"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.
Thursday, February 15, 2007
Tuesday, February 13, 2007
An Intelligent Policy Idea from an Unlikely Source
http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2007/02/a_fair_health_fix.html
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.
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?”
Tuesday, December 26, 2006
Freedom - like the road we drive to work, used too much to be appreciated
Today I'm sitting in an office of one of the palaces Saddam built with money from the UN Oil for Food program. This is a stupendous example of real repression, abuse of government power and why you and I are glad we have the freedom we have in the US. Bill Gates may have a palace this nice, but he didn't take the money from anyone - everyone that paid for Gates' products did so because they wanted the product more than the money. Sometime today, I'm likely to read an article by a well intentioned politician who's describing why he should use the coercive power of government to help some part of our population. The legislation, if passed, will take a little money from a lot of us, and will give it to a few of us; it will strike another small blow against liberty. It will have the effect of boosting the politician's career while benefiting one small segment of American society at the expense of the rest of us, and will become part of the albatross dragging down our economy, making us less competitive in the world. It will be a defeat for freedom, but no one will notice. Americans have grown up with an, historically speaking, amazing amount of freedom. In many ways, we can choose how to make our lives good or bad, with the greatest consequence of our bad choices falling on ourselves or our families. However, strangely enough, though we talk about freedom, we don't understand it. We don't know why freedom is good, we fear the likes of Bill Gates more than we fear an overbearing government, and we don't know why we should tell our politicians "no" when they try to "help us" by swapping the harsh reality of freedom for the harsh reality of power politics. I would like to think my military career has not preserved a government that will continue an inevitable march to greater power, leaving less and less liberty for you and for me. We are the inheritors of the great torch of freedom for the world, and inherit a better torch than the one our parents held; let us use our Constitution to defend liberty from all enemies, inside and outside of our nation. Apolloswabbie
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