI Bridges, if it ever works).  As I’ve asked before, was this necessary?  Even assuming the state wouldn’t have taken the same steps that it has promised in the settlement once negative attention forced action, couldn’t a push from a few activist groups have produced the same result?

Well, mostly.  This part of the settlement probably wouldn’t have been in the outcome of a simple petition:

Plaintiffs shall be entitled to recover their reasonable attorneys’ fees and costs pursuant to 42 U.S.C. § 1988. Within sixty (60) days of the Court’s entry of this Order as an order of the Court, Plaintiffs shall file a bill of costs and motion for attorneys’ fees and costs with the Court pursuant to 42 U.S.C. § 1988, unless such time is extended by agreement of the Parties or order of the Court or unless such motion is rendered unnecessary by agreement of the Parties. Prior to filing such motion, 13 Plaintiffs shall present a bill of costs and fees to Defendant and within fifteen (15) business days thereafter, or at such time as the Parties mutually agree upon, the Parties shall confer by telephone or in-person in a good faith effort to agree to an amount in settlement of fees and costs. If the Parties are unable to agree to a fee amount, Plaintiffs may file a motion for attorneys’ fees and costs with the Court.

Indeed, if a petition-driven resolution had included language promising money to the activists, it would have seemed shady.  But in this case, to recap, the state is having trouble providing money and services to needy people, and some activist lawyers managed to make a payday of it while appearing to be warriors of charity.  That’s government under a progressive regime, I guess.

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Risk Aversion in Stocks and in Politics

Here’s an interesting find from Justin LaHart in the Wall Street Journal, in a brief article titled “Why the Stock Market Doesn’t Like Republicans“:

The two economists created a model where people have a choice between being entrepreneurs and working for the government, and of voting for a political party that favors lower taxes or higher taxes. When risk aversion is low, more people want to be entrepreneurs and to vote for the low-tax party. When risk aversion is high, the opposite is true.

It is a highly simplified version of U.S. politics and economics. But the implications for stock prices are interesting. The low-tax party gets elected when risk aversion is low, and then if risk aversion merely returns to the mean, stocks suffer. For the high-tax party, the opposite is true.

The next question, obviously, is what causes these changes in sentiment, because the variables seem more to correlate than to cause one another.

Of course, they may have a causative relationship indirectly.  The high-tax party, for example, is likely to sense this dynamic (whether consciously recognizing it or not) and change policy in a way that makes people more risk-averse (such as regulations to make independent activity more difficulty while acclimating people to dependence on government’s socialization of risk).  Indeed, even when they promote entrepreneurialism, they strive to make it seem like something that cannot be done without the safety net of government subsidies.  (“You didn’t build that.“)

The insight has implications for advocacy, too.  Conservatives who make a theme of imminent doom under progressive rule — however accurate that theme is — may be making the public more inclined to fall for progressive promises of security.  The key, perhaps, is to make people feel secure in their families and their own ability to transcend

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The Anti-Poverty Idea That Became a Dependency Trap

Jason Riley recently wrote, in the Wall Street Journal, about Peter Cove, who once was a warrior in the “War on Poverty” but has come to the quite different conclusion that the government is now promoting dependency:

“We have edged toward a moral cliff where the shame of being dependent on government aid has been replaced by a breezy bonhomie for entitlement,” he writes in a new book, “Poor No More.” “We have moved from a commitment to serve the deserving poor to an assumption that all are deserving. And much of this rests at the feet of politicians trolling for votes by larding on the largesse.”

What Cove is talking about, in my view, is the business model of the government plantation.

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Making Distinctions on Immigration

This New American Economy study of immigration has been going around:

Though it is our nation’s smallest state, Rhode Island is home to almost 140,000 immigrants. The state’s immigrants are mostly of working age and play a valuable role in both the manufacturing and software industries. They are also bolstering the housing market by buying the wave of homes coming on the market as baby boomers retire; all of these positive contributions are critical to the success of Rhode Island’s economy.

For the most part, this has been deployed as part of the mainstream effort to blur lines on immigration, proclaiming the value of immigrants generally.  That has always been a distortion of the debate; I don’t know anybody who objects to controlled immigration that takes account of the national interest and emphasizes assimilation.  The first objection people have is to illegal immigration, and the (distant) second objection is to indiscriminate legal immigration that bolsters welfare roles and puts downward pressure on low-end wages.

With respect to illegal immigrants, note that, overall, immigrants in Rhode Island pay $886.1 million in state and federal taxes, based on income of $3,500 million.  That’s 25.3%.  By contrast, illegal immigrants pay $43.7 million on income of $365.2 million, which is 12.0% — less than half the rate for all immigrants.  (The proportion for state taxes is roughly the same as taxes overall.)  Note that the numbers for legal immigrants would be substantially more positive than the presented numbers, because illegal immigrants account for 20% of them and bring the numbers down.

Those on the political Left might say that this proves that illegal immigrants should be normalized so they’ll pay more taxes, but the type of work they do is different, as is their propensity to need financial assistance.   The New American Economy study (surprise, surprise) doesn’t give information on welfare programs and other public expenditures (such as for education), but that’d probably be higher for the illegals, too.

Rhode Island should refocus immigration policy on those who contribute the most, certainly until our employment situation is no longer stagnant.

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Projo Catching Up on Illegal Immigrant Benefits; Information Still Partial

It’s always nice to see the Providence Journal catching up on topics that Anchor Rising covered long ago.  Here’s Monique Chartier writing in 2011:

When someone goes to the State of Rhode Island and applies for social services, one of the first pieces of information for which they are asked is a social security number. However, there are instances when the applicant/recipient may not have one (more on that in a sec). When that happens, the staff at the Dept of Human Services is permitted to enter a “666” by-pass number – a nine digit number that starts with 666.

Know how many people are receiving benefits under a 666 by-pass number?

3,388.

And here’s Katherine Gregg writing in the Providence Journal the other day:

The numbers: As of February 8, there were 3,419 people without Social Security numbers listed as receiving benefits by the new state computer system that tracks eligibility determinations and payments of publicly-subsidized benefits in Rhode island, from cash assistance to health care.They have been entered into the state computer system with the code “666” or “000” in lieu of a Social Security number.

That tiny increase brings to mind Monique’s 2011 question: “Are we to believe that there is a steady new batch of 3,300 applicants continuously coming into the system who need to use the by-pass number while waiting for a social security number or a copy of their card to arrive?”

Curious, indeed.  Gregg got the state to insist that “fewer than” 750 of the beneficiaries using the bypass numbers are illegal immigrants.  Per Monique’s earlier question, one wonders to what extent they are the same people receiving benefits six years ago, or whether there’s amazingly consistent churn.

We shouldn’t forget, by the way, that the bypass numbers can’t be the complete count of illegal immigrants receiving benefits.  Consider this recent video of illegal immigrant activist Jose Vargas acknowledging that his grandfather bought him a Social Security Number.  One gets the impression that such things are common, given that Vargas raises the matter as evidence that illegal immigrants pay taxes.

In summary, we still don’t know how much Rhode Islanders are paying for illegal welfare benefits.

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A Well-Planned “Shock” To The System Is, Indeed, Warranted

According to the Rhode Island Family Prosperity Index, “startups aren’t the only thing when it comes to job growth. They’re the only thing.” The only way to incentivize enough start-up activity to make a difference in our state is to create a business climate that is attractive enough to make thousands of entrepreneurs want to invest here. Crony deals for a few dozen companies will not get it done.

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News Flash: The Law Even Applies to People Progressives Like

Over on RI Future, Steve Ahlquist complains that, under President Donald Trump, the Immigration and Customs Enforcement (ICE) is now detaining people for “even minor crimes.”  Here’s Ahlquist’s example:

According to sources familiar with the incident, José Eduardo Cames (the third part of his name may be misspelled) lied to immigration officials at the border when he and his wife entered the country. They carried a baby with them that was not theirs, loaned to them from another family, to make a better case for themselves to stay in the United States.

An investigation revealed the lie, but under Obama, that did not make the couple a high priority for deportation and as long as they made periodic visits to an ICE office in Warwick, they were allowed to stay in the country. At their most recent visit to the Warwick ICE offices on Friday, ICE did not let them leave and detained them, said a source familiar with the case.

In other words, the “minor crime” that the couple broke was entering the country illegally, with the added dynamic of fraud, and the agency that the federal government has created at great expense to enforce that particular area of the law is holding them, perhaps to deport them.  (Never mind that they “borrowed” a baby, as one borrows a car, perhaps with the intention that the child’s actual parents would then have an excuse to enter the country, which is arguably a form of exploitation and human trafficking.)

As I’ve written before, there are legitimately difficult cases in the immigration debate, but one gets the impression that progressives don’t actually believe that any of the cases are difficult.  Their view appears to be that we should let everybody in at the border and then let them stay (seeding the government plantation and giving progressives political leverage).

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Mike Stenhouse on GoLocal LIVE – Gov’s Manufacturing Council

Thanks to Kate Nagle and GoLocalProv for inviting the Rhode Island Center for Freedom and Prosperity’s Mike Stenhouse on their new GoLocal LIVE program yesterday. They discussed, in part, Governor Raimondo’s recently announced manufacturing advisory council, which is comprised of lots of people but not a whole lot of economic diversity.

Meanwhile, congratulations and best wishes to Kate Nagle, Molly O’Brien and GoLocalProv on the launch of their cutting edge new program!

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Doesn’t Money Have to Come from Somewhere?

A nagging question is never addressed in this Christine Dunn’s Providence Journal article:

One of the Trump administration’s first actions last Friday was the suspension of a previously announced 0.25 percentage point rate cut in the Federal Housing Administration’s annual mortgage insurance premium. The planned cut, scheduled to become effective Jan. 27, had been projected to save new FHA-insured homeowners an average of $500 this year….

The FHA is a part of the U.S. Department of Housing and Urban Development, and it offers mortgage insurance, most often to first-time buyers and low-income individuals. An estimated 16 percent of mortgages in the U.S. are FHA-insured. The mortgage insurance is designed to protect lenders against defaults.

Was there no information about why the Trump administration took this action or where the money comes from?  Maybe this move benefits corporate interests, or maybe it benefits taxpayers; it would seem incumbent upon journalists reporting the benefits of a government program for the recipients to also give some sense of whom it affects adversely.

Inadvertently or deliberately, this omission perpetuates an imbalanced understanding in the public, disallowing us from weighing costs when assessing how well government is making decisions.

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Money-Grubbing Company’s CEO Praises Politician Who Paid Him

It’s tempting to wonder whether Democrat Governor Gina Raimondo made a governor-praising op-ed by CEO Bob Baird a condition of the state government’s tax-dollar handout to pen-company A.T. Cross:

Enter Gov. Gina Raimondo. In 2014, soon after she was elected, Governor Raimondo called to tell us she loved our history in Rhode Island and looked forward to using a Cross pen to put her signature on official documents. Later, when the governor and her team learned we were talking to other states about pulling up our roots and beginning anew somewhere else, they made it clear they value Rhode Island companies that have been here all along. The governor, Commerce Secretary Stefan Pryor and their team made a compelling case that our business is best served by staying in Rhode Island and that our employees will find everything they are looking for here at home.

Most likely, though, the CEO’s public promotion of the governor was more of a wink and nod affair than a contractual stipulation, or maybe it’s simple etiquette in the you-scratch-my-back-I’ll-scratch-yours crowd.

I will say that I’ll never deliberately buy an A.T. Cross pen, now, although if the company decides to send a thank you gift to every Rhode Islander for our involuntary contribution to the company’s bottom line, I’ll take one.

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Raimondo Insults Your Intelligence with College Plan

This morning, I noted that legislators are the only people in Rhode Island who can promise workers a 10% increase in pay without worrying about where the money will come from.  It just magically appears in their imaginations.  At noon, I suggested that Rhode Islanders should be embarrassed that their state is so dependent on federal government welfare.

The state government’s latest revenue and caseload conference estimated that the government’s revenue will fall $52 million from fiscal 2016 to fiscal 2018.  And during the budget process, last year, the state expected that deficits would climb $40-60 million per year, hitting $333 million by 2021.

So how in the world does Democrat Governor Gina Raimondo state the following — and get away with it in G. Wayne Miller’s Providence Journal article — while promising the new $30 million expense of giving all Rhode Islanders two free years of college at a state institution?

We have the money. This is affordable. It’s a smart solution.

It’s a vote-buying giveaway pure and simple that counts on Rhode Islanders’ not noticing that they’re paying the bill.  It’s an insult to our intelligence.

Moreover, we should expect that the estimated cost is laughably low.  Given free tuition, more families will use the colleges and university, and the institutions will surely increase their tuition rates once the cost to the decision makers (students and their families) is zilch (or half-price, for four-year degrees).  And this doesn’t even get into the governor’s assumptions that people who have no financial skin in the game for their degrees will actually take their studies seriously and apply themselves and that those who do will stay in the state rather than taking their subsidized degrees to states that actually have healthy economies.

One can only hope that Rhode Islanders aren’t so far gone, at this point, that they fall for the governor’s snake oil sale.

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The Conversation Starts Tuesday: Opportunity To Become Self-Sufficient

Everyone concerned about the well-being of our state’s families should be alarmed by our unacceptable 48th-place ranking. It is time to challenge the status quo insider mindset and to search for a more holistic path to help real Rhode Islanders improve their quality of life. This week, the Center will co-host a forum at Bryant University, that will provide an ideal opportunity for community, religious, and political leaders to convene and begin the process.

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