Archive for December, 2010

Death Panels

December 28, 2010 2 comments

Death panels are in the news again.  Here is the story.  Basically, they tried to include end of life planning in the healthcare bill but the public didn’t like it so they took it out and now they are doing it through the bureaucracy over the weekend…..on Christmas…… oh and they advised Democratic congressmen not to brag about it too much.  So having the government pay for end of live planning isn’t really such a bad thing (at least it’s not any worse than when they pay for other things).  But there are two important things to take away from this.

First, this is how things get done now, not through congress but through the bureaucracy.  All the attention is on what congress passes but regardless of what they pass, the bureaucracy does whatever it has to do in order to advance their progressive agenda.  We mistake these bills for a battle over how powerful the government will be but for the most part, the battle is already over and we have lost.  We have let the executive branch gradually gain the power to do practically whatever it wants so now they have a big debate and the public weighs in and then they do whatever they want regardless of public opinion and the outcome of congressional proceedings.  We have to realize that our problems are deep and systemic.  They won’t be fixed by just electing Republicans or repealing the healthcare bill.

Second, and more importantly, even though what they are creating now are not death panels, death panels are the inevitable result of their philosophy.  The progressive moral code says that “healthcare is a human right.”  This is not like the right to life, liberty and the pursuit of happiness.  Let’s examine the difference.

Negative rights:  This means you cannot be prevented from doing something.  These are the rights of which the founders spoke.  The right to life does not mean that you are guaranteed to never die.  It means that you cannot be prevented from trying to remain alive.  There are certain negative rights with which everyone is “endowed by their creator.”  These are part of the laws of nature.  There is a liberty inherent in man simply as a result of being man.  This cannot be taken away by the government, the government can only change the options between which he is at liberty to choose.

Positive rights: This is the right to get something no matter what.  This is the right to healthcare.  It is entirely different from a negative right.  If “right” is understood to mean a negative right, then we had a right to healthcare when the country was founded.  That is, you had a right to get whatever healthcare you could buy or get someone to willingly buy for you.  But this is not what they mean.  They mean, you should get healthcare no matter what, even if nobody is willing to provide it for you.  There are no positive rights inherent in nature.  Every creature is born with the freedom to try to survive but no creature is born with the guarantee that it will survive no matter what it does.

I have said before that progressives are people who don’t believe in scarcity.  This is the case here.  They say “I believe everyone has a right to healthcare.”  But if they believe this then they are simply factually incorrect.  There is no natural right to healthcare.  What they mean to say is “I wish there were a right to healthcare.”  Well that’s all well and good but the fact is that there isn’t and in the presence of that fact the question which confronts us is whether to embrace the rights we do have or to sacrifice them grasping for an imaginary one we wish we had.

This may sound like hyperbole but it must be understood that creating a positive right always infringes upon someone else’s negative rights.  If someone is to be guaranteed healthcare that means that someone else must be compelled to provide it for them.  This means the second person’s right not to provide it is sacrificed.  Sometimes it’s more subtle than this.  For instance if you are healthier than I am and the government gives me the “right” to buy health insurance for the same price as you, what it is really doing is preventing you and the insurance company from engaging in a mutually beneficial trade (insurance for some amount of money less than the amount for which it would be willing to sell it to me).  In other words, they are taking away your negative right to healthcare.

So what does this have to do with death panels?  Once you acknowledge that scarcity is not caused by greedy capitalists, it is a fact of nature, you have to acknowledge that goods must be rationed.  The question then is how to ration them.  Here are two ways.

1.  Everyone has the right to their own property and labor and the right to trade it with whomever at whatever prices they want.  This means that you have a right to whatever healthcare you are willing and able to pay for.  You make the decision about how much of it is worth buying just like any other good.  You can negotiate an insurance contract with an insurance company and buy as much or as little as you think is worth buying on terms that are beneficial to both parties. 

2.  Everyone has a right to healthcare.  Healthcare must be provided to anyone who wants it potentially at someone else’s expense.  This already violates the moral premise of private property but it doesn’t even address the issue of rationing.  Rhetorically this solves the problem of rationing by assuming scarcity away.  But the problem is still there and eventually it must be dealt with.  You can’t actually give everyone all the healthcare they want because there isn’t an unlimited supply of it. 

What’s more, people will now make decisions which are inefficient since they are no longer trading their own stuff for healthcare, they are just demanding it and someone else is paying for it.  So naturally they will want as much as they can get. Under the first rationing scheme a person might find themself toward the end of their life and be faced with the opportunity to undergo an expensive procedure which is expected to prolong their life for a few months.  They may decide that it would be better to pass the money on to their children or donate it to the local orphanage or what have you.  Or they may not, since it’s their money they could decide the best way to use it.

On the other hand if a person finds themself in a similar situation under the second scheme, naturally they will want as much healthcare as possible because the benefits will be disassociated with the costs.  The costs will be bourne by others but the check will be signed by the government, quite likely a government that had promised to reduce healthcare costs.  So who will decide whether or not it is worth it to get the procedure? 

The free market is a mechanism for rationing scarce goods.  It happens to be the only mechanism compatible with individual liberty and property rights and it also turns out to be pretty efficient most of the time.  But the free market doesn’t guarantee that everyone will be “equal.”  If you go on a quest to make them “equal,” you will have to destroy the free market.  If you destroy the market and the price mechanism, you must have another way of rationing (one that is not compatible with individual liberty and property rights). 

I’m not saying that they have created this system already I am saying that it is a logical necessity of the system they are creating.  Of course they aren’t going to tell you that they are creating a system where the government has to decide what you can and can’t get.  They are just going to tell you that you can have whatever you want. But scarcity is a law of nature you can’t just wish it away.  Eventually this system will cause a “crisis” by which they will pretend to be totally surprised.  They will have no choice but to ration care.  But don’t worry because the structure to do this will already be in place.  We will just have the bureaucracy tweak the rules a little bit, no congressional approval required.


Billboards, Healthcare and the Tragedy of Externalities

December 18, 2010 Leave a comment

The reason we are in such bad shape today is that most Americans have no code.  To see what I mean consider the following 2 codes.  Code A: everyone has the right to use their property however they want as long as it isn’t destructive to someone else’s property.  Code 2: the government controls all property and should make whatever decisions are best for the society as a whole.  Obviously these two codes are incompatible.  Anyone could see that.  The problem is that they don’t teach us to choose a code and stick to it.  They teach us to be afraid of having a code, to value things like “compromise,” “moderation,” “centrism,” etc. 

So we tell ourselves that there is some truth on both sides and that we hold both values.  We are for private property but we also think the government should intervene sometimes when there is a big enough social benefit.  But we don’t realize that by doing this we are implicitly choosing one of them.  When we go on this way we always end up running into these contradictions where we don’t know what to do.  And we try to weigh the benefits and costs of both sides.  But by doing this we are accepting the premise that the welfare of different people can be compared.  In other words we are accepting the notion of “social value.”  And what do you know, when you compare the benefit to one measly property owner against the perceived value to society it usually seems like the latter is much “larger.”  This is why progressivism works.  Progressives actually believe in the second code and they know you don’t.  But they are progressively getting you to accept it even though if you knew what you were getting into it would horrify you.

Case in point: here is a story from the town I currently call home.  Note this quote: “It’s a skyline that’s collectively owned by all of us and suddenly it becomes privately marked.”  The skyline is not collectively owned!  A skyscraper is private property.  There is no subtle distinction here.  The reason this guy thinks it is public property is that the public can see it.  Did you hear me?  It’s collectively owned because the public can see it!  Therefore, what a private owner does to his own property is a decision which must be made by government because it affects other people who want to look at something other than what the supposed owner wants to put there.  And this is not just a crazy proposal by a fringe group, this is existing policy.  This guy is complaining because we are going back to letting owners decide what to put up on their own private property.  How did this happen?

Well, I already told you but let’s get a little more specific.  A long time ago in a galaxy far far away people believed in private property and there was a lot of economic work done showing that private property and individual freedom let to efficient outcomes.  Then someone discovered the concept of an externality, a situation that could make free markets inefficient.  So we said “OK government, go ahead and regulate situations where there is an externality to make them efficient.”  We forgot that we had property rights for the sake of our freedom, we thought we got them because they were efficient!   So as soon as someone came along and told us a little bit less freedom would be more efficient we weighed the social cost against the social benefit and agreed.  And at that moment the code “everyone has the right to use their property however they want as long as it is not destructive to someone else’s property” became “everyone has the right to use their own property however they want so long as the decision doesn’t affect anyone else in any way.”  But this is the same code as “The government controls all property and should make whatever decisions are best for society as a whole.”  It just doesn’t sound the same, it sounds kind of like the first one….

The reason that this code is the same as code B is that we have to live together.  When people live together in a society, their actions affect each other.  Practically everything you do affects other people.  People have to look at your house, your car, your yard etc.  Does that mean the government can tell you what kind of flowers to grow in your garden?  The air you are breathing is air someone else can’t breath.  If you walk out on your front porch and pass gas, your neighbor has to smell it.  Obviously I could go on and on like this and if you are skeptical you will say “yeah but the government would never try to regulate those things that’s just silly.”  But can you imagine what people would have said if Ayn Rand had said in Atlas Shrugged in 1957 that the government had decided people’s buildings were public property because other people look at them and therefore they can tell you what you can and can’t put on them?  (If you can’t, it would have been much like what they did say anyway which is that it was crazy and it would never happen.) 

To find a more important example of this phenomenon one need look no farther than the court battle over the recent healthcare bill.  This bill requires you to buy health insurance even if you don’t want it.  The reason that they claim they have the right to do this is that your refusal to buy health insurance affects other people.    The reason it affects other people (and interstate commerce) is that your decision affects demand for and therefore the price of health insurance and if you don’t want it they are going to give it to you anyway.  These of course are both direct consequences of their interference in the healthcare and health insurance markets but that’s a topic for another post.  The thing you need to understand is that even not doing anything affects other people because if you did do something it would affect some market and that would affect other people.  This means that there is literally nothing that the government can’t prevent you from doing or even force you to do.  By the way, notice that the pretext of efficiency is completely dropped (in this case it is certainly less efficient) that was just a transitory technique to change the code.  So let’s review the transformation in values.

Code 1: We believe in private property rights.  A pleasant side effect of this is economic efficiency.

Code 2:  We believe in economic efficiency which usually means we should respect private property rights but sometimes the government should intervene when there is some externality which would make free markets and private property inefficient.

Code 3:  We believe in private property rights as long as the exercise thereof does not have any external effect on someone else, then the government can regulate it.

Code 4: The government controls all property and activity and can prevent or require any action by any person it wants in the name of public welfare.

We are at number 3 right now but the only difference between 3 and 4 is that when you’re at 3 you haven’t noticed that 3 and 4 are the same.  I will present a similar argument with respect to taxes shortly.

Obama’s North Star

December 9, 2010 Leave a comment

This is the problem with Obama and the ideology of leftism.  Yesterday Obama gave what I think is probably the most defensive and combative presidential press conference of all time.  Here it is if you would like to watch the whole thing but allow me to cut through some of the fluff and highlight the key points.  He begins with this head scratcher.

This isn’t the politics of the moment, this has to do with what can we get done right now.

This actually made me laugh when he first said it until I heard him talk about medicare and social security.

So this notion that somehow we are willing to compromise too much reminds me of the debate that we had during health care. This is the public option debate all over again. So I pass a signature piece of legislation where we finally get health care for all Americans, something that Democrats had been fighting for for a hundred years, but because there was a provision in there that they didn’t get that would have affected maybe a couple of million people, even though we got health insurance for 30 million people and the potential for lower premiums for 100 million people, that somehow that was a sign of weakness and compromise.

Now, if that’s the standard by which we are measuring success or core principles, then let’s face it, we will never get anything done. People will have the satisfaction of having a purist position and no victories for the American people. And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are, and in the meantime, the American people are still seeing themselves not able to get health insurance because of preexisting conditions or not being able to pay their bills because their unemployment insurance ran out.

That can’t be the measure of how we think about our public service. That can’t be the measure of what it means to be a Democrat. This is a big, diverse country. Not everybody agrees with us. I know that shocks people. The New York Times editorial page does not permeate across all of America. Neither does The Wall Street Journal editorial page. Most Americans, they’re just trying to figure out how to go about their lives and how can we make sure that our elected officials are looking out for us. And that means because it’s a big, diverse country and people have a lot of complicated positions, it means that in order to get stuff done, we’re going to compromise. This is why FDR, when he started Social Security, it only affected widows and orphans. You did not qualify. And yet now it is something that really helps a lot of people. When Medicare was started, it was a small program. It grew.

Under the criteria that you just set out, each of those were betrayals of some abstract ideal. This country was founded on compromise. I couldn’t go through the front door at this country’s founding. And if we were really thinking about ideal positions, we wouldn’t have a union.

See this is what they mean by “progressive.”  They are going to gradually compromise us to where they want us to go.  This will keep us from considering what is really down that road.  They just want us to think one step at a time.  And they will make each step as small as they have to in order to get us to go along.  This is an encoded message to the left, it says “look I know you guys want to go faster but you have to understand that this is how we get things done, progressively, and this is as fast as we can go right now.”  It’s not the politics of the moment it’s the politics that the moment require to move us in what he thinks is the proper long-term direction.  And then comes the most important part.  The part where he lays out the moral code which is required if one is going to be led down this path.

So my job is to make sure that we have a North Star out there. What is helping the American people live out their lives? What is giving them more opportunity? What is growing the economy? What is making us more competitive? And at any given juncture, there are going to be times where my preferred option, what I am absolutely positive is right, I can’t get done.

And so then my question is, does it make sense for me to tack a little bit this way or tack a little bit that way, because I’m keeping my eye on the long term and the long fight — not my day-to-day news cycle, but where am I going over the long term?

See Obama has four north stars (and how many more do you think he could come up with if you asked that question again in a couple weeks?).  And what is much more important than the multitude is the fact that these north stars are always moving around.  “What is helping the American people live out their lives?”  What does that mean?  That could be anything.  Whatever you want to do, you can claim that it is helping the people live out their lives.  It doesn’t actually guide you, it’s just a thing to say to make people think you are going somewhere that they want to go.  Imagine the following conversation between a sea-captain and his passenger.

Passenger: It’s so empty out here, how can you possibly tell where you are going?

Captain: Well you see I just use the four north stars.

Passenger: Four north stars?

Captain: Yeah they always point north, so I can use them to tell direction.

Passenger: Where are they?

Captain: Well one of them is over there sometimes and sometimes it’s over there….and other times it’s that way.  The other one is usually in that direction, except occasionally when it’s over there…..

There are only two possibilities: either this captain has no idea where he is going and he’s just making something up to convince you that he does, or else he does know where he is going and he doesn’t want you to know so he’s making something up that you couldn’t possibly use to figure it out.  Which one do you think we’re dealing with here?

Finally, to address his comments about the founding of the Union, first of all nobody was allowed through the front door, it was locked down tight.  But I get it, the founders were racists and we are a flawed nation that must be fixed progressively through the wise leadership of an enlightened elite who have to trick us into doing what history will eventually confirm is the right thing.  Let’s just get one thing straight though.  The country was founded on compromise, but it wasn’t compromise about values, it was compromise about the best system to further those values.  Every founder (for the most part at least) was led by the same north star.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The disputes among the founders were over the principles and powers that were most likely to effect their Safety and Happiness, they were not compromises over which parts of your life the government should be able to control and/or sacrifice for the good of someone else and which parts they should not.  This question was ruled out by the common values that they agreed upon.  Their north star was individual liberty.  This star is always in the same place, it’s not moving around.  This star doesn’t lead you to compromise.  It might lead you to somewhere you wish you didn’t have to go sometimes, but it’s always clear where it leads.  That is, at least, if you know how to find it.

Now we compromise on values, and not surprisingly, this has taken us to a place where we have no values.  We are a boat on the open ocean and the captain is telling us “we need to go that way it’s much better over there” and we have no idea where he is taking us because we have lost our north star.    I suggest we brush up on our navigation America.

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