In a recent post on his blog, Paul Krugman disparages Dick Armey for saying the government ran the housing market into the ground (or something along those lines). Krugman writes:
There’s a persistent delusion, on the part of many pundits, to the effect that we’re actually having a rational political discussion in this country. But we aren’t. The proposition that the Community Reinvestment Act caused all the bad stuff, because government forced helpless bankers into lending to Those People, has been refuted up, down, and sideways. The vast bulk of subprime lending came from institutions not subject to the CRA. Commercial real estate lending, which was mainly lending to rich white developers, not you-know-who, is in much worse shape than subprime home lending. Etc., etc.
If you watch the video, you'll see Armey never mentioned the CRA. He simply made a sweeping blanket statement. Now anyone who has followed the decade long critique of government interference in the housing market knows the CRA is the last policy serious critics claim played a role in the debacle. It's pretty much accepted, in all camps, that the policy had a relatively negligible effect on the market.
But what Krugman misses (or most likely chooses to miss) is that the CRA is in and of itself one of the many results of a political mindset that dominated Washington in the 80's, 90's, and 00's that indirectly forced hundreds of thousands, if not millions, of parties to get involved in something they ordinarily never would have gotten involved in.
No doubt a similar thing will happen in healthcare if the same mindset wins out.
(Note: See chapter 2 of Johan Norberg's Financial Fiasco for a detailed analysis of government interference in the housing market)
Showing posts with label Healthcare. Show all posts
Showing posts with label Healthcare. Show all posts
Roman Deininger on Healthcare
Roman Deininger comments in a recent The Philadelphia Inquirer op-ed, "if there is to be an honest discussion about universal health care - as provided by nearly every industrialized nation - we must dispel the myth that it infringes on individual rights."
As many of us have come to realize, the term "universal health care" means different things to different people. The difference between the modern liberal's definition of the term and the classical liberal's is not that the classical liberal believes reaching such a goal is impossible, but he believes only that to achieve it through government coercion and against the will of the individual is immoral. Deininger would most likely make the opposite argument, claiming that it would in fact be immoral not to do such a thing; that we have the moral imperative to help others in this vastly important area.
And i do believe we who are more fortunate should help others who are less fortunate. But I think that only should be done through our own voluntary action. To mandate morality, in my eyes, is inherently contradictory and immoral (if one views liberty as a moral principle and end in and of itself).
Deininger's argument is based on the idea of positive rights, that all human beings have the right to basic necessities such as food, water, shelter, health care, education, etc... It is a wonderful notion and one I think we all impulsively believe to be true. But it forgets a fundamental truth: these amenities (yes, as the modern liberal describes they are amenities, not necessities) all come at some cost to other parties. And a right, which is something that cannot be denied, cannot come at a cost to others. If such a system existed then the world would be a system of constant debt where everyone perpetually owe everyone. Individual determinism would have no place in such a world and liberty would cease to exist.
I understand Deininger's sentiment and from reading his well-written article I believe he has his heart in the right place. But I do think he needs to think the issue through on a deeper level.
As many of us have come to realize, the term "universal health care" means different things to different people. The difference between the modern liberal's definition of the term and the classical liberal's is not that the classical liberal believes reaching such a goal is impossible, but he believes only that to achieve it through government coercion and against the will of the individual is immoral. Deininger would most likely make the opposite argument, claiming that it would in fact be immoral not to do such a thing; that we have the moral imperative to help others in this vastly important area.
And i do believe we who are more fortunate should help others who are less fortunate. But I think that only should be done through our own voluntary action. To mandate morality, in my eyes, is inherently contradictory and immoral (if one views liberty as a moral principle and end in and of itself).
Deininger's argument is based on the idea of positive rights, that all human beings have the right to basic necessities such as food, water, shelter, health care, education, etc... It is a wonderful notion and one I think we all impulsively believe to be true. But it forgets a fundamental truth: these amenities (yes, as the modern liberal describes they are amenities, not necessities) all come at some cost to other parties. And a right, which is something that cannot be denied, cannot come at a cost to others. If such a system existed then the world would be a system of constant debt where everyone perpetually owe everyone. Individual determinism would have no place in such a world and liberty would cease to exist.
I understand Deininger's sentiment and from reading his well-written article I believe he has his heart in the right place. But I do think he needs to think the issue through on a deeper level.
Barack Obama and Competition
Barack Obama has displayed an affinity for sports since he first came into the national spotlight. In particular, Mr. Obama seems quite enamored with basketball. I wonder if Mr. Obama thinks there is enough "competition" in the NBA at the moment. If he did not think there was, what would his solution be? If he viewed competition in the NBA like he does national healthcare, why Mr. Obama would simply form an "NBA team". No one would really know what or who this team was, only that it would be implicitly backed by the NBA. In other words, the NBA could shape the rules however it saw fit to benefit its "team".
Now what would this team's name be? How about "Public Option".
Who in their right mind actually thinks this would increase competition?
Now what would this team's name be? How about "Public Option".
Who in their right mind actually thinks this would increase competition?
Shika Dalmia, Healthcare and Polticians
Here's Shikha Dalmia of the Reason Foundation and forbes.com take on Obama's Healthcare speech last night. A snippet that I found personally jarring:
Perhaps the most striking--and disturbing--thing about the speech was the unblinking confidence Obama exuded while breaking key campaign promises he made to voters. He had raked poor Hillary Clinton over the coals for admitting that her road to universal coverage was paved with an individual mandate. "Everyone would be forced to buy coverage, even if you can't afford it," warned Obama in an ad. "You pay a penalty if you don't."
My father and I watched the speech together and while we were taking it in he turned and asked me "So what do you think of this guy?" I told him that I wasn't a fan as I fundamentally disagreed with him philosophically, but that I did not dislike the man from a personal perspective. But I stopped myself, thought about it for a second, and said I didn't trust him. My Dad only nodded and said something along the lines of "So that's what you think of him personally." And he was right.
I have told myself that I will never form an opinion about someone, no matter how tempting it is, without personally meeting them and getting to know them. Maybe this is a good policy to follow when dealing with regular folks, but when concerning politicians it is certainly not. These are people who have unprecedented power to intrude in virtually every aspect of our lives. To not consider them personally is hiding behind a facade of tolerance and cool-headedness, when all one is really doing is being a coward, too frightened and weak to step into the fray.
Do I think Barack Obama has Americans' best interests in mind? No, I do not. Do I trust him? No, I do not. Although I disagree with him, can I say Barack Obama is principled? No, I believe he is not.
I would not shake the hand of President Barack Obama. I could not look myself in the mirror afterward if I ever did.
Note: In the article, Dalmia has a far more effective analogy for mandating care for those with pre-conditions. After reading hers, I realized mine is both inaccurate and actually portrays the policy in far too generous a light.
Perhaps the most striking--and disturbing--thing about the speech was the unblinking confidence Obama exuded while breaking key campaign promises he made to voters. He had raked poor Hillary Clinton over the coals for admitting that her road to universal coverage was paved with an individual mandate. "Everyone would be forced to buy coverage, even if you can't afford it," warned Obama in an ad. "You pay a penalty if you don't."
My father and I watched the speech together and while we were taking it in he turned and asked me "So what do you think of this guy?" I told him that I wasn't a fan as I fundamentally disagreed with him philosophically, but that I did not dislike the man from a personal perspective. But I stopped myself, thought about it for a second, and said I didn't trust him. My Dad only nodded and said something along the lines of "So that's what you think of him personally." And he was right.
I have told myself that I will never form an opinion about someone, no matter how tempting it is, without personally meeting them and getting to know them. Maybe this is a good policy to follow when dealing with regular folks, but when concerning politicians it is certainly not. These are people who have unprecedented power to intrude in virtually every aspect of our lives. To not consider them personally is hiding behind a facade of tolerance and cool-headedness, when all one is really doing is being a coward, too frightened and weak to step into the fray.
Do I think Barack Obama has Americans' best interests in mind? No, I do not. Do I trust him? No, I do not. Although I disagree with him, can I say Barack Obama is principled? No, I believe he is not.
I would not shake the hand of President Barack Obama. I could not look myself in the mirror afterward if I ever did.
Note: In the article, Dalmia has a far more effective analogy for mandating care for those with pre-conditions. After reading hers, I realized mine is both inaccurate and actually portrays the policy in far too generous a light.
Obama's Healthcare Speech - Language
As is often the case on this blog, I enjoy examining the use of language and how people/groups distort it to further a certain agenda. Barack Obama did this tonight (numerous times) in his Congressional Address. There is one specific example I want to focus on though: "no denial of insurance for preexisting conditions".
The President decreed that in his plan no persons suffering from a pre-existing condition (two other words that need to be thoroughly examined) would never be denied coverage. This sounds like a wonderful idea at first glance (I know I thought it did). But it begs the question: why would an individual ever purchase insurance in the first place until they became afflicated with said condition? Of course they have zero incentive to do so. Consequently, insurance companies are going to have to make up for these unintended coerced costs in another way. One method may be to raise premiums. But what if they can't do this either? Well, like with any price control that puts a ceiling on prices (and this is what the pre-existing argument essentially is), you will have market participants drop out and a shortage will occur and this will further the path of a government takeover.
Look at the incentives in another way. What if tomorrow the federal government mandated that car insurance companies could not deny any applicants with car accidents or points on their licenses on their records.
(I don't have any data, on this, but I am fairly sure such applicants generate enormous revenues for car insurance companies. What the companies do though is counter the added risk with increased premiums and deductibles).
What signal would this send consumers? First, it would tell them there is zero chance they could be denied coverage, so they would never purchase the insurance until they were involved in an accident or were assigned points by a court. Secondly, it takes away negotiating power from the companies. If they have to sign such applicants by law, what is to prevent prices from plummeting to artificially low levels (the cost problem)? Finally, such a policy would create a significant moral hazard. If I know that government will force insurance companies to provide me "insurance" at the lowest cost due to the cost problem, or totally subsidize me through taxpayer dollars if I cannot afford said prices, what is to stop me from taking adverse risks while driving?
I digress though. My basic point is if the federal government implements this rule insurance will no longer be insurance. It will be a subsidy. The guise of calling it "insurance" is incredibly dangerous.
The President decreed that in his plan no persons suffering from a pre-existing condition (two other words that need to be thoroughly examined) would never be denied coverage. This sounds like a wonderful idea at first glance (I know I thought it did). But it begs the question: why would an individual ever purchase insurance in the first place until they became afflicated with said condition? Of course they have zero incentive to do so. Consequently, insurance companies are going to have to make up for these unintended coerced costs in another way. One method may be to raise premiums. But what if they can't do this either? Well, like with any price control that puts a ceiling on prices (and this is what the pre-existing argument essentially is), you will have market participants drop out and a shortage will occur and this will further the path of a government takeover.
Look at the incentives in another way. What if tomorrow the federal government mandated that car insurance companies could not deny any applicants with car accidents or points on their licenses on their records.
(I don't have any data, on this, but I am fairly sure such applicants generate enormous revenues for car insurance companies. What the companies do though is counter the added risk with increased premiums and deductibles).
What signal would this send consumers? First, it would tell them there is zero chance they could be denied coverage, so they would never purchase the insurance until they were involved in an accident or were assigned points by a court. Secondly, it takes away negotiating power from the companies. If they have to sign such applicants by law, what is to prevent prices from plummeting to artificially low levels (the cost problem)? Finally, such a policy would create a significant moral hazard. If I know that government will force insurance companies to provide me "insurance" at the lowest cost due to the cost problem, or totally subsidize me through taxpayer dollars if I cannot afford said prices, what is to stop me from taking adverse risks while driving?
I digress though. My basic point is if the federal government implements this rule insurance will no longer be insurance. It will be a subsidy. The guise of calling it "insurance" is incredibly dangerous.
Choice and Competition
I am watching Meet the Press at the moment and David Gregory is interviewing David Axelrod on healthcare. I've heard Axelrod invoke the ideals of choice and competition and that implementing a public choice option is essential to ensuring the optimal amount of competition and providing the American people with the most options. Merriam-Webster defines "competition" as "the act or process of competing as a : the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms b : active demand by two or more organisms or kinds of organisms for some environmental resource in short supply".
A few things to note. First, I am becoming more and more convinced that the interpretation (or misinterpretation) of language is the root cause of many conflicts in the world. Gay marriage strikes me as a great example of an issue that suffers from this language disparity. Ala, how does one define "marriage"? Where does that definition come from? What makes it legitimate? Has it evolved at over time? How does culture change the definition? Naturally, many answers can be given to these questions. Consequently, people will fundamentally disagree on the premise, and it will thus be impossible to move forward.
Axelrod makes the claim that competition is enhanced if the government enters the fray. Given the above definition, I have enormous difficulty in seeing how this is possible. The state is not a desirable producer. There are two distinct reasons for this. The first is the state has the unique power to shape the rules of the game, aka regulations. Consequently, would be like having two teams participate in a basketball game, but the ref is employed by one of the teams. He will clearly be biased and enforce the rules in favor of his team.
Secondly, the role of power and the government's ability to use coercion, has direct effects on the incentives of the state as a producer. When you can collect billions of dollars in taxes, borrow billions of dollars for low interest, or print money at any rate you wish, and the public MUST fall in step with such policy implementions, the government gains an advantage over private companies that can ONLY end in monopoly. Look at public education. No one would suggest that public education in this country is at a desirable level given the cost. Yet what is public education? Quite simply, it is a public option. If a public option or something like it is implemented, we will see the same inefficiency, malaise and perverted incentives that make public education what it is infect the healthcare industry. The cost will be overwhelming.
A few things to note. First, I am becoming more and more convinced that the interpretation (or misinterpretation) of language is the root cause of many conflicts in the world. Gay marriage strikes me as a great example of an issue that suffers from this language disparity. Ala, how does one define "marriage"? Where does that definition come from? What makes it legitimate? Has it evolved at over time? How does culture change the definition? Naturally, many answers can be given to these questions. Consequently, people will fundamentally disagree on the premise, and it will thus be impossible to move forward.
Axelrod makes the claim that competition is enhanced if the government enters the fray. Given the above definition, I have enormous difficulty in seeing how this is possible. The state is not a desirable producer. There are two distinct reasons for this. The first is the state has the unique power to shape the rules of the game, aka regulations. Consequently, would be like having two teams participate in a basketball game, but the ref is employed by one of the teams. He will clearly be biased and enforce the rules in favor of his team.
Secondly, the role of power and the government's ability to use coercion, has direct effects on the incentives of the state as a producer. When you can collect billions of dollars in taxes, borrow billions of dollars for low interest, or print money at any rate you wish, and the public MUST fall in step with such policy implementions, the government gains an advantage over private companies that can ONLY end in monopoly. Look at public education. No one would suggest that public education in this country is at a desirable level given the cost. Yet what is public education? Quite simply, it is a public option. If a public option or something like it is implemented, we will see the same inefficiency, malaise and perverted incentives that make public education what it is infect the healthcare industry. The cost will be overwhelming.
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