Not-a-Lemming

Never run with the crowd. They're probably headed over a cliff.

August 2009 - Posts

Ma Bell, Milk, and the Medical Industry.

Okay, I'll admit that I was listening to NPR yesterday (8/20/09). Like the old Cold War addage goes, you have to know your enemy. And admittedly, NPR covers a lot of news I wouldn't otherwise hear about. I have to listen to it with my filters on, just like I have to listen to Rush with my filters on, but through the right glasses, NPR is reliable and even useful. But never, oh no never, funny. And when they try to be it is just embarrassing. But that's another story.

Yesterday I happened to tune in at the beginning of a story on milk. Not Harvey Milk as you might expect NPR to cover, but the white stuff I enjoy with cookies before bed. Apparently the milk freemarket is under assault having been taken over by a few, ruthless conglomerates. After all, as the number-three fluid handling industry in the nation, after water and petrochemical fuels, we're talking about millions upon millions of gallons a year. Milk may be white but that adds up to a lot of green.

The two evil culprits are Dallas-based Dean Foods, and Dairy Farmers of America, or DFA, headquartered in Kansas City. Though the stuff they pedal is wholesome, their business practices aren't. At least that is the take by independent dairy farms who are being squeezed out by what even NPR is calling a cartel. They must be making a lot of money. In truth, they have been engaging in predatory business practices and are, or may well be, in violation of various anti-trust laws now on the books. Laws that exist to foster competition because as these laws attest, choice is good for consumers because it drives down prices. The government must agree because the Justice Department under President Obama is considering filing suit against these conglomerates and breaking them up. Especially since they've joined forces.

Ma' Bell faced the same government attack in the 70's. Or was it the 80's. I forget, it was oh so long ago, and if your interested you can Google it and get firehosed. Anyway, The Bell Telephone Company pretty much was The telephone company. Because they owned the wires, they owned everything. At some point the government invoked anti-trust laws enacted by Theodore Roosevelt at the turn of the last century when the Railroads had stifled competition. Prices had risen, service had degraded, and customers were tired of having no other choice. The break up was huge, and lasted for years, but one consequence was, in part, the enormous telecomm boom of the late 80's and 90's. Amazingly, throwing competition into the mix lowered prices drastically while at the same time improving service and greatly expanding the industy. The short of it, more tax dollars into government coffers.

Now we come to the Medical industry which the left, if it could have its way, would centralize into one huge, government run blob. Many politicians on the left are on record as favoring this approach. The same politicians, that freely admit through support for moves to break up Dean Foods and DFA, and who proved by busting up Ma'Bell, that the best way to lower prices and improve service is to create more competition. So what is up? Why do they want to break up the milk cartel to lower prices, and at the same time, centralize the medical industry to lower prices? Is President Obama in violation of anti-trust laws? Is it just me or does this sound...?

When things don't make sense it pays to look behind the confusion at motives. Why are all those lemming running towards a cliff? If something doesn't make sence you have to ask yourself, what does the person doing the herding really want? The arguments posed by the left to consolidate health care to lower prices and improve service don't make sense. So what is it that they really want?

Futbol Guru, http://mises.org/community/blogs/not-a-lemming

The Single-Payer / Public-Option Lie

The old joke goes something like this: How can you tell a politician is lying? Easy. His lips are moving.

While elected officials have contributed mightily to our perception of their honesty they are not entirely responsible for their reputation. Having been an athlete for many years on all three sides of the ball - playing, coaching, and referring - I've come to understand one very important fact: emotions influence perception. If someone has a bias towards an ideology or solution the mind is very good at justifying a choice of that particular ideology or soultion. Even to the exclusion of otherwise obvious facts to the contrary. We've all seen this and is something of which most are guilty.

But there is one point in the single-payer approach to healthcare that is a clear cut lie being pandered by the left. It goes something like this. Healthcare is too expensive so we need a "public option." This public option, it is said by many long time supporters of a single payer system, will foster competition between insurance companies and result in lower rates. That is what is being said.

The reality is much different though, and here is how. Elected officials in favor of the public option are almost unanimously in favor of single payer. Single payer, however, means the legislative elimination of all competition. So on the one hand they are saying that the public option is good because it will increase competition and thereby reduce costs, while on the other hand they are on record as favoring a plan that will eliminate all competition. And no-competition always means only one thing, higher prices. In point of fact, they are supporting opposite solutions with opposite outcomes for the healthcare problem. Since it is unlikely they are unaware of this cognitive dissonance the question becomes, for the rest of us, "Why?"

One thing that can be said about Barney Frank and his ilk is that he is a consumate politician. He wants single payer. He also knows he can't get single payer in a single step. So what does a career bureaucrat do when he wants something he can't get? He introduces step legislation. Step legislation can come in two forms. It can be written badly so that interpretation by judges can give the bill's supporters what they want. Or, it can begin the process, increase people's dependency, hamstringing the competition, so that bills introduced later will face less and less resistance. Current versions of the healthcare bill in the house and senate take both approaches.

In some cases it is difficult to know exactly what someone's motives are. If you'd asked a German citizen on the street in 1934 what Germany was going to be like in 1944, I doubt any of them would have predicted a police state with institutionalized death camps. Unless they'd read Mein Kampf. Hitler wrote Mein Kampf while he was imprisoned for having attempted to stage a coup. It spelled out his intentions in detail. But his party was swept into power anyway and he was ultimated appointed Chancellor. The part about the Third Reich being utterly defeated and Germany destroyed and split in the process wasn't in Mein Kampf, however. No doubt an oversight by the Fuhrer.

Do I think Obama is Hitler and the US Germany? Of couse he isn't and no we're not (though Hitler was actually Austrian and the Nazis swept into power amid the tumult of a Global economic meltdown.) But history tells us only too well what happens when mere men are granted power over their brothers. Hitler lost control of the machine he built. While he is responsible for the Holocaust through his association with passing laws that allowed it to take place, he is neither solely responsible nor directly or indirectly guilty of each and every atrocity. In fact, once certain legislative doors had been opened, the fate of Nazi Germany was inevitable. The first laws against Jews didn't order them to death camps, they merely curtailed their economic rights. When that weakened them, and strengthened others, more laws followed. The door only needed to be cracked.

So, how do you tell when a politician is lying? Well, it is when he's lying.

Futbol Guru, http://mises.org/community/blogs/not-a-lemming

The Economy of Scale: Why European-style Health Care CAN'T Work in America

Dinosaurs were big. They were the largest land creatures to ever walk the Earth. The largest were nearly a hundred feet long. But as large as they were there is a good reason they didn't get any bigger. In fact, there is an absolute limit to the size an Earth-bound creature can grow without collapsing under its own weight.

Complex organisms like humans, bears, and dinosaurs are muscles hung on a skeleton. The skeleton supports the structure and the muscles make it move. As you'd expect, as the animal becomes larger the skeleton and muscles must become larger as well. While creatures can become large and strong, much larger than humans, the proportions at which they scale are not linear.

For example, if an animal evolves into a similar creature that is twice as tall, you might think that the bones would have to be twice as large. In fact, this doesn't hold. The strength of a bone is related to the cross-sectional area of the bone. However, weight of the bone is related to volume, and volume increases much faster than cross-sectional area. A bone twice as large will weigh four times as much. This means the bones get heavier faster than they get larger and stronger. Eventually, the bone will simply break. Bridges, skyscrapers, and other structures have similar limitations.

Economics is much like this. England has a population 51 million. A healthcare system large enough to service 51 million people won't necessarily scale to a country like the United States which has a population of 330 million; six times larger. This is true because the system won't necessarily have to be just six times larger, it may well have to be 36 times larger. Consider this example as you recall the previous example of the bone.

I build cabinets. I don't do this for a living but it is something I enjoy and we occasionally need cabinets at my house. And the scientist inside me likes holding tolerances to 1/64 of an inch. Regardless, I have a 12' x 20' shop in my backyard that is large enough to build one cabinet at a time. I can store the wood and the tools in the shop. Move the partially completed structure around in the shop at various stages of construction. Then, when I don't building it I can clean the shop thoroughly and move on to the finishing phase - which must be as dust free as possible. While I also use my shop to fix my trials motorcycles, clean guns, and do other odd jobs, I can pretty much only do one thing at a time in there.

Suppose I wanted to start a business building cabinets, something I've thought about from time to time. What would it take? At a minimum I'd have to build another building for the finishing because I can't finish and build at the same time. And finishing takes time as the paint, stain, and varnish cure. Time that I could use to start other projects.

As business picked up I'd have to build another building to store more wood or I'd be wasting all my time at Lowe's. And then increases the size of my small shop so I could work on multiple projects at one time. At some point I'd have to invest in larger tools that I wouldn't have to wheel around. Eventually I'd have to hire more people. While some of them would build cabinets, others would have to maintain the machinery and keep the shop clean or we'd be knee deep in sawdust. Others would go out and buy wood, sandpaper, glue, nails, stain, and deliver and install the completed units. Which means I'd also have to buy some trucks. Which would need more people for maintenance.

At this point I have enough employees that I need specialized employees to manage the employees and computers to streamline the workflow. Now I need IT guys to keep the computers working. And someone to keep track of the books. And people to keep tabs on them. My stain supply has gone from a gallon a year to a hundred gallons a month and Lowe's doesn't support that so I have to get someone to go out and find a supplier, then lawyers to draw up the contracts. And now I'm also sponsoring golf tournaments to keep the lawyers and executives happy - yes, people are part of this equation. Never forget that personal appetites are a part of EVERY equation.

Taking this example to the absurd, suppose I get so big that I become the supplier for every cabinet built in the country. I would now have to have a huge distribution system requiring thousands of people to maintain equipment, buy wood, transport raw materials and completed products, manage the people, manage the managers, and schmooze government officials who are breathing down my neck about where I'm going to dispose of the thousands of tons of sawdust and scrap wood. And just the buildings to house all the equipment and cabinet makers will cover hundreds of acres. I've got labor managers, facility managers, machinery managers, utility managers, benefits managers, administrative managers, environmental managers, manager managers, and an entire executive structure that now wants golf tournaments in Dubai. My business is a thousand times larger but the structure has grown much, much more than that, and is now full of corporate climbers, greedy executives, and self-serving lawyers who have multiplied the bureaucracy for their own ends. And everybody wonders why my cabinets suck now.

Healthcare is barking up the same tree. The bureaucracy that will be necessary to support this government acquisition will produce the same waste, inefficiency, complacency, and largesse that would obviously come from World Cabinet Makers International. That is why European-style healthcare can't work on a US scale. Sure it is great, I guess, that everybody gets to go to the doctor for free. But the best parts about these systems will scale far less quickly than the worst parts about these systems simply because of the law of Entropy. Everything in life is like this and you learn it in your gut by the time you're twelve years old. Don't ignore this simple fact of life now or we'll wind up with a huge, ravenous dinosaur that that will roar for more, and more, and more food but never be full. It won't be able to move because its bones are too large, nor can we let it die because it'd take a hundred years to rot, so we just have to keep bringing it more, and more, and more of our resources until the basic service it was born to serve will be so deeply buried in bureaucracy that you won't even be able to find it. There is no European healthcare system. There are separate, much smaller completelyt separate systems, in each of the various contries in Europe.

Obama knows this. So do the Capitol Hill morons who are pushing it. But they're not really interested in what the dinosaur will do for us. They're interested in what the dinosaur will do for them. For they are the dinosaur and it is their appetite for power and control that we'll be feeding. And once we've taken that step towards creating the paradise of Vol, there is no turning back.

Below is a brief list of Western European nations whose healthcare people like Obama and Barney Frank want to emulate, followed by their populations. Some of these countries actually have decent systems. The only free healthcare country I know of with a population close to the size of the United States was the former Soviet Union and NOBODY went there for healthcare unless they wanted to be dead.

Germany - 82 million

France - 65 million

Italy - 60 million

England - 51 million

Spain - 46 million

Canada - 33 million

Netherlands - 16 million

Belgium - 10 million

Portugal - 10 million

Sweden - 9 million

Austria - 8 million

Switzerland - 7 million

Denmark - 5 million

Norway - 4 million

Iceland - 319 thousand

United States - 330 million

Soviet Union - 293 million

Futbol Guru, http://mises.org/community/blogs/not-a-lemming

How To Pay For Healthcare - The Wrong Question

I suppose that in a perfect world everyone would have access to healthcare. Well, then I guess the United States is as close to perfect as anywhere because everyone here has access to healthcare. Just like anyone can buy a car, buy a home, or buy clothes and food, anyone can buy healthcare. Healthcare is a service and money is the medium we use to exchange our time for goods and services.

Linking the concept of Universal Healthcare to the word free is a lie. We have universal healthcare. What we don't have is free healthcare. Nor do we have free cars, free houses, or free clothes and food. There was a time, not that long ago, when it was understood that hard work and good choices led to more options in lifestyle. Long before I graduated from high school my parents were telling me that I'd need to get a good education so I could get a good job with good benifits. And lest you think that I was raised with a silver spoon in my mouth, think again. Economically we were lower middle class and neither of my parents went to college. My father worked very hard and understood that hard work and good choices could take you places. Hard work and good choices led to higher paying jobs with access to health insurance. It was one of the benefits of hard work and one of the things that motivated you to stay on track. My brothers didn't listen to his advice, didn't work hard, made poor choices, and have paid the price. But to their credit, they don't expect anything for free.

As a result of hard work and good choices, and years of delayed gratification and personal sacrifice, I now have a good job and work in a nice place surrounded by other hardworking people. No, I'm not rich and my family finances are tight. It doesn't look like I'll ever retire. My cars aren't new and my house needs work. And it galls me to this day that I can't take the vacations I see other people take. As a result I sometimes think my life sucks. Especially since I'm rarely around people who's lives do suck. But I had that chance recently and it opened my eyes.

We had some work done on our house this summer. No, I didn't have a windfall, I borrowed money that I now must pay back. The owner of the contracting company who did the work was a pretty sharp guy. He was reasonably punctual (for a contractor) and accurate (for a contractor) and seemed to have his affairs in order (for a contractor). His hired help was another matter entirely. Their finances were in complete disarray. None of them had cars - well, one of them actually had a vehicle reposessed on the job. None of them had health insurance. They were walking disasters. On the surface it seemed kind of sad. But as days turned into months (no it isn't quite done even now!) their stories began to come out. To a man they had made horrible choices pissed away their public education, and taken every short cut conceivable. Some had been in jail. Others had multiple children outside of wedlock. Some had past drug problems. Others simply failed to show up for work and couldn't be reached. (Naturally of course they all had cell phones.) The owner tried to find better help but good workers seem to be quite a rarity these days.

As I took all this in it began to dawn on me that a) I really had a wonderful life and b) these people were entirely responsible for their own misery. From this I came to c) why should I pay for their free healthcare?

The question Obama is asking, and the question our nation is debating, should not be, "How are we going to pay for free healthcare?" The question should be, "Why should we pay for free healthcare?" Why should my hard work, good choices, years of personal sacrifice and delayed gratification, countless long nights studying when others were out playing, saying no to sex when it sounded good, staying healthy by refraining from bad behavior, be used to pay for people who will screw anything with two legs, come to work drunk - or high, fail to pay their bills (because they pay their texting bill first), and called anyone with a decent GPA a geek? And the president is out there preaching that it is partly my fault, and at the very least my problem, that they don't have healthcare? Is it just me or is something very wrong here?

The short of it is, these people don't deserve free health care. Sure, they may be nice. And these guys I worked with were very nice and even polite. But it was to their advantage to be so when they were on the job. You'd see a far different story Saturday night when they bust some dude over the head with a bottle because they're both to drunk to notice that the guy that just called their girlfriend a "Ho," had already left the bar! Why, how, and when did that kind of behavior become worthy of my time and effort?

I actually lied at the beginning of this piece. I said there were no free cars, free houses, or free clothes and food. In fact, there are. Free housing is called the projects. Free cars is called the public transportation. Free clothes and food are called welfare. And it was government mandates that made mortgage credit available to people who had no business buying a house and led directly to worst recession since the depression. I wonder how long it'll be until "cash for clunkers" morphs into the auto-loan meltdown, because $4,500 isn't a lot of money when you have a $500/month car payment for 72 months.

Yeah, free healthcare. That sounds just great. Only don't ask me to pay for it because I sure ain't gonna be using it.

-Futbol Guru, www.not-a-lemming.com

Obama: Only Capping Health Care Costs?

Don't be a lemming. When some flashy guy in a funny hat starts waving his arms and yelling, "Danger! Danger! Run, run, run! As fast as you can!" take a moment to look around and see where you're going. You might just find there's a cliff there behind the bedsheet painted to look like a rosy sunset. Lemmings don't commit mass suicide, they are guilty only of mass hysteria when in the presense of clever film makers who stand to gain from the carnage.

The health care debate goes something like this: Health care costs are rising. Many people are uninsured. We need a government insurance plan to make health care affordable. Obama has promised that this option is not intended to put private insurers out of business but only to provide an option for the poor. Is the Futbol Guru the only person who sees that this argument makes no sense whatsoever?

As far as I can tell, providing government insurance doesn't address rising medical costs at all, it just makes people with jobs pay for those without jobs. Hospitals are expensive and must be amortized over time. Drugs are expensive and must be included in the cost of care. Medical equipment is expensive because it does amazing things. Makers of hospitals, drugs, and equipment need good lawyers because people are always trying to sue them for killing grandma. And of course doctors and nurses aren't cheap either. These are the costs of health care and are completely unaddresed by the subject of government insurance, which promises only to pay the bills.

Access to health care is literally, access to your life. What better way to control people than to control access to your life? You'll do just about anything to get the chemo that could save your child's life, wouldn't you. Or your own. And people might hold that over you to get what they want. There are people who think this way. They want to control your life for their own ends. Sometimes they just want to get rich. Sometimes they just want to be in charge, or have some personal agenda like environmentalism. We all know people like this. Sometimes they are the little-league parent who demands their child be placed in a position of honor. And sometimes they are the President of the United States.

What has the Obama administration tried to take control of since taking office? The health care debate is front and center right now. If the government wins they control your health.

What else? The auto industry? They already own two of the three American automakers and are passing ever more stringent regulations. Are these regulations all environmental? Maybe they are and maybe they're not. Either way, they now control 2/3 of the US auto industry which means they are in the process of taking over transportation. And what is transportation if not your ability to move from place to place? They will control movement in the country.

How about energy? Cap and trade will place a tax on the use of fossil fuels. How do you get around? Fossil fuels. Cap and trade will further limit your movements. And if you want to leave the country you'll need energy to do it. How will that affect the cost of an airline ticket? Will you be able to afford it? Will you have enough carbon credits left to buy an airline ticket even if you have the money? They will control your ability to leave the country? Liberty itself is at stake.

Anything else? How much money has gone to banks? What do these banks now 'owe' the government. How much does the Federal Reserve, always a private, quasi-governmental institution, now owe to the government? The Federal Reserve controls cash flow. Does the government now control where the money goes? It sure has done some radical redistribution in the last six months.

A recap of what the government stands to gain if they get their way with all this? They could ultimately control your health, your movement within the country, your ability to leave the country, and your access to money. Sounds a bit like another country that is no longer with us. The largest empire in the history of planet Earth. Lot of people cried when that wall came down. Reckon they might just be smiling again.

Futbol Guru, http://mises.org/community/blogs/not-a-lemming

Ask Not...

Oh for the days of liberals like John F. Kennedy!

I recently watched Kennedy's 1961 inaugural address on YouTube. (See it --> here.) It was filled not with grandiose, government, give-away programs, but with rhetoric about how we as citizens of the finest country on Earth have control over our own destiny. He went on to say again and again that both sides (US and Soviet) needed to work together in a new spirit of cooperation and peace, using science not for destruction, but for exploration and the betterment of man against our common enemies, tyranny, poverty, sickness, hunger, and the other ills of the ages. Encourage discovery and commerce. Commerce! He then said that this battle wouldn't be won during the first hundred or even the first thousand days of his administration, and maybe not even in our lifetimes, but that it was important to begin. And that, "In your hands, more than mine, rests success or failure." He actually said that. This was followed by a call to service to bear the burden of the long struggle. A call to service! The long struggle. You see, Kennedy understood that government couldn't fix these problems, and indeed that they couldn't be 'fixed.' They could only be battled, and that it was going to take people serving and getting involved. He followed this with one of the greatest phrases from any inaugural speech:

Ask not what your country can do for you, ask what you can do for your country.

JFK has been the liberal posterchild ever since, but curiously, you don't hear much about him these days. Perhaps that's because no liberal in his left mind would say, or even support, the principles President Kennedy was espousing. Service. Sacrifice. Struggle. Involvement. Persistence. Compare these principles with Mr. Obama's. He literally promised to fix things and he promised that government was going to do it and do it quick. People needed only to get out of the way and let him get the job done. In his hands, not ours, lies success or failure. And once he has stared the problem down it will be finished. No protracted struggle. No sacrifice. No service. Just a blank check -- if only those pesky conservatives would get out of his way. "Let me show you what your can country do for you!" has been his mantra since the beginning of the campaign. (Or is it "Show me the money!") And now the government is helping you buy a car!!! That's what your government can do for you, baby. Kennedy is rolling over in his grave!

But even with his push for publicly-funded healthcare, nationalization of the auto industry, and socialized car purchasing I guess there's still one line from Kennedy's speech Mr. Obama might be able to use. He'd give it a little polish to make is shine just right, though. His own special spin to make it truly his, for he does turn a phrase like no other. It'd probably go something like this:

"Ask not what you can do for your country, ask what your country can do for you!"

Futbol Guru, http://mises.org/community/blogs/not-a-lemming

 

Obama Proves Tax Cuts Stimulate Economy

All we have to do is get him to see that this is exactly what he's already doing.

It goes like this. The average Joe, of which I am one, can't afford a new car. So, because the average Joe makes up the bulk of the population, Mr. Obama has created his Klunkers-for-Cash program. The idea? Give the average Joe (that's me and you) $4,500 bucks to buy a new car! With this extra "cash in hand" Americans will go out and buy cars like they haven't in years, stimulating the auto industry and through trickle down economics, jump-starting the economy in general. Neat. So how does this get back to my initial claim?

Like many Americans, even after tens of thousands of dollars in income withheld from my paycheck every month so Mr. Obama can give it back to people to buy new cars, I still wind up owing taxes at the end of the year. In this last year it came out to just about exactly the amount offered in the Klunkers-for-Cash program. Or, a couple of hundred dollars less than the amount of money I was able to save over all of last year. Result, I didn't spend that money on economic stimulation. And with all this talk of increased taxes to pay for record deficits for things like programs to give people money to buy new cars, I'm saving like hell so I can pay my tax bill next year. So that money isn't going to economic stimulation either.

The answer? Reduce taxes so I will have an incentive to spend that money! Then, I might just take that $4,500 and buy myself a new car and I won't even need a government middleman to launder the money for me. I will even have the liberty to spend it on other parts of the economy since, last I checked, the auto industry wasn't the only part of our GDP reeling from gross mismanagement.

Car sales are up because people are being given money to buy new cars. In other words, they are buying carse because they have more money. Which is exactly what cutting taxes does! And we won't have to run a record deficit to do it. It is so obvious I almost think there must be some other reason Mr. Obama is doing this. Could it be because the government now owns 2/3 of the US auto industry? Could it be because the United Auto Workers represent an enormous voting block? Naaaaa. He wouldn't do that...

Futbol Guru, http://mises.org/community/blogs/not-a-lemming