Filed under: Capitalism, Economy, Freedom, Health Care, Progressivism, Regulation | Tags: Can't Tell What Free People Might Do, Fear of Freedom, The Left Demands Control
The late Milton Friedman had a way of clarifying the subject. contrary to “conventional wisdom — health insurance does not make health care more affordable. Perhaps you have noticed.
In his masterpiece Free to Choose, Milton Friedman wrote of four ways to spend money.
- Category I — You spend your money on something for yourself. Here you are very careful, because it is your money, and the good or service you are buying is for you.
- Category II — You spend your money on something for someone else. Here you have the same incentive as in Category I to economize, but since you are buying something for someone else, you are not quite as meticulous when it comes to the purchase meeting the needs or values of the recipient.
- Category III — You spend someone else’s money on something for yourself. Here you are not concerned about how much you spend, because it is not your money. But because you are spending on yourself, you make sure you are getting what you want.
- Category IV — You spend someone else’s money on something for yet another person or persons (This is what we ask our legislative representatives to do every day.) Here you are the least incentivized to economize, or to buy something that meets the needs or values of the recipient.
Third party payers operate under Friedman’s Category IV — think Medicare and Medicaid. When the government buys goods or services for other people with other peoples’ money, special interest pleading, politics and cronyism run the game. And “leakage” of money through “waste fraud and abuse” is a given.
Private insurance companies are also spending other people’s money — the premiums paid into a risk pool — on medical services for other people. When they negotiate compensation schedules with providers and facilities, they don’t have to bargain hard enough to reach the best price possible. They just have to reach a price that is good enough — one that allows them to charge premiums that compete well with rival insurance companies. They pass on the difference between what they could have negotiated and what they actually negotiated to the customers who pay the premiums.
People who negotiate direct payment from providers get better deals than the insurance companies get. When health care providers give discounts for direct payment they don’t lose money on the process, or they wouldn’t do it. To keep from losing the direct-pay patient they need to keep their prices acceptable to those paying the bill.
The foregoing is from an article by Dr. Jeffrey A. Singer. It should give you glimmerings of how health care insurance could be better done. Health savings accounts, where tried, have been both extremely popular and extremely effective.
Here’s another example of how medicine can be more affordable and more effective. Competition improves everything. And that goes for insurance too. With stiff competition, insurers will bargain harder to get good prices. When insurance policies have to compete on a national basis, and policies are sold across state lines, costs will come down significantly. There are hundreds of good ideas from Republicans. Keeping costs down doesn’t have to be slashing payments to doctors and hospitals, increasing deductibles to astronomical levels — that’s a command and control theme, where the left is always stuck. They just can’t give up control.
A small company called 23andMe offers a genetic-testing kit. It consists of a tube into which the customer spits and returns to the company. The actual test is conducted at a lab that is regulated by another agency. The FDA has chosen to go after 23andMe aggressively for marketing a “medical device” even though the only “device” is a plastic tube, and the client cannot cannot undertake further action on the test result without consulting a health care provider. This kind of device is part of the new economy, favoring the free flow of information. It is completely at odds with the old paternalistic model, in which regulators and the medical establishment control what patients may learn.
Liberals place great faith in the perfectibility of politics. They believe that the next law or the next regulation will make up for imperfect human nature. Freedom, to be sure, is frightening. There is no telling what values free people will hold, or even what they might do. That’s why they are so frightened by the Tea Party. They must be controlled.
Filed under: Freedom, Heartwarming, Military, Music, The United States | Tags: Joy to the World, Mational Air and Space Museum, USAF Band Flash Mob
The United States Air Force Band performed a surprise flash mob at the Smithsonian’s National Air and Space Museum on December 3. Lovely!
Filed under: Capitalism, Democrat Corruption, Economy, Energy, Global Warming, Junk Science, Regulation, Science/Technology, Taxes | Tags: Decarbonization Fail, End User Energy Cost, Public Subsidy Forever
The German energy giant RWE just pulled the plug on one of the world’s largest wind parks, the £4 billion Atlantic Array in the Bristol Channel. RWE did so for the stark reason that “the economics do not stack up”. It’s a mantra that well reflects the entire chaotic, incoherent and frankly competing elements at the heart of Europe’s energy policies.
Big renewable energy projects will always require state intervention and public cash in pursuit of the illusory aims of decarbonization. Private investment and business venture capital, are of sounder mind, and not inclined to take on the monumental risks involved, without the safety net of government guarantees and continuing public subsidies. Often better known as crony capitalism.
A democratic electorate views its key priorities with a combination of skepticism and common sense, particularly when their first priorities, like an improving economy have gone a glimmering. RWE had complained that the government was treating environmental subsidies as a “political football” which is an accurate representation of the ideological differences at the heart of the coalition.
The British Liberal Democrat energy secretariat is philosophically committed to paying for renewable energy, apparently whatever the cost to the end energy user. George Osborne’s Conservative Treasury, on the other hand, is quite aware of the political cost of the consumer’s energy bills. Britain has been dealing with “energy poverty,” for a number of years. But the whole thing goes back to Germany’s panicked knee-jerk reaction to abandon nuclear power in the wake of Fukushima. That led to the early closure of perfectly operational power stations, many owned by RWE. That short-sighted reaction now threatens Germany with a serious power shortage. RWE knew that the Atlantic Array needed more, not less government subsidies, and there is no prospect of that happening. They have embarked on a fast track divestment of their assets, divested itself of part of its UK gas and electricity sector and are outsourcing 1,400 jobs from Europe to India.
This is a stark warning to the rest of the world that renewable energy projects come with a need for constant government subsidy. These projects do not pay for themselves. Australia is drafting legislation to abolish the country’s carbon pricing mechanism to assuage the consumer anger over soaring energy prices. Green Dreams are all very well, but business is business, and the public has had enough of governmental green dreams. Somebody really needs to tell President Obama.
Filed under: Democrat Corruption, Domestic Policy, Election 2014, Health Care, Law, Politics, Regulation, Taxes | Tags: Defending the Indefensible., ObamaCare Lies, Zeke Emanuel Medical Ethicist?
On the Sunday shows, host Chris Wallace interviewed Obama health care adviser Ezekiel Emanuel. He asked about the oft noted Obama lie about “If you like your health insurance, you can keep your health insurance.” and “If you like your doctor you can keep your doctor.” Emanuel responded that the promise was true enough — providing you’re willing to pay a lot more.
Lucianne Goldberg was, like many of us, disgusted, and today she delivered the killer response on Twitchy.
Filed under: Economy, Environment, Global Warming, Junk Science, Regulation, Science/Technology | Tags: A Little Humor, Climate Change, The Dreaded Deniers
Filed under: Foreign Policy, History, Economy, Democrat Corruption, Capitalism, National Security, Iran | Tags: Embarrassing!, Obama's Iran Deal, The Saban Forum at Brookings
President Obama appeared at the Brooking’s Institution’s Saban Forum in Washington D.C. He responded to questions put to him by Haim Saban, the forum chairman. The discussion focused on the “interim deal” with Iran, although it covered the Israel-AP peace talks and the agreement with Syria to destroy its chemical weapons as well.
The Washington Times covered Obama’s appearance here, and Politico here, if watching the video is beyond your tolerance level. If Mr. Obama believes that he is actually getting anything in exchange for the relaxation of sanctions, he is far more ill-informed about foreign policy than I thought.
In spite of our current economic problems, the United States has the power to impose crippling sanctions on Iran and to enforce them. Iranian chants of “Death to America” are not children’s playground taunts. We were told, before Geneva, that Iran was just a month from a bomb. Iran is well supplied with oil and gas, and does not need nuclear power to keep the lights on. Their sole interest is nuclear weapons and the ability to strike Israel and America at will. They have in mind the return of the Mahdi and the reestablishment of the Caliphate. When they keep telling us so, sooner or later, we possibly should start believing that they mean it.
We don’t require Iran’s agreement to accept crippling economic sanctions. We just impose them.
Iran, Obama said, will always retain some nuclear enrichment capability simply because it is no longer a terribly difficult process.
“Theoretically, they will always have some capability because technology here is available to any good physics student at pretty much any university around the world,” he said. “And they have already gone through the cycle to the point where the knowledge we are not going to be able to eliminate. But what we can do is eliminate the incentive for them to want to do this.”
As he has before, Obama defended the six-month deal to relax some economic sanctions on Iran in exchange for some weapons inspections as not ideal, but better than the alternative of doing nothing.
When I hear people criticize the Geneva deal say it’s got to be all or nothing, I would just remind them that if it’s nothing, if we did not even try for this next six months to do this, all the breakout capacity we are concerned about would accelerate in the next six months,” Obama said. “They’d be that much closer to breakout capacity six months from now. And that’s why I think it’s important for us to test this proposition.”
“Not ideal but better than doing nothing?” “You see we can’t expect Iran to relinquish its nuclear program because it won’t!”
If one thought that preventing Iran’s development of nuclear weapons was the object of the exercise, then the Geneva deal is incomprehensible. The only real explanation of the deal is that we seek to protect Iran’s nuclear program and accept their development of nuclear weapons.
Filed under: Capitalism, Economy, Foreign Policy, History, Military, National Security, The United States | Tags: Pearl Harbor 1941, Remembrance and Preparedness, The Battleship Arizona
(Republished from Last year)
Every year on December 7, we say “Remember Pearl Harbor” but fail to point out why we should be remembering. John Steele Gordon in his essential history An Empire of Wealth: the Epic History of American Economic Power, outlines the state of the world:
In a fireside chat on December 29, 1940, Franklin Roosevelt first used a phrase that would prove enduring when he called upon the United States to become “the great arsenal of democracy.”
…..War had broken out in Europe on September 1, 1939, after German troops invaded Poland, and France and Great Britain stood by their pledges to come to Poland’s aid. Few Americans thought the Nazis anything but despicable, but public opinion in the United States was overwhelmingly to stay out of the conflict. Many newspapers…were strongly isolationist. In 1934 Senator Hiram Johnson of California had pushed through a bill forbidding the Treasury to make loans to any country that had failed to pay back earlier loans. That, of course included Britain and France. On November 4, 1939, Congress had passed the Neutrality Act, which allowed purchases of war materiel only on a “cash and carry” basis.
…..Seven months later France fell to the Nazi onslaught, and Britain stood alone. In the summer of 1940 Germany proved unable to defeat the Royal Air Force in the Battle of Britain and thus gain the air superiority necessary to mount an invasion across the English Channel. It tried instead to bludgeon Britain into submission with the blitz and to force Britain into submission by cutting off its trade lifelines across the Atlantic. It nearly worked. …
…..At the time American military forces were puny. The army had about three hundred thousand soldiers—fewer than Yugoslavia—and was so short of weapons that new recruits often had to drill with broomsticks instead of rifles. The equipment it did have was often so antiquated that the chief of staff, General George C. Marshall, thought the army no better than “that of a third-rate power.” The navy, while equal to Britain’s in size, lacked ammunition to sustain action, and much of its equipment was old or unreliable.
Roosevelt realized what was at stake in terms of America’s own security, but he felt that Britain must survive long enough to hold the Nazis at bay while the U.S. rearmed and he was able to bring the American people around to see where their own true interests lay. This was easier said than done.
On September 16, 1940 Congress approved the first peacetime draft in American history and 16.4 million men between the ages of 20 and 35 registered. But it specified that none was to serve outside the Western Hemisphere and that their terms of service were not to exceed twelve months. In 1941 Roosevelt was able to get Lend Lease through Congress, and after Pearl Harbor, isolationism vanished from the American political landscape.
Japan ran loose over the Pacific for the next six months, taking Hong Kong, the Philippines, Malaya, Singapore, the Solomon Islands, the Dutch East Indies, and Burma while threatening Australia and India.
The rearming of America was one of the most astonishing feats in all economic history. In the first six months of 1942, the government gave out 100 billion in military contracts— more than the entire GDP of 1940. In the war years, American industry turned out 6.500 naval vessels; 296,400 airplanes; 86,330 tanks; 64,546 landing craft; 3.5 million jeeps, trucks, and personnel carriers; 53 million deadweight tons of cargo vessels; 12 million rifles,carbines, and machine guns; and 47 million tons of artillery shells, together with millions of tons of uniforms, boots, medical supplies, tents and a thousand other items needed to fight a modern war.
We weren’t ready for Pearl Harbor, nor for Africa, nor the European front. We disarmed after World War II and we were once again not ready when North Korea invaded the South. We weren’t ready when Saddam Hussein marched into Kuwait and we weren’t ready for 9/11. America’s national character is perhaps always ready to assume that the war just finished was the last — ever.
Does anyone assume that now, we would have six months to a year to begin to produce the necessary equipment and round up and train the necessary troops? I seem to remember Donald Rumsfeld saying, to vast scorn from the American media—”you go to war with the army you have.”
It’s quite true, and the threats don’t always come from the direction you expected. When America is perceived as weak — as we are today, and indecisive — we are in greater danger. The “Arab Spring” has “unexpectedly” not turned out to be a people seeking for freedom and democracy. Instead the goal appears to be Sharia and dictatorship. Al Qaeda is again on the rise, and we seem to be rearming them. Syria’s Assad evidently is preparing to gas his own people. And we are cancelling missile protection for Eastern Europe because Obama wants a reset button with Russia, and now has more “flexibility.”
We must remember Pearl Harbor as a warning from the past. The troubled world keeps sending us reminders, and we fail to pay attention.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Politics, Progressivism, Regulation, Taxes | Tags: Kills Innovation, Kills Jobs, Regulators' Hubris
Somewhere along the way, Congress got lazy and decided it would be better if they palmed off the annoying business of writing laws and regulations on the myriad federal agencies, and then they wouldn’t get so much disagreement from ordinary citizens, and they could do more important things like make speeches and fund raise.
Delegating such tasks to unelected bureaucrats has meant not only the vast expansion of am alphabet soup of agencies, but laws that sound as if they are written by faceless, unelected bureaucrats. Nobody understands the laws, every t may be crossed and i dotted, and every possible dereliction from the law may have its penalty and every regulation may attempt to control ever more of the actions of the public., but it’s not working and it should be stopped.
Agencies are working at cross purposes, regulations are based on inadequate understanding of economics, and caught between the proverbial rock and hard place, businesses close or decline to open, jobs are lost or are never created but the regulatory machine churns on unabated. The regulators remain completely unconcerned about their vast hubris, for they are convinced that they know better than the rest of us what is good for us.
Consider the 20,000 pages of the ObamaCare act which has not managed to be intelligible to anyone after 3½ years. Contrast that with the clean simple law of the Homestead Act of 1862: simple, clear language, 21,296 words that transformed the United States and populated the country. We could do with a lot more clear language and a lot less regulation.
A small company called 23andMe offers a genetic-testing kit. It consists of a tube into which the customer spits and returns to the company. The actual test is conducted at a lab that is regulated by another agency. The FDA has chosen to go after 23andMe aggressively for marketing a “medical device” even though the only “device” is a plastic tube, and the client cannot cannot undertake further action on the test result without consulting a health care provider. This kind of device is part of the new economy, favoring the free flow of information. It is completely at odds with the old paternalistic model, in which regulators and the medical establishment control what patients may learn. Walter Olson, a senior fellow at the Cato Institute said there are sound legal reasons for the FDA to have refrained from acting in this case. But you can’t fight city hall, or a federal regulator. They will perhaps move offshore, jobs will not be created, and regulatory excess trumps citizen health.
The EPA decided that the Renewable Fuel Standards, which would require the use of 35 million gallons of alternative fuels by 2017, would promote clean energy. Unfortunately the technology for producing some kinds of biofuel did not exist. The goals failed to take into account the difficulty of turning that much corn into fuel, scientific studies demonstrated that engines in older care would be damaged by the new fuels. And government agencies and the military are required to buy significant amounts of a fuel that does not exist.
Hubris reigns, common sense evaporates, and citizen’s respect for government goes a glimmering. They brought it upon themselves. As somebody remarked the other day, when the government refuses to obey the laws, rewrites them to suit themselves, and imposes silly regulations that destroy businesses and lives, pretty soon the people will act on the example, and decide that they don’t need to follow the regulations or the laws, and then where are we? Innovation goes where it is appreciated. Job growth will go where it is wanted.
Filed under: Capitalism, Democrat Corruption, Economy, Health Care, Law, Regulation, Taxes | Tags: $5000 More Next Year, The Health Insurance Tax (HIT), United States Health Risks?
Is it fairly clear out there that people really aren’t very enthusiastic about ObamaCare? So is it a popular idea to increase the damage the failed law is doing? One would think not. Silly me. Over the Thanksgiving weekend the administration finalized the ObamaCare Tax ( the Health Insurance Tax (HIT) Love the acronym). This is a provision in ObamaCare that will cost nearly $60 billion over the next five years and raise health care premiums by 3 percent.
The final rule, published on November 27, imposes a fee beginning in 2014 for health insurers with premium revenues over $25 million per year. Can’t have any of the dreaded insurance companies making too much money. The tax is levied for “United States health risks,” and is hidden from consumers since it is directly levied on health insurance companies.
But of course the insurance companies don’t pay the tax, you do. It will be added to the cost that you are already shocked by. It will disproportionately fall on small companies. The American Action Forum found that premiums for small businesses and household will increase as much as 3 percent over the next ten years or roughly $5,000 per family over the next decade. That’s all you need — another $5,000 added to your bill. The taxes don’t even go to fund new health care benefits, but goes right into the Treasury.
They can’t help themselves. More control, more regulations, more taxes and then they simply cannot understand why the unemployment rate stays so high. They are unable to grasp that there is a relationship between increased regulation and taxes and control and employers’ reluctance to hire. They are cheering the unemployment rate’s move from 7.3 % all the way down to 7 %. That it should be around 3 % by now never seems to occur to them.