Vladimir Putin is running roughshod over International Law and the EU is addressing Coffee Makers

Posted by PITHOCRATES - April 19th, 2014

Week in Review

Vladimir Putin is running roughshod over international law.  He took Crimea.  And is threatening further parts of Ukraine.  Some think he will take Moldova next.  Or possibly one of the Baltic States.  And what is the European Union (EU) doing to protect democracy?  This (see EU lays down the law on coffee making by Edward Malnick posted 4/19/2014 on The Telegraph).

Filter coffee machines will have to turn off automatically to help save energy, under new European Union rules.

All of the devices on sale for domestic use from next year will be required to go into “standby mode” after brewing the drink, the Sun reported.

The European Commission said the changes would save money on electricity bills and were “supported by consumer and industry organisations” as well as member states including the UK.

However campaigners claimed the rules would leave many people with “cold coffee”…

Those machines with non-insulated jugs will have to go on standby after no more than 40 minutes.

Really?  Coffee makers?  That’s the threat to Europe?  Not Vladimir Putin running roughshod over international law.  I guess the EU has a different set of priorities.

All right, let’s look at the cost savings for the average EU consumer.  In America we typically brew a pot of coffee and let it sit on the warmer for maybe 2 hours.  After that it gets a little strong.  So let’s look at two hours.  Assuming a typical 600 watt heating element and an electrical cost of $0.15/kilowatt-hour the cost savings comes to $0.12.  If we brew a pot every morning that comes to a cost savings of $43.80 per year.  Of course, people will have to warm up their tepid coffee after the coffee maker automatically shuts down.  And the most likely way will be in a microwave oven for about 30 seconds.  You do this for three cups of coffee and you’re not going to consume much electric power.  But you’re going to put a lot of wear and tear on your microwave oven.  Which cost more than the $43.80 savings in electric power.  Not to mention the inconvenience of having to run your microwave when you want another cup of coffee.

You know what can keep that coffee warm without stressing your microwave oven?  The coffee maker.  For only $0.12 a day.  There are people that won’t stoop to pick up a coin if it’s less than a quarter.  So do you really think the people are going to appreciate paying more for a coffee maker (that now must include a timed shutoff mechanism) so they can go through microwave ovens quicker just to save $0.12 a day?  Probably not.

This is the problem with a nanny state.  Which the EU is.  The worst part is that these people are paid by taxes to come up with these brilliant ideas no one needs.  Something taxpayers may be more in need of is a way to stop the law-breaking ways of Vladimir Putin.  For Vladimir Putin probably poses a greater risk to Europe than coffee makers.

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Only Government can Create and Enforce a Monopoly

Posted by PITHOCRATES - April 19th, 2014

Week in Review

So many people fear the low prices of corporations.  They say they will put higher priced Mom and Pop shops out of business.  Then when they have a monopoly they will raise their prices and gouge their customers.  Which is silly.  Because corporations can’t create a monopoly.  Only government can grant them one.  Allowing them to charge the high prices once the government eliminates all competition.  But even when the government does if there is a market for lower prices some competition will find a way (see 3 epic fails that prove Uncle Sam is a terrible venture capitalist by Burton W. Folsom Jr. and Anita Folsom posted 4/19/2014 on the New York Post).

After 20 years in Europe perfecting his steamboat, an inventor named Robert Fulton returned to the US in December 1806.

He knew that a legislator, Robert Livingston of New York, would back him to the hilt. Livingston was a Founding Father who believed that steamboats would work well on the wide rivers of North America. Livingston and Fulton obtained a monopoly from the New York legislature for the privilege of carrying all steamboat traffic in New York for 30 years, if they could produce a working steamboat within two years…

One problem with Fulton’s monopoly, however, was that it affected shippers in neighboring states. As steamboats became more common, the Fulton monopoly meant that other companies couldn’t sail in New York waters without fear of fines. The monopoly also kept ticket prices high.

Finally, in 1817, Thomas Gibbons, a New Jersey steamboat man, tried to crack Fulton’s monopoly when he hired young Cornelius Vanderbilt. Gibbons asked Vanderbilt to run steamboats in New York and charge less than the monopoly rates…

For 60 days in 1817, Vanderbilt defied capture as he raced passengers cheaply from Elizabeth, NJ, to New York City. He became a popular figure on the Atlantic as he lowered the fares and eluded the law.

Finally, in 1824, in the landmark case of Gibbons v. Ogden, the US Supreme Court struck down the Fulton monopoly. Chief Justice John Marshall ruled that only the federal government, not the states, could regulate interstate commerce.

This extremely popular decision opened the waters of America to competition. A jubilant Vanderbilt was greeted in New Brunswick, NJ, by cannon salutes fired by “citizens desirous of testifying in a public manner their good will.”

On the Ohio River, steamboat traffic doubled in the first year after Gibbons v. Ogden and quadrupled after the second year. The real value of removing the Fulton monopoly was that the costs of traveling upriver dropped. Passenger traffic, for example, from New York City to Albany immediately dipped from $7 to $3 dollars after the court decision.

Only governments can maintain and enforce a monopoly.  And only a business with a government enforced monopoly can gouge their customers.  For with the government eliminating all competition what else is a consumer to do?  He or she has no choice but to buy from the business with the government enforced monopoly.  The same is true today.

Free market capitalism is always finding a better way to do something that costs less.  But people who enjoy government monopolies try to fight back.  To keep their government privileges.  Just look at the UAW and the automotive industry.  Which used the power of their government privilege to restrict competition.  Such as with tariffs and import quotas.  Which only let the UAW to continue to burden the American automotive industry with ever more costly union contracts that ultimately led to their bankruptcy/government bailout.  All the while keeping cars more expensive than they had to be.  As the UAW used their government privilege to gouge American automotive customers.

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The Left wants a Health Care System like Britain’s NHS despite the NHS having Crippling Deficits

Posted by PITHOCRATES - April 19th, 2014

Week in Review

Obamacare is not going well.  The say it is.  But it isn’t.  The White House can all of a sudden give us a number like 8 million enrollees when they said earlier they couldn’t tell until the insurance companies tell them.  And the other big question is this.  Are these enrollees?  Including all people who enrolled whether they paid or not?  Or are these only the people who paid?  Or are most of these people enrolling in Medicaid?  Those who won’t ever pay?  If that 8 million aren’t paying customers Obamacare is doomed.

So the financial foundation of Obamacare is likely very perilous.  Where the sick and poor are probably signing up more than the healthy with money.  And the delay of the employer mandate to sometime after the midterm election takes a bad financial foundation and makes it worse.  For they can’t keep delaying the funding parts until after elections.  Because someone has to pay for all of the subsidies.  As well as the high cost of the old and sick.  Which alone may bankrupt Obamacare (see Labour considers raising national insurance to fix £30bn NHS ‘black hole’ by Toby Helm posted 4/19/2014 on the guardian).

Radical plans to increase national insurance contributions to plug a looming £30bn a year “black hole” in NHS funding and pay the spiralling costs of care for the elderly are being examined by Labour’s policy review.

The Observer has learnt that the idea is among options being considered to ensure NHS and care costs can be met under a future Labour government, without it having to impose crippling cuts on other services in successive budgets.

Senior party figures have confirmed that a scheme advanced by the former Labour minister Frank Field – under which funds from increased NI would be paid into a sealed-off fund for health and care costs – is being examined, though no decisions have been taken.

Recent figures based on data from NHS England and the Nuffield Trust and produced by the Commons library suggest that NHS costs alone will go from £95bn a year now to more than £130bn a year by 2020.

Some have suggested that they designed Obamacare to fail.  So they can get what they really want.  Single-payer.  Or national health care.  Like they have in Britain with their National Health Service (NHS).  Which is running an enormous deficit.  Based on the above numbers it currently is 31.6% (£30bn/£95bn).  Which is just unsustainable.  But this is what an aging population will do.  When you have more people leaving the workforce consuming health care benefits paid for by fewer people entering the workforce.  Which should be a huge warning for the United States.  Because they have an aging population, too.

At the current exchange rate that £30 billion comes to $50.37 billion.  Is this what the US can expect?  No.  Because they have five-times the population Britain has.  So their deficit will be approximately five-times as big.  Or $251.85 billion.  That’s a quarter of a trillion dollar shortfall PER YEAR.  At least.  And $2.52 trillion over a decade.  So unless the Americans can somehow make their people less sick so they won’t consume health care resources the deficit alone for Obamacare will be more than twice the original CBO projection for the total cost over 10 years.  Which means the Americans will have to do what the British must do.  Increase taxes.  Charge for some health care services in addition to these higher taxes.  Or impose crippling cuts to services.  Hello rationing.  And longer wait times.

This is the absolute worst time to impose a single-payer/national health care system.  Just as the baby boom generation fills our health care system in their retirement.  It might have worked if we had kept having babies the way we did before birth control and abortion slashed the birthrate.  But we didn’t.  And now we have a baby bust generation stuck footing the bill for a baby boom generation.  Fewer paying for more.  And the only way to make that work is with confiscatory tax rates.  Or death panels.  Because you have to raise revenue.  Or cut costs.  There is just no other option.  Or people can work longer, pay out of pocket for routine, expected expenses and buy real insurance to protect themselves from catastrophic, unexpected medical expenses.  Which is actually another option.  And probably the only one that will work.

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