Sat, 29 Aug 2009
Free-Market medicine
Here's a letter that I sent to North Country Now. If it gets
published, it will come out next Tuesday.
One of the sound-offs points out that the US doesn't have universal
healthcare (except that it does -- nobody gets turned away from an
emergency room), and that we should be leaders. I agree. We should
lead the rest of the world away from a system of government-rationed
health care to a system of free-market health care.
Before anybody tries to suggest that we already have a free-market
health care system, let's compare socialized medicine vs. our current
corporate-insurance medicine vs. free-market health care.
socialized: out-of-pocket expenses are minimal, so everybody loves it,
but nobody has any reason to economize. Nobody gets bankrupted by
catastrophic health care, but on the other hand, some people are
denied care at any price (good thing Canadians have the US to fall
back on). You pay the full cost because it comes out of your taxes.
corporate-insurance: if you have a good job, you have health care,
with a low deductible and small co-payment. If you switch jobs, you
lose your health care, and maybe the new job's insurance company will
cover your pre-existing condition. If you have no health care, you go
to an emergency room. The corporation pays the insurance company
which then rations out payments to doctors. Patient is not
consulted. Technology is expensive. You pay the full cost because it
comes out of your salary.
free-market: cooperation is maximized by multiple competing plans.
The doctor's union (the AMA) has no power to restrict entry, so
doctors' pay is competitive and bad doctors aren't
protected. Technology reduces costs just like everywhere else in the
economy. Genetic testing and preventative care keeps the worst
illnesses at bay. Doctor's charity (or government, if necessary)
covers losers of the genetic lottery. Non-patenting of drugs (and no
FDA) reduces costs of drugs to level affordable by all. You pay the
full cost because it comes out of your pocket.
Make no mistake about it -- health care is a hard problem to solve.
There are no good solutions, only least-bad solutions. It will
require all of us, competing and cooperating freely, to devise a
solution we can accept. A single government solution imposed on us by
the exigencies of politics will likely be controlled by politically
powerful groups: drug companies, insurance companies, and doctors.
You'd be correct to notice that patients aren't listed among the
politically powerful, so when politics controls medicine, patients
lose out.
Let's put the patient in control of the purse so they can choose the
solution that's best for them. Free markets -- they're not just for
breakfast anymore.
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Fri, 14 Aug 2009
Obamacare not possible
Folks, I have bad news for you. The Barack Obama Health Care Reform (shepherded through by Nancy Pelosi) will be, as written, an utter and unmitigated disaster. It attempts to do two things which are, in combination, impossible. First, it makes health insurance much more widely available through the mind-boggling deal it made with the insurance companies. To wit: the health insurance companies agree to insure everyone, and the federal government forces everyone to buy health insurance. While that's a huge give-away to health insurance companies of your personal tax dollars, that's not impossible.
No, the impossibility comes when you combine that with: Second, Barack is
going to pay for this new plan by reducing costs. There's two problems with
this idea. A) if costs could be reduced, insurance companies would have
already done it, and pocketed the money. B) when you pay less for something,
you get less of it. This is one of the iron laws of economics, which is
just as inviolable as the laws of thermodynamics, or the laws of mutual
attraction (things fall at 32ft/sec/sec absent wind resistance).
So Obamacare will attempt to 1) increase the amount of medical care needed
because you have all these newly insured people, AND 2) decrease the amount of
medical care available by paying less for it.
No, really.
Stop laughing.
This is our PRESIDENT, and he deserves the same respect due to any other
politician who is ignorant of economics yet tries to regulate markets: zero.
There can be only two results: either we'll have less medical care (think
you're having a hard time finding a doctor now??), or we'll pay a lot more
for it (think your doctor's visits are expensive now??).
But there is a different way: free market health care. Reduce every
possible barrier to health care. First, stop protecting the doctor's union.
Let anybody practice medicine, but give the doctor's union a super-trademark
on the term "physician", just like the 4-H shamrock and Olympic rings are
protected. If you want a graduate of a medical school, you can have one; just go looking for a physician. Second, stop treating us like children, and let anybody buy any
medicine they want. Abolish the FDA. Pharmacies will compete to provide
the safest and most effective medicines. Abolish the patent system. Drugs
are only expensive to develop because of the FDA and don't need patent
protection. Testing can be provided by pharmacies. Stop expecting doctors
to be medical deities. Greatly reduce the available torts to only those
things that doctors have control over, like leaving sponges inside patients
after surgery. I'm sure there is more government hampering that I'm just not
thinking of right now. Oh, yes, stop the war on (some) drugs. Abolish the
ONDCP.
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Fri, 07 Aug 2009
Lawrence Lessig on Obama's First Year
Well, I listened to Larry talking about how Obama failed to change anything. And I
heard about Larry's plan to change this: Citizen Funded Elections. It's
astounding how someone so smart can miss the mark by so much. The problem
is not that special interests are buying congressmen. The problem is that
congressmen have power to sell to them. As long as they have the power,
they will be able to demand a price.
So, first things first: If we want to be able to trust Congress again,
first we have to take away their power. How do we do that? Well, for one,
people could vote Libertarian, but I don't think that's likely. More likely
would be to demand that state legislators take back the power that rightfully
belongs to them, according to the design of our country.
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Trust to speak?
I had an interesting conversation at OSCON last week over a couple of beers. Since this conversation was alcohol-involved, I decline to name the person who said the following. I can only assume that he wasn't at his logical best.
"Freedom of speech is just libertarian bullshit. If people have the right to say anything they want, then you can't punish fraud."
I was nonplussed. How do you respond to a statement like that? Of course, you always realize the right thing to say hours or days later. The right thing to say is simply this:
"We trust people to vote for anyone they want; we trust anyone to run for office; we should trust them all to say anything they want."
Anybody who disagrees with
that is obviously not someone to be trusted with the vote.
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Wed, 05 Aug 2009
Progressive Taxation
Progressive taxation is not logical. It assume that not only should we tax the rich at the same rate as the poor and middle class, we should tax them at a HIGHER rate. And yet if they didn't the money, why did they bother to earn it? Taxing them at a higher rate can only give them a lower incentive for the most productive people in our society, who employ the most people.
And what do they do with their money? They INVEST it, usually back into their own business, but into the general economy as well.
Progressive taxation is taxation of capital. If you ask any economist, they will explain that taxing capital is eating your seed corn.
If you want to understand that progressive taxation is unfair, then give four pennies to one boy, and eight pennies to another. Then charge the first boy a penny for some candy, and the other boy three pennies. When he objects, and surely he will, tell him "but you have twice as much money." If he can do simple math and then says "But that's no fair! I should only be paying twice as much." You can then try explaining how under the theory of progressive taxation, it's no hardship for him to pay three times as much.
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