I answer a few questions from Jason Pye of UnitedLiberty in a 16-minute podcast here.

This is what happens when government price controls limit insurance companies’ ability to set premiums according to risk:

Note that this adverse-selection death spiral happened before ObamaCare’s price controls on child-only coverage even took effect. (Of course, President Obama never calls them price controls. He calls them “consumer protections.” Some protection.)

ObamaCare supporters are in full-blown denial:

“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds,” Ethan Rome, executive director of Health Care for America Now, an advocacy group, said in a statement. “[It] is immoral, and to blame their appalling behavior on the new law is patently dishonest.”

I’d say that brave new world is already here.

ObamaCare supporters can take comfort in this: since it might take healthy people a while to figure out that they’re better off financially if they drop their coverage and pay the individual-mandate penalty, ObamaCare’s health insurance exchanges might not collapse before their January 1, 2014, launch date. They could last until January 2.

USA Today and Politico Pulse report that ObamaCare has prompted BlueCross BlueShield of North Carolina to rebate $156 million to its customers in the individual market. This may seem like good news. It’s actually bad news, particularly for BCBS’s sickest customers.

Pre-ObamaCare, BCBS’s customers – whether healthy or sick – had coverage with an insurer that had already pre-funded their future medical needs. Competition protected them from BCBS skimping on care: if BCBS got a reputation for skimping, it would have a hard time enrolling new customers.

Post-ObamaCare, BCBS no longer needs that pile of cash, so they’re returning it to their customers. That hurts sick enrollees because BCBS is doling it out to all enrollees – not just the sick enrollees whom that money is supposed to serve. This cash-out is actually a transfer from the sick to the healthy.

Also, every BCBS customer who is sick or becomes sick in the future will have less protection against their insurer skimping on care. Competition used to discourage insurers from providing lousy access to care, but under ObamaCare competition will reward skimping. Under ObamaCare’s price controls, insurers that gain a reputation for providing quality coverage to the sick will attract sick people and go out of business. Insurers that gain a reputation for providing lousy access to care will drive away sick people and thrive.

Russia will cut its army of bureaucrats by more than 100,000 within the next three years, saving 43 billion rubles ($1.5 billion), Finance Minister Alexei Kudrin said on Monday. “We assume more than 100,000 federal state civil jobs will be cut within three years. The government has already included a schedule for cutting the number of federal civil servants in the draft budget for the next three years and coordinated it with ministries and agencies,” Kudrin told President Dmitry Medvedev, who in June ordered a 20 percent cut in the number of bureaucrats. Under the government plan, ministries and agencies will have to sack five percent of their staff in 2011 and 2012, and 10 percent in 2013. …In the last three years, the number of bureaucrats in the federal government had increased by nearly 20,000, in regional governments by 60,000 and at municipalities by 50,000, he said.

Today POLITICO Arena asks:

Does the Republican Party have a sore-loser problem?

My response:

Lisa Murkowski is Exhibit A of the GOP sore-loser syndrome. Poor little thing: She thought she was entitled to the seat. After all, Daddy gave it to her.

But she’s not alone: Charlie Crist, Bill McCollum, Bob Bennett, Bob Inglis, Mike Castle, Dede Scozzafava — all sitting on the sidelines, running against the primary opponents who beat them, or even endorsing the Democrat in the race. They confirm the Tea Party contention: They have no clue about the changes taking place beneath their feet. Lisa Murkowski talks about the bacon she’s brought back to Alaska. But unlike the people marching in Paris to protest moving the retirement age from 60 to 62, the growing Tea Party movement is marching across America with signs that say “We Want Less!” In other words, get out of the way so we can be free to plan and live our own lives.

Matt Kibbe of FreedomWorks, co-author with Dick Armey of the new book Give Us Liberty: A Tea Party Manifesto, has it exactly right when he says: “What you’re seeing in the Republican primaries amounts to a hostile takeover of the Republican Party – and I mean that in the technical sense of replacing a failed management and tired ideas.” It began, one could say, with slowly growing opposition to the two Bushes, who squandered the Reagan Revolution. It continued with the rejection, ultimately, of the Republican Congress that came to office in 1995, which in time forgot why it was elected as members grew far too comfortable in office. Today, the opposition to “business as usual” — to Republicans as “Democrat Lite” — has a full head of steam. A two-party system works only if the parties are distinct, standing on different principles. It’s taken a long time — since the New Deal — but that’s what we’re moving toward, and that’s good, because it gives voters a real choice.

Thanks to the Obamacare legislation, we already know there will be a new 3.9 percent payroll tax on all investment income earned by so-called rich taxpayers beginning in 2013. And the capital gains tax rate will jump to 20 percent next year if the President gets his way. This sounds bad (and it is), but the news is even worse than you think. Here’s a new video from the Center for Freedom and Prosperity that exposes the atrociously unfair practice of imposing this levy on inflationary gains.

The mini-documentary uses a simple but powerful example of what happens to an investor who bought an asset 10 years ago for $5,000 and sold it this year for $6,000. The IRS will want 15 percent of the $1,000 gain (Obama wants the tax burden on capital gains to climb to 23.9 percent, but that’s a separate issue). Some people may think that a 15 percent tax is reasonable, but how many of those people understand that inflation during the past 10 years was more than 27 percent, and $6,000 today is actually worth only about $4,700 after adjusting for the falling value of the dollar? I’m not a math genius, but if the government imposes a $150 tax (15 percent of $1,000) on an investor who lost nearly $300 ($5,000 became $4,700), that translates into an infinite tax rate. And if Obama pushed the tax rate to almost 24 percent, that infinite tax rate gets…um…even more infinite.

The right capital gains tax, of course, is zero.

Social conservatives talk about real problems but offer irrelevant solutions. They act like the man who searched for his keys under the streetlight because the light was better there.

Social conservatives tend to talk about issues like abortion and gay rights, stem-cell research and the role of religion “in the public square”: “Those who would have us ignore the battle being fought over life, marriage and religious liberty have forgotten the lessons of history,” said Rep. Mike Pence (R‑Ind.) at the Values Voter Summit.

But what is the case for social conservatism that they’ve been making at the summit and in recent interviews?

• Mike Huckabee: “We need to understand there is a direct correlation between the stability of families and the stability of our economy.… The real reason we have poverty is we have a breakdown of the basic family structure.”
• Jim DeMint: “It’s impossible to be a fiscal conservative unless you’re a social conservative because of the high cost of a dysfunctional society.”
• Rick Santorum: “We can have no economic freedom unless we have good, virtuous moral people inspired by their faith.”

Those are reasonable concerns, but they have little or no relationship to abortion or gay marriage. Abortion may be a moral crime, but it isn’t the cause of high government spending or intergenerational poverty. And gay people making the emotional and financial commitments of marriage is not the cause of family breakdown or welfare spending.

When Huckabee says that “a breakdown of the basic family structure” is causing poverty — and thus a demand for higher government spending — he knows that he’s really talking about unwed motherhood, divorce, children growing up without fathers, and the resulting high rates of welfare usage and crime. Those also make up the “high cost of a dysfunctional society” that worries DeMint.

But take a look at the key issues of the chief social-conservative group, the Family Research Council — 7 papers on abortion and stem cells, 5 on gays and gay marriage, 1 on divorce. Nothing much has changed since 1994, when I wrote in the New York Times:

The Family Research Council, the leading “family values” group, is similarly obsessed. In the most recent index of its publications, the two categories with the most listing are “Homosexual” and “Homosexual in the Military” — a total of 34 items (plus four on AIDS). The organization has shown some interest in parenthood — nine items on family structure, 13 on parenthood and six on teen pregnancy — yet there are more items on homosexuality than on all of those issues combined. There was no listing for divorce. (Would it be unfair to point out that there are two items on “Parents’ Rights” and none on “Parents’ Responsibilities”?)

Back then, conservatives still defended sodomy laws, as Santorum continued to do as late as 2003. These days, after the 2003 Supreme Court decision striking down such laws, most have moved on (though not the Montana and Texas Republican parties). Now they just campaign against gays in the military, gays adopting children, and gays getting married.

Why all the focus on issues that would do nothing to solve the problems of “breakdown of the basic family structure” and “the high cost of a dysfunctional society”? Well, solving the problems of divorce and unwed motherhood is hard. And lots of Republican and conservative voters have been divorced. A constitutional amendment to ban divorce wouldn’t go over very well with even the social-conservative constituency. Far better to pick on a small group, a group not perceived to be part of the Republican constituency, and blame them for social breakdown and its associated costs.

But you won’t find your keys on Main Street if you dropped them on Green Street, and you won’t reduce the costs of social breakdown by keeping gays unmarried and not letting them adopt orphans.