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Sunday, August 3, 2014

Paul Krugman, "Obama’s Other Success": Another Such Success Could Ruin the Country

"A few such Victories would Ruin the Army"

- British Lieutenant-Colonel James Abercrombie, dying from his wounds after the Battle of Bunker Hill


In his latest New York Times op-ed entitled "Obama’s Other Success" (http://www.nytimes.com/2014/08/04/opinion/paul-krugman-dodd-frank-financial-reform-is-working.html), subtitled "Dodd-Frank Financial Reform Is Working," Paul Krugman would have us believe that after five and a half years as president, Obama can point to two successes: Obamacare and Dodd-Frank. Concerning Obamacare, Krugman writes:

"Although the enemies of health reform will never admit it, the Affordable Care Act is looking more and more like a big success. Costs are coming in below predictions, while the number of uninsured Americans is dropping fast, especially in states that haven’t tried to sabotage the program. Obamacare is working."

Fascinating. Needless to say, Krugman avoids reference to the most recent Kaiser Family Foundation tracking poll. As observed a few days ago by Aaron Blake writing for The Washington Post (http://www.washingtonpost.com/blogs/the-fix/wp/2014/08/01/obamacare-hits-a-new-low-in-popularity-but-its-not-a-dominant-issue/):

"The Kaiser Family Foundation tracking poll, which has been keeping constant tabs on public sentiment on the Affordable Care Act for nearly four years, shows 53 percent of Americans now have an unfavorable impression of the law. That's the highest on record and an increase of eight percentage points in one month."

Yes, I know: We shouldn't pay attention to what a majority of Americans think. They are stupid and don't know what's best for them. Obama knows best.

But then there was also a recent Forbes article entitled "How Obamacare Encourages Some Millennials To Become Uninsured" (http://www.forbes.com/sites/theapothecary/2014/07/31/how-obamacare-encourages-some-24-year-olds-to-become-uninsured/) by Chris Conover, which informs us:

"About 30% of 24-year-olds have incomes at 275% or more of poverty. The chart demonstrates starkly how Obamacare makes life worse for such individuals. Prior to Obamacare, such individuals would have been slightly better off buying a non-qualified health plan with an actuarial value of 50%. But Obamacare gets rid of such plans, substituting plans with a higher actuarial value and more comprehensive benefits. So now the privilege of buying health insurance costs 44% more than the expected cost of remaining uninsured–and that’s AFTER taking into account the individual mandate penalty."

More about the cost of Obamacare? Have a look at a Washington Post article entitled "Older women bear the brunt of higher insurance costs under Obamacare" (http://www.washingtonpost.com/blogs/she-the-people/wp/2014/06/24/older-women-bear-the-brunt-of-higher-insurance-costs-under-obamacare/) by Joann Weiner, which states:

"[W]omen age 55 to 64 will face a huge spike in cost when they go out to buy individual insurance on the federal exchange. These women bear the brunt of the increased premiums and out of pocket expenses after the Affordable Care Act."

Or in other words, not everyone is benefiting from Obamacare. In fact, there are those who are paying a very heavy price to subsidize this highly unpopular "success."

But what about Obama's other "success," Dodd-Frank, which was intended to prevent a recurrence of the events responsible for the 2008 financial crisis? Krugman writes:

"The Dodd-Frank reform bill has, if anything, received even worse press than Obamacare, derided by the right as anti-business and by the left as hopelessly inadequate. And like Obamacare, it’s certainly not the reform you would have devised in the absence of political constraints.

But also like Obamacare, financial reform is working a lot better than anyone listening to the news media would imagine. Let’s talk, in particular, about two important pieces of Dodd-Frank: creation of an agency protecting consumers from misleading or fraudulent financial sales pitches, and efforts to end 'too big to fail.'"

Krugman fails to understand that Dodd-Frank addresses past financial abuses, while ignoring newer manipulative and predatory tactics devised by hedge funds to line their pockets. With the cancellation of the Uptick Rule  (see: http://jgcaesarea.blogspot.co.il/2013/08/maureen-dowd-summers-of-our-discontent.html) and the advent of high-frequency trading (see: http://jgcaesarea.blogspot.co.il/2014/05/paul-krugman-now-thats-rich-hedge-funds.html), we have another catastrophe in the making, yet the Obama administration has done absolutely nothing to address these problems.

Obamacare and Dodd-Frank? Another such "success" could send the US into a death spiral.

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