Tag: economy

Obamacare Is A Disaster, Just As Expected

Just over 15 years ago, when the Democrat-controlled House and the Democrat-controlled Senate were debating the healthcare proposals offered by the Democrat president, nearly everyone on the political right was unified in opposition. It may well have been the last time the right was united on anything, but it was indeed unified and resolute.

Congresswoman Michelle Bachmann (MN) warned that “This monstrosity of a bill will not only destroy the private healthcare market, it will lead to massive increases in premiums and rationed care.” Congressman (and eventual vice-presidential nominee and Speaker of the House) Paul Ryan (WI) complained that “This bill is a fiscal Frankenstein. It’s a government takeover that will explode costs and kill jobs.” Senator (and Republican Leader) Mitch McConnell (KY) insisted that Americans “want reforms that lower costs, not a trillion-dollar government experiment.”

Right-leaning commentators like George Will and Charles Krauthammer agreed, not only with each other but with Republicans in Congress as well. Krauthammer, in particular, argued that President Obama’s promise to “bend the cost curve” down was pure, unadulterated, and extensively documented fantasy. National Review, much maligned among Trump supporters these days, dedicated most of an issue to exposing and forecasting Obamacare’s fiscal absurdities and the likelihood that it would result in lower quality of care, increased taxes, and exploding insurance premiums. Even the Heritage Foundation—in the news lately for purportedly exacerbating rifts in the conservative coalition—likewise agreed with everyone in the movement, insisting that Obamacare was a disaster waiting to happen and would keep none of the promises that it made, all while destroying what was good and valuable in the private insurance market.

More than a decade later, when it was clear that the system was in trouble and that only greater government intervention and spending could save it, Heritage (in the form of Robert Moffit, Edmund Haislmaier, and Nina Owcharenko Schaefer) took something of a victory lap, detailing Obamacare’s manifest failures and arguing that it was long past time to scrap the whole experiment.

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Albany Republicans’ $20B shame: state spending madness is their fault, too

Albany Republicans, the minority in the state Senate and Assembly for the last seven years, face a long hike back to political relevance.

They can start by answering the $20 billion question.

That’s the difference between what New York state expects to spend this fiscal year — $148 billion, excluding federal aid and borrowing — and what it would be spending if the last budget enacted with GOP support, in 2018, had kept growing only at the rate of inflation.

That amount is $128 billion.

Republicans correctly note state spending is higher than ever — and, given Albany’s reliance on a small subset of high earners, rising unsustainably.

But they can’t put the blame on the Democrats alone.

The $20 billion question isn’t about what Republicans would cut if voters again entrusted them to steer the state.

It’s a deeper challenge: It asks them to explain, to themselves especially, how they can credibly claim to be the taxpayers’ champions when they not only supported much of this fiscal bulge, but pushed to make it worse.

Most of the budget growth since 2018 has been in just two programs: Medicaid and school aid.

Republicans supposedly concerned about the state’s fiscal picture have repeatedly agitated for higher spending on both.

New York spends $4,942 per resident (enrolled or not) on Medicaid, per Empire Center’s Bill Hammond. That’s 23% more than the next-highest state, Kentucky, and double what New Jersey spends.

A credible opposition party would be hammering Gov. Kathy Hochul on this, arguing that the program is pushing up taxes, crowding out essential services and often failing the vulnerable people it’s meant to help.

But the tiny group of upstate fiscal hawks making these points are undercut by their own Republican team: Sen. Pat Gallivan, ostensibly his conference’s health care point man, last year joined 1199 SEIU, the state’s largest health care union, to demand  “Medicaid equity,” a budget-busting increase in what the state pays hospitals and other providers.

New York’s GOP can’t even credibly levy its evergreen complaint about “waste, fraud and abuse” in Medicaid.

The Consumer Directed Personal Assistance Program, a once-tiny initiative meant to help a small group of people live outside nursing homes, mushroomed into a $9 billion boondoggle that pays more than 400,000 people to care for 250,000 New Yorkers.

Republicans should have been first to sound the alarm on CDPAP — yet when Hochul proposed modest reforms by eliminating middlemen, they called her suggestion a “full-blown catastrophe” and all but ignored the fiscal hemorrhaging.

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Trump’s Republican Party insists there’s no affordability crisis and dismisses election losses

Almost two weeks after Republicans lost badly in elections in Georgia, New Jersey, Pennsylvania and Virginia, many GOP leaders insist there is no problem with the party’s policies, its message or President Donald Trump’s leadership.

Trump says Democrats and the media are misleading voters who are concerned about high costs and the economy. Republican officials aiming to avoid another defeat in next fall’s midterms are encouraging candidates to embrace the president fully and talk more about his accomplishments.

Those are the major takeaways from a series of private conversations, briefings and official talking points involving major Republican decision-makers across Washington, including inside the White House, after their party’s losses Nov. 4. Their assessment highlights the extent to which the fate of the Republican Party is tied to Trump, a term-limited president who insists the economy under his watch has never been stronger.

That’s even as an increasing number of voters report a different reality in their lives.

But with few exceptions, the Trump lieutenants who lead the GOP’s political strategy have no desire to challenge his wishes or beliefs.

“Republicans are entering next year more unified behind President Trump than ever before,” Republican National Committee spokesperson Kiersten Pels said. “The party is fully aligned behind his America First agenda and the results he’s delivering for the American people. President Trump’s policies are popular, he drives turnout, and standing with him is the strongest path to victory.”

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New foreclosures jump 20% in October, a sign of more distress in the housing market

Foreclosure filings climbed again in October, after sitting at historic lows in recent years, according to new data released Thursday.

While the numbers are still small, the persistent rise in foreclosures may be a sign of cracks in the housing market.

There were 36,766 U.S. properties with some type of foreclosure filing in October — such as default notices, scheduled auctions or bank repossessions, according to Attom, a property data and analytics firm. That was 3% higher than September and a 19% jump from October 2024, and marked the eighth straight month of annual increases, Attom said.

Foreclosure starts, which are the initial phase of the process, rose 6% for the month and were 20% higher than the year before. Completed foreclosures, the final phase, jumped 32% year over year.

“Even with these increases, activity remains well below historic highs. The current trend appears to reflect a gradual normalization in foreclosure volumes as market conditions adjust and some homeowners continue to navigate higher housing and borrowing costs,” said Attom CEO Rob Barber in a release.

Florida, South Carolina and Illinois led the nation in state foreclosure filings. On a metropolitan area level, Florida’s Tampa, Jacksonville and Orlando had the most filings, with Riverside, California, and Cleveland rounding out the top five.

Looking specifically at completed foreclosures, Texas, California and Florida had the most, suggesting those states will see more inventory coming on the market at distressed prices. There is still very strong demand for homes, especially in lower price ranges, so it is likely those foreclosed properties will find buyers quickly.

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Why Are Things Unaffordable?

With the election of Zohran Mamdani as Mayor of New York, much conversation has been made of his appeal to “affordability.”

As I’ve written previously, this is a noble conversation, but one that has been dishonestly framed (by Democrats and media) to date.  I will use Mamdani’s comment in his acceptance speech to re-frame the debate.

We will prove that there is no problem too large for government to solve, and no concern too small for it to care about.

Mamdani and the Democrat party have effectively defined a binary choice: Should government or “the market” control affordability?  The Democrats are seemingly all in on expanding the size and scope of government, to the point of eventually seizing the means of production.

First let’s look at the role that government has already played and its effect on affordability.  What areas in the economy have seen the greatest increase in costs for the consumer?  Education, housing, healthcare, and food.  Ironically, these are all areas of the economy that the government has interjected itself in the form of subsidies, regulations, government-backed loans, and transfer payments.  

In the 1960s, tuition costs were a reasonable expense.  The best and brightest pursued advanced degrees and had good-paying high-skilled jobs available upon graduation.  Government-backed loans were buffeted by a competitive “private loan” market.

In 2010, Obama eliminated the federal guaranteed loan program, which had let private lenders offer student loans at low interest rates.  Now the Department of Education is the only place to go for such loans.

Private lenders (prior to 2010) would lend money based on a risk model, where student loans could be obtained with the lender determining their degree of risk associated with repayment. It didn’t serve their interest to make loans to a large swath of students that might likely not repay the loan.  Tuition was mostly held in check, as students and lenders evaluated the cost-benefit analysis of higher education.  Universities couldn’t raise tuitions beyond what “the perceived market” for return on investment would support.

Eliminating the private lending market placed government as the sole provider of student loans.  The government abandoned risk-benefit analysis and effectively provided loans to anyone and everyone who wanted to attend university.  This act ballooned the number of people (qualified and unqualified) who obtained government-backed student loans and removed the “market” pressure on tuitions, causing tuition rates to rise exponentially.

Housing unaffordability has three distinct (government-created) problems.

One: Rent control.  New York offers us a glimpse at the impact of rent control programs on price and availability.  Controlling rents on some subset of housing creates hyperactive demand on the balance of housing in a generalized area.  Wherever rent control has been instituted, rents throughout said market rise above and beyond where “the market” might otherwise settle.

Two: Supply and demand (price controls and regulations).  Wherever rent controls have been instituted, local governments (i.e., New York, San Francisco) alternately impose strict regulations on the building and upkeep of housing within said market.  These regulations, as we see playing out in Pacific Palisades in California, make it near impossible to rebuild and repair, and they discourage private investment.

Three: Illegal immigration.  Unfettered illegal immigration has placed extreme demand for housing above and beyond what the market might otherwise require.  Cost supports (transfer payments) to illegal aliens, like government-backed student loans (above), removes some cost pressure against entry for many, causing prices to rise above what the market might otherwise demand, making housing unaffordable in many, primarily urban markets.    

Obamacare, or the inaptly named Affordable Care Act, we were told, was necessary to “bend down the healthcare cost curve.”  Conservatives, Republicans, health care industry analysts, and economists warned that the opposite would occur, with costs rising and care becoming rationed to curb hospital outlays.  This is exactly what occurred, as we see with the debate over Obamacare subsidies as part of the Democrats’ rationale for shutting down the government.  Temporary Obamacare subsidies implemented by Democrats in 2021, expiring at the end of 2025, are necessary, say Democrats; otherwise, Americans (and non-Americans) will see a doubling or tripling of their health insurance premiums.

If only someone had warned Democrats that this might occur.

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California’s Fast-Food Minimum Wage Hike Is Killing Jobs

In 2023, California adopted a law that raised the minimum wage to $20 per hour. It also created a Fast Food Council with the power to further increase wages by dictate every year. Twenty bucks an hour is a nice, round number which is probably why state lawmakers picked it—though it’s not clear why they stopped there. After all, if you’re going to create prosperity by command, why not shoot for the moon and make all the Golden State’s fry cooks millionaires? But it’s just as well that they didn’t go further—that hike to $20 per hour is killing jobs as it is.

One Law Kills 18,000 Jobs

“On April 1, 2024, California raised its minimum wage from $16 to $20 per hour for fast-food workers employed at chains with more than 60 locations nationwide,” Jeffrey Clemens, Olivia Edwards, and Jonathan Meer write in a National Bureau of Economic Research working paper that was first addressed by Reason‘s Peter Suderman in the November print issue. “Our median estimate suggests that California lost about 18,000 jobs that could have been retained if AB 1228 had not been passed.”

The authors initially calculate that “employment in California’s fast-food sector declined by 2.7 percent between September 2023 and September 2024 relative to fast-food employment elsewhere in the United States.” But they make the point that, prior to the passage of A.B. 1228, the bill hiking the minimum wage, fast-food employment was rising faster in the state than elsewhere in the country. Allowing for that, and for changes in the overall labor market, they estimated the real decline in California’s fast-food employment at 3.6 percent to arrive at 18,000 lost jobs.

That’s a lot of missing opportunities for Californians to get a foothold in the work world, make money, and pay their bills. It also squares with other estimates of the attempt to legislate prosperity.

In September, the Employment Policies Institute (EPI) drew on U.S. Bureau of Labor Statistics data to estimate “15,988 fast food jobs lost since the law went into effect in April 2024.” The group added, “California’s fast food job loss rate (-3.3% of jobs lost) more than doubled the losses in fast food restaurants nationally (-1.6% of jobs lost) since September 2023.”

That EPI memo built on a November 2024 study that found “more than 4,400 California fast food jobs have been lost since January,” based on federal data. That study also found “10.1 percent menu price increases by April 2024 since the law’s passage in 2023.”

A February 2025 paper from the Berkeley Research Group (BRG) found the fast-food sector “lost 10,700 jobs (-1.9%) between June 2023 and June 2024.” The researchers added, “this decline sharply contrasts with the sector’s historically compounded annual growth rate of 2.5% and marks the only December year-over-year decline in fast food employment this century–excluding the Great Recession (2009) and the COVID-19 pandemic (2020).” That report also found that “menu prices at California’s fast food restaurants increased by 14.5% between September 2023 (the month AB 1228 was signed into law) and October 2024, nearly double the national average (8.2%).”

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Unbanked In A Connected World

Financial exclusion remains high in many parts of the world. In several countries, more than two out of three adults are unbanked, yet the majority own a mobile phone. This contrast between connectivity and financial access highlights both the persistent gaps in global inclusion and the massive opportunity to close them.

Created in partnership with Plasma, this graphic, via Visual Capitalist’s Jenna Ross, shows how ownership of financial accounts and mobile phones compares across countries. It’s part of our Money 2.0 series, where we highlight how finance is evolving into its next era.

The Unbanked Gap

In low- and middle-income economies, 84% of adults own a mobile phone, while 75% of people have financial accounts. This gap is much wider in some countries, especially in Africa and the Middle East.

For the most unbanked countries worldwide, here are the percentages of adults who own a financial account and those who own a mobile phone.

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Tariffs, Tobacco, and Policy Whiplash

When politicians talk tough on trade, they usually promise to protect American jobs. But sometimes those gestures do the opposite. The Trump administration’s proposed 100 percent tariff on large cigars imported from Nicaragua is a case in point. According to my latest research, the tariff would shrink US GDP by $1.26 billion, reduce total output by $2.06 billion, eliminate nearly 18,000 jobs, and cost state and local governments $95 million in tax revenue.

There is no domestic industry to protect. The United States produces almost no large cigars, which are rolled by hand from long tobacco leaves and sold through tobacconists, cigar lounges, and small brick-and-mortar shops. Roughly 60 percent of all 430 million cigars imported each year come from Nicaragua. Doubling landed import costs would devastate the 3,500 retailers and 50,000 workers whose livelihoods depend on that trade.

Worse, this tariff reverses one of the administration’s genuine policy successes—its early effort to limit the Food and Drug Administration’s overreach into small-batch cigars and other low-risk nicotine products. It also repeats the same arbitrary logic behind the FDA’s recent warning letter to NOAT—a Swedish company selling mild, recyclable nicotine pouches already cleared for sale in Europe. In both cases, symbolic toughness trumps scientific and economic sense.

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The Climate Cult Fails Europe

The roadmap is already set: in the coming years, the EU and its member states will make both businesses and consumers pay even more for CO2 emissions. BASF CEO Markus Kamieth warns of the enormous destructive potential of this policy.

Truth comes on pigeon feet — Friedrich Nietzsche already knew that. And apparently, the same applies to European climate policy: slowly, but inevitably, the reality of the true costs of the green transformation and its impact on Germany’s industrial foundation is emerging.

On October 29, BASF’s CEO Markus Kamieth faced the press during the quarterly results presentation. What he announced was another cold shower for anyone still hoping for a new economic miracle.

Weak Results in a Stable Environment

The world’s largest chemical company reported a 3% decline in revenue in Q3 2025 compared to last year, while EBITDA fell by 5%. BASF is under massive pressure and has already cut 1,400 jobs to meet growing cost pressures.

BASF’s numbers have to be seen against the backdrop of a slowly recovering global economic cycle. The U.S. economy, growing nearly 4%, is driving strong demand. Economies in China and India continue to expand dynamically, particularly in sectors critical to the chemical industry.

While the global economy gains momentum, BASF — like much of Germany’s chemical sector and the broader industry — continues to lose ground.

The company’s main site in Ludwigshafen is hit hardest, leaving its 33,000 employees facing an uncertain future.

Criticism of the Climate Course

Kamieth was unexpectedly outspoken during the presentation. In addition to criticizing EU trade policy and rising energy costs in Germany, he struck at a rarely openly discussed wound: the EU’s climate policy.

Kamieth didn’t mince words, calling the European CO2 emissions trading system (EU ETS 2) what it is: an attack on Europe’s industrial foundation.

For BASF alone, if the current climate course within CO2 trading remains unchanged, annual additional costs of around €1 billion will arise from 2027 onward, when exemptions are removed — costs borne exclusively by European industry, while the rest of the world simply does not participate.

Kamieth hit a sore spot. EU industry is being financially squeezed by an ideologized CO2 policy. Deindustrialization is — whether unspoken or suppressed — the result of Brussels’ policies and their national enforcers, whose only response to their self-inflicted disaster is ever-new subsidies.

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The EU’s Green Ideology Is Crashing Europe’s Car Industry

The European Green Deal, launched in 2019, is an ecological pact that has been, unequivocally, an enemy of European taxpayers and innovation. Its declared goal is to achieve net-zero emissions by 2050 through a dense web of regulations that reach deep into every sector of the European economy. More than any other sector, the automotive industry is being put at risk of an irreversible crash.

Pressuring companies and citizens alike, the pact promotes the renunciation of capitalism, an inevitable sacrifice in the name of green policies. Such binding commitments will have severe economic consequences for a European Union increasingly weakened by its own laws and regulations.

At the heart of the Deal, by 2035, all new cars sold within the European Union are expected to be electric, imposing a total ban on combustion and engine vehicles. The problem is that this goal, far from being an environmental triumph, represents a deeply ideological political intrusion, an act of social engineering with an anti-capitalist character, disguised as green progress but detached from economic reality. The consequences are serious for the European automotive sector.

It is important to recall that this industry is one of the pillars of the European economy, representing over 7% of the EU’s GDP and around 13.8 million direct and indirect jobs.

Yet the sector now faces the prospect of mass layoffs, relocation of production, and a loss of global influence as a direct consequence of this heavy-handed Deal. Core EU countries such as Germany and Italy have already voiced resistance, warning of the economic and social consequences of a forced transition that ignores the continent’s technological and energy realities.

CEO of Mercedes-Benz, Ola Källenius, stated that the EU’s plan to eliminate combustion engines by 2035 would drive the sector “full speed into a wall.” His words, though strong, capture the growing sense of unease among Europe’s leading manufacturers.

The pressure is twofold. Internally, profit margins are shrinking as companies divert billions into forced electrification. Externally, they face fierce competition from China, with brands such as BYD and NIO, backed by an aggressive industrial policy, consolidated supply chains, and technological dominance in batteries. This combination allows Chinese manufacturers to produce at lower costs and scale faster.

Meanwhile, European brands struggle to survive between the high costs of transition and Asian price dumping, which has already led Brussels to impose additional tariffs of 30–40% on Chinese electric vehicles. 

The interventionist posture of Brussels remains unchanged, failing to understand that regulation only breeds more regulation, and inevitably creates market distortions that harm both businesses and consumers.

Europe is imposing a single path on manufacturers—electric cars—while the automotive sector itself argues that it is possible to meet environmental goals through multiple technological solutions. Brands such as Mercedes, Porsche, Ferrari, and Stellantis maintain that the transition can and should be technologically neutral, allowing electric, hybrid, e-fuel, and hydrogen vehicles to compete on equal terms. The goal, they say, must be to reduce emissions, not to eliminate technologies for ideological reasons. Instead of encouraging innovation, Brussels dictates by decree what may exist and what must disappear, ignoring the knowledge and experience of those who actually build the industry.

Synthetic fuels, produced from green hydrogen and captured CO₂, are the clearest example of a more appealing alternative: they drastically reduce emissions without leading to the destruction of engines, factories, and jobs, demonstrating that true innovation arises from freedom of choice, not political imposition.

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