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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Dr. Jerry Ellig, Senior Research Fellow at the Mercatus Center at George Mason University to discuss his in-depth study of government’s own analysis of Obamacare, the “interim final” regulations, and how federal rules and regulations have been used and abused.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Affordable Care Act Study Shows Billions of Dollars In Hidden Costs
Beware the Rush to Presumption
Dr. Jerry Ellig at the Mercatus Center

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The independent Mercatus Center at George Mason University has given a grade of “F” to the ObamaCare Health Insurance Exchanges regulation. The center studies the anticipated results and economic effects of proposed regulations. In other words, their researchers evaluate whether regulations are likely to accomplish what their supporters say they will.

The Mercatus center delivered its “Regulatory Report Card” on the Health Insurance Exchanges, the set of rules that states will use to set up online health insurance marketplaces. These virtual marketplaces will allow individuals and small employers to compare available private health insurance options on the basis of price, quality, and other factors. The Exchanges, which are scheduled to be in effect by January 1, 2014, are, next to the individual mandate upon which ObamaCare is based, crucial to the law’s ability to achieve its stated goal of expanding access to health insurance to the currently uninsured. Ultimately, they will be used to distribute $460 billion in federal health subsidies, through the year 2019.

The Health Insurance Exchanges regulation received only 42% of potential points (25 out of 60) on the Mercatus “Report Card.” The score of 25 points is the second lowest score the Mercatus Center has issued for 2011 regulations. The Exchanges were measured according to 12 criteria covering three broad categories: Openness, Analysis and Use. For each criterion, the researchers assign a score ranging from 0 to 5, with “5″ being the highest score on any given criterion. Some of the highlights are below:

In the Openness category, ObamaCare’s Exchanges received the lowest score of “2″ on the ease with which someone could find the regulation online. Verifiability of the assumptions used in the regulation’s analysis and the data used to support it were both given scores of “3,” with comments that the regulation relies heavily upon analyses performed by agencies such as the Congressional Budget Office (CBO). The regulation received a score of “4″ on its ability to be understood by an informed layperson. Interestingly, the researchers comment that the Health Insurance Exchanges regulation is “light reading” for someone who is “informed,” but due, in part, to the fact that there is little detail provided. However, as we have come to discover in ObamaCare, the devil is, indeed, in the details.

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The Cost of Government Day Report, published annually by Americans for Tax Reform Foundation, measures the number of calendar days Americans must work to pay off spending and regulatory burdens at all levels of government. In 2011, Americans labored 224 days to pay Uncle Sam—until August 12. 77 days went solely towards paying off regulatory costs. These costs will only grow under the aggressive regulatory regime envisioned by the Obama Environmental Protection Agency (EPA). Coupled with the existing 77 day burden, proposed EPA regulations promise to increase the costs of electricity and household items for all Americans.

In a 2008 talk with the San Francisco Chronicle, then-Senator Obama boasted that his emission reduction plan would cause electricity prices to “necessarily skyrocket.” As President, Obama quickly pushed for higher energy prices through the American Clean Energy and Security Act of 2009, better known as “Cap and Trade.” While the Act did not pass the Senate, the 2009 Cost of Government Day Report estimated that Cap and Trade would have increased the Cost of Government by three additional days.

The failure of Cap and Trade to net legislative success inspired the Obama Administration to pivot to the EPA to pursue its environmental agenda. Enabled by unaccountable bureaucrats, the EPA enacts much more harm than the politically-conscious Congress could ever achieve.

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In March 2010, Veronique de Rugy of the Mercatus Center at George Mason University released a study about President Obama’s stimulus package.  It contained many informational gems:

• Public entities received 42 percent of awards under the stimulus package, but received over half of dollars awarded (meaning they got larger chunks of change than private contractors);
• Even according to the administration, $285,814.61 was spent to create each job under the stimulus;
• On average, Democratic districts received 1.53 times the amount of awards that Republicans were granted, with Democratic districts receiving 2.65 times the amount of stimulus dollars Republican districts received.  Democratic districts received 73 percent of the total stimulus funds awarded, and Republican districts received 27 percent of the total amount awarded.

De Rugy claimed that “a district’s representation by a Republican decreases the stimulus funds awarded to it by 41.7 percent.”  She also found that unemployment did not correlate with stimulus funds received.  In other words, much of the money under the stimulus was directed at Democratic districts for political reasons.

The mere suggestion that politics had anything to do with allocations under the stimulus got the journalistic left’s panties in a wad.  Some of the criticism of de Rugy’s study was worthwhile.  Nate Silver at FiveThirtyEight.com pointed out that de Rugy had not taken into account the fact that cash was allocated largely to districts containing state capitols, since money allocated to states generally flows through state capitols (which are overwhelmingly represented by Democrats).  There is something to be said for this criticism, of course, which is why de Rugy proceeded to re-run the study taking into account the effect of allocations to state capitols – and found that the average Democratic district still gets 30 percent more cash than the average Republican district.

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Admittedly, Media Matters doesn’t have a deep well of credibility, but even I was shocked by the sloppiness of this hack-attack yesterday. Their headline:

Nate Silver takes the Hot Air out of Cato’s stimulus attack

And opening line:

Right-wing blogger Allahpundit put some Hot Air behind a piece of Cato Institute research that sought to attack stimulus spending as unfairly tilted in favor of Democratic congressional districts.

Except, you know, it wasn’t a Cato study. It was a Mercatus Center study. If Media Matters had even bothered to look at the actual study, pausing just a few moments from launching their attack, they would have seen that. Here is the study, technically a ‘working paper,’ but the title page is very clear, Mercatus Center: George Mason University.

Media Matters also identifies the study’s author, Big Government Contributor Veronique de Rugy, as a “Cato Scholar.” But, their own link for de Rugy makes it clear that she is a senior research fellow at the Mercatus Center and used to work at Cato. AKA, in the past.  Does Media Matters even follow their own links?

Sure, these may seem like minor points, but getting obvious facts so completely wrong is indicative of the drive-by, hit-and-run style of analysis employed by Media Matters.

There is, actually, a much more substantial error on their part.

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Charles Gasparino does a very nice job exposing Freddie Mac,  Fannie Mae, and their advocates for the destructive forces that they are. Everyone, even Obama for a while, recognizes that at the heart of the financial markets meltdown was the collapse in the US housing market, which itself was a bubble enabled in various ways by government programs explicitly designed to increase the percentage of people owning homes.

Whether through the Community Reinvestment Act or through a relentless Federal Reserve bank policy of next-to-zero percent interest rates or guarantees of Freddie Mac and Fannie Mae (and major incentives to them to buy any mortgage on secondary markets no matter how dubiously documented or financed), it’s clear that pro-home-ownership policies massively increased housing prices and risky loans.

Yet what blows my mind, is that currently the government is again pumping billions of dollars into various programs to increase home ownership rates and to stabilize or increase home values throughout the country.

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