Wednesday, July 22, 2009

Health "Insurance" isn't insurance at all

It's more of a cost shifting mechanism, writes The American Thinker, and rightly so:


It is no more practical to have "health insurance" to pay for prescription drugs and routine doctor visits than it is to expect your auto insurance to pay for your oil changes and tire rotations.

I tend to agree that the larger issue is the creeping of the entitlement culture, and tonight's comments from Obama only confirmed that, and the role of Obamacare (C)(TM) in worsening the problem:


"I'm rushed because I get letters every day from families that are being clobbered by health care costs, and they ask me can you help," he said.

If you think that's what insurance is, the government moving money from one pocket to another to make things more affordable, you're going to have a tough time when your car gets rear-ended. That's why the car insurance analogy is so fitting - we've come to expect that the routine be subsidized, insured and cost-mitigated, as if its not that - routine, and so expected that we could easily budget for it ourselves and pay less than the health insurance premium. In fact, that most people with employee sponsored coverage can afford their employee health insurance premium seems strong evidence that they could afford the routine medical costs themselves. What they couldn't cover, and what insurance was supposed to alleviate, was unexpected health care costs and incidents.

The problem here is that when people say "insurance," they mean "I want something for nothing (or substantially less)." Routine, maintenance healthcare is not cheap, but simply bundling the costs does not eliminate the fact that somebody has to pay them. By creating a system where payment at the point of the transaction is lessened (or removed, in a socialized system), the illusion of zero cost allows the average person to ignore the increased taxes, and inevitable burden on businesses and "wealthy individuals," required to pay the costs. Hiding them doesn't fix the problem, but it does make people feel better.

Wednesday, January 28, 2009

Sometimes they say it best...

In case you had any reservations regarding what the stimulus is really about, President Obama accidentally gave it away - from Yahoo!:

"But I do hope that we can all put politics aside and do the American people's business"

Tuesday, January 27, 2009

Inaugural aspirations, his and mine

At last, the pageantry of the inauguration has begun to fade, and although the media's chanted refrains ("historic!," in case anyone alive, anywhere, had yet to be informed of the history-making going on) continue to echo across the morning talk show spectrum, we are finally beginning to see what sorts of policies will actually come from the Obama Presidency. Thus far, it has been a decidedly mixed bag. While I have been pleased to see the President backing off of "cut-and-run" campaign promises vis-a-vis Iraq, I can't begin to describe how ironic and condescending it is for Democrats to demand tax increases for the rich, and then to nominate and confirm a rich, tax-evader to oversee the IRS. Ah, yes - not those rich.

I am realistically inclined to believe that the next 4 years will not be kind to the small-government, free-traders amongst us, but I think there are a few possible outcomes we might reasonably hope for:

  • Honor the legacy of Dr. King, and complete the civil rights revolution, by ending race based preferences in education and hiring: "A man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a sacred oath," the President declared, and proud we should rightly be. Yet, with the election of our nation's first minority President (or, as I have argued, with his very nomination), the politics of race and the grievance-based culture of victimization have been necessarily marginalized. What can be more farcical than claiming that our system still requires separate rules for certain groups of people, when that very system is led by a member of one of those groups. Mr. Obama should declare that if his election has any meaning beyond the political, as so many millions believe it does, than he, and our nation, can no longer tolerate a government that is not blind to race. While probably a long shot,Obama has indicated that he has warmed to the idea, particularly when discussing race-based versus means-based preferences.


  • Enact meaningful economic reforms without doing more damage: In his inaugural address, President Obama promised "...not only to create new jobs, but to lay a new foundation for growth," signaling early and sizable action to counter-act the current recession. Yet, thus far, congressional democrats have continued to propose outdated Keynesian experiments that will do little to address the current crisis, and much more to address their wallets, and their special interest constituents. Rather than pump tax-payer billions into congress's pet projects (Condoms? Really?), President Obama should propose a comprehensive plan based on marginal tax cuts and pro-business incentives. As the Wall Street Journal argues, any stimulus to individuals and businesses need to be in the form of incentives to produce and spend, rather than temporary, lump sum payments. Only by changing the marginal incentive structure will government effect consumer and supplier decision-making on a semi-permanent basis. Infrastructure spending is an important priority, but hardly an effective way to stimulate the economy, and federal subsidies to bail-out state budget deficits and fund state-level infrastructure are a bad idea, aside from doing diddly for the economy (University of Chicago Nobel Laureate Gary Becker makes a strong argument here that it could even hurt the private sector). Again, there is growing clamor for a tax-oriented stimulus, and President Obama has met with congressional Republicans to discuss the topic.

    Moreover, and perhaps more important to the long-term vitality of the economy, we must not return to an era of over-regulation, nor should we demonize the products and tools that were abused in the lead-up to this crisis, rather than those who abused them. The ability to spread and exchange risk, represented in such now-demonized products as sub-prime mortgages and credit default swaps (CDS), is vital to a thriving economy and continued capital investment. Onerous regulation and government intervention, while pacifying to reactionary populist sentiment, will only hurt those it intends to help.


  • Secure victory and a successful transition out of Iraq: There can be little doubt that America is tired of Iraq, and has been for some time. But with the gains of the last 12-18 months becoming more evident with every passing day of media silence, it would be folly on a grand scale for the President to rush to withdraw our troops, and leave our fledgling democratic ally underdeveloped and ripe for relapse. Just as one-time stimulus payments have little long-term effect because consumers know they are temporary (see 2008, stimulus check of), so too security gains can be squandered if Iraq's enemies know they must simply wait for a hasty American withdrawal to strike. For our endeavor in Iraq to be a lasting success (and make no mistake, it can very well be), we must ensure a functioning Iraqi military and security force that is not only capable of maintaining relative peace, but is also actively doing the job that coalition troops are now, that of rooting out remaining al-qaeda militants and securing the country's porous borders. Luckily, President Obama has begun to back pedal on his aggressive withdrawal timeline, and has been in active discussion with the Joint Chiefs and leaders on the ground. A victory in Iraq is more feasible now than any time since the invasion, and a pragmatic approach could ensure a successful draw down on Obama's watch.

Of course, only time will tell if President Obama will actually turn out to be the pragmatic centrist he claims to be, or if he will cave to left-wing special interests and the lures of a complicit congress. Let's hope for the former, as its the best we can get.