Saturday, November 27, 2010

Auto insurance is NOT like Obamacare

Many make a false analogy between health insurance and auto insurance. Here are some differences between auto coverage and health coverage routinely glossed over or unacknowledged:
1) With auto insurance, the states are making the mandates not the feds. The states have that authority and the feds do not.
2) Government provides us roads to enable driving, but it does not provide us our health to enable living.
3) Using roads requires interaction, requiring some of those government protections for us from other drivers;
while someone else's poor diet, lack of exercise, bad genes or poor luck simply are not be anyone else' problem health-wise, nor should it be financially. (Let's leave public health issues aside for now.)

Group health insurance model provides the same risk pooling benefits that are often cited by Obamacare defenders. It does and addresses adverse selection, but THAT model is a big part of the reason for escalating costs. Consumers of the coverage are removed from the provider selection process and providers are encouraged to form provider networks (cartels). Both of these facts mean that providers do not have to compete on price. THAT is the main source of the cost problem.

Risk pooling does have its issues, but in and of itself it is not socialism UNTIL the government mandates or operates its own health coverage networks. Of course the federal government has done just THAT with Medicare, Medicaid and VA hospitals for at least the last 45 years, which is again part of the current cost problem. There is no free market in health care, so there is no cost containment.

Health care for the indigent should be reassigned back to the fine faith-based hospital systems like Baylor, Presbyterian and Methodist so the "public" is not stuck with the bill. Every one else should buy individual policies for major medical issues and leave everything else as fee for service.

Monday, June 28, 2010

End Federal Drug Prohibition

Recently John Stossel used his program on Fox Business to renew the debate over drug prohibition. While I personally believe that Mr. Stossel has this totally right, I would like to focus on the notion of drug prohibition by the national government. (N.B., using the term "federal" when our national government is so centralized is an abuse of the term "federal".) You see, I believe that national drug prohibition is unconstitutional.

Consider that legislation and enforcement of nearly all criminal behavior is done by the states. (The major exceptions are treason and counterfeiting, and patent infringement.) By criminal behavior, I mean actual crimes by any selfish enough to use violence or treachery or mistreat the (tangible) property of others: murder, assault, rape, armed robbery, theft, vandalism, and so on. Even non-criminal behavior, that is a crime against a state, so-called victim-less crime like prostitution or unlicensed vending, are all managed by the state, its subdivisions, and its chartered cities and districts, not the supposedly federal government. So for what reason can the central authority in Washington impose or intrude upon what the citizens of each state choose?

This time our journey into federal over-reach starts with the Pure Food and Drug Act from 1906. As laws goes, it is certainly a reasonable one for a state to pass because it discouraged fraud in sales of tonics and syrups and encouraged meat inspection. But it set up the scenario for the national government to start the bloated and unnecessary FDA and set precedent for interventionism by the feds in drug use. What should have happened is competitive private laboratories should be used to test truth-in-labeling and food safety in accordance to the standards for each state. This law was superseded the Food, Drug, and Cosmetic Act of 1938.

Next we have the Harrison Narcotics Tax Act which is "An Act to provide for the registration of, with collectors of internal revenue, and to impose a special tax on all persons who produce, import, manufacture, compound, deal in, dispense, sell, distribute, or give away opium or coca leaves, their salts, derivatives, or preparations, and for other purposes." The courts initially interpreted this to mean that physicians could prescribe narcotics to patients in the course of normal treatment, but not for the treatment of addiction. This was later overturned and now federal law has no authority over treatments in medical practices. Although technically illegal for purposes of distribution and use, the distribution, sale and use of cocaine was still legal for registered companies and individuals. But the biggest problem here is that for the first time individuals had to register with the national government to possess something. This is totally unacceptable.

The 1937 Marihuana Tax Act was a significant bill on the path that led to the criminalization of cannabis. The bill was passed in order to destroy the hemp industry, largely as an effort of businessmen Andrew Mellon, William Randolph Hearst, and the Du Pont family. This alone makes it clear abuse of power by Congress. In 1969 in Leary v. United States, part of the Act was ruled to be unconstitutional as a violation of the Fifth Amendment, since a person seeking the tax stamp would have to incriminate him/herself. In response the Congress passed the Controlled Substances Act as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970. The 1937 Act was repealed by the 1970 Act.

The Anti-Drug Abuse Act of 1988 created the Office of National Drug Control Policy, headed up by the "drug czar". Today that office (mis-) employs over 100 people alone!

All of these laws have one thing in common: they violate the principle of federalism which is the bedrock of the US Constitution. In doing so they increase the power of the federal government at the expense of the states and what's worse, legitimatize the use of government resources against the very individuals it is designed to keep free!

All of these silly laws should be repealed as soon as possible.

Monday, May 31, 2010

Limits of Interventionism

By questioning some of the unconstitutional meddling of the federal government in modern American society, including the Civil Rights Act of 1964 and the Fair Housing Act, Rand Paul has performed a useful service for the liberal media elitists who love to empower our elected officials. Outlets like the New York Times have helped to illuminate their blind love for the authoritarian state, despite the limits of the US constitution.

Many Americans are sputtering mad, believing that government has let them down in abetting a ruinous recession, bailing out bankers and spending wildly. Rand Paul is just one part of the remedy they have in mind. His views and those of other Tea Party candidates are reminders of the truth that there is no such thing as "enlightened government".

In a handful of remarkably candid interviews since winning Kentucky’s Republican Senate primary this week, Mr. Paul made it clear that not only he does understand the nature of racial progress in this country, he sees interventionist policy of government itself as racist.

As a longtime libertarian, he espouses the view that personal freedom should supersede all government intervention. Neighborhood associations should be allowed to discriminate on the basis of race, he has written, and private businesses ought to be able to refuse service to anyone they wish. Under this philosophy, the punishment for a lunch counter that refuses to seat black customers would be public shunning, not a court order.

It is a theory of liberty with roots in America’s creation, and the succeeding centuries have yet to give it a chance to show how effective it can be. Even if "promoting a civil society" was somehow spelled out as a constitutional goal (and it isn't), the arrogance of the Times' editors to think that they know what that means is astonishing. The views of a few people empowered by government to discriminate meant generations of less freedom for large groups of others, since the government could now routinely overstep its boundaries and play favorites.

It was only government power that instituted and maintained slavery and enacted Jim Crow, neither of which would have been in place in a purely free society. It was government that brought on and extended the Depression and created the union/EEOC counterculture in the workplace, all through the best of intentions.

Republicans in Washington have foolishly distanced themselves from Dr. Paul’s remarks, afraid that voters will be as ignorant as the Times' editorial staff. But as they properly continue to fight the new health care law and oppose greater financial regulation, claiming the federal government is overstepping its bounds, they should notice that the distance is closing. Maybe the next step is to call out all of the unconstitutional laws as part of the Republican platform. Maybe then the liberal media will understand?

Monday, April 19, 2010

Curtail unions in government agencies

Once, over a hundred years ago, before the Fair Labor Standards Act or the National Labor Relations Board ever existed, there were robber barons. These were hard core wealthy industrialists who leveraged their existing wealth to more wealth, often on the backs on the great unwashed masses.

Well it probably wasn't that bad, but there were serious problems with child labor, working hours, safety and fair compensation. Most of these issues were the result of the transition from an agrarian to a manufacturing-based economy. Also at issue were monopolies that limited employment opportunities within industries. Finally much labor was unskilled, often lacking even the ability to read, let alone write to keep records.

Two major events occurred that began changing all of this: government expansion and unionization. Now usually I am very critical of government growth. There are a few exceptions where sometimes we need a "push" from Congress. I believe the Fair Labor Standards Act was one such example. The eight hour day and forty hour work week for the working person became a national standard and for the first time large employers had to meet an expectation. (Local merchants and specialty shops were much more prevalent before the industrial revolution, with smiths, wainwrights, carpenters and candle-makers all have small family-oriented businesses who might take on apprentices on occasion).

At the same time unions came along. The main union benefit was to give labor a voice and clout against the wealthy employer who might otherwise take advantage of those who would otherwise get taken advantage of. This was mostly fine, as the new dynamic of big employers and large groups of non-specialist employees and candidates. With the advent of corporations it became even more important for the employees to have a collective voice, as a group of owners and manager would almost never consider the employee stakeholder in those early days of industrialization.

But somewhere things went wacko. You see there is a downside to unions.

For one, it become someone's job to advocate and as long as everyone voluntarily donated out of their own wages, freely elected that advocate and that advocate was limited in tenure things were okay. But then came closed shops and large nationally organized unions with expensive lobbies and ties to organized crime.

Another issue with unions is that they often work against management, creating an adversarial relationship where there should be a cooperative one. Rules about layoffs, seniority and callbacks while not arbitrary, made life more difficult for management and increased liability beyond already complex resource management questions.

So unions where once a good, arguably necessary counterbalance to corporatism and collusion on employment; now they are a burden to profitability, bringing a sense of entitlement to the well-connected and well-established few.

And any good they once (or still) brought is restricted to private, for-profit enterprise. It is simply unnecessary for government employees to unionize; things true for steelworkers or mineworkers today are not applicable to government clerks and service agents. Firstly, there is no for-profit over-utilization incentive to counter-balance. Second, the "owners" of the enterprise are ultimately the citizenry! Most are prohibited by law from striking of course

The practical upshot of this is that local jurisdictions and states are going broke! The people cannot reign in government spending because of overly generously compensation beyond wages for these so-called public servants. A few well-connected people can take a generous retirement stipend from one job at say age 50 then get yet another job from a different jurisdiction, earning even more retirement after a few years. These people can make six figures after retirement!

End the SEIU! It is time to return sanity to our public service sector.

End public employee unions