Tag Archives: libertarians

The Democrats are stupid like foxes: A libertarian argues for single-payer health insurance

By now you’ve probably read somewhere that the new healthcare bill will eventually mandate everybody to own insurance, and that for most middle class folks, the punishment for not doing so will be about 2.5% of your income. You may have also read that given that health insurance premiums will increase (they already have for many people just due to the legislation passing) that a health insurance contract will probably cost about $10,000 a year for a family. So, unless you’re making over $500k a year, it’s in your rational best interests to not purchase insurance, and simply wait until you get cancer, at which point you buy insurance. (Perhaps you keep cheap catastrophic coverage to handle the transition.) Under the new law, the insurance companies can’t deny you coverage, so this is undeniably the smartest thing to do. It’s not a moral issue; the government isn’t criminalizing not purchasing insurance, they are simply saying you are going to pay into the pool one way or another, either by buying insurance or paying the government. The only problem is that the fine hasn’t been set remotely intelligently; given the mandate to cover those with prior conditions, the true cost to society of somebody leaving the insurance pool is probably very close to the actual insurance premiums (minus a little bit to account for the fact that this person will not be using routine services while they are waiting for their catostrophic illness).

There is absolutely no flaw in this strategy, and I’m probably the millionth person to write about it. Therefore, the average consumer is likely to hear about it from somewhere, by the time the bill takes effect, and Americans aren’t a bunch that tend to miss a chance at free buffet. I’m pretty sure people will adopt this approach in significant enough numbers to cause a problem for the insurance companies. So, how the heck did such seemingly poorly designed legislation come to pass?

There are three plausible hypotheses out there, as far as I can tell: (a) The Democrats are fools, too enamored with their own savior complexes to bother to understand even the most simple manifestation of unintended consequences, (b) The Democrats are stupid like foxes, and know this will bankrupt our health insurance industry, and when that happens we will be forced to have the government step in with single-payer insurance, (c) The Democrats know the bill will be struck down by the courts as unconstitutional (you can’t force private parties into contracts) well before the provisions set in, thereby paving the way for a single-payer system.

I think the first is, by far, the least likely of the three scenarios, and yet it is the assumption that seems to be made by the Republicans and everybody I know who is conservative or libertarian. I think it’s very dangerous to assume your opponents are fools, and while Pelosi may make that very tempting at times, I think the way she got the bill passed shows that she’s a lot more shrewd than most people give her credit for. I think the Democrats know exactly what they are doing, and I’m not entirely convinced they aren’t right for doing it.

The free market, for all the worship thrown at its feet, simply finds equilibrium points, nothing more, and sometimes less. Whether or not those points are places any of us really want to be is entirely a function of the constraints we put on the market in question. And in the case of health care our current system has some really unintelligent constraints that lead to us being forced to pay for a health care system where the market is too regulated to limit the introduction of new and expensive technology, and yet too free to cover everybody. I’m fairly libertarian, but I have to admit that if you’re going to operate with the notion that unlimited access to a million dollar PET scan machine is a basic human right (and while I think it’s ridiculous to honestly consider it a right, it is certainly a worthy goal to have) then you really need to have a single-payer insurance system and rationed care, or else we’re going to bankrupt ourselves. Will quality of care suffer? Inevitably. But the system we have now may very well destroy the republic, so that’s wouldn’t be so good for quality of care, either.

If you’re liberal, you’re probably already in agreement with me. You can go back to reading The New Yorker now. If you’re libertarian or conservative, you’re probably saying “Well, isn’t the solution to having a health care market perverted by government regulation to just completely deregulate the market?” The problem is, the free market mechanisms that we normally happily exploit to give us things like cheap computers can yield some pretty unsavory things in the case of health care. For one, the free market would let poor people die on the side of the road. Same with old people, and anybody else who’s future economic output is less than the statistically expected cost of keeping them alive. That’s just the economically rational thing to do. That is only the case, however, because we’re very good at putting a positive price on things involving an exchange of goods, but we haven’t developed a way to price intangible things, like the cost most of us would implicitly ascribe to the outcome of having our fellow Americans dying in ditches. Were there a way to accurately impute a real monetary cost to the intangible (psychological?) cost of that happening, perhaps going with the free market would be a good idea. I’m not sure that’s advisable or even possible, but at any rate, we don’t currently do it. It is thus a simplistic and short-sighted adherance to half-baked economic theory that compels somebody to say we should let our health care be handled by the free market. We may find the market’s equilibrium point is optimizing a cost function we’re not proud of.

Economic theory, as it currently stands, is  the last discipline we should entrust our lives to. In the future, we will look back on our current economic theories and realize that they were just the first steps in a thousand mile journey towards understanding how the world operates. Right now, microeconomics says a few vague things about equilibrium prices provided humans are rational and a million variables are rendered constant. It is more notable for what it doesn’t tell you than what it does. For example, it talks vaguely about the restoritive forces which tend to push down the price of a a good produced with surpluses. But does it say anything about how long that process will take? Does it take into account the “friction” of people avoiding the risk of switching production? The effects of human irrationality? People are just beginning the work of answering these questions with new disciplines like behavioral economics. But we’re a long, long way off from having economic theories on which one can auto-pilot policies affecting matters of life and death.

As things stand, we’ll just have to use the same method engineers use when they don’t have a complete theory of the underlying problem: intuition and trial-and-error. And what’s wrong with that? Our country started out as a big experiment? Since when did we stop seeing the US as a laboratory for good government? Why are people so freaked out by a single-payer system? Give it a shot. If it doesn’t work, we can go back to our current fantastic system, tweak it, or try another idea. And we probably won’t have wasted any more money than we do right now rebuilding Iraq for a month. Personally, I would try a single-payer system where people pay co-pays for each procedure determined as a fraction of their gross income. This would form a progressive tax to fund the system (the equanimity the Left wants and the Right wants but just not if the government does it), as well as motivation to not abuse the system (the efficiency the Right wants but the Left seems to think will happen automatically because bureaucrats always do such a good job). Hospitals should be given bonuses for good performance relative to expenditures. Adoption of medical advances should be subject to a hard limit on medical expenditures as a function of GDP, and decided by ranking effectiveness per unit of cost. Is there a perfect way to quantify results when ranking hospitals and technologies? Of course not, but the beauty of our current system is that it’s so bloody godawful that having a monkey spin a casino-style Health Care Policy Fruit Wheel could not possibly fail to improve things. Let not the perfect be the enemy of the slightly less shitty.

Whether or not you agree with my solution, I think it’s fair to say that trusting our health care industry to the precepts of current free market economic thinking is like building an airplane based on a 19th century understanding of aerodynamics and expecting it to fly. I think there’s archival footage of how well that worked out. Economic principles may be elegant, but that doesn’t mean they work in the real world. And here’s some bad news: if we ever do get economic theory to the point where we can let it dictate health care policy, that theory is probably going to be as ugly as the subject of that theory (i.e. us). In the meanwhile, there’s nothing libertarian about letting people croak so that we can adhere to some imagined Platonic form of government.

Going John Galt

A while back I wrote about how the present financial crisis may be the “rock bottom” that precedes better days ahead for the country. A return to our better natures, I hope, and not just a prelude to a collapse. My hope on that front was given a boost when I recently discovered that the forth most searched for phrase on Google was “Going John Galt.”

(For the record, I’m pleased that people are looking into objectivism, not that I think anybody actually should literally “go John Galt” in the sense of quitting their jobs. And I also don’t think objectivism is 100% of the answer, but I think it is a way of thinking we could use a little more of right now.)

One trillion dollars spent without a single vote

Here is an e-mail I just got from the Libertarian party, suggesting that perhaps we should be a little more upset than we are with the bailout. Even if you’re not normally inclined to listen to the Libertarians, I think they have a point here. A trillion dollar bailout to avoid a financial disaster? That is a financial disaster, and one being paid for by the wrong people!

Like most Americans, I’m sure you were glued to the news about the “financial crisis” and the government’s “fix” for the problem. You probably heard that the government was going to come in and save the mortgage industry by bailing out failing corporations. And, you probably heard both Barack Obama and John McCain say that this bailout was necessary, and good for the economy.

What you probably didn’t hear was that it was going to cost up to $1 trillion dollars, and you were responsible for this money.

“American taxpayers will come up with the money,” says the New York Times.

Such a number is hard to conceptualize if you’re not the government. So, in order to show you just how much $1 trillion dollars really is, we’ve put together these figures:

One trillion dollars ($1,000,000,000,000) is enough money:

  • To buy everybody living in Los Angeles at least one Lamborghini Gallardo. 
  • To buy 88,052, 394′ custom mega yachts; enough to stretch around ¼ of the world. 
  • To buy everyone living in Belize and Malta a Manhattan apartment.
  • To get half of the Democratic Party into a fundraiser for Barack Obama at the $28,500 admission price. 
  • To give one out of every two men in the United States a Men’s Presidential Rolex watch.
  • To buy every woman in the United States a Tiffany Diamond Starfish Pendant.
  • To get two Mitsubishi 73″ HDTVs for every household in America.
  • To buy four copies of The Office: Season Four on DVD, to every person on earth.
  • To send everybody in America on an all-inclusive vacation to Tahiti (and some people can stay a few extra days).

AND…

$1 trillion is enough money for everyone in Buffalo, NY to buy their own 65-acre island in Panama.

This is how much the government is going to cost you (roughly $3,278 for every man, woman and child in the United States).

Barack Obama is for it. John McCain is for it.

But, Bob Barr and Libertarian Party are against it.

“No one voted to pour taxpayer funds into Wall Street,” says Bob Barr, the Libertarian Party’s presidential nominee, “and no one voted for the government to take over an insurance company. If the Federal Reserve can spend as much money as it desires to bail out any company that it desires, is there anything that it cannot do with taxpayer funds?

How I learned to stop worrying and love Obama

Maybe love is too strong a word. I typically vote for Libertarians and the occasional Republican, and usually consider Democratic primaries like the political version of NASCAR: I don’t care who wins, but enjoy watching the crashes. However, the Republicans have lately forgotten their core values of limited and responsible government, and are spending like drunken sailors on shore leave (back when the dollar was worth something). The most decent man in the race, Ron Paul, was never even given a chance despite being the only one of the lot who actually understands economics or the concept of a republic. On the other hand, the Libertarian party is starting to get on my nerves, as it’s increasingly clear they will never get their act together and be anything more than a loose federation of ineffective idealists drowned out by a core of anti-government shack dwellers who don’t understand the first thing about classical liberalism but simply don’t like paying taxes. Finally, through the dishonesty and mismanagement of decades of administrations BOTH Democrat and Republican (don’t listen to anybody so simple-minded as to tell you that all of our problems are due entirely to Bush) our country is in the worst shape anybody in my generation has ever seen, in virtually every arena possible. You can thank the Bushes for the wars, of course, but you can thank Carter and Clinton for the lax lending policies that were meant to help poor people get homes but ended up turning the middle class into real estate speculators. And we can thank the lot of them for a corrupt government that bails out corporations and throws subsidies at politically powerful industries, devolving us into a perverse version of capitalism where taypayers take on the risks and the owners of capital still reap the profits.

The upside to things being so dire is that they are, in many ways, clarified. In truth, there is much low hanging fruit which honest politicians of any ideology should agree need to be fixed: earmarks, tort reform, corporate welfare, border security, massive government redundancy and inefficiency, etc. People may differ on approaches to economic theory, but I think it’s safe to say that hardly anybody thinks corruption and graft is a good form of government.

From all the partisan rancor, however, you’d think other than baseball steroids and Tibet, all the problems we face are of inscrutable complexity and hopelessly nuanced. But all the partisan heat is just part of the divide and conquer strategy employed by our “leaders” on both sides. Like clever sleight of hand sharps who get you to look at what the Right hand is doing while the Left hand is taking your watch, they hope that if they convince you their opponent is evil, you’ll fail to notice they’re not much better.

At this point, whether or not we have universal health care pales in comparison to whether or not we return to being a society with integrity. It is a common mistake and conceit to think if only we have the right system of government with the right laws, all else will fall into place if we just sit back and watch. This applies to those that think all will be right if we only have more socialism, as well as to those that think more laisez faire capitalism will automatically cure our ills. A government only applies rewards and forces, or the lack thereof. It is a force, not a fate. What matters more, above all, is the value system and cultural dynamics of the people under that government. Capitalism may enable great things, but it is a guarantee of nothing without a society composed of individuals who take responsibility for themselves and their neighbors, and who are thus capable of operating with the trust necessary for free trade to work. Capitalism is merely the absence of interfering artifice, in some sense, and the exposure to natural restoring forces; it will punish a society that does not treat its members with respect and fairness in the long run, but it will not inherently cause anybody to change themselves. On the other side of the idealogical spectrum: to the extent that socialism represents the will of the people to help each other, it is unnecessary, and to the extent that it represents an essential collective coercion of individual actions, it is unsustainable in the long run. I don’t mean to equivocate between socialism and capitalism; that matter is for another time. My point is simply that in either case, the notion that our destiny is in our system is a fallacy. It is in our culture, and a government can either be a road or a bog, but the private sector is the only thing that can do the driving.

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