Sunday, November 22, 2009

Clearing Up Some Misconceptions for the Left

Listening to lefties talk, reading their books and editorials, and hanging around on their message boards, has taught me how they view those who disagree with them.  And they tend to completely misunderstand not only what their ideological opponents believe, but also what motivates their opponents' beliefs.  For example, pro-lifers aren't against abortion because they are "anti-woman," or believe women have to be chained to a stove, or are sexist.  We're against abortion because it takes the life of an unborn human being.  Attend any pro-life event, visit any pro-life pregnancy help center, and what will you find?  Women.  Lots of them.  Look at Sarah Palin, do you think she's anti-woman, hates women, thinks women belong in the home and not the office?  Oh, that's right, lefties cannot rationally discuss Sarah Palin.  Shouldn't have brought her up.  Sorry.

Anyway, I wanted to address some of the more common misconceptions and myths I see coming from liberals.  I won't go super-in-depth on any one of these, just touch on them briefly.  Many times on Democratic Underground I've wanted to interject to clear something up, but of course I'm not allowed to post.  So I hope some of you guys/gals/misc. read this:

1.  We're not "anti-union" because we're "anti-worker," we're are simply opposed to the tactics "unions" (and I put unions in quotes because the modern, legally-enforced unions are really rent-seekers and not true examples of collective bargaining at all) use, and we are opposed to the special enforcement unions get from the government in non-right-to-work states.  We fully support the right of workers to organize and voluntarily associate, so long as they remain within their rights and are not given special rights (rights which infringe upon business owners as well as their own fellow workers) to do so.  We believe unions can only be a force for the greater good when they have to stand or fall on their own merits.  We also believe that there is a major difference between merely organized labor and the modern-day legal construct we call "unions."  I know I said it earlier but it bears repeating.  We believe that artificially raising wages (this includes non-pecuniary benefits and the increased risk associated with strikes) above market levels leads to greater unemployment among non-unionized workers.  For that matter, so do virtually all economists.

2.  We're not all rich.  I know, some of you already know this.  Unfortunately, you also seem to think that if a person is a rightie and is not rich, then it's because they want to be rich and so cling to a "pro-rich, pro-business" ideology, or because we've been duped by our corporate masters to be too scared to vote the way that would most benefit us, since you lefties are all about taking away our Bibles, guns, and turning our sons into fags.  I'm satirizing your own satire there, in case you didn't notice.

3.  There's actually more ideological diversity among us than you might think.  Though not nearly as paralyzing as the special-interest splintering I see on the left, there are atheist libertarians and gay-hating, 700 Club-watching, protectionist, welfare-state backers among us, and a jillion other varieties I could mention.  I spend some time on Free Republic, and at least half of that is spent arguing with my fellow righties.

4.  We read.  And not just the Bible and Sarah Palin's book.  I literally have more books than places to put them.  I read 19th-century classics, left-wing 20th-century authors such as William S. Burroughs, Albert Camus, and Kurt Vonnegut, all sorts of economics texts both positive and normative, sci-fi, fantasy, the list goes on.  Most righties I know also read voraciously.  In fact, I don't think anybody quite enjoys reading history or economics more than righties.

5. We don't hate the environment, although we often make jokes about driving extra miles on Earth Day and clubbing seals just to tweak you guys.  In fact, since a disproportionately high number of us are rural or suburban dwellers who enjoy camping, hiking, fishing, hunting, and boating, you can bet we care very much about keeping the environment pristine.  But we don't buy into your trendy hysteria or your attempts to prop up a dubious hypothesis on the weather as a means to enact government control over the economy and hence, over peoples' lives.  And be honest lefties, that's what the global warming scam is all about.  So go ahead and pat yourselves on the back for bringing the world clean air and water, but pat us too, since basic conservationism and restricting pollution are non-partisan issues that nobody has a claim to.

6.  You're actually not more educated than us.  I know, the figures show that the more graduate level education a person has, the more leftie they are.  But you are forgetting that an enormous number of public school teachers, public administrators, bureaucrats, social workers, "education" specialists, etc., make up most of those numbers.  These people depend on the government's giant welfare state (and its growth) for them to have a job.  They naturally tend towards leftiness.  Most righties I know have a better understanding of history and of the political process, and studies bear that anecdotal evidence out as well.

7.  We're not all about making money.  In fact, we give more to charity than you do.

8.  Not many of us actually "hate" gays, and if and when we vote against gay marriage (and not all of us do), it's because we don't want to be forced to recognize a marriage that conflicts with our religious beliefs.  And that's what it's really all about.  An orthodox Jew shouldn't be forced by the government to eat crab legs and bacon, a Scientologist shouldn't be forced to see a psychiatrist, a Wiccan shouldn't be forced to shave her legs, and I shouldn't be forced to recognize a marriage that conflicts with my religious beliefs.  I happen to believe that the government shouldn't have any role in marriage at all, so that I am not forced to recognize a marriage that conflicts with my values and also I am free to marry whoever I want.  Lefties wanting gay marriage sanctioned by law are seeking a government solution to a government-created problem.

9.  We don't travel less because we're backward, uncultured xenophobes, we travel less because we aren't as rich as you and we have entire families we'd have to bring along.  It's funny how out-of-touch you can be with the culture in your own country, yet consider yourself cultured because you know how to order coffee in Paris.

10.  Palin never said she could see Russia from her porch.  That was an SNL joke.

11.  That offensive Rush Limbaugh quote you heard?  Taken out of context.

12.  We don't love Bush, we weren't brainwashed by Bush, and it actually is possible to be in favor of the Iraq War, against how the post-war occupation was conducted, and not be either a Bushbot or a soulless Nazi.

13.  What you consider torture is actually not even as bad as the routine training exercises we inflict on OUR OWN TROOPS, but since so few of you know anybody serving, you wouldn't know.

14.  When we take a stand against the public education monopoly, we aren't "against education" or "against kids."  Anybody in favor of educating kids would be appalled at our system, not an ally of it.

15.  Islam is not a race, so any criticism of Islam cannot be called racist.  For that matter, Judaism is not a race either.  So you hereby have my permission to criticize Israel without me calling you a racist.

16.  Criticism of Obama is not racism, criticism of Hillary was not sexism.  When you have to resort to irrelevant insults rather than actual reasoned argument, it's time to rethink your stance.

17.  Deficits are bad no matter who makes them, and yes, we criticized Reagan and Bush for their deficits.  We are criticizing Obama more merely because his are so astronomic.

18.  You may not know this, but the stimulus theory has been debunked.  In fact, one of Obama's chief advisors, Dr. Romer, wrote a paper explaining how stimulus has no effect on the economy.

19.  Media consolidation is actually a sign that the traditional media has gotten too big and is shrinking (or about to), not that it has "gotten more powerful."  To wit, recent nosedives in news ratings, paper and magazine subscriptions, etc.

20.  We dislike Nixon, love Reagan, don't care for Bush Sr. and are lukewarm on Bush Jr.  Stop assuming we love and are brainwashed into obedience by every GOP president.  Stop seeing people as products of society or of powerful wealthy special interests, and start seeing them as individuals for a change.

21.  The current recession was not caused by Reaganomics.

22.  Reaganomics doesn't mean what you think it does.  Neither does trickle-down economics, a term which is used more by the left than by the right, and which right-of-center economists didn't invent.

23.  The Reagan deficits were due to increased spending, not tax cuts.  Revenue soared throughout the latter two-thirds of the 80s.  But spending, driven by Congress, soared even more.  Thus, deficits.

24.  "Tax cuts for the rich" don't mean what you think they do.  Despite what you may have heard, the wealthy pay a disproportionately high share of taxes in this country, not lower.  What's called tax cuts for the rich are really attempts to "flatten" the tax system.

25.  We think Cheney's an idiot when he said "Reagan proved deficits don't matter."

26.  Only a regressive tax, not a flat tax, falls disproportionately on the poor.  A progressive tax falls disproportionately on the wealthy, and a flat tax doesn't fall disproportionately heavy on anybody.

27.  Those 91% income taxes of the Eisenhower era?  Three recessions.  It was your hero JFK (who would be a Republican today) that turned things around with tax reductions.

Sunday, November 15, 2009

E.J. Dionne's latest

"Why do I write so many responses to editorials?" you may be asking.  Well, actually you would ask "why does he write so many..."  It's not just to respond to what's being said in editorials, it's because they provide a simple source of stupidity, fallacies, myths, and muddled thinking.  Rebutting the worst offenders is an exercise in wisdom, and since what's being said in these editorials will doubtlessly come up in other editorials, campaign commercials, arguments, etc., it's worth covering here.

This one is a week old or so but I'm just now getting around to talking about it.

BTW, I recommend reading these editorials first, in context, before reading my rebuttal.  This editorial is kinda about a few ballot issues in Maine and Washington state, what he calls "tax-limitation measures" being defeated.  Whether he accurately describes them or not is beside the point, and also beside the point is his main point of the editorial, which is that:

"When advocates of public programs take on the right-wing anti-government crowd directly, the government-haters lose."

First of all, that only matters if the debate is over what kinds of policy are likely to be popular among a given group of voters.  Alas, much to my unhappiness, economic freedom is not always popular with voters, from any area, because it is often seen as a threat to special interests.  Things that in everybody's general interest tend to get less support than things that in somebody's special interest (especially when that special interest can convince other people that it's in their interest too).

That whole debate is aside from the debate over whether a particular policy or program "works" or not.  Minimum wage laws are opposed by virtually all economists, because economists understand that minimum wage laws simply increase unemployment and raise prices on basic goods and services--they do not, contrary to popular belief, raise peoples incomes, and also contrary to popular belief, minimum wage laws are most harmful to the very people these laws were supposed to protect--minorities, teenagers, single mothers, ex-cons, the disabled, etc.

But that's one example.

Something that irritates me in politics is how people act as if something is "right" because it is popular (with voters, whose ignorance of politics and economics is well-documented), and they do this disingenuously.  They sidestep the real argument (would a reducing taxes and lowering government spending lead to greater economic growth?) in favor of some other argument (Americans want more government spending!  We have a mandate from the voters!  etc.).

Also, in this particular instance, Maine and Washington state are two left-of-center, and in some places far-left-of-center, constituencies.  It would be surprising if these ballot initiatives had passed, not been defeated.  As is, the only lesson here is that left-of-center states will vote left.  Way to earn your paycheck, Dionne.

"Only rarely do those who believe in active government take the argument head-on and insist that many of the things government does are necessary and, yes, good. The media almost never discuss what the sweeping dismantling of public services inherent in the rhetoric of the anti-government movement would mean in practice. It's far easier to replay footage from a few tea-party rallies over and over, and discuss some vague "mood" in the electorate."

I really do believe that leftists have something in their brain that censors and distorts reality for them, so that they don't see things as they are.  F'instance, find somebody in one of these "tea party rallies" who is anti-government.  Just one.  Fine one, single anarchist.  You can't.  But you will find people who have different ideas than Dionne has about what powers a government should have and how those powers should be exercised.

Since Dionne doesn't provide specifics here about what "good" things the government does, I can't really rebut it without putting words in his mouth, which I prefer not to do.

"Nor was the anti-TABOR campaign confined to what individuals get out of government. Another ad highlighted the larger social and economic impact of public education. "Without strong public schools, our kids won't be prepared for good jobs," the announcer said. "Maine's future could be in doubt.""

Leftists have two approaches to defending our obsolete, bloated, inefficient, joke of a -baby-sitting-service-pretending-to-be-an-education-system system.  The first, usually done in times of economic growth, is to claim that education isn't just about preparing people for careers (since it's obvious to everybody that they aren't doing this), but preparing them to be "citizens," "well-rounded," "critical thinkers," etc.  They won't debate past this point, because that would mean coughing up empirical evidence that schools actually achieve these things for the majority of it's expensively undereducated students.  On these grounds they defend bloated budgets, more school construction, more teacher hirings, and a system of employment which virtually assures that you will need to commit murder to get fired (and even then at enormous tax-payer expense).

In lean times, leftists resort to another tactic, which is to claim that we need schools to prepare students for the job market and for America to stay competitive.  How much the art classes, strata upon strata of administrators, bands, sports, extra-curricular activities, and books about how the Great Depression was caused by Bush is contributing to students learning how to read, write, and do math is not clear, but I suspect it ain't contributing much.  This is a tricky defense for leftists to try, since the next obvious question would be "well then why do education costs keep rising while reading, writing, math, and science scores keep going down?"  Leftists have a few options here.  They can provide cooked statistics that look at the data in just the right way to declare it a "myth," or they can hope that voters are stupid and will fall for the original "schools make better workers" argument.  Unfortunately it works for them--for now.

Given that the home-schooling system proves that average parents working with their average kids with cheap textbooks studying at home with their kids for a few hours a day produces far better results than our expensive schooling-industrial complex, it's only a matter of time before the populace slowly wakes up to the realization that our education system isn't just broken, it's actually not working at all, and students are coming out of high school no more educated than they were when they went in.

Back to the editorial:

"In Washington state -- where tax limitation was opposed by leading moderate Republicans, including former governor Dan Evans and former senator Slade Gorton -- the No campaign offered a cross-generational message, focusing on cuts in both school budgets and home care for seniors."

Obamacare is opposed by "leading moderate Democrats," but I doubt Dionne would use that factoid as part of an argument for why it should be opposed.  Notice again how the left uses the most vulnerable, or the allegedly most vulnerable, as hostages for their policies.  "Vote our way or the kids and the old folks get it!"

Folks, let me tell you, if the inefficiency and bureaucratic crap and wasted resources on this or that "initiative" were taken out of the American welfare system, we could provide live-in DOCTORS for these old people and private tutors for these kids.  Not that I advocate that.  I'm just pointing it out.  The real enemies of these people are the leftists who run the welfare system programs and departments, who enlarge them and enlarge them and make actual service to their consumers incidental to the whole process.  I have an insider's view on this.

I won't quote it, but Dionne also makes the irrelevant point that the gay-marriage ban passed in Maine while the tax-limiting proposal failed.  I guess he lives in the fantasy land where social conservatives and people who believe in sound economics are always one and the same.

He finishes with an Obama quote:

"Obama took a brief whack at doing so in his September health-care speech. He noted that his predecessors "understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, the vulnerable can be exploited." Why aren't we hearing more of this?"

Possibly because it's bunk, and Obama knows he can't provide real specifics.  He knows, as his famous econ advisors have undoubtedly told him, that the Great Depression was caused by the Federal Reserve (i.e. da gubmint) not a market crash as we are erroneously taught in history class, that markets fix themselves, that monopolies don't exist in a free market, and that his concerns about exploitation of the vulnerable hardly justify the type of socialism he's trying to introduce.

It's more phony false dichotomy from the left.  Real free market economists, from Smith to Hayek to Friedman to Sowell have held that there is a role for the state in preventing coercion and fraud, for maintaining law and order, for enforcing contracts.  But it's bad economics to say that markets need a hand of wise policy to guide them, unless, of course, you were trying to make the economy fit your view of society...

Sunday, November 8, 2009

Things I Hate About Politics--Part One

This is the first in a series of posts (future posts to arrive whenever I feel like it) about thinks I dislike about politics (which is plenty).  First, I'm going to focus on what the people, i.e. voters and non-voters who are not politicians, bureaucrats, or employed by the government do that bug me (though you'll notice that quite a lot of these things are also practiced by politicians).

1.  The tendency to believe uncritically what alleged statistics or facts you hear from somebody on "your side," and to automatically disbelieve any alleged statistic or fact that comes from "the other side."  People often do this to protect themselves against reality, they'd rather believe a falsehood than a truth, because believing the truth might mean changing their beliefs on policy (though this assumption is often false).

2.  People's lack of curiosity about how the other side thinks and feels.  I often hear people of various viewpoints describe people who disagree with them as liars, jerks, or just stupid.  Sometimes that's the case, sometimes people are liars, jerks, or stupid.  But when I hear somebody describe the other side that way, that tells me they don't know much about the other side, their understanding of the other side is limited to what "their" media tells them about the other side (i.e. what Rush says about the left or what Michael Moore says about the right), or is defined by the lunatic fringe of the other side, or misunderstandings of what exactly motivates the other side.  Which tells me that you don't understand the issues yourself very well, it tells me that you are in a cocoon where your beliefs reign supreme and unquestioned.  If you can't understand your views in relation to the views of those who disagree with you, how well do you understand political issues?  How well do you understand how prices work if you cannot observe an economy where prices don't function properly or at all?  Understanding other viewpoints isn't about making compromises or being weak, it's simply about understanding, gaining knowledge.  It does not necessarily imply any change in your positions on the issues.

3.  The kneejerk reaction to be against something that the other side is for.  This is often because of what motivates their policy positions, rather than what that particular policy position is.  F'instance, I consider myself in favor of free immigration and am against deportation of illegal aliens and am in favor of some form of amnesty for workers who are already here--although my reasons are practical in nature and differ entirely for the reasons that leftists hold to similar policy (yes, to calm your fears, I am opposed to immigrants benefiting from the American welfare system and believe violent criminals ought to be deported).  For the left, a good example is minimum wage laws.  Every economist agrees, and so does the empirical data, that minimum wage laws simply raise unemployment among the least-skilled workers--teenagers, certain minorities (why only certain minorities?  that's for a future post), ex-cons, in other words the people who most need to improve their job skills and productivity are the first ones cut out of the work force when minimum wage laws are enacted or raised.  Even flaming left-wing economists oppose them for this reason.  Yet rank and file Democrats and lefties are whole-heartedly in favor of minimum wage laws, and raising them to ridiculous, economy-crippling heights.  Why?  Because the other side is opposed to minimum wage laws and/or hikes.  Lefties don't want to find themselves in agreement with (dun dun DUN!!!!) Big Business.

4.  Feeling the need to defend something a politician said because they are the same party as you.  One of the liberating things I noticed about going independent six years ago was that I no longer felt obligated to defend stupid things politicians said because they were my party.  I wasn't a fanboy anymore, defending the indefensible against any criticism.  I could see politicians for who they are, policies for what they actually do, and if somebody said or did something stupid I could attack it.  I see plenty of this right now coming from the left as regards Obama, such as defending his insensitivity to various issues (Ft. Hood massacre, the Berlin Wall anniversary), his membership to radical socialist churches and his friendships with communist terrorists (future generations will look back at a person like Obama winning the Presidency and wonder if the entire nation had lost its mind), I could go on.  But the point is that people are only defending these things because Obama is a Democrat.  Simple as that.  Any excuse will do when it's your guy.  Doesn't have to be a good excuse, just an excuse, and you'll swallow it and tout it.

5.  Not voting third-party, or voting even when you don't really have a choice.  If there is a race and none of the two-party candidates really fit your views, I don't care if it's for President and you are in a swing state, you vote third-party with a candidate who fits your views.  Think about future elections, not just one.  Hate RINOs or DINOs?  Stop making excuses to vote for them.  If there is no third-party choice, abstain from voting for that race.  Politicians do pay attention to turnout, and if "their base" doesn't turn out they notice.  Not voting can be as powerful as voting, it's just a shame that we're so inundated with "voting is your duty" propaganda that many people don't understand that.  It's all about giving those in power the incentive to make the right decision, it's not about getting the right people in, because once those right people get in they face the same incentives as the last guy.

6.  Ignoring the importance of grassroots action.  This relates to number five.  As I said, it's all about giving those in power the incentive to make the choice you want them to make, to vote for the bills you want them to vote for, to introduce the bills you want them to introduce.  It matters less who is in office, and it matters more what incentives they face, and they get their incentives from opinion polls and what voters vote for (and lobbyists, that's another post).  Obama got the (wrong) impression that voters wanted a center-left President and that he had some kind of socialist-lite mandate.  He was wrong.  But the GOP got the right message for future elections:  they don't want soft RINOs.  Already you see the GOP changing its behavior, its rhetoric, and the types of candidates it puts forward.  These changes don't happen fast (they can't), but if they are led by genuine grassroots efforts (and that includes not voting) then they will be forced to happen if politicians want to keep their jobs.

The Left is in for a Rude Awakening on Socialized Medicine

And I won't give any dignity to the pathetic pretense that what they are calling "health care reform" is anything less than an attempt to socialize medicine in this country.

If, based on the title of this post, you think I'm going to talk about how socialized medicine in this country won't happen, or how the Dems will get voted out in 2010 because of it, etc., you're wrong.  I want to talk about what the actual result will be of this bill.

To the leftists reading this blog, let me present you with a few concepts you may never have heard in all of the propaganda you've read railing against the health insurance industry.  Here they are:

1)  Health care costs are not dictated by insurance companies, they are dictated by providers.

2)  What providers charge for services is determined partly by supply and demand, but also by what the government pays them with Medicare and Medicaid.  The government automatically influences prices on health care at the provider level whenever it fixes fees.  Costs are squeezed onto the private health care consumer.

3) Insurance prices are the sum total of the costs of health care plus profits.  Despite what cooked statistics you may have seen, profit margins in the health insurance industry are not high (absolute figures, or figures picked from particularly profitable years, tell us nothing).

4) Insurance prices are thus dictated by provider prices, and to a large extent, the government, when the government mandates that all policies must carry particular types of coverage (such as private care for autistic children, check-ups, etc. etc.).

5) Insurance for the serious illnesses and injury you often talk would be far cheaper if it could be purchased legally, if people could choose a la carte what coverage they want (to say nothing of being able to purchase this insurance from literally anybody, anywhere on the planet, instead of only from licensed companies in their home state).

6)  Provider costs for services are drastically higher than they need to be because of licensing laws.  Licensing laws prevent services from being performed at the lowest possible cost, and generally work to constrict the available supply of doctors and nurses and other professions.  People are restricted from opening cheaper, doctor-free clinics for ailments that a nurse or other less expensive laborer could perform.

7) Drug costs are ridiculously high partly because both our own and other governments abroad coerce companies into selling drugs too cheaply, and thus squeeze the cost onto the private consumer, and also (this is the big one) because the FDA and other government bodies/laws act as a wall between drug companies and consumers.  Most people are unaware of just how expensive it is to get a drug approved for sale in this country, and as a result drug companies often focus less on life-saving treatments and more on easier, more profitable ventures such as impotency pills.

What I'm trying to say here is that you shouldn't blame the free market, because there is no such thing in the health care industry.  Licensing laws, subsidies, regulations, all act to constrict the workings of the industry.

Why do insurers not cover previous conditions?  The same reason you cannot buy car insurance right after a wreck and expect the insurer to cover the costs of the wreck.  Insurance is (or should be) a risk management technique, but a preexisting condition isn't a risk, it's a certainty.  You are asking the insurance company to pay out a large sum of money in exchange for which you will give them a much smaller sum of money.  Any idiot can see how that would bring the insurance industry to its knees.  It's worth adding here that the only real reason insurance companies don't cover preexisting conditions is because the laws prevent them from doing so efficiently: in a perfect world they would simply charge higher rates due to the increased risk, but the law often keeps them from doing that.

Why do insurance companies charge different people different rates for the same service?  Because of differences in risk.  Older people are more likely to file claims than younger people, so are the obese, so are smokers, etc.  Women have the risk of pregnancy, men don't.  Differing risks by definition mean that people are getting different services, not the same service.  Because you are buying protection against risk, not health care.  The health care providers might provide the same service when they give an old man or a young man a blood transfusion, but insurance companies don't.

What happens if you required that insurance companies charge the same rates regardless of risk differentials, or if you require that they cover preexisting conditions without charging different rates?  The only solution to keep from going out of business is to raise the rates of all of their less-risky, condition-free customers, to subsidize all of their riskier customers.

How dramatic an effect will this have on health care in this country?  Well, this would transform insurance companies from companies that manage risk into companies that are simply privatized middle-men through which the American population subsidizes the health care of the sickest, the poorest, the fattest, etc.

Add to that this ludicrous "public option" which is where the stealth socialization comes in, and for many people, the artificially low prices of the government plan will seem attractive and they will jump ship.

In short, I wouldn't buy stock in any health insurance company right now.  In fact, I'd sell it, and I'd take whatever I could get for it, ASAP.

Now, dear liberals, I hope I don't blow your little childish minds, but let me make this clear:  the government isn't going to lower health care costs.  Nope, sorry, it's just not possible.  They are changing the mechanism through which health care costs are paid for in this country (the ostensible "insurance" companies) from private companies to a government bureaucracy, but they are not doing one little thing, NOT ONE LITTLE THING to affect the actual costs of health care--which as I've said earlier begin at the provider level.

Due to regulation, licensing laws, restrictions on this and that, these costs will just continue to grow and grow (this is beyond the scope of a single blog post, but for the econ nerd a study of why health care costs continue to grow and grow is fascinating) and the government won't do anything about it.

I know.  It'll seem, at first, like health care is suddenly cheaper.  That's because the full cost of it won't be passed directly to you.  And even after they hike taxes, it won't be passed directly to the tax-payer.  Nope, it'll be financed through deficit spending and thus the cost will be passed onto future tax-payers.  Your children, your grand-children, etc.  The government will have to borrow money to pay for this, in addition to covering Social Security.

Where I'm going with all of this is that one-sixth of our economy can't just be punched in the balls without expecting some fallout.  Things will not just keep ticking along but only with a better way of funding it all--rather, health care in this country is about to face a catastrophic restructuring, a major shock to a system that won't be able to face the sudden new demands that are about to be put on it, and with no real way to pay for it.  Budget estimates are not taking this into account, they are not expecting people to respond to the incentives that they will face.  And they are about to be shocked.

Here are two things that might happen.  I guarantee you with all my heart that one of these things will happen, and both of them may happen together (God forbid):

1)  Health care must be rationed, as it is in other socialized health care systems, because there is too much demand and too little supply, and the supply is capped from growing because it is socialized and not a free market.  This will lead to drastic changes in how Americans get their health care, and it will be decided by bureaucrats and special interests, not individuals making their own choices.  IOW, the sky-high standard of care we get in this country is about to end.

2)  Or, rather, the government will be even more naive/foolhardy than I expect, and they will try to provide the same level of service Americans are used to, without rationing, and funded through deficit spending.  I find this one less likely, because it could only go on for a short while before people stopped buying Treasury bonds.

Part of me thinks (the optimistic part, that is) that this could turn out to be a Nixon price controls-style boondoggle, i.e. a bad policy that is enormously unpopular right away and is repealed within several years.  I won't guarantee that.

Sunday, November 1, 2009

Krugman Brought Down to Earth

As an econ nerd, it greatly pains me to see total hacks like Krugman not only get prestigious prizes that used to go to real economists, but also get praise from other economists that I sort of respect.  The man is a total fraud!  Why can't more people see that?  He's the John Kenneth Galbraith of his generation, a famous phony economist who has a lot of people taking him seriously purely for political reasons, but who falls on his face by constantly contradicting himself, making bogus predictions, advocating bad policy, and clashing with economic logic and facts.  I'm really hoping he'll be a distant memory twenty or thirty years from now, regarded as a nobody.  Some Nobel laureates are like that.  "Arthur who?"

So I was happy to see somebody use the powers of the internet (and a Krugman fan site!) to show that Krugman was indeed advocating a Fed-created housing bubble after 9/11 as a way of boosting the economy.  He's as guilty as any other political figure or hack economist who championed the housing bubble and subsequent burst.  Notice in these quotes that he admits that the bubble burst could lead to a recession if the government doesn't react fast enough, which he doesn't think it will do.  Hacks like him always think that "with the right people in charge," i.e. people like them, then bad economic policy can be made good economic policy.

Enjoy the discrediting.