Southern Bread Blog

You will be hearing more and more about so called “cap and trade” in the near future as Obama moves toward getting that passed. It’s already in his budget proposal from the other day. So, it’s a good idea to look at just what it is and why conservatives oppose it. I mean besides the obvious reason, that at this point there should be a knee-jerk reaction of opposition to every Obama inspired idea. Every time he opens his mouth the nation collectively holds it’s breath to see what sector he’s gonna target for destruction next. But I digress. What is cap and trade?

Cap and trade is a system dreamed up by tree huggers to help the environment by reducing green house gasses. Specifically, good ol’ carbon dioxide(CO2), to the chagrin of plants everywhere. The way it works is like so:

Now, leaving behind the question of how it’s possible for a naturally ocurring gas like carbon dioxide to be a pollutant, why is this a idea bad? Doesn’t it help the environment to pollute less? Well, sure. But the devil is always in the details. Firstly, how do we know that we need less pollutants. It’s pretty apparent at this point that there is no consensus on the whole global warming issue. Japan recently made headlines by saying that they are re-thinking the whole “man made” part of global warming. There are definitely enough dissenting scientific voices to hold off on something so radical as this. From my view, it’s becoming more and more obvious that the whole global warming movement is a big money scam on the part of an elite group of environmentalists. That makes anything targeted at global warming reduction suspect. Cap and trade itself was born by the Environmental Defense Fund.

And that leads me to the next point. The money factor. The real heart of cap and trade has nothing to do with environmentalism. It’s got everything to do with tax dollars. It’s a total money grab by politicians. Think about it. If there is some pre-set cap that you will have to pay penalties on if you exceed; do you think for one minuite that the “cap” will be sensible? Think again. It will be absurdly low. And anytime budgets get a little tight in Washington, they will just lower the cap and have an instant tax increase, without changing a single IRS rule. And, as I said, the cap will be so low that every company will have to buy credits. Every one. And where will this extra money to buy credits come from? You guessed it. YOU! Remember the first rule of taxation. Companies don’t pay taxes. Individuals do. We pay all of them in the end, as they trickle down.

What’s worse about all this, is that higher energy prices directly hurt the poor first. As these companies have to spend millions more each year to buy credits, they will pass those costs on to the consumer. The ones who will hurt most will be the ones least able to afford it. This is not all just some conservative cynicism. We’ve seen the massive problems with cap and trade in Europe as a result of Kyoto protocols:

And this is the heart of the argument from an economist perspective. The end game here is to force a reduction in output. And the only way to reduce output in any substantial way is to make less product. This means less energy supply and thus higher prices. Every time government gets involved in a certain sector of the market, that market ends up reducing output. And it’s done in the name of helping the consumer. What a crock. The only sector they seem to be increasing output in these days is banking. Credit is in more than adequate supply. And they’re gladly handing out more every day.

I actually had this post written in full last night and then totally lost it. A couple of hours work down the drain. Curse you Filezilla auto-updater! Oh well, here goes round two. Maybe I can actually keep it this time.

It’s become something of a conservative cliche’ to blame everything bad in the economy on government intervention. I know things aren’t as simple as that. But, the reason cliche’s become cliche’s is because they’re so often true. It’s no different in the case of health insurance. I talked last time about how government regulations have been the main cause behind high premiums. Now I’m gonna back up that statement. First up, government mandates on benefits. You might not know that in many states, if you are a single man, you’re coverage may well include pregnancy and gyno. visits. Why you ask? Government mandated benefit inclusion. Heritage explains it thus:

But there are also mandates on the physician side. A friend recently told me that all pathology groups are now being forced to provide pap-smears. These are among the hardest tests to accurately prognose. Historically those have been handled by only a few, higher risk pathology groups that are willing to pony up for the high cost of malpractice insurance and pass those costs on to the insurer, leaving other groups to provide lower cost normative testing. This mandate will necessarily result in higher insurance premiums. Even for men. What we have is government regulated one-size fits all healthcare mandates coupled with one-size-fits all plan benefits mandates. It makes no sense. And it’s blowing up premiums.

Contrast that with other types of insurance. When you buy auto insurance you get to choose your deductible, whether you want collision, road-side assistance, etc. In short, you get to tailor the plan to fit your needs in a la carte fashion. Why would you buy collision insurance on a 15 year old clunker? You wouldn’t. But if it was sold the way health insurance is, you would have to. And your wallet would be all the lighter for it. Again, take homeowners insurance, renter’s insurance, life insurance, and on and on. They all allow flexible packaging to reduce cost and make it affordable to you in your individual situation. Why not healthcare?

I’m glad you asked. Nothing pulls at the heart strings more than sob stories about health care and sickness. Some stories, especially involving kids, will just wrench your heart out. That makes it the perfect candidate for political demagoguery. It’s a win/win for politicians all the way around. They get to rail against evil insurers to gain favor with the public. All the while passing laws that make it tougher and tougher for people to afford it. Which then in turn provides more ammo for railing against corporate greed. The final result is pricing everyone out of the market, intentionally, so that the only entity left that can afford it is government. Take a lesson from Ayn Rand:

And that’s just what has been in the works for years and years. Liberal politicians know that if they get socialized healthcare, that’s the death blow to individual freedom in this country. Once a program of that size and magnitude gets implemented it will never go away. Anyone who tried to re-privatize it would be met with the most vicious of rhetoric about how he wanted to “take away your healthcare.” They want it so bad they can taste it. And, don’t kid yourself. They know that regulations lead to a breakdown of the system. They aren’t stupid:

I’m gonna do a part three and look at how a socialized health system in this country would look. I may not do it next since it will require some research, but look for it soon.

Health insurance over the last 10-12 years has absolutely skyrocketed in price. I’m currently paying about $450 dollars for family coverage. My employer covers the other half of the bill for me. So, the total cost for family coverage is around $900. That’s unbelievable. Especially when you consider the fact that my family rarely gets sick. Sure, we have our bouts where the kids(otherwise known as snuggleable petri dishes) get sick a few times, but for the most part we never go to the doctor. So why is my bill so high? As with so much in this modern era, the answer lies in government meddling. You can’t be surprised at this point. But first, what is the rough outline for how insurance is supposed to work?

Insurance is about risk. Risk is king. Contrary to popular belief, insurance companies are not in the business of pooling risk. Instead they use risk analysis to determine, based on a wide array of factors, how much risk a certain person or item poses to them. They then use that calculation to arrive at a premium price that balances that risk. In this way, each thing being insured gets analyzed and accounted for to keep one bad seed from ruining the whole. This is fairly straight-forward when it comes to non-people. Things like houses are easily priced based on a consistent set of variables that are not hard to predict. For instance, if you have a house alarm, your premium is discounted because the insurance company’s risk has been reduced. Likewise, a car is very easy to analyze because all of the factors – total value, repair cost, driving record, etc. – are readily known and can be quantified.

The story changes dramatically when you consider people and healthcare. The only two really measurable things about a person are age and medical history. If your medical history is short and sweet and you are relatively young, you probably don’t pose much risk. Sure, you could get sudden cancer tommorrow. But the risk of that is all in the risk analysis calculations. But the devil is on the backend. When you actually do get sick, the cost is extremely hard to predict. Something that seems small can quicly blossom into a very costly sequence of Dr. visits. We all know someone who went to the Dr. when they felt bad and ended up being sent to 10 different clinics and specialists because of abnormal test results. It’s those types of things that would normally cause insurance premiums to slowly rise. But, what we’ve seen in the past few years are government mandates that require insurance companies to cover people they wouldn’t normally cover or would charge very high premiums to.

This has the effect of blowing up risk analysis. The end result is a more pooled approach, where every one else subsidizes a chronically sick person with their premiums. This pooling will necessarily cause premiums to go up rapidly to cover this huge added risk. So, take all that into consideration when you read this section of an article from American Spectator:

There are two questions here. First, what will happen if health insurers are forced to cover every American without respect to pre-existing conditions or medical history or anything else? It turns into a giant, private sector version of Medicare where pooled risk will cause rates to soar beyond anything imaginable. Second, why are these “insurers, doctors, hospitals and business groups” in favor of something so ludicrous as this? They aren’t. This is just like what we are seeing in the energy sector with all these companies “going green”, like GE and their eco-magination. They are trying to get out in front of legislation they fear is coming from this administration and at least have a voice in it. I guarantee the health sector is terrified of the federal government right now. By participating they can at least avoid being thrown under the bus totally.

This is gonna be long so I’ll pick it back up tommorrow and talk about the specifics in the article…

We all heard about Obama’s mortgage “relief” plan yesterday, but maybe you didn’t know that you’ve been paying a lot of people’s mortgages for years. How’s that? Well, I know I can’t be the only one that has noticed the surge in government pay and benefits in the last decade or so. It seems that everywhere you turn these days, somebody’s on the government dole getting a lot better benefits than us. Turns out my instincts were correct. I want to prepare you that the contents of this article will make your blood boil. You’ve been warned.

The article explains how all the best jobs now are to be had not in the private sector, but in the public sector. It used to be that you sacrificed pay for better benefits when you took a government job. Not anymore. Government unions so dominate the public sector now, that you can get private sector type wages with astronomical benefits to go along with it. Here’s the lowdown:

So our buddy Glenn, and millions of others like him, are enjoying benefits and wages unheard of for comparable private sector jobs and stability that just can’t be matched due to it being written into law. It makes you wonder why there is even a private sector anymore. It used to be that if you wanted a really stable job, you went to work for one of the utility companies. They’d take care of you for a lifelong career. Those days are gone now:

If you want to live the good life now days, you’ll have to go and get on the government payroll. But not just any government job. You’ll have to get one of the ones that are backed by a government worker’s union. We’ve talked about unions here before and how their collusion and special treatment allow them to keep wages and benefits artificially inflated above market value. Well, guess what you get when you combine that with government protection enshrined by law:

The private sector(you and I) are footing the bill for these fatcats to live high on the hog. Excuse me if I don’t buy into the notion that teaching children for 20 years entitles you to lifetime inflation-adjusted pensions with full paid health care. Guess what I’ll get if I retired after 20 years at my job. You guessed it. A few grand in a profit-sharing plan and a nasty COBRA payment each month. I also don’t buy into the cops as public servants thing either. At least not the cops I see around here. All they do is write speeding tickets and tow their bass boats to the lake. That’s when they aren’t conning the mayor into spewing fear rhetoric about budget shortfalls meaning less cops on the street. Any time I’ve needed a cop to actually help out they’ve given me the cold shoulder. When our house was robbed a few years ago they basically said sorry. We could probably use a few less cops on the street. Maybe at least then I wouldn’t get a speeding ticket that one time I forget to stare at my speedometer. Again, excuse me if I don’t jump on that bandwagon.

But surely it’s not as bad as all that, right? Guess again:

But, but, but, you say, firemen and cops have dangerous jobs so they need to have benefits like that right? Not exactly:

So, at the end of the day, what do we think about all this? Being realistic, the laws of economics don’t cease to exist simply because it’s government doing it. Pension plans are ponzi schemes. Always have been and always will be. So just like all the private sector pension defaults, the government one will eventually fail too. There simply won’t be enough money to fund them. Until then, though, maybe we should all go to fireman school.

On the advice of a friend, I’ve been reading a book called Before Scopes. It’s subtitled as “Evangelicalism, Education, and Evolution in Tennessee, 1870-1925″. It’s a survey of the events leading up to the famous Scopes monkey trial in Tennessee where the school board indicted John Scopes for teaching evolution in his classroom, in violation of the Butler bill. The Scopes trial itself really isn’t of interest to me, but public education in the South is. So I have been making my way through it and it’s very good. It chronicles the pre and post-war Tennessee educational environment and gives it a pretty fair hearing in my opinion. It’s a story that we could all learn from today.

But, on to the point. One of the forces behind public education in the post-bellum South is something he refers to as the Peabody Education Fund. That peeked my interest and I filed it away to follow up later. Well, low and behold, while reading a paper that my wife sent to me by John Taylor Gatto, I ran into a reference to “…George Peabody, who funded the cause of mandatory schooling throughout the South…”. So I just had to dig a little and find out who this guy was and why he was so interested in Southern schooling. After researching a little bit, I guess I should have heard of this guy before.

From what I can tell, George Peabody was a founder of the banking company that eventually became J.P. Morgan(Morgan’s son would later sit on the trust fund’s board), and also Morgan Stanley. He is considered the first “philanthropist”, in the modern sense. An extremely wealthy individual who devotes his latter years to benevolence. He sounds to me a lot like Walter Annenberg. It’s actually uncanny how close the comparison is. Down to the fact that Peabody lived his last years in London, and Annenberg was the ambassador to the U.K. in his latter years. Anyway, it looks like he created the Peabody Education Fund in 1867, and died a few years later. He set up a trust for the distribution of the money, with little or no restrictions or caveats on how it was doled out. Again, very similar to Annenberg.

I found some of his letters to the trust board in the New York Time’s archives section, and as far as I can see, the guy’s motives were honest. He seemed to genuinely believe in the cause he was starting. Things would start to change, however, in 1879 as the interest rate on government bonds slowed the amount of money that the fund was generating. The board called on a petition to the Federal government to appropriate money for Southern education initiatives. This idea would only grow as the board later included William McKinley and then later President Teddy Roosevelt. In 1883, the board said that “no private benefactions or endowments, however liberal,” would be able to meet the great need of southern education, and called again on National moneys.

In going through the trust’s report from 1880, there are some revealing things as well in the language:

So we see a few reasons here for the need for education that the trust saw. Restoring a taxable constituency and easing tensions between the haves and the have nots. Remember that this board was made up almost exclusively of business tycoons who had in their self interest, a population that was not hostile to them. This was definitely one of the aims of early public schooling, that would become even more and more prominent as the century turned. So much of the public school system can be traced directly back to wealthy magnates and tycoons such as Rockefeller, Stanford, Vanderbilt, Morgan, etc. That whole 1880 report is fascinating. Take your time to read through it when you can.

As the 19th century came to a close, the fund began to focus mostly on training teachers for the public schools. This was the subject of the meeting in 1901, as well as talk of the nature of the emerging shool system. The manager of the trust called it a “duty of government” to educate the people, and praised that the American public education was “free from ecclesiastical control” and “severed” from “sectarian domination”. It’s chilling to see that even in 1901, religion was being purged from the school system as a requirement of taking this private/government money. This only intensified as the years went on, and most Southern states bought into it hook, line and sinker.

Hurry! Right now. Quote me the 17th amendment to the U.S. Constitution. You don’t know it? Well, it’s understandable. Outside of acedemia hardly anyone pays it any attention. It was ratified in 1913 and it reads like this:

So we’re square right? Oh, you still don’t see it? Well, I can’t blame you. The key to this amendment is the wording that says: “elected by the people thereof.” This amendment changed the original constitution to have direct election of senators by the people of each state. The original language of the constitution mandates that senators be chosen by each state’s legislature. This was a key check that the states had on Federal power. State legislatures would send senators to Washington and instruct them on how to vote. That kept senatorial interests firmly in the hands of the states, as opposed to now, where you have a senator in one state taking campaign donations from an interest group halfway across the country. The state is just where the guy lives.

James Madison wrote the following in the federalist papers:

It’s quite obvious that the father of our constitution saw the indirect election of senators to be absolutely necessary to keep the senate from slowly becoming tyrannical and aristocratic. Guess what. He was right of course. Just look at what happens continuously in the senate. They routinely sabotage the House of Representatives (the people’s house). Prior to 1913, if a senator didn’t vote the way his state legislature instructed him, he was frequently recalled, and sometimes replaced. That is the ultimate check on the senate. And it keeps all politics as local as possible to voters. It’s time to bring senators back under the direct control of state legislatures and re-assert the sovereignty of the states as a check to federal power. I say repeal the 17th and do it fast.

I’ve been interested to see a real grassroots bulge starting to form around the old founding ideals of states rights and liberty. It makes me cringe to think of liberty as an “old ideal”, but it seems that’s where we are now. I saw the other day where some congressmen in New Hampshire had put forth a measure to reassert it’s sovereignty as a state. This led me to find another article on this topic on the liberty caucus page:

This is a really good article about what’s really going on with these sovereignty bills. What is prompting it is less of idealism and more of a backlash against federal mandates coming down to state legislatures that are not backed up with funding. Basically in many cases the Federal government is placing mandates like No Child Left Behind and SCHIP on the states and providing no source of revenue to enforce it. This is basically robbing the states, and it’s grossly unconstitutional. They demonstrate this by using Arizona’s sovereignty bill:

Don’t be surprised, if this administration pushes too hard that you might see some actual attempts at nullification by states. You reallly can’t expect a state like California with a debt in the tens of billions to be able to handle a bunch of new federal mandates at their expense. If the Feds swoop in and demand things of these states that are already badly in debt, those states might just say no. And what then? Welcome to 1832 and John C. Calhoun. How I would love a good nullification battle. And you know it will be one of our neighbors here in the South that does it first. Watch South Carolina closely. It’s in their blood.

I know this is gonna be a wierd rant and I usually keep this kind of stuff to myself, but something about this economy and this holiday has just got me fired up. Am I the only one that just loathes Valentines Day? I suspect that I’m not. I mean the whole idea and execution of this holiday is just so manufactured. Every other holiday has some basis in some kind of historical event or a real person or something. But Valentines Day is just wholly created out of thin air by retailers to get your money. It’s a cash cow. I mean really. Why do you have to have a special day set aside to tell your spouse you love them? Does it not count those other two-hundred days a year that you express your love?

I guess what has me fired up a little is hearing the annual radio bombardment telling men what they have to buy to keep their women from hating them. In THIS economy. That’s just offensive. If you have to buy something for your wife/girlfriend when the times are tough like this, to keep her from hating you, maybe you should find a new woman. I love my wife and tell her daily, along with thanking her for all the stuff she does for our family. She would think less of me if I bought into some system that tells me what I have to do and when, in order to love her just the right way. It’s kinda like actually listening to those stupid PSA’s with Matt Damon telling you to read to your kids more. Give me a break. Get a real holiday. Valentines is that holiday you just want to get over with.

You’ve got your pocket bible and your pocket constitution. Now you need to get yourself a pocket Obama. Because, you can’t leave home with no means of getting a shot from the big O’s best speeches. Here’s the writeup:

So, for a complete, fairness-doctrine endorsed pocket library, you should put the pocket bible and pocket constitution in your right pocket and the pocket Obama and pocket Mao in your left pocket. That will have you covered for whatever mood your in. If you’re currently fuming over getting laid off or the latest story about corporate greed just reach left. If you just had to write a check to the IRS or had to spend a fortune to comply with some government regulation reach right.

So, I started out the other day giving all the reasons we do homeschool. But, I intended to give you a heads up on why you might want to think about it long and hard before taking the plunge. Many homeschooling families are kinda like we were. Too naive about the crap your gonna take from people to be concerned about it. We would have still done it anyway for all the reasons I gave last time. But you do have to get ready for being treated differently by a lot of people. You also have to be willing to be under government scrutiny to a larger degree than your public school brethren. So here are the things you can expect to deal with if you do decide to homeschool:

The last one is the most common reason that people give for not schooling at home. They list some personal reasons that they don’t feel they can. I’m not a homeschool Nazi. I think some of those reasons are actually legit. I’ve heard stories of people that just didn’t have enough personal initiative to pull it off and end up hurting their child’s education in the process. They get them home and then just fail to follow through on the actual teaching process. But I’ve also heard tons of stories of people who took the risk, not thinking they could do it, and turning out to be wonderful at it. Those people are usually the most vocal about anyone being able. The bottom line is: count the cost, but don’t be afraid to step out on faith. We do that with plenty of other big life decisions. Why not this?