March 31, 2010

A Growing Government

There is an article in Newsweek titled “Make it Stop: How Obama can fix our runaway government.” in which the author Jacob Weisberg addresses current concerns about the size and scope of our government. Many people fear that government may begin to grow without limits. This worry is in part because of the recent recession and because of the wars that our country is currently fighting. In responding to these events the author believes that our public sector may become more intrusive and expansive and in turn make the private sector less free and dynamic.
I completely agree with the author of this article on the potential for unwanted government growth and the terribly negative effects an expansive government would have on society. Weisberg suggests that President Obama can help to alleviate these fears at least slightly if he addresses dangers. Thus far Obama has not addressed these concerns and has made them even worse by keeping his view on what government’s role should be very vague. He has not identified himself as being someone who wants to provide a wiser and more responsible government.
Weisberg quotes Obama as saying “The issue isn’t how big government is but weather it works.” This statement caught my attention immediately because Austrian economics addresses not only big government but also addresses weather certain government practices “work” or not. If Obama truly only cares that government “works” then he would see that the size of government does matter. In our readings we read numerous examples of how expanded government intervention is a bad thing. The more government attempts to over step its bounds into the private sector the more problems it creates. An Austrian economist would not make value judgments about these policies but simply ask one question: Did government accomplish what they intended to accomplish? We saw in numerous cases that the answer was no. Government was not successful in accomplishing what it intended to. There are many things that government simply cannot do and should not attempt to do. If Obama really doesn’t see the size of government as being an issue then I think that our country certainly should be worried.

cOnGrEsS' SChiZoPhReNic tUmMy

It's late and I'm hungry. So, if the wellspring of human action really is dissatisfaction, then please allow me a few cathartic moments to remove it as I seek a relation between two seemingly unrelated government interventions. I've been on a gluten-free kick for a month now, with good results - more energy to write late-night blogs, specifically. Normally a midnight Taco Bell run would satisfy my amygdala's urges, but removing fast food options from my diet cleared my mind of the governmental schizophrenia that helps produce my 4 for $1 tacos. Why schizophrenic? Because while one agency preaches that good eating habits are central to successful health care reform, another lavishes billions of tax dollars on the primary culprits of American society's obesity: corn and sugar.

I happened upon this idea watching the Ellis and Cheney documentary King Corn. While the filmmakers highlighted the demerits of a high-fructose corn syrup diet, a relatively minor point stuck with me ever since. Human actors, in this case a majority of Congressional men and women, authorize funds for the United States Department of Agriculture to pay farmers to produce corn and sugar beets, among many other agricultural products. There are various reasons for this, including a pledge to maintain low-cost food available to the citizenry, stabilizing farmers' incomes, and the reelection of the aforementioned human actors.

Market intervention always results in undesired effects - this is not a revelation of the Austrian School as much as a reminder that unintended consequences occur when force is brought to bear on free exchange, no matter how benevolent the intention. When the Federal Treasury outlaid $2.5 billion to corn producers in 2008, it (read: We The People) assumed the role of the largest corn consumer. And corn is a wonderful product. With current technology, American industry successfully produces a wide variety of goods from this plant, including highly effective food sweeteners, feedstock for the majority of U.S. cattle and ethanol fuel. (Digression: earlier this month our Environmental Protection Agency changed its mandate for biofuel production by vastly increasing the amount of advanced biofuel technology required in combustion fuels sold in the U.S., while decreasing its requirements for ethanol fuel production, as ethanol is now regarded as more a effective source of greenhouse gas than even gasoline. This may come as an unpleasant surprise to the thousands of farmers who chose to produce corn this year in anticipation of the formerly-mandated demand for this fuel source.)

As young adults, we are considered by advertisers to be "easy prey" for impulse purchases. Gastronomically speaking, such choices include ready-to-consume prepared food, often in fast food and convenience store forms. The menus of the largest fast food restaurant chains consist primarily of beef (corn-fed), soft drinks (flavor-enhanced by high-fructose corn syrup) and bread (subsidized wheat and sugar-laden.) These businesses are often cited by another human actor in government - Kathleen Sebelius, Secretary of the Department of Health and Human Services - as culprits in the increased levels of obesity (34%!) and diabetes among Americans, due to their highly desirable, fat and sugar-endowed products. Oddly enough, these same foods are also subsidized by our taxes.

Is this not a little crazy?

The Economist January 21st article entitled "The Fat Plateau" quoted Secretary Sebelius as saying "fighting obesity is at the heart" of health care reform. Obese patients' bills average 42% more than those of "normal-weighted" patients. Yet human actors just across town from her, sworn to the same oath of duty to the country, send our money to the industries which provide the goods necessary to produce food these same obesity-causing foods. Interestingly, lower-income Americans have two things in common - higher than average consumption of fast food, and lower than average health care coverage. And now perhaps I begin to see the correlation between corn and sugar subsidies, and health care. One literally feeds the other.

This situation reminds me of Ludwig von Mises' 3d Lecture, "Interventionism," in which he stated that "isolated government interference brings about a worse situation than it sought to abolish." FDR's Secretary of Agriculture Henry Wallace called the original farm subsidies "a temporary solution to deal with an emergency" (the Dust Bowl), yet these subsidies apparently now increase our subsidized health care costs.

And The Force continues its schizophrenic spiral...

Moving in the right direction...

Recently Colorado Springs removed the trash cans in all parks but 15 selected parks. To me this looks like a classic example of government failing to do its part on city maintenance. People don't want to pay more taxes so the government will let the parks of our city die and become big trash holes. What is the solution to this problem? PETA has offered money to get the trash system working again. There is one catch though, they get to put logos on the cans that say eating meat destroys the earth with a lady in a lettuce bikini in the background. This solution is currently being considered by the city government.
This may not be the perfect solution to the problem, but this is a good start. Now if only big businesses like Coke or Pepsi could put logos on the cans and help pay for the service the problem of the trash would be solved. If I saw a Pepsi trashcan in the park I would think that the company cares about the environment and the people visiting the parks.
The PETA trashcans seem a little heavy on the political goals for my taste but the company would get a job done that the government has failed to do. If companies like Pepsi or Coke can figure out the opportunity of advertisement there could be good money made.
The start of private companies providing the trash services for the parks of Colorado Springs is a step to less government spending and control over the day to day services that the private market can provide.

What's a little oil between presidents anyway...

Let me start with some news that hasn't exactly hit the mainstream yet: According to Reuters, "The Obama administration is expected to announce by Wednesday its updated plan for oil and natural gas drilling in U.S. waters, including whether to allow exploration for the first time along the U.S. East Coast," (

Now let me provide a bit of a flashback, for perspective; "Obama Administration Halts Bush Expansion of Offshore Drilling." A title can be telling I suppose, (

Further, to provide a context for this discussion, journalist Matt Drudge revealed,
"Administration sets 'embargo' on press leaks detailing oil plan; 11 PM ET release," ( Surely this must bear some resemblance to the "transparency" we were all promised?

In a stunning reversal of course, the Obama Administration, it has appeared, will be pushing forward with Bush's offshore drilling agenda. Just over a year after former U.S. Senator Ken Salazar promised "'a new way forward' in offshore energy development including new windprojects." The notion that this administration would therefore push forward with the predecessor's plans is very interesting indeed, as the past year has been filled with semantics hoping to move
away from such a connection. Of course, actions will speak louder than words.

Let me say, too, that I am not wholly opposed to the idea of offshore drilling in the slightest. On a personal note, I feel that it is an excellent temporary solution while realistic alternative energy solutions can be formulated. The problem here is not that Obama is allowing a move like this, but moreso the underlying principle that has created it. I wonder if those that so adamantly opposed the plan when it was pushed by Bush will have the same feelings today when it is announced to the media. It is interesting, indeed, to note that this is not the first continuation of Bush policy that Obama has embraced; the stimulus package was quite complementary to the bailout, and the health care bill, while dwarving the latter in comparison, has further enabled dependency on federal government that president Bush was himself not terrified of. The social trends that got Obama elected prove that the masses who voted for him had a miniscule grasp of where he was coming from.

Anyways, I digress with such social commentary. The importance of this move here holds many economic ramifications to the country. It is no doubt that the process of offshore drilling is tedious and requires patience. That being said, it is a sure manner in which to guarantee positive step forward in greater economic independence for the United States. That being said, however, we are left with a very interesting predicament. How does this particular maneuver tie in with other notable moves by the president, and what are the implications of such?

This move is both perplexing and unsurprising. Strange in the fact that it is a blatant contradiction to the Obama policy of 2009, but unoriginal in the sense that, as previously aforementioned, Obama has not shied away from the Bush comparisons since his election, when scrutinized objectively. The onset of offshore drilling will, in time, allow a great amount of oil to be utilized domestically in the hopes of keeping prices down for Americans. Frankly, this could have come much sooner but I suppose it IS better late than never. The economic dynamic that comes into play at this point, though, is how this might fare in the shadow of the enormous spending that will be caused by the health care bill. The economic impact can not possibly offset the behemoth of the recent health bill, and I think that might be the intended reaction.

The announcement of this in such proximity to the recent bill passed does not seem coincidental to me. I have to think that the reasoning is as mechanical as the politics that caused it. The concept of offshore drilling will no doubt strike at the tightwad strings of Americans, in a desperate effort to win over the hearts and minds of those of us who just don't like big government spending. That, ultimately, is the reason for the timely manner of this announcement.

Anyways. The idea of offshore drilling has appealed to me for some time now, so I won't bash it simply to bash the president's doing. However, I believe this is something that must be put into context. In the long run it will serve very little. The presumption here being that alternative fuel technologies will, in our lifetime, replace petroleum fossil fuels and more importantly that the allowance of offshore drilling in the foreground of stimulus bills and health care is minuscule at best.

Ultimately, what can we do in the face of such economic events? Capitalism has been wonderful for its uncanny ability to provide relatively so much to so many people and naturally work things out through the failures of government and firms. With the onset of such increased government power, however, we are surely moving away from capitalism as a form of economy in our country and towards socialism. It is difficult for contemporaries to pinpoint with accuracy how far along then we are along the captialism-to-socialism scale, but it is certainly not boding well for a tried economic system that has remained true for over two hundred years now.

What can we do? Well for starters, we might as well allow offshore drilling to continue... At the very worst it won't hurt, and it has plenty of economic promise for our country. The point here is that it exists as a form of reference to where we are now, versus where we were two years ago, before bailouts and "change." The impact of offshore drilling will come and go, but it's hard to say how long it will take to recover from the trillions of dollars spent in the last 18 months, and if we will ever recover at all from the monster of a health care bill recently passed. All we can do is take from the lessons we have learned, as Americans have continually strived to do historically and vote based on this. Ultimately, great change can truly be wrought from such difficult situations and these times are no different.

I have no doubt that the re admittance of offshore drilling will help to affirm this in our society.

Sources: The Drudge Report, Reuters, and the Huffington Post

There's a Googalplex of information out there; Why hide it?

Since nobody else has talked about this subject yet, I will take the opportunity for myself. This being a blog, I will say what is on my mind, exactly how I want to say it: Way to go, Google.

The web search engine powerhouse, due to censoring activities of the Chinese government, moved operations of their Chinese-language services to Hong Kong, where users can search and download information uncensored by the government. This action comes shortly after cyber-attacks against the company believed to be aimed at collecting information on local human rights groups took place (
Branigan, Jan 13). However, many also believe (me included) Google’s action was more strongly influenced by their principles of information freedom. Because of this action, Google has done it again. In this intricate act of principle and defiance, Google has not only re-established themselves as a leading innovator, as well as one of the strongest entrepreneurial centers in the world, they have provided economic benefit for the Chinese population, as well as the rest of the world, by acting to bypass this censorship.

After all, in the past 12 years, Google has achieved success of which many companies (Or, rather, individuals within companies) can only dream. Started in 1998 by Larry Page and Sergey Brin, two Stanford grad students, Google now grosses roughly $180 B in market capital, according to MSN Investing (
MSN Investing). This success can only have occurred because Google offered something to people that no one else before had offered them. That something is stated right in Google’s mission statement: “to organize the world's information and make it universally accessible and useful” (Look for yourself). The keyword here, I believe, is useful; in those 12 short years, Google has developed a system of indexing information unmatched on the internet today. Even the advertising displayed on the engine webpage, the sole source of their tremendous profits, is designed to reflect the relevant information pertaining to particular search parameters. However, it is the terms universally accessible that may be the driving force behind the company’s radical action. In Google’s list of “Ten Things we know to be true,” True Thing #8 summarizes an almost philosophical standpoint:
“The need for information crosses all borders.”(
Google's True Things)

It is exactly at this point that abiding by moral stance and operating under economic principle coincide. The standpoint to supply information “across borders” exemplifies a solid understanding of the network of information that exists around us. And, of course, who better to know about this network than the mighty Google?

In his Individualism and Economic Order, F.A. Hayek explains that the nature of information, specifically information upon which economic decisions are made, is dispersed amongst the minds of all people, and cannot be compiled into one place or body. In this way, the information that each person knows about is unique to him alone:
Practically every individual has some advantage over all the others because he possesses unique information of which beneficial use might be made, but of which use can only be made only if the decisions depending on it are left to him or made with his active co-operation. (Hayek, pg. 80)

The censorship put in place by the Chinese government effectively puts a limit on the breadth and detail of such a network. With less access to the network, decisions of an economic nature are hampered. Google, by moving operations to Hong Kong and sidestepping government censorship, allowed the information network to remain whole and strong, by allowing more pages to be accessed and more individual perspectives of information to be voiced.

There is little doubt that the Chinese government is slightly perturbed about this action by Google, even to the point of removing Google’s ability to use the “” domain name. Even before the action took place, the U.S. State Department was notified as to Google’s intentions. So why would Google do such a thing, putting their stake in the Chinese market at risk, and cause international strain?

Why, that’s what entrepreneurs do! The function of the entrepreneur not only innovates and satisfies unmet desires, but also serves to, for lack of a better word, “fix” the economy when it…well….breaks. Why would the economy “break”? When government, ignorant to economic process, intervenes in such processes.

And now we wait and see the results. Speaking from a purely speculative point of view, it may come to be that, if Google is removed entirely from the Chinese market, there is a tremendous void of information available to the Chinese population: The best search engine was kicked out, and other companies would not challenge the government like Google did! For the time being, however, Google has still proven themselves both morally and economically. Way to go, Google; What will you do next?

Reference: Hayek, F.A. Individualism and Economic Order. 1948. University of Chicago Press, Chicago, IL

March 30, 2010

The Expansion of Power within Government

Recently, the passing of the controversial health care bill has got many people in an uproar. A majority of the people opposed strongly disagree with the plan mainly because, under this bill, the government will grow in size, power and reach. From the Austrian econ perspective, one can examine this situation and confidently state that in many ways, the government is increasing its use of “force.” For example, under this bill, the IRS will make a person prove that he has health insurance and specifically, the "right kind" of insurance- as they define it. And he doesn’t meet their standards and their rules, he will have to put up with the wrath of the IRS. Furthermore, the bill also states the following:

The Internal Revenue Service will function as the government’s chief enforcer for health care reform... monitoring both businesses and individuals to certify whether they have the insurance coverage the government requires.

The [IRS] will [monitor and enforce] compliance with the individual and employer insurance mandates... how and when health care is paid for, when health insurance is purchased... [and] minimum level[s] of health insurance.... [The] IRS [will] monitor individuals and employers and punish those who do not comply.

Every individual and most businesses [will be] required to report to the IRS, on their tax returns, whether they have purchased or provided the required level of coverage and disclose to the IRS which months, if any, in which they failed to do so....

If the above information does not reflect the government’s expansion of power or “force,” then what does? If that information alone is not enough to convince a person of the far reaching power of the government, consider this: In order to enforce above rules and regulations, the “Congressional Budget Office estimated that the IRS will need $10 billion in additional funds… to fund an additional 16,500 new IRS agents and other personnel to monitor and enforce the new mandates” (CNS News). This means that the government, via the IRS, now has the legal right to poke their nose into our businesses, our homes, our families and our very lives. Various polls suggest that a large portion of Americans do not support the bill. This bill was, therefore, pushed or forced upon the American people against their will. With the government growing in size, scope, and control, it’s no wonder that many people are angry with the recent passage of the healthcare bill.

In another case very similar to the healthcare example, a recent article in Business Week entitled “A Caribbean Tax Holiday” provides some insightful information regarding recent investigations being done by the U.S. internal revenue service into the “$100 billion a year in retail credit-card receipts is escaping taxation” (Silver-Greenberg 46). Here, like with the healthcare bill, the government is seeking to increase its power in order to crack down on tax evasion by individuals and corporations.

The article explains how some business owners are choosing to minimize U.S. tax bills by “sending credit-card receipts to Panama, Nevis, Aruba, the Cayman Islands, and other business havens” (Silver-Greenberg 46) in order to payout less in sales and income taxes. While significant portions of the article suggest that most of these businesses are acting legally and within the legal bounds the law, it is interesting to note that in its effort to crack down on corporate tax minimization strategies, the IRS has begun to meddle within private businesses and their practices. The IRS began looking into international payment processors that help U.S.-based businesses export their card receipts. In order to search company records, the IRS issues a subpoena and demands the “names of all U.S. merchants that have retained the company to help them deposit credit-card receipts is foreign banks” (Silver-Greenberg 48). In doing so, the IRS can then determine whether or not a certain company is facilitating tax evasion.

IRS leading agent Daniel Reeves declined to talk to Bloomberg Business week about the investigation and the IRS declined to “provide specifics about the continuing probe” (Silver-Greenberg 46). Some might discount this statement as just an interesting bit of information, but such an action does beg the question, “What does the IRS have to hide?” It’s not to say that they are doing something wrong, but rather that those within the agency realize they are blurring the lines of their duties and may in fact be operating outside of its bounds. These actions may be entirely plausible, especially in light of the administration’s increased need to collect taxes. Whether it be the case of healthcare reform or the offshore tax havens, these real-life examples within the IRS agency display the latest increase in interference within American life and economy and give us a glimpse of how the government has used its growing power to “force” the American people to act how it thinks it best.

Works Cited

Cover, Matt. "IRS Needs $10 Billion to Be Nation." CNS News. N.p., 23 Mar 2010. Web. 30 Mar 2010. .

Silver-Greenberg, Jessica. "A Caribbean Tax Holiday." BusinessWeek. 22 Feb 2010: 46-49. Print.

Economic Growth in Peru

It is often said that “beauty is in the eye of the beholder.” I would suggest that everyone's perception of the world is dependent on his or her beliefs. People look at the world and see it different ways, and sometimes our preconceived notions keep us from seeing the truth. The average person in Peru does not have the same quality of life as the average person in America, but this does not mean that economic growth is not occurring in Peru.

In the last 30 years Peruvians have overcome many hardships including hyperinflation. Despite difficulties the people of Peru have not given up hope, and as Marvin Olasky writes in “Peru Poco A Poco,” they are experiencing “economic improvement little by little.” Many of the ideas that are changing Peru come from the Peruvian economist Hernando de Soto. His support of private property and entrepreneurship has helped revitalize Peru.

Hernando de Soto suggested allowing Peru's poor to build homes on unused land. Once a group of homes is established the owners can legalize their claims by proving they are a community. Peruvians have done this by setting up churches, small libraries, and even community centers. Private property creates stability for these individuals and helps cement entrepreneurship by providing the foundations for businesses.

People in Peru have begun to start small businesses with the help of micro-loans. A micro-loan can range from 100 to 1,000 dollars. A small loan like this allows new entrepreneurs to buy supplies and begin working. Micro-loans allow people to become self-sufficient unlike other types of charity which can lead to dependence, if the charity does not lead to the development of a useful skill. Furthermore microloan groups are improving the community by offering business classes for members and providing support for those taking out new micro-loans. As we discussed in class one benefit of entrepreneurship is that the entrepreneur pays wages to laborers thereby bettering life for those workers. As these new business leaders use micro-loans to get started and grow, capital is beginning to accumulate in the slums of Peru.

Hernando de Soto believed that the individuals of Peru could revitalize the country by entering the market as property owners and entrepreneurs. As he said when referring to the complexities of Peru, “with millions of people whose specialization makes them interdependent, with complex systems of communication between producers and buyers... with competition and a daily flow of information from other countries, it is physically impossible to be familiar with and directly run even a small fraction of national activities.” Like Austrian economists, Hernando de Soto believes in the individual. He recognizes that a central planner cannot know everything, and that therefore an economy is more successful when individuals make decisions with the knowledge that they possess. A person in Peru many not have what I have, but the only reason I have what I have is because of the capital accumulation of previous generations. Hernando de Soto's ideas have started Peru along the path of capital accumulation, and the people of Peru have hope because of it.

Olasky, Marvin. “Peru Poco A Poco.” World Magazine. 13 March 2010.

There goes the economy...

I was a little frustrated a few days ago when it was announced that the new health care hoopla passed the vote. I don’t mind that idea behind it is to help those without coverage. But is that really the purpose of this bill? I would submit unto you Nay!

1) Why put into effect a health care plan that will affect 100% of Americans, when only approximately 10% of Americans are without coverage? It just doesn’t compute! And that’s including the large number of 18 – 30 year-olds who choose not to get coverage because they feel they don’t need it. They would rather buy a big screen TV, than “waste” their money on an intangible good like insurance. Why not come up with a plan that will benefit just those that are without coverage, and can’t afford it?! Congress should be smart enough to come up with such a solution. Maybe I’m giving them too much credit. After all, this is the same group that couldn’t find a way to put the bill on the internet. Give me a break!

2) Do the individuals that voted on this bill understand that well over 60% of Americans did not want this bill passed, let alone the effects it would have on the economy? NAY…One would think.

Rahm Emanuel stated in 2009, “You never want a serious crisis to go to waste - and what I mean by that is it’s an opportunity to do things that you didn’t think you could do before.” The American people in a clear majority, through polls, tea parties, etc., do not want this. Yet the White House is taking advantage of the current recession to push through something that will break down America even more. With unemployment already at 16%, including those who have just given up on looking for work, the government wants to cause even more people to lose their jobs. Oh, but they are creating 16,000 new jobs in the IRS to monitor this program. The only sector in which there seems to be growth now days is in the government. Maybe all the poor individuals who will be losing their jobs in the health care and insurance industries can go work for the IRS.

Well, if they know how detrimental it would be to affect 1/6 of the economy, then you’d think they would keep their conniving little hands to themselves. That’s not the case. The goal of this administration is to break down and eliminate the private sector, when it comes to insurance. This will lead to even more reliance on the government than people already have.
The government is effectively offering the option to wait until coverage is needed, buy it, and when it is no longer needed, get rid of it. This is a cheaper option to everyone than to own private coverage. By offering a fine to those who do not have coverage, it is intentionally cheaper than the cost of coverage itself, and by eliminating the preexisting conditions clauses, it allows for individuals to easily take advantage of the system. In doing this, definitionally, the government is no longer providing insurance; it’s providing welfare.


Ignorance and lies lead to failure

It is very obvious that the current administrations posturing on the policies affecting the future of the United States economy is lacking the support of the majority of U.S. citizens. It seems as though the more we protest the less the government listens. This ignorance by our government has the unfortunate similarities of past socialistic governments that have failed. It has been documented and proven by the essay's we are currently discussing in this course that there is no future for the people if the government has too much control and continues to grow. We as Americans have to ask ourselves how much more of the lies and corruption can we take until we reach a breaking point? The politicians continue to string the believers along but they are slowly loosing support. The breaking point is finally being reached.

This is a epic moment in history. It is obvious that the left realizes its radical agenda will be short lived. That is the exact reason why they are trying to pass all of these socialist ideas before the November elections. They are like sheep being lead to the slaughter house. By not recognizing what the majority of people want and the fact that America became so wealthy because of the lack of government in the system, they will fail. So let them continue to disregard the peoples wishes, press on with a socialistic agenda and continue to lie. The truth has come out, they will be voted out, and destroy the Democratic party.

From what I have read the November elections are gaining support by the people to elect individuals with a business background, not a political one. Where taking responsibility for your actions and decisions will have merit over the governing parties agenda. Once again our representatives will reflect the voices of the people not the government in power. This cleansing of our government will provide a base for the entreprenural spirit and lead to a prosperous economy vs. a prospering government.

Vote the liars out.

March 4, 2010

Healthcare: A Little Common Sense

In my myriad of researching, opinion-creating, and philosophy-searching, one thing is clear:

I still remain confused as to how to solve our healthcare dilemma.

But the question remains: how does the US outspend everyone else on healthcare but still rank behind literally every other developed country on life expectancy and survival rates from pretty much everything other than cancer, something that the Conservatives like to spout off about like it's some sort of one-stop refutation.

Read: Great Britain and most other European nations have GREATER survival rates for most other chronic diseases other than some cancers. And in some, like France, the wait times are actually competitive with ones in the US for procedures. Wait times are not nightmarish in every socialized healthcare country like they may be in Canada.

My general guiding philosophy is that socialized healthcare obviously and without dispute results in much more positively valued macro-scale health indicators for the population of a nation as a whole. Also, I know from economics that healthcare is a sui generis good, and profit incentives in healthcare are directly in line with denying as much of the product as possible, unlike most tangible goods.

This is troubling because healthcare is a good that determines life or death at a fundamental level. Most socialized countries pay between 2 and 5 cents per dollar per capita on administrative overhead and bureaucracy, a word Republicans love to use. We spend 29 cents per dollar on our private bureaucracy, out of a per capita amount that's twice as high as the next highest nation. Talk about stupidity and inefficiency.

Also, from the perspective of insurance, it is Econ 101 that insurance, in any form, is most efficient when the risk is diluted as much as possible per a population. This is the entire point of the idea. Insurance, private or public, cannot be efficient or effective when you are not required to pay into the system or to have it. You are required to have car insurance for the same reason; if car insurance were optional for car owners, the whole system would break down.

Healthcare is the same, except as a good it applies to everyone universally, since everyone has a mortal body subject to harm. Therefore it only makes sense that everyone has it, without the option to opt out. This is especially important with health because the current optional system conflicts directly with societal morals; if you willfully choose to not have insurance and get into a a bad accident, you still must be treated according to the law and according to morality and decency. So we either change morality to be logically consistent, i.e.- don't treat those who have chosen not to get insurance no matter what unless they wish to pay out of pocket up front, or we change the universality of insurance. And one is much easier and more morally palatable to do than the other.

However, I also know that even though it is a sui generis good, it is still a good that is subject to scarcity, and I am swayed that socialized healthcare, at least in the classical sense, does fail at the margins and does fail to effect innovation. Yes, it is true that 5 out of the 10 largest pharmaceuticals are based in socialized-healthcare countries, but these companies rely on the profits from the US market in order to innovate. This is a fact.

Having said all this, my position is that I'm all right with private healthcare, as long as everyone is required to have it under penalty of law, it can be sold across state lines, and it is price regulated to a small extent. However, I'm also all right with completely socializing the system, for the greater good and in the name of efficiency.

I also desire tort reform and believe it is an essential step as well.

But I'm not convinced that the healthcare bill does any of the above. Bill Mahrer has joked that it is essentially a [naughty word] to the insurance industry, and I think he's right as far as I know. However, I also feel that even if it is a severely flawed bill, it is our only shot at actually changing anything. Heaven knows a Republican won't do it.

So I'm torn. I don't know what's going to happen to healthcare reform, but I just want to believe that the current proposal will be the start in making some changes, despite its huge flaws. I don't know if I can though.... I wish they would just rewrite the whole thing, Democrats would let tort reform and interstate competition happen, and we mandate universal coverage under penalty of law. Heck, I'd even be in favor of getting rid of Medicare and Medicaid completely...

To get efficiency we need to focus on ONE approach, whether it be public-insurance for all, Medicare for all, or private insurance for all. I don't care. The key is to make it universal.

Then the system would be fixed. Period.

©2010 Drew Willsey.