Friday, April 30, 2010

Exactly how much is "enough money"?

President Obama:
We’re not, we’re not trying to push financial reform because we begrudge success that’s fairly earned. I mean, I do think at a certain point you’ve made enough money.

"I think when you spread the wealth around, it's good for everybody."--talking with Joe the Plumber

Karl Marx:
From each according to his ability, to each according to his need. - 1875 Critique of the Gotha Program

And he says he's not a socialist?

Tuesday, April 27, 2010

Visualizing Obama's Budget cuts

As you have noticed, I haven't had time to do my own commentary lately---so instead I am sharing gems from other people.

This particular video (less than 2 minutes long) provides a way to help visualize the huge numbers thrown around these days while discussing government spending. We have all become numb to the numbers---and that is dangerous.

While watching the clip (sorry, no way to embed it) keep in mind that the table of pennies represents the annual federal budget. On this scale, $90 of pennies = $3.6 trillion.

Currently the federal deficit is $12.8 trillion and projected to be $20 trillion in 2020.

Now think about that 1/4 of a penny budget reduction next to a table holding 3 to 5 times as many pennies. The significance shrinks even further.

(HT Patrick Peterson)

Monday, April 26, 2010

Income Inequality or Equal but Poorer?

Mrs. Thatcher gets it right.
(It's also a fun peek at the operation the British Parliament.)

Saturday, April 24, 2010

Spread the Wealth Penn and Teller Style

(HT Ari Armstrong on Oactivist list.)

On a discussion list, Stephen Bourque made the following astute observation:
The video is very good-I like Penn and Teller a lot--but the analogy would have been better if it had made crystal clear that it was Teller's pie that was being "spread around." (They should have had Teller wear an apron or oven mitt or something, to indicate that he had made the pie.) One of our challenges as activists is to make explicit what is often left implicit or ambiguous. The video correctly criticizes wealth redistribution, but it misses an opportunity to show that free people do not simply HAVE wealth but must PRODUCE it.

Stephen blogs at One Reality

Friday, April 23, 2010

"Wealth is not the Problem" Round Up

Check them out!

Trying to Recapture that Old Earth Day Magic Stephen Hayward, The American
"For the last 15 years, Earth Day has been the occasion for me to play the contrarian through the annual publication of the Index of Leading Environmental Indicators, which offered official government data documenting the substantial improvement in environmental conditions in the United States."

Consume More this Day Kenneth Green, The American
"The sooner people grow wealthy, the sooner the environment will benefit. Now, get shopping!"

Earth Day, 7 New Rules to Live By John Tierney, NYT
3. “Let them eat organic” is not a global option.
4. Frankenfood, like Frankenstein, is fiction.
5. “Green” energy hasn’t done much for greenery — or anything else

The Rich get richer, the Poor get richer, the New York times gets outraged. Don Watkins, Voices of Reason
Profit is a benevolent force that creates a harmony of interests among all producers, rich or poor–and any attempt to reduce industry profits can accomplish only one thing: to reduce the poor’s access to capital and prevent microloan companies from reaping the rewards they’ve earned."

A Reality check on the Neo-Mathusian world. Indur Goklany @ The Master Resource
"[I]nstead of becoming scarcer, resources (such as metals and food) actually have become more affordable, and the hunger and famine that had been foretold went AWOL"

Wednesday, April 21, 2010

Fee-for-Service and the Profit Motive

Fee-for-service is frequently and erroneously maligned as the cause of our current health care ills. The denigration of fee-for-service follows from the failure to properly understand the functioning of free market and the beneficial role of the profit motive. Most transactions in our economy are fee-for-service (think of your grocer, plumber, CPA or housing contractor) and are functioning just fine. Free market competition increases quality and efficiency while bringing down prices and costs. The problem we currently face in medicine is the lack of free market competition, not the fee-for-service payment.

Increasing paperwork and administrative hassles, rising health care expenditures, increased demand for and subsequent increased prices of health care goods and services are all consequences of the current 3rd party payment system (in combination with low out-of-pocket costs for patients.) Tax laws since WWII have supported the replacement of medical insurance (catastrophic coverage and high-deductible) with comprehensive pre-paid health care and government entitlement programs---both of which are erroneously referred to as insurance. Understandable attempts on the part of the payer (both insurance companies and government) to control costs and assure quality invariably leads to intrusive bureaucratic management of medical decision-making.

The solution is to neutralize government health care policies and let individuals decide what financial arrangements best meet their needs. Contracts should be enforced, but not designed, by government. Fraud and negligence should be objectively defined and punished. Social engineering through tax policies, government subsidies, entitlement programs and regulations will always have harmful unintended consequences and are an inappropriate use of government force.

Some individuals may find it desirable to receive or provide medical care within an HMO or in a system of capitation—and they should be free to make this choice. Businesses should be free to experiment with health care delivery designs and to compete for patients on price and quality. Fee-for-service is one of many possible valid financial arrangements between physician and patient, and one that demands consistent quality and affordability for a physician to remain in business. As in any other business, the pursuit of long-term profits in medicine requires providing a valued service to one's patients--perhaps even more so in medicine because of the crucial role that trust plays in the doctor-patient relationship.

Fee-for-service is simply one profit-engendering trade arrangement: the physician provides a service for which the patient pays a fee. Profit is simply the money difference between the cost of providing the service and price that is paid for it. In a free market, pursuit of profit is an appropriate motivation for providing excellence--in medicine as in any other economic endeavor. Anyone able to offer a unique or superior service rightly earns the higher profits they voluntarily obtain. When a high profit margin exists, it signals a need for more resources to be directed to that area--not exploitation or gouging. Without free market prices and profits, there are no such signals and no way for resources to be efficiently allocated.

In spite of the fact that the Marxist theory of exploitation has been thoroughly refuted (both in theory and in practice,) our culture retains a suspicion of the profit motive. This is due in part to thinking of our economy as a free market, when in fact it is not free but a mixed economy: a mixture of freedom and central planning--replete with all the special interest influence and political favoritism that central planning promotes. Profits earned in this system are a mixture as well--in part due to voluntary trade of value for value, and in part due to political pull and government coercion.

Fee-for-service in a free market generates justly earned profits. It is the system that promotes win-win transactions and the benevolence of mutually respected individual rights. When externally imposed incentives distort the normal economic relationship of voluntary trade, fee-for-service can lead to an exploitive relationship, but the cause is the artificially imposed incentives, not fee-for-service or the profit motive per se.

So beware of those who disparage fee-for-service, for underlying it is a condemnation of profits, and thus the means of supporting our lives through our productive labor.


Tuesday, April 20, 2010

Paperwork vs. Patient Care

Today's post is up on my new website: The Black Ribbon Project.

As the health care bureaucracy grows, so does the paper work.

Paperwork, or documentation, takes up as much as a third of a physician’s workday; and for many practicing doctors, these administrative tasks have become increasingly intolerable, a source of deteriorating professional morale. Having become physicians in order to work with patients, doctors instead find themselves facing piles of charts and encounter and billing forms. --NYT 4/8/10

Saturday, April 17, 2010

This much debt really should be illegal.

HT John Goodman's Health Policy Blog: Federal Debt

From "Nation's soaring deficit calls for painful choices" USA Today 4/12/10

Under Obama's budget plan, the USA's debt in 2020 would be nearly the size of the entire economy then. Interest costs would be $900 billion, five times today's level...

"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above," Federal Reserve Chairman Ben Bernanke said last week...'

So far this fiscal year, the debt held by the public — not including money the government owes itself — is 58% of the U.S. economy...

Moody's Investors Service issued a warning in March that the nation's triple-A credit rating would come under pressure unless economic growth exceeded projections and tougher actions were taken to tackle the deficit...

Congressional Budget Office director Douglas Elmendorf calls the 90% projection "very worrisome..."

Real solution: Gradual scaling back of Medicare and Social Security:

Raising Medicare's eligibility age from 65 to 67 would save $86 billion over 10 years. Raising the premium for doctors' bills from 25% to 35% would save $217 billion...[as well as]raising taxes or scaling back benefits for high earners, and increasing the early and regular retirement ages, now 62 and 67...Raising the retirement age faster, so that it reaches 67 in 2020 rather than 2027, would save $92 billion.

Read the rest here.

Update: Harold linked to the following graph in the comments. The loss of purchasing power is the consequence of monetary inflation by the government as a way to deal with the country's massive debt.


Friday, April 9, 2010

Massachusetts Health Insurers Going Galt

(As reported in the Wall Street Journal "Massachusetts Insurance Blackout." Subscription required, but a summary by NCPA can be found here.)

Price controls on Massachusetts' health insurance premiums for small business and individual policies are set too low to be profitable. After experiencing heavy operating losses for 2009, the insurance companies appealed to the state to lift the rate cap--but were denied permission to raise premiums. Instead of continuing to operate at a loss, the insurers have decided to stop selling new policies.

This is just the latest in "unintended consequences" of Massachusetts' universal health care laws which, just like ObamaCare, include both individual and employer mandates.

Since the introduction of Romney Care in 2006, health care costs in Massachusetts have risen twice as fast the rest of the nation, wait times for appointments have increased, physician shortage has been aggravated, emergency room visits have increased, hospitals are teetering on the brink of bankruptcy. Fewer people are uninsured, but all of the other problems that RomneyCare (and ObamaCare) are supposed to address have worsened.

Anyone with a modicum of economic understanding will find these developments unsurprising.

This is economic malpractice at its most egregious. Government has been destroying health care freedom, affordability and access for decades.

Obama and our congressmen must be held accountable, and ObamaCare must be repealed.

Your lives and your health care depend on it.


Thursday, April 8, 2010

Updating Received Wisdom

In a delightful rewriting of an old proverb, Ron Pisaturo points out the truth of its obverse:

Update to an old Proverb: Obama supporters Take Heed

Rob a man who fishes, and you feed yourself for a day. Trade with a man who fishes, and you have a potential source of food—and so many other things that this free, thinking man might create—for a lifetime.

Read the rest here.

This is also another way of stating Say's Law of Markets: production must precede consumption and is what opens up the demand for products.

As we approach April 15th, ponder the fact that to tax one man to give to another is to use the coercive mechanism of government to rob Peter and pay Paul. Voting on this theft gives the illusion of a civil process--but a majority can have no greater right to a man's honestly earned wealth than can one acting on his own.

This explains the immorality of such taxation.

Ron's new proverb explains its impracticality.

The immoral and the impractical always go hand in hand.


Monday, April 5, 2010

Pandora's Box

"Enslave the liberty of but one human being and the liberties of the world are put in peril."

-- William Lloyd Garrison (1805-1879)


Saturday, April 3, 2010

The Unleashing the Lash of License Laws

This ribbon is to raise awareness of the recent damage our government has caused to health care freedom and the integrity of the doctor-patient relationship. Under ObamaCare, physicians will be compelled to base their advice and treatment on politically determined goals, even when in conflict with the best interest of their individual patients.

Yesterday I renewed my medical licence. In California, I have a Class G Physicians and Surgeons licence. In order to maintain my licence to practice medicine, I had to attest to the following:

1. having obtained 50 hours of continuing medical education in the past two years, including 12 hours of pain management end-of-life care within the past 4 years, and if 25% or more of my patients are 65 or older, 20% of my CME must be in geriatrics.

2. the zip code in which I practice, the number of hours I work per week in various types of medicine-related activities, my years of training beyond medical school, board certification-if any, foreign languages I am fluent in, and my ethnic background. (In the last2 categories, I was at least given the option "decline to state.")

3. "the name and address of each health-related facility in which you or your immediate family have a financial interest."

After completing the form, I was given the option of contributing $25 for family practice training. The required license fee for the "privilege" of practicing medicine in California is $808.00--however $25 of that fee is a mandatory contribution to a loan repayment program:

Mandatory - Physician Loan Repayment Program Fee California Business and Professions Code section 2435.2 requires applicants to pay a mandatory fee of $25.00 at the time of issuance or renewal of a physician and surgeon's license to the Physician Loan Repayment Program. The Physician Loan Repayment Program encourages recently licensed physicians to practice in under served locations in California by authorizing a plan of repayment of their medical school loans in exchange for their service in a designated medically under served area for a minimum of three years.

In order to legally practice medicine in California, I am forced to fund other physicians who work in "under-served locations."

I paid my own tuition for medical school, which required taking out loans and which I personally paid back every cent. But this personal responsibility is not sufficient for the state of California. The mere fact of choosing to maintain my licence in this state requires me to help others repay their loans.

With the advent of RommneyCare (the Massachusetts universal health care equivalent of ObamaCare) and the subsequent physician shortage and soaring state deficits, proposals in Massachusetts include threats of price controls--and of linking medical licences to treating patients on the state public access plan.

How long before we see similar requirements imposed from a federal level?

For years, physicians have practiced under the government-protected cartel of licensing laws. When the fiscal disaster of ObamaCare manifests as nationwide physician shortages and soaring costs, it won't take long for the licencing laws which have protected physicians from market competition to turn into a leash for government control of incomes as well the practice of medicine.

Of gradual and silent encroachments

"There are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations. "

-- James Madison, Speech to the Virginia Ratifying Convention [June 16, 1788]

Friday, April 2, 2010

A Lesson in Profit

Check out the article "A Lesson in Profit" by Gen LaGreca and Marsha Enright published on 3/31/10 in The Daily Caller. Using the success story of Henry Ford, the authors critique Obama's erroneous disdain for profit, and the free market in general.

Gen and Marsha--
Thank you for this important lesson. Throughout the health care reform debate, I kept hearing the phrase "profits before people" with the implication that the two are in conflict. Similarly, the denigration of "fee for service" in medicine as the cause of rising costs and prices while ignoring that the bulk of economic exchanges in a free market are "fee for service" and lead to increased efficiency and lower prices.

Both of these criticism are at root anti-profit. But as you point out, profit is simply the reward for successfully offering a good or service while keeping your own costs less than the price people are voluntarily willing to pay. To be against profits, is to be against benefiting by offering to others something of value.

Marx's exploitation theories have been disproven in economics (von Mises, Reisman and others) and in practice (USSR, Cuba, S. Korea)--and yet they linger on in the minds and hearts of many. Until people understand the tremendous value and benevolence of profts and the profit motive, we will be condemned to continually play whack-a-mole with wealth-robbing legislation.

Three cheers for profits! And three cheers for your article which shows us why!

UpDate 4/5/10: See also: Profits Are for People by Richard Ralston


Doctor's Advice: Obama Supporters Should Go Elsewhere

A Florida physician is recommending to patients who support ObamaCare to seek their medical care elsewhere. This is wise advice.

The new law places a physician in the impossible position of serving two masters: the best interest of his individual patients and what politicians have decreed to be the interest of "society."

Supporters of ObamaCare have promoted laws which deprive physicians (and all providers of medical goods and services) of the ability to employ their medical expertise, conscience and independent judgement in the best interest of their individual patients. Instead, advice and treatment must be tailored to serve government regulations and the goals of politicians. Time must be wasted learning, following and proving compliance with the mandates of government bureaucrats.

I do not think enough people understand the destructiveness to human relations of socialism in general and of socialized medicine in particular. It is individual rights which are the source of compassion, benevolence, mutual respect and cooperation---and the policies of statism which are grounded on coercion, and lead to class warfare, envy, distrust and resentment.

Coercion is not compassionate. You can not protect the rights of one by denying the rights of another.

You cannot expect your physician to advice and act in your best interest when the state criminalizes and punishes that behavior.

This is the message that needs to be understood--and which is reflected by the doctor's advice above.

Update: No surprise. This doctor is being called to task for "discriminating" against people who support the destruction of freedom in medical care.

Thursday, April 1, 2010

Important News of the Day

Unfortunately---no April Fool's on these stories.

1. Do you have to reveal your income to re-enter the US?

Michael Yon, independent news reporter on the middle east, arrested as he returns to the US.

It's unclear at this point what is going on here, but points toward abusive and excessively intrusive use of government power.

2. More evidence of data manipulation of the "official temperature record."

The above graphs show the change in the reported temperatures through time as the temperature data was "adjusted." See how the gap between the red and blue lines gradually disappears?

3. Obama's $3,000,000,000,000 Tax Hike - WSJ (Just incase you missed this back on March 3---before the health control bill passed.)

4. According to the RAND Corporation, ObamaCare will increase health care costs 2% more than what they would have increased without this law.

4. Now that it's passed it time to find out what is in it.

As you read through the timeline, ask yourself, just how many government programs, regulations, mandates and commissions does it take before it qualifies as a government take-over of medical care?


The One and the Many

"If all mankind minus one were of one opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind."

-- John Stuart Mill (1806-1873) English philosopher and economist Source: On Liberty, 1859

If all mankind minus one desired to accomplish a particular goal, mankind would be no more justified in coercing that one person to participate or contribute, than he, if he had the power, would be justified in coercing mankind.

I am constantly perplexed that so many people are able to understand the first proposition, but not the second.