Wednesday, December 5, 2007

Give them an inch

Mark Steyn recently penned a piece about the "Right to be Offended" and how it's now far more important a right than the constitutionally protected right to free speech - political correctness gone mad, in other words. I think it's very predictable that having abandoned the education of our children to the lowest common denominator (government), and empowered same to take our money by force or threat thereof to pay for said ‘education,’ it would follow that we would all not be happy with the outcome. One might think we could learn from the example of govt monopoly on schools and figure out that we don’t want another on health care …

To the tune of $10,000/student/year, do you know anyone that is really delighted with the product that our public school system delivers? Well, it would be a lot more delightful if we just gave the schools more money - that's what the teachers' union says. As if doubling the money we spend on schools, in real dollars, since 1970, isn't enough. Of course that's the issue with a federal monopoly - there will never be enough money to make it right.

A couple of parents over-reacting to the meaningless daily recitation of the Pledge (there's a real patriotism driver, eh? Remember how blessed with liberty you felt when you were mindlessly droning the Pledge every day?) is nothing compared with the horror of the much more serious and deleterious outcomes generated by the government's monopoly on schools.

I love Steyn’s work, I totally resonate with his point regarding issue of the 'right to be offended' and the emerging govt role in punishing those who say what they mean to protect those 'victims' cannot possibly bear to have to feel what they feel upon hearing the 'offensive word' - but the school example is the least of the problem with either schools or 'free speech.'

And for the record, freedom of speech only refers to the citizen's right to freedom from govt restrictions on free speech - much of the 'right to be offended' issues have nothing to do with that, but are part of the ongoing spat between the Christians who've grown used to having their way in the public sphere in our country, and the non-Christians who for some reason feel they need to push back using whatever institutions they can use to poke the eye of their perceived Christian antagonists.

It's just another example of the predictable abuse of govt power - give them an inch, they'll take a mile and then some.

Tuesday, July 10, 2007

Heinlan, libertarian hero, renaissance man, great read. One could conclude, knowing only the little in that write up, that his was a life well lived.

It never fails to fascinate me how folks divorce economic and individual liberty, as if they were different or had a different basis for justification. Milton Friedman said, more or less, "I used to think I would trade a bit of personal liberty for more economic liberty but was delighted to find I needn't." The point being, of the two, a person can create a better outcome with high economic liberty (Hong Kong and Singapore being two examples) and less personal liberty.

Most of us think of personal liberty when we speak of freedom - how did it come to pass that a government, taking money by force and redistributing it, is not widely perceived as being a degradation of freedom. It reminds me of the 'frog boiling' analogy. We no longer seek to leave the boiling water of socialist/statist solutions because we see them as the normal temperature - sad, because there are better, non-state solutions out there, and for those who insist non-state solutions are 'too risky' there are smarter statist solutions that better align programs with incentives and would produce better outcomes (Charles Murray's "In Our Hands" for example:

Which would keep the US from getting to this:

Luckily for us, all the major politicians have boldly embraced their job of preventing the US from entering the death spiral ... yeah right. Instead they are fiddle frocking around with silly BS. At least their spineless inability to champion freedom and the solution freedom provides is not being totally ignored. The Fair Tax is gaining some steam:

The Fair Tax would provide amazing improvements in US manufacturing world wide competitiveness, eliminate billions in waste US businesses currently spend complying with IRS regulations and add back millions of lost personal hours of time spent submitting returns.

Formula for a rejuvenation of American competitiveness: The Fair Tax, the In Our Hands Plan for entitlement programs, and removal of the present incentives to tie health insurance to work place compensation.

Tuesday, March 6, 2007

Would you like to have a choice on immigration?

Europe made a deal with the devil, and the U.S. refuses to learn from it. Much of what I’m about to write applies equally to our much loved neighbors to the north, but not all.

I continue to be amazed that folks talk about immigration and additions to socialized programs (such as the renewed charge for 'universal' health care) without discussing the fact that these policy issues are joined at the hip.

Socialized programs depend upon a growing worker base for financial solvency. Since we westerners have a choice, and choose not to breed all that much (the US is barely sustaining replacement rate, thanks to minority populations which exceed the anglo rate of 1.67 by enough to bring our rate to 2.1 or so), our social programs are as unsustainable as Europe's have proven to be, and we will be forced to do what Europe does – throw in the towel on defense spending, and open the borders for anyone.

I am not anti-immigration and would in fact prefer a “controlled” open border policy, with incentives for legal immigration and an appearance of deterrence for immigration of criminals (appearance, regrettably, is all that can be reliably done). I would remove any restrictions on educated, English speaking immigrants immediately to brain drain the rest of the world to here, but not being master of time and space as yet, I will have to wait on that one. The fact that politicians and others continue to discuss the two issues - govt programs and immigration policy - as if they were separate issues makes me wonder if they think we are stupid or they are disingenuous (of course, both may be true). Also true, we are not as informed as we should be or we would demand better leadership.

If sustainability is an issue – for example, water availability in the west – one has to be concerned about population growth. Also, if you are one who believes the four assertions about global warming (it is happening, caused by humans, will cause injury to humans, and is reversible by human behavior without causing greater harm than good), you should be concerned about population growth. If the US would like to have the choice not to have a growing population, we cannot continue to have socialized programs which function by taking a little of the life energy from a lot of workers to pay for the ‘benefits’ of all (while I admire the originally stated intent of social programs, I think there’s ample evidence that outputs of socialized programs are a thing done TO people not FOR people, but that’s another discussion). “Socialized math” only works with a growing population base, because government transfers are zero sum transactions. Health care and social security in particular are largely consumed by the elderly – 25% or so of all health care costs are consumed in the last year of life, “end of life care.” ‘Wealth transfer programs’ (‘life energy’ transfer programs) only work when the young outnumber the old by a wide margin, otherwise, there’s no hiding the fact that these programs are in fact politicians bribing the public by taking money from those who are productive, and passing that money/wealth/life energy to the unproductive, so the unproductive can sustain life without being productive (in some cases, maybe most cases, despite not having taken the effort to store up wealth for later years, and/or without having to depend upon the productive members of their own families, which was the only similar option in pre-industrial days).

Socialized programs amount to a politician saying you can have something for nothing, and we had no reason not to believe them in 40s, but we would know better now - if we were paying attention. Since we have not been paying attention, we're at the point that by 2040, we will be able to pay for our promised social benefits and payments on our national debt; and nothing else.

Three considerations, totally apart from the immigration/socialization discussion – if you pay more to people to be unproductive, you get more unproductive people. Two, the implication of a smaller and smaller population of the productive, most of whom are young, being forced by the government to pay more and more of their life energy for the unproductive, most of whom are old (as is seen now in Europe), is that the whole process will begin to appear to be a fight between the young and the old for resources (it will seem that way because it is that way). One might think that would cause more than a little generational friction. If you look, you can see the impact of that struggle in European (particularly continental) culture today, and it is starting to get ugly. Third, I don’t assert, nor could I prove, that proposals for sustaining or increasing socialistic programs are a means by which some would like to wreck the US’s incontestable military dominance, but socialization programs are a proven strategy to economically handcuff a nation such that it cannot afford to defend itself. Examples abound.

Please note that I do not intentionally disparage all of the unproductive as blameful for their condition, or lesser humans for their lack of productivity – clearly, the world is not fair and produces many humans who can not be productive due to accidents of birth or life. The term unproductive is intended as descriptive and factual but not pejorative term.

It appears there is a fundamental gap of understanding which drives the willingness of some to put their trust in a government solutions to economic problems. The best I can tell, that gap is the mis-understanding of where wealth comes from. Governments do not create wealth, but at their best, they are essential for creation/defense of conditions under which men/woman may create wealth through busy-ness (business?). Men/women create wealth by investment in capital goods, which may be combined with innovation (or result from innovation) to produce an output of greater value than the sum of the inputs to the process. Value creation can be as simple as making/selling pencils from graphite, wood, pot metal and rubber, or as complex as the post 9/11 US economy growing by an amount larger than the entire value of the (2006) economy of China.

One example – social security is supposed to take money from many, hold the money in a trust, and then redistribute the money to the original “contributor” (slave?). In the time that the money is not available for use by the one who produced it, the money does not ‘work,’ it is not invested. By contrast, the same person who might invest only half of what social security requires (15%, ask a small business owner), would have the option of using the money to invest in the purchase of capital, such that the money is utilized to create wealth/value where none exists. 7% of the free man’s income would nearly always produce more wealth for him as a retiree than the government's 15%, and in the mean time would contribute to overall economic growth. The investor keeps his/her own money, plus a ‘return on investment,’ AND whomever utilized the money in the investment process also created a product of greater value to a customer than the sum of the inputs to create the product, not to mention jobs.

Even when the ‘insurance’ idea is referenced (“social security is just an insurance policy”), the government approach is demonstrably poor. The insurance premium you pay for real insurance coverage is immediately ‘invested’ by the insurance company – providing a means to increase wealth for the insurance company owners/investors – and thus when the premium is paid back out as a claim, it has in the mean time created wealth, contributing to the growth of the overall economy. In other words, the insurance company makes its money off of the 'float' - the use of premiums in between collection and payout. If the government were to provide the amount of coverage, they would have to charge much higher premiums because government cannot invest, cannot put capital to work to create value/wealth. Government ‘insurance’ programs are zero sum, at best. Real insurance programs are an incredible economic boon.

Failing to understand what creates wealth, many won’t understand why government wealth transfer programs do not contribute to wealth and in many ways stifle additional wealth creation.

Failing to understand the source of our wealth, like the fabled farmer, we will kill the golden goose thinking to get what is inside.

I fear it is not an accident that public schools and universities don’t require fundamental economic literacy.

How does this tie into today’s title? By the fact that Europe has no choice but to continue to import labor, much of which must come from Muslim nations such as Somalia, because these are the nations which produce unskilled labor (for example, Somali birthrate exceeds 6/female). Even if they decided they’d like to reduce immigration to a rate such that immigrants would be more likely to assimilate into European culture, these nations don’t have that choice. Mark Steyn’s articles and books are pointing this out, and what the implications are, but I can’t tell that anyone’s listening. No one on the main political stage is.

Should the US continue to ride economic illiteracy, the fallacy of which has been demonstrated for our edification by observable experiments in socialism, we will follow Europe into financial helplessness. The helplessly fertile will inherit the earth.

Thursday, February 15, 2007

From the Master of Economics, The Great Scot

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." Adam Smith

In other words - we count on the self interest of the business man to get us the best product at the best price, to do things for us or get things for us we could not do or get for ourselves (or not as well). He/she will do all of this for us, not out of respect for our needs or in appreciation for what great people we are, but simply because in so doing he/she makes their way in the world.

When I buy something from one such as this, it makes the world a better place because we each get what we want. I want what he's selling more than the money I give, and he wants the money more than he wants the good or service. This is almost magical and we take it for granted. This simple analysis is why freedom permits the more efficient organization of an economy - for who knows better than I what I want in place of the money/time I have at my disposal? Who knows more than the businessman what price to offer to make money and make it worth my while to purchase?

In comparison to this almost 'to good to be true' example, you can think of how government arranges things - they tell us what we're paying (sometimes not up front) then they provide a service and we're lucky if it is satisfactory. And if it isn't ... there's little to be done, for we certainly cannot choose another provider.

Businesses provide us more by profiting than governments do by wasting money we never wanted them to have in the first place. A business can never force you to give them your hard earned money - a government almost never offers a product you would pay for if you were not required by law to do so.

So when I hear people complain about profits, and ask for government intervention, I assume they must be ignorant of what they are doing; and if not, they have a perverse sense of justice and goodness and no appreciation for freedom. All of that I could forgive, except they conspire to give away my freedom with their own.

Tuesday, February 13, 2007

An Intelligent Policy Idea from an Unlikely Source

As noted in this article by Michael Barone, President Bush proposed a solution that would accomplish much of what I wanted to address in my last post. Holy smokes, an intelligent policy proposal from a State of the Union address! Whatever will they think of next.

This will not on it's own turn off the flipping awful single payer (govt) "universal" health care proposal that's still the toast of the left. As much as I would like to, I don't have time to describe how costly, inefficient and ineffective this sort of govt directed health care would become, nor how it would increase our dependence on a growing population base (generally via importing labor since Americans no longer choose to make enough of our own. Our birth rate in the US is 2.1 or so, just barely the sustainment rate; all population growth is via immigration now).

All I can do is pray that intelligence will win out, that Americans will demand more than feel good legislation, that they will look at what these 'single payer' systems are doing to countries that have tried them already. Bottom line: there are so many emerging options for health care, many of which are nice but optional, that no system is going to be able to afford to pay for all of these choices for everyone. We can ration by individual choice - or by government rationing, as is done in Canada, UK, etc.

What is govt rationing? One example: in Canada, a man needed a knee replacement surgery. His knee was hurting quite a lot. He was put on a two year waiting list - in other words, knee replacements under the Canadian system are rationed. He decided he would like to just pay out of his own money to have the surgery done - eventually, he was allowed to do this, but only after winning a suit against the govt in the Canadian Supreme Court! He had to sue to be able to pay with his own cash for a knee replacement. This is the kind of 'care' we can expect from govt run health care.

Please, America, see through the facade of government supplied solutions, don't sell out, hold on to liberty, demand less govt intervention, demand fewer govt solutions, hold out for the excellent market based solutions out there. Don't let the socialist ________s get us down.

Sunday, January 7, 2007

Do Democrats like big business? They do if it is health insurance big business ...

The link below describes Schwarzenegger’s struggle to deal with the mess caused by the long standing government intervention into health care, which has prevented free markets from providing to health care what they have provided in most or all commodities that are not ruined by government intervention - to wit, a variety of choices with plans to meet different needs and pricing that allows most of us to get what we need. To me this is the tell all – why is it that all but America’s most poor buy cars and car insurance, and houses and home insurance (69% of Americans own homes, and all but a fraction have housing), but we don’t have a market for affordable health insurance?

-What if you could choose from health care plans like you choose car models? What if companies were out there thinking of new ways everyday to market and sell individual health insurance plans for individual Americans? What if this market were as competitive as the life insurance market or the automobile insurance market, with companies hiring the best and the brightest to figure out how to profit by selling you a product you want for a price you are willing to pay? Why is health insurance the only product of this type that isn’t sold that way, responsive to individuals in the market place?

-The answer: Like many persistent problems we face, the government messed it up. Prior government interventions have “kaleidoscoped” natural incentives that would make this product as consumer oriented as it should be.
Interestingly, the Dems are not leveling their normal accusation, against Schwartzneggar & the GOP, that they are in bed with big business - because when it comes to health care, no one's warmed big businesses sheets better than the Dems, so they have nothing to say.

-It was WWII, and FDR had embraced the Keynesian idea that governments could tweak economic policy to make an economy run better. One of his GFIs (great ideas) was to set upper wage limits. Corporations convinced congress to allow them to offer generous health insurance policies as a tax free portion of an overall compensation package (I’m sure the health insurance companies were glad to see this law passed, as it immediately made their products more valuable by virtue of being tax free). In other words, an employer could give Joe Wartimeworker more compensation by giving him an extensive insurance package, even though it was illegal to offer Joe W. more cash dollars than the government limits. This idea doesn't make a lot of sense to me, 60 years removed, but I can see why insurance businesses liked the idea.

-That’s an ungracious way to say that after this strange, war time change in legislation, health insurance became an expected component of employee compensation, due the tax benefits. An employer could pay an extra $1200 in salary, of which the government could take “their share” in taxes, leaving you less than $1200 in take home pay, or, the employer could buy a $1200 health insurance policy, of which you would get the full $1200 in value. When I went to work after graduating from college, I never wondered why health insurance was part of my overall compensation package, I never considered whether I could find a better deal by taking the money paid for my insurance as pay and buying my own policy – but I didn’t take any other benefits that way, for example, housing or transportation. Do you have any doubt that if employers were better at providing housing or transportation than you could do on your own, they’d be offering that as compensation? Well, I don’t think companies do any better at providing health insurance either, but because of the tax incentives, companies provide it and few question the value of what they receive.

-A result of the “employer provided tax sheltered health insurance” approach is it has resulted in companies providing the most expensive possible insurance policy. That’s what we all think of now when we think of a health insurance plan – it is not really insurance, it is a pre-paid service contract, which is the most expensive way to provide insurance like coverage for a service. For example – how many people that you know purchase a plan that pays for every possible expense in car ownership; fuel, oil changes, tire changes, tire maintenance, minor paint repair, car washes, etc? Almost none of us do because this kind of coverage is VERY expensive. But that’s the kind of health care most of us have. If health care looked like car insurance, we’d only have coverage for very high, unexpected costs, the equivalent of car crash repair or injury from car wrecks. Instead, we pay for coverage that includes predictable, minor expenses - akin to fueling the car and changing the oil each quarter.

-Once you have a pre-paid service plan policy, then the incentives get screwy in a hurry. Doctors have no reason not to prescribe any and all tests that might, no matter how improbably, find something that might be wrong. In fact, if they don’t and you get really sick, you may sue the doctor; so the incentive to recommend tests and procedures, even ones that aren't likely to find anything, is monstrous. Because of that practice, we all pay higher premiums, pricing many folks out of the market. As Arnold Kling shows in his book, A Crisis of Abundance, we’re spending a fortune on health care because we’re buying Cadillac care while getting a Chevy ride, and pricing many Americans out of the market in the process.

-What are the solutions? Well, I’ll bet you dollars to handfuls of Iraqi sand that the present government efforts to ‘solve the healthcare crisis’ will lead to calls for additional government solutions to the problems that today’s solutions will cause tomorrow. The result will be a system that continues to suck up more and more money, while providing only marginally better care, leaving less money for Americans to spend on things that would provide genuine benefits, and resulting in: reduced world wide competitiveness, lower take home pay, and perpetual calls for additional government intervention, while each intervention will reduce the ability for free men/women to enter into mutually agreeable decisions about how to conduct their lives.

-If you want to better understand how we could all have a reasonable amount of coverage and pay a reasonable price, bringing even the “less fortunate” into buying their own health insurance (just as they buy their own cars and houses and insurance for both), read Arnold Kling’s excellent and short book, “A Crisis of Abundance.”

-After spending 10 or 20 hours looking it to the issue, it is no longer a wonder to me that we have a “health care crisis.” Interestingly, most Americans likely won’t spend 10 or 20 hours to understand this issue, but many will be seduced by the siren song of most government “help for the less fortunate,” never knowing that it is government help that’s priced health care out of the market for that population in the first place.

-Have you any doubts we’ll be seeing more government directed actions, less freedom and more government intervention leading to lower quality of life for us and our children? There are none from my end.

-A freedom lover's koan: “How much government intervention will it take until the politicians are no longer willing to spend other people’s money to intervene?”