Here is a quote from Nobel Prize winning economist F.A. Hayek, reprinted from The University of Chicago Law Review, from the spring of 1949.
“Socialism has never and nowhere been at first a working-class movement. It is by no means an obvious remedy for the obvious evil which the interests of that class will necessarily demand. It is a construction of theorists, deriving from certain tendencies of abstract thought with which for a long time only the intellectuals were familiar; and it required long efforts by the intellectuals before the working classes could be persuaded to adopt it as their program.
In every country that has moved toward socialism, the phase of the development in which socialism becomes a determining influence on politics has been preceded for many years by a period during which socialist ideals governed the thinking of the more active intellectuals. In Germany this stage had been reached toward the end of the last century; in England and France, about the time of the first World War. To the casual observer it would seem as if the United States had reached this phase after World War II, and that the attraction of a planned and directed economic system is now as strong among the American intellectuals as it ever was among their German or English fellows. Experience suggests that, once this phase has been reached, it is merely a question of time until the views now held by the intellectuals become the governing force of politics.”
Sunday, November 30, 2008
Thursday, November 27, 2008
They're not “ideologues”?
Here economist Richard Ebeling explains the misconception that Barack Obama's economic appointees are “pro market.”
Wednesday, November 26, 2008
7.7 Trillion And Counting
Like kids in a candy store, our Federal Reserve has done everything it can to consume and steal its way through as much product as possible before heading home. They (Paulson & Bernanke) originally told congress that the total for the TARP bailout would be 700 billion dollars. They then turned toe and loaned out over 2 trillion dollars. Now they're pledging a sum total of over 7 trillion dollars, 24,000 dollars for every man, woman and child in the U.S., or roughly half of the GDP for 2007. In legal parlance, that's known as a “bait and switch,” something the government has passed laws against.
So now, in what appears as a soon-to-be-tragic abuse of power, we're getting to see first hand the truly fragile nature of our marketplace when it's up against such massive manipulations. Fear is creeping in faster than before, not just because of publicly perceived doom and gloom, but also because of the interventions themselves. So in their heavy-handed efforts to alleviate fear and create stability, they have succeeded in doing exactly the opposite. But ultimately that's just the status quo in intervention history. One would think that Ben Bernanke already understands this fact, since he's an economist and Depression Era historian. But apparently not.
These amounts are staggering. And so is Bernanke's attitude. In testimony on November 18th, he stated: “We take collateral; we haircut it; it is a short-term loan; it is very safe; we have never lost a penny in these various lending programs.” He's referring to lending out less money than the current market value of whatever collateral was accepted by The Fed. But so far, only they can say what that collateral is worth, since no one has been allowed to inspect their books. And I have a couple of nagging questions. Correct me if I'm wrong. These banks were over extended with bad assets in the first place. That's why they're in trouble. So what assets (collateral) are left? Their buildings? Their computers? Do those add up to several trillion dollars? Or are they offering as “collateral” the same SPV's that have wreaked so much havoc in the first place? What else do they have to offer? Their “good” loans? Which ones? How about their stocks? How much are they worth now? And when creditors collect, is it first-to-loan, first-to-get-paid-back? Essentially, the oldest loans come first. Right? So that leaves the American taxpayers last in line. If they've “never lost a penny” on these kinds of loans, which I doubt, then they had better be extraordinarily sure that the monies going out now will indeed be repaid. I know a poker face when I see one. And Bernanke seems far too dismissive about the size of these loans for my comfort. I feel like I'm watching a poker player with two pairs bluffing his way through to the end of the pot. Or maybe, to use another metaphor, like a policeman telling a crowd “don't worry; nothing to see here.”
Henry Paulson leaves me feeling the same way. In his testimony, he stated: “I think it would be extraordinarily unusual if the government did not get that money back and more.” Hey, Hank. Isn't this entire “credit crisis” an “extraordinarily unusual” situation? Isn't it, what most journalists, pundits and government watch dogs are calling “unprecedented”? That is, nearly by definition, extraordinarily unusual. His poker face isn't good either.
All of this adds up to a sum total of “what the bejabbers is going on?” We're shaking our heads at the size and scope of it. And we're shaking in our shoes over its implications.
We can't trust these guys anymore. They say one thing, and do something else. Then they change their minds, and tell us, in Paulson's own words, “you should thank me.” They've been binging on greenbacks, and it's time to cut them off. I would like to suggest a myopia intervention. You've had enough boys. Now back away from the printing press.
But I need to take a moment here, to digress, and smile smugly over what Congressman Scott Garrett (R) from New Jersey said recently regarding The Federal Reserve. He said:
“Whether it’s lending or spending, it’s tax dollars that are going out the window, and we end up holding collateral we don’t know anything about. The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
This is, in my humble opinion, the very first rumbling of a call to nationalize The Federal Reserve, which is step two in my “Top 30 Watch List For Economic Armageddon.” It's another one of my “I told you so” moments. To my surprise, they've skipped a couple of steps. But I guess that shouldn't surprise me. It is government after all.
Remember, once they call for step one, “A State of Emergency,” our “crisis” will be seen as totally “out of control,” and the only remedy a bureaucrat understands is more control. That's the very definition of governance - to restrict, to control. And just one sidebar-style question: does this seem like a “representative” government to you?
My “Top 30 Watch List For Economic Armageddon”
U.S. Pledges Top 7.7 Trillion to Ease Frozen Credit
Another Day, Another $800B: 'Staggering Size of Bailout Necessary,' Economist Says
Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace
So now, in what appears as a soon-to-be-tragic abuse of power, we're getting to see first hand the truly fragile nature of our marketplace when it's up against such massive manipulations. Fear is creeping in faster than before, not just because of publicly perceived doom and gloom, but also because of the interventions themselves. So in their heavy-handed efforts to alleviate fear and create stability, they have succeeded in doing exactly the opposite. But ultimately that's just the status quo in intervention history. One would think that Ben Bernanke already understands this fact, since he's an economist and Depression Era historian. But apparently not.
These amounts are staggering. And so is Bernanke's attitude. In testimony on November 18th, he stated: “We take collateral; we haircut it; it is a short-term loan; it is very safe; we have never lost a penny in these various lending programs.” He's referring to lending out less money than the current market value of whatever collateral was accepted by The Fed. But so far, only they can say what that collateral is worth, since no one has been allowed to inspect their books. And I have a couple of nagging questions. Correct me if I'm wrong. These banks were over extended with bad assets in the first place. That's why they're in trouble. So what assets (collateral) are left? Their buildings? Their computers? Do those add up to several trillion dollars? Or are they offering as “collateral” the same SPV's that have wreaked so much havoc in the first place? What else do they have to offer? Their “good” loans? Which ones? How about their stocks? How much are they worth now? And when creditors collect, is it first-to-loan, first-to-get-paid-back? Essentially, the oldest loans come first. Right? So that leaves the American taxpayers last in line. If they've “never lost a penny” on these kinds of loans, which I doubt, then they had better be extraordinarily sure that the monies going out now will indeed be repaid. I know a poker face when I see one. And Bernanke seems far too dismissive about the size of these loans for my comfort. I feel like I'm watching a poker player with two pairs bluffing his way through to the end of the pot. Or maybe, to use another metaphor, like a policeman telling a crowd “don't worry; nothing to see here.”
Henry Paulson leaves me feeling the same way. In his testimony, he stated: “I think it would be extraordinarily unusual if the government did not get that money back and more.” Hey, Hank. Isn't this entire “credit crisis” an “extraordinarily unusual” situation? Isn't it, what most journalists, pundits and government watch dogs are calling “unprecedented”? That is, nearly by definition, extraordinarily unusual. His poker face isn't good either.
All of this adds up to a sum total of “what the bejabbers is going on?” We're shaking our heads at the size and scope of it. And we're shaking in our shoes over its implications.
We can't trust these guys anymore. They say one thing, and do something else. Then they change their minds, and tell us, in Paulson's own words, “you should thank me.” They've been binging on greenbacks, and it's time to cut them off. I would like to suggest a myopia intervention. You've had enough boys. Now back away from the printing press.
But I need to take a moment here, to digress, and smile smugly over what Congressman Scott Garrett (R) from New Jersey said recently regarding The Federal Reserve. He said:
“Whether it’s lending or spending, it’s tax dollars that are going out the window, and we end up holding collateral we don’t know anything about. The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
This is, in my humble opinion, the very first rumbling of a call to nationalize The Federal Reserve, which is step two in my “Top 30 Watch List For Economic Armageddon.” It's another one of my “I told you so” moments. To my surprise, they've skipped a couple of steps. But I guess that shouldn't surprise me. It is government after all.
Remember, once they call for step one, “A State of Emergency,” our “crisis” will be seen as totally “out of control,” and the only remedy a bureaucrat understands is more control. That's the very definition of governance - to restrict, to control. And just one sidebar-style question: does this seem like a “representative” government to you?
My “Top 30 Watch List For Economic Armageddon”
U.S. Pledges Top 7.7 Trillion to Ease Frozen Credit
Another Day, Another $800B: 'Staggering Size of Bailout Necessary,' Economist Says
Bail-Outrage: Misuse of Funds, Lack of Transparency a National Disgrace
Tuesday, November 25, 2008
Who's Afraid of a Little Deflation?
This is a quote from JÖRG GUIDO HÜLSMANN, dated just last month, addressing the fears of deflation. It's from one of his essays you can get for free here.
There are also pages and pages of full length books on Austrian Economics, political economy, morality and especially our current financial mess, all of which can be downloaded free of charge.
"To raise these questions is to answer them. The crisis did not hit us despite the presence of our monetary and financial authorities. It hit us because of them.
Then there is the fear factor. If we follow a hands off policy, the majority of experts tell us, the banking industry, the financial markets, and much of the rest of the economy will be wiped out in a bottomless deflationary spiral.
The present essay argues that this is a half-truth. It is true that without further government intervention there would be a deflationary spiral. It is not true that this spiral would be bottomless and wipe out the economy. It would not be a mortal threat to the lives and the welfare of the general population. It destroys essentially those companies and industries that live a parasitic existence at the expense of the rest of the economy, and which owe their existence to our present fiat money system. Even in the short run, therefore, deflation reduces our real incomes only within rather narrow limits. And it will clear the ground for very substantial growth rates in the medium and long run.
We should not be afraid of deflation. We should love it as much as our liberties."
JÖRG GUIDO HÜLSMANN
Angers, France October 2008
In addition, if you're interested in the bailout and its ramifications, which are getting more ridiculous every day, you can check out their “Bailout Reader” blog. It has a huge pool of information about causes, effects, and best of all, what can be done to remedy our current financial situation.
There are also pages and pages of full length books on Austrian Economics, political economy, morality and especially our current financial mess, all of which can be downloaded free of charge.
"To raise these questions is to answer them. The crisis did not hit us despite the presence of our monetary and financial authorities. It hit us because of them.
Then there is the fear factor. If we follow a hands off policy, the majority of experts tell us, the banking industry, the financial markets, and much of the rest of the economy will be wiped out in a bottomless deflationary spiral.
The present essay argues that this is a half-truth. It is true that without further government intervention there would be a deflationary spiral. It is not true that this spiral would be bottomless and wipe out the economy. It would not be a mortal threat to the lives and the welfare of the general population. It destroys essentially those companies and industries that live a parasitic existence at the expense of the rest of the economy, and which owe their existence to our present fiat money system. Even in the short run, therefore, deflation reduces our real incomes only within rather narrow limits. And it will clear the ground for very substantial growth rates in the medium and long run.
We should not be afraid of deflation. We should love it as much as our liberties."
JÖRG GUIDO HÜLSMANN
Angers, France October 2008
In addition, if you're interested in the bailout and its ramifications, which are getting more ridiculous every day, you can check out their “Bailout Reader” blog. It has a huge pool of information about causes, effects, and best of all, what can be done to remedy our current financial situation.
Sunday, November 23, 2008
What Are They Thinking?
Ever wondered “What are they thinking?” when watching the news of our financial mess? In “Everything bad is good again,” writer Jacob Sullum puts some great illogical head scratchers into perspective. It's pretty funny.
Saturday, November 22, 2008
Out of Control (I Told You So pt. 2)
I've been reviewing some of the most recent information about the TARP program (Troubled Assets Relief Program). And I've dragged out of the online financial mire some interesting information that just isn't getting the attention it deserves. If you've been following the bailout news at all, you know that it's costing the American taxpayers about 700 billion dollars. And that more businesses, especially the automotive industry, are asking for a slice of the total, or even better, a bailout of their own. And lawmakers are seriously considering it. So not only is the program failing to bring about the stability that was promised. But it's also growing in amount, and branching out into other industries. These manuvres are in lock step with what I predicted in my other posts. But silly me, I gave the government, and their quasi-government “helpers” at The Federal Reserve, some credit (catch the pun?). I thought the massive amount they were confiscating publicly was all they would get.
Little did anyone know, they would get far more. But The Fed didn't make this massive addition public. What's most shocking, though, is that they're not accountable to anyone. So why just confiscate 700 billion, and be accountable for it, when you can confiscate over 2 trillion, and be accountable for less than half? Let's just go for broke. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS1eWoJj0sKc
That's right. I said 2 trillion. Henry Paulson and the people at The Federal Reserve are now taking on the responsibility of doling out more than 2 trillion dollars. In an impressive and rapid response, Bloomberg News filed a freedom of information act request, demanding clarity in these massive transactions. It's important for taxpayers to know where their money is going. But the Federal Reserve refused. Bloomberg followed up by filing a lawsuit demanding disclosure. And still today the Fed is thumbing its nose.
The crux of this issue, though, isn't that they don't want to turn over their books for inspection. Any reasonable person can understand that what is essentially a client list is proprietary information. And the federal reserve isn't necessarily run by the government. So they don't have to turn over their books, unless they are accused of criminal activity. Which they're not. The real problem is that they have acquired another 1.3 trillion dollars in taxpayer monies without congressional approval.
This is no little booking error. It was a conscious decision – probably by a number of people working within The Fed. So it begs some serious questions. How did The Fed get it? Who within (or outside) The Fed authorized the use of these extra taxpayer funds? What authority do they have to do such a thing? What standards were used in making the decision to continue the program outside of congressional oversight? What standards will be used to decide who gets the additional money? Why, if the amount is so enormous, and the money not theirs, would they knowingly deny the rightful owners of the dollars access to their information? Was denial of this access predetermined? What was the original destination of the additional funds? Were they to be used in other programs that will now be underfunded?
To wit. What gives them the right? I smell a hideous abuse of power here. The last time I checked, it was criminal for private individuals to simply take taxpayer dollars. If they have confiscated the money, it could very well be a criminal act. If it's a loan they intend to pay back, the people deserve disclosure. But no charges have been filed – yet.
That much is shocking. But now is where the story gets funny, and borders on the ridiculous. When questioned about the extra money, Fed Chairman Ben Bernanke stated that he thinks disclosure would be “counterproductive.” His reason?
“There is a concern that if the name is put in the newspaper that such-and-such bank came to the Fed to borrow overnight for a perfectly good reason, that others might begin to worry 'is this bank credit worthy?' and that might create a stigma, a problem, and might cause banks to be unwilling to borrow, and that would be counterproductive.”
He's worried about their... reputations. So he's denying access to the information about what he's doing with huge amounts of taxpayer dollars, because he's worried about the banks getting a bad name. Isn't it a little late for that? He sought to alleviate concern over that issue by following up with statements like “We take collateral,” and the loans are “very safe.” So this begs another question. If you take collateral, and the loans are clearly safe, why not let everyone see your info? If what he said were actually true, it would be obvious to anyone with a little bit of interest. Reputations would remain in tact, and transparency would help to lessen any emerging Big Brother fears. (When was the last time you got a loan for a home, or even just a car, without telling every little financial detail to the people giving you the loan?) But all the while, Henry Paulson is testifying: “We need oversight. We need protection. We need transparency. I want it. We all want it.”
So this becomes strangely dysfunctional. What a pair, these two. Is this a conscious out-of-touch-with-each-other act? Is it unintentional? Or are they really on separate pages? Are they playing good cop/bad cop? Or are they the keystone cops? We might have to wait until charges are filed. Or at least until someone resigns.
Meanwhile, your dollars are getting sucked out of The Federal Reserve's doors as if there's a giant money vacuum outside. All of it essentially vaporising into no one knows where. I take that back. Only Henry Paulson and Ben Bernanke know where.
Here are some quick links giving just the numbers on how much the bailout is costing us, and who has received money so far.
http://www.breakthebailout.com/node/3
http://www.ritholtz.com/blog/2008/11/tracking-the-bailout/
Mises.org offers a lot of free books on line. One of them that's of particular interest right now is this book by Jorg Guido Hulsmann, explaining why deflation isn't what the politicos and the media make it out to be. It's only about 45 pages, and definitely worth the read.
Here is a website dedicated to following just the bailout.
Here is a Wall Street Journal discussion board video that takes about 4.5 minutes.
Here are some more links from mises.org, my favorite site, just in case you're starting to get a little skeptical about whether or not the bailout will actually work. Market corrections are good – not bad.
Consumers Don't Cause Recessions
Markets Need Time, Not More Poison
Financial Crisis and Recession
In Praise of Bankruptcy
Little did anyone know, they would get far more. But The Fed didn't make this massive addition public. What's most shocking, though, is that they're not accountable to anyone. So why just confiscate 700 billion, and be accountable for it, when you can confiscate over 2 trillion, and be accountable for less than half? Let's just go for broke. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS1eWoJj0sKc
That's right. I said 2 trillion. Henry Paulson and the people at The Federal Reserve are now taking on the responsibility of doling out more than 2 trillion dollars. In an impressive and rapid response, Bloomberg News filed a freedom of information act request, demanding clarity in these massive transactions. It's important for taxpayers to know where their money is going. But the Federal Reserve refused. Bloomberg followed up by filing a lawsuit demanding disclosure. And still today the Fed is thumbing its nose.
The crux of this issue, though, isn't that they don't want to turn over their books for inspection. Any reasonable person can understand that what is essentially a client list is proprietary information. And the federal reserve isn't necessarily run by the government. So they don't have to turn over their books, unless they are accused of criminal activity. Which they're not. The real problem is that they have acquired another 1.3 trillion dollars in taxpayer monies without congressional approval.
This is no little booking error. It was a conscious decision – probably by a number of people working within The Fed. So it begs some serious questions. How did The Fed get it? Who within (or outside) The Fed authorized the use of these extra taxpayer funds? What authority do they have to do such a thing? What standards were used in making the decision to continue the program outside of congressional oversight? What standards will be used to decide who gets the additional money? Why, if the amount is so enormous, and the money not theirs, would they knowingly deny the rightful owners of the dollars access to their information? Was denial of this access predetermined? What was the original destination of the additional funds? Were they to be used in other programs that will now be underfunded?
To wit. What gives them the right? I smell a hideous abuse of power here. The last time I checked, it was criminal for private individuals to simply take taxpayer dollars. If they have confiscated the money, it could very well be a criminal act. If it's a loan they intend to pay back, the people deserve disclosure. But no charges have been filed – yet.
That much is shocking. But now is where the story gets funny, and borders on the ridiculous. When questioned about the extra money, Fed Chairman Ben Bernanke stated that he thinks disclosure would be “counterproductive.” His reason?
“There is a concern that if the name is put in the newspaper that such-and-such bank came to the Fed to borrow overnight for a perfectly good reason, that others might begin to worry 'is this bank credit worthy?' and that might create a stigma, a problem, and might cause banks to be unwilling to borrow, and that would be counterproductive.”
He's worried about their... reputations. So he's denying access to the information about what he's doing with huge amounts of taxpayer dollars, because he's worried about the banks getting a bad name. Isn't it a little late for that? He sought to alleviate concern over that issue by following up with statements like “We take collateral,” and the loans are “very safe.” So this begs another question. If you take collateral, and the loans are clearly safe, why not let everyone see your info? If what he said were actually true, it would be obvious to anyone with a little bit of interest. Reputations would remain in tact, and transparency would help to lessen any emerging Big Brother fears. (When was the last time you got a loan for a home, or even just a car, without telling every little financial detail to the people giving you the loan?) But all the while, Henry Paulson is testifying: “We need oversight. We need protection. We need transparency. I want it. We all want it.”
So this becomes strangely dysfunctional. What a pair, these two. Is this a conscious out-of-touch-with-each-other act? Is it unintentional? Or are they really on separate pages? Are they playing good cop/bad cop? Or are they the keystone cops? We might have to wait until charges are filed. Or at least until someone resigns.
Meanwhile, your dollars are getting sucked out of The Federal Reserve's doors as if there's a giant money vacuum outside. All of it essentially vaporising into no one knows where. I take that back. Only Henry Paulson and Ben Bernanke know where.
Here are some quick links giving just the numbers on how much the bailout is costing us, and who has received money so far.
http://www.breakthebailout.com/node/3
http://www.ritholtz.com/blog/2008/11/tracking-the-bailout/
Mises.org offers a lot of free books on line. One of them that's of particular interest right now is this book by Jorg Guido Hulsmann, explaining why deflation isn't what the politicos and the media make it out to be. It's only about 45 pages, and definitely worth the read.
Here is a website dedicated to following just the bailout.
Here is a Wall Street Journal discussion board video that takes about 4.5 minutes.
Here are some more links from mises.org, my favorite site, just in case you're starting to get a little skeptical about whether or not the bailout will actually work. Market corrections are good – not bad.
Consumers Don't Cause Recessions
Markets Need Time, Not More Poison
Financial Crisis and Recession
In Praise of Bankruptcy
Tuesday, November 18, 2008
I Told You So
In my post "Hear No Evil; See No Evil," I made a prediction that the bailout program will not work, or its results will be marginal at best. I also stated "...they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can."
It's now been just a few weeks since the TARP program was given the green light, and already there are serious problems. So far, there are complaints of politicizing the funds and who gets them; showing preferences to friends and former business acquaintances; general mismanagement of the amounts given, and how they're tracked; heavy, behind-closed-doors lobbying; and, of course, calls for more money and expansion of the program. If politicians weren't so ridiculously predictable, it might actually be fun to sound like a prophet once in a while. Instead, it's just nauseating. But I'll make another couple of predictions anyway. By the time this program is fully under way, Henry Paulson will have well over a trillion dollars at his personal disposal – a trillion dollars of your money - one thirteenth of the total U.S. GDP. (Is he the first to singularly have authority over that much money?) In addition, there will be multiple committees and subcommittees trying to govern the program, all of which will be fighting for influence over amounts, timing and distribution rights.
But I'm also a firm believer in Mr. Murphy, and his one, undeniable law.
This is rapidly becoming one of the most worrisome economic times in American history. And if there is any way that this government can prove to the world how impotent it really is, that time is now. At some point Mr. Murphy will raise his ugly, old, wart-filled, wretched head, and remind everyone that he never, ever goes away. In fact, he's already started. Can you smell it? I can. The stench of failure. It's almost time to get out the pitchforks.
In this article, one of my favorite authors, Robert Higgs, skewers the TARP, and gets in some great digs on several other policies, industries and hysteriopots. It's really worth the time to read this article, and get a less than Chicken Little review of what the TARP is, does, has done, and what should be done. He calls it “The TARP Is Dead, Long Live The TARP.” Owch.
http://mises.org/story/3217
Mark Thornton advocates a “Slash and Burn” policy to bring the economy back to a healthy norm.
Daniel Mitchell details why bailing out the auto industry is a bad idea.
Daniel Ikensen explains why “There's Nothing Wrong With a 'Big Two.'"
And in "How Did We Get Into This Financial Mess?", Lawrence White explains where the mess really originated.
http://biz.yahoo.com/cnbc/081118/27781824.html
http://biz.yahoo.com/ap/081118/congress_autos.html
http://biz.yahoo.com/ap/081118/financial_meltdown.html
It's now been just a few weeks since the TARP program was given the green light, and already there are serious problems. So far, there are complaints of politicizing the funds and who gets them; showing preferences to friends and former business acquaintances; general mismanagement of the amounts given, and how they're tracked; heavy, behind-closed-doors lobbying; and, of course, calls for more money and expansion of the program. If politicians weren't so ridiculously predictable, it might actually be fun to sound like a prophet once in a while. Instead, it's just nauseating. But I'll make another couple of predictions anyway. By the time this program is fully under way, Henry Paulson will have well over a trillion dollars at his personal disposal – a trillion dollars of your money - one thirteenth of the total U.S. GDP. (Is he the first to singularly have authority over that much money?) In addition, there will be multiple committees and subcommittees trying to govern the program, all of which will be fighting for influence over amounts, timing and distribution rights.
But I'm also a firm believer in Mr. Murphy, and his one, undeniable law.
This is rapidly becoming one of the most worrisome economic times in American history. And if there is any way that this government can prove to the world how impotent it really is, that time is now. At some point Mr. Murphy will raise his ugly, old, wart-filled, wretched head, and remind everyone that he never, ever goes away. In fact, he's already started. Can you smell it? I can. The stench of failure. It's almost time to get out the pitchforks.
In this article, one of my favorite authors, Robert Higgs, skewers the TARP, and gets in some great digs on several other policies, industries and hysteriopots. It's really worth the time to read this article, and get a less than Chicken Little review of what the TARP is, does, has done, and what should be done. He calls it “The TARP Is Dead, Long Live The TARP.” Owch.
http://mises.org/story/3217
Mark Thornton advocates a “Slash and Burn” policy to bring the economy back to a healthy norm.
Daniel Mitchell details why bailing out the auto industry is a bad idea.
Daniel Ikensen explains why “There's Nothing Wrong With a 'Big Two.'"
And in "How Did We Get Into This Financial Mess?", Lawrence White explains where the mess really originated.
http://biz.yahoo.com/cnbc/081118/27781824.html
http://biz.yahoo.com/ap/081118/congress_autos.html
http://biz.yahoo.com/ap/081118/financial_meltdown.html
Sunday, November 16, 2008
The Good Die Young
My condolences to the families and friends of everyone lost in the Mexican Interior Ministry airplane crash on November 4th, in Mexico City. Mexican citizens have been shaken very hard by the event. It's made news daily since it happened. There were a total of 13 people lost – 8 on the plane, and 5 bystanders on the ground. The plane crashed in a prominent and famous locale during rush hour traffic. The site just happens to be in line with one of the landing lanes at Mexico City International Airport. The crash has so far been attributed to possible pilot error during a necessary correction due to jet wash from another plane. Several interior ministry employees were on the plane at the time. There were no survivors. In the United States, a similar event would be like losing nearly the entire U.S. Cabinet in a single crash. What has saddened Mexicans most is the loss of Secretary of the Interior, Juan Camilo Mourino, who, since Calderon took office, had been very successful in fighting internal corruption and drug cartels. He was a personal friend of Felipe Calderon, and publicly very popular.
http://news.xinhuanet.com/english/2008-11/08/content_10326077.htm
http://en.wikipedia.org/wiki/2008_Mexico_City_plane_crash
http://www.bloomberg.com/apps/news?pid=20601086&sid=al.fglwKaupA
http://news.xinhuanet.com/english/2008-11/08/content_10326077.htm
http://en.wikipedia.org/wiki/2008_Mexico_City_plane_crash
http://www.bloomberg.com/apps/news?pid=20601086&sid=al.fglwKaupA
Saturday, November 15, 2008
Dog Flourishes On Two Legs
Meet Faith, one of the world's most impressive dogs. It's rated G, and takes about two minutes. “The greatness of a nation and its moral progress can be judged by the way its animals are treated." - Mahatma Gandhi
Super Powers
Here is a funny youtube video of a couple trying to spice up their sex life. It's PG-13, and takes about 6 minutes.
Wednesday, November 12, 2008
Hear No Evil; See No Evil
Here's proof government causes major distortions in the marketplace, and they don't listen to the responses.
A story published on Yahoo News November 12th, entitled “Stocks lower as Paulson unveils change in bailout,” states:
"...the government's $700 billion financial rescue package won't
purchase troubled assets from banks as originally planned.
Paulson also announced a new goal for the program to support
financial markets which supply consumer credit in such areas
as credit card debt, auto loans and student loans. He said,
'with a stronger capital base, our banks will be more confident'
to support economic activity."
Later in the same article, is the news of widespread reaction.
“Morgan Stanley outlined plans to cut 10 percent of staff... The layoffs are in addition to a 10 percent cut made earlier this year.”
“Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's workforce.”
“In midday trading, the DOW shed 278.21, or 3.2 percent...”
“...Standard & Poor's 500 index dropped 29.34 points, or 3.26 percent...”
“the NASDAQ composite index stumbled 47.86 points, or 3.03 percent...”
“The Russell index of smaller companies fell 17.00, or 3.52 percent...”
“Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange.”
An article published mere hours later says it all: "Stocks skid on news gov't won't buy banks' assets."
So my question is: exactly what part of “more confident” was Mr. Paulson talking about? The banks? Obviously not. The markets? Nope. Consumer spending? No. That's down also. So they must have their fingers in their ears, and hands over their eyes, because the signals that stampede by the rest of us are incredibly obvious, but seem to pass by Washington without so much as a pitter-patter sound. And they're paying no attention whatever to the trillions of dollars in private investments in the stock markets, which make up college monies, retirement savings, vacations, etc., all drying up and blowing away every time they make one of these announcements. And to make matters worse, they're going to expand the program. No surprise there. In this one Yahoo News article, we have perfect examples of the three things gov't does best: lie, grow, and waste money. I said it elsewhere on this page; bureaucrats need to be beaten over their heads with reality. Let us not forget that this all happened in less than 24 hours. So thanks, Mr. Paulson, for all of your "help." With friends like you, who needs enemies?
I would like to make a prediction. This bailout program will not work. If there is any response at all, it will be marginal at best. When this failure becomes apparent to the power players in Washington, they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can. They'll then tell the people, “This time it will work.”
http://biz.yahoo.com/ap/081112/wall_street.html
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown
http://biz.yahoo.com/ap/081112/wall_street.html
A story published on Yahoo News November 12th, entitled “Stocks lower as Paulson unveils change in bailout,” states:
"...the government's $700 billion financial rescue package won't
purchase troubled assets from banks as originally planned.
Paulson also announced a new goal for the program to support
financial markets which supply consumer credit in such areas
as credit card debt, auto loans and student loans. He said,
'with a stronger capital base, our banks will be more confident'
to support economic activity."
Later in the same article, is the news of widespread reaction.
“Morgan Stanley outlined plans to cut 10 percent of staff... The layoffs are in addition to a 10 percent cut made earlier this year.”
“Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's workforce.”
“In midday trading, the DOW shed 278.21, or 3.2 percent...”
“...Standard & Poor's 500 index dropped 29.34 points, or 3.26 percent...”
“the NASDAQ composite index stumbled 47.86 points, or 3.03 percent...”
“The Russell index of smaller companies fell 17.00, or 3.52 percent...”
“Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange.”
An article published mere hours later says it all: "Stocks skid on news gov't won't buy banks' assets."
So my question is: exactly what part of “more confident” was Mr. Paulson talking about? The banks? Obviously not. The markets? Nope. Consumer spending? No. That's down also. So they must have their fingers in their ears, and hands over their eyes, because the signals that stampede by the rest of us are incredibly obvious, but seem to pass by Washington without so much as a pitter-patter sound. And they're paying no attention whatever to the trillions of dollars in private investments in the stock markets, which make up college monies, retirement savings, vacations, etc., all drying up and blowing away every time they make one of these announcements. And to make matters worse, they're going to expand the program. No surprise there. In this one Yahoo News article, we have perfect examples of the three things gov't does best: lie, grow, and waste money. I said it elsewhere on this page; bureaucrats need to be beaten over their heads with reality. Let us not forget that this all happened in less than 24 hours. So thanks, Mr. Paulson, for all of your "help." With friends like you, who needs enemies?
I would like to make a prediction. This bailout program will not work. If there is any response at all, it will be marginal at best. When this failure becomes apparent to the power players in Washington, they will do two things: lobby for more money, and further contort their bailout package to make it look like they're doing everything they can. They'll then tell the people, “This time it will work.”
http://biz.yahoo.com/ap/081112/wall_street.html
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown
http://biz.yahoo.com/ap/081112/wall_street.html
Tuesday, November 11, 2008
Is There a Real "War On The Middle Class?"
If you've been listening to our politicians and pundits lately, you might actually think that the middle class has it harder today than ever before. Is it true? Nope. It's H-Y-P-E. Here are the numbers.
Sunday, November 9, 2008
Mark's Top 30 Watch List For Economic Armageddon
Here are the events that I'm personally looking for to tell me when a very real economic catastrophe is near. I call it the “change we need.” Ha. I crack me up. Some of these have been done in the U.S. already, and I've listed which ones as "Done" at the beginning of each entry. I've also listed which ones have not yet been done, but which I expect will be done eventually. Some others, just for effect, I've listed with an asterisk (*) at the end of the entry to denote which ones were attempted by Nazi Germany prior to WWII. I'm calling this list the “change we need” in reference to Barack Obama's campaign slogan, because I believe that this “change” will bring an eventual swing in the political pendulum back to responsible, non-interventionist, small government. I've tried to list them in order of what I think resembles least to most important. Take note of how many I've listed as "Partially," or "Not yet." I believe that once this list is fulfilled in its entirety, our economic doom will be at hand. And the real change that follows will be much better for all of us.
30. (Done) Intervene when a hyper-inflated marketplace shows signs of correction. Do this regularly, and tell everyone it's for necessary “calm” and “control.” *
29. (Done) Raise personal income and corporate taxes to new highs. *
28. (Done) Encourage economists to publicly state that lowering taxes doesn't necessarily raise gov't revenues.
27. (Done) Protect inefficient businesses from failure by tax, tariff, cap-and-trade, anti-dumping laws and subsidies, among other things. Then tell everyone "It's for your own good." *
26. (Done) Bail out inefficient businesses when they fail in spite of your efforts, by confiscating as much money as they need. Whitewash all failures with propaganda. Then rinse and repeat. Then tell everyone "It's for your own good." *
25. (Done) Make a laundry list of government restrictions and mandates for all businesses to pay, including health care, minimum wages, environmental restrictions, multiple licensure and operational safety regulations, among other things. Then tell everyone "It's for your own good."
24. (Done) Have prominent economists decry capitalism as either dead, on its way out for something better (Marxism), or in need of a great deal of restraint. *
23. (Done) Condemn competition as uncivilized, and force cooperation. * (Communism)
22. (Done) Tell the voters that government “creates” jobs. *
21. (Done) Tell the people the only thing needed to correct all of society's ills is just a little more government. Paint the government as a new messiah. *
20. (Done) Consider the desire for profit to be “greedy.” *
19. (Done) Let the media elect whichever politicians they desire most. *
18. (Done) Engage in costly and multiple military conflicts that ultimately no one has any specific need for, and are most likely to lead to extraordinarily expensive failures. *
17. (Done) Take away cheap labor. *
16. (Done) Allow special economic interests to manipulate lawmakers.
15. (Done) Allow lawmakers to stay in office no matter how detached they become, or how dissatisfied the electorate becomes. *
14. (Done) Guarantee all tax monies to those same lawmakers, despite the electorate's dissatisfaction. *
13. (Done) Tell the taxpayers that government "needs," or "deserves" their tax dollars.
12. (Done) Consider any monetary policy that might have an effect on the economy of less than half a billion dollars to be "chump change."
11. (Done) Force the biggest companies in the nation to forgo profit in favor of the political whims of politicians. * (Corporatism, or Mixed Economy)
10. (Done) Print as much money as you think you need. *
9. (Done) Punish businesses when you feel you can no longer trust them, or when you personally consider them “too big.” *
8. (Done) Publicly redistribute privately earned wealth, involuntarily making each neighbor responsible for all the ills of every other neighbor. Then tell everyone "It's for your own good." * (Socialism)
7. (Done) Think that a governing body, consisting of a small number of individuals, that cannot voluntarily control its own spending, will somehow be able to control the ins and outs of a multi-trillion dollar economy that consists of billions of individuals located all over the face of the earth. Pursue this idea, despite the fact that it has been proven throughout history to be a bad idea that fails every time it's tried. Then tell everyone "This time it will work." *
6. (Done) Run up massive debts and deficits, the depth and breadth of which have absolutely no comparison in human history, and consider them normal. *
5. (Done) Arbitrarily manipulate interest rates. *
4. (Partially done) Nationalize the banking industry. *
3. (Done) Let the government consume 40 percent or more of the country's GDP. * (federal tax rate is currently over 37 percent) (Promised 8.5 Tril. on Dec. 1st, for bailout - equal to 60% of GDP for 2007)
2. (Not yet) Nationalize The Federal Reserve.
1. (Not yet) Call for a “State of Emergency.” *
http://en.wikipedia.org/wiki/Corporatism
http://en.wikipedia.org/wiki/Mixed_economy
http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
http://www.bizjournals.com/sacramento/stories/2008/12/01/daily3.html
http://articles.moneycentral.msn.com/Taxes/Advice/YourRealTaxRate40.aspx
30. (Done) Intervene when a hyper-inflated marketplace shows signs of correction. Do this regularly, and tell everyone it's for necessary “calm” and “control.” *
29. (Done) Raise personal income and corporate taxes to new highs. *
28. (Done) Encourage economists to publicly state that lowering taxes doesn't necessarily raise gov't revenues.
27. (Done) Protect inefficient businesses from failure by tax, tariff, cap-and-trade, anti-dumping laws and subsidies, among other things. Then tell everyone "It's for your own good." *
26. (Done) Bail out inefficient businesses when they fail in spite of your efforts, by confiscating as much money as they need. Whitewash all failures with propaganda. Then rinse and repeat. Then tell everyone "It's for your own good." *
25. (Done) Make a laundry list of government restrictions and mandates for all businesses to pay, including health care, minimum wages, environmental restrictions, multiple licensure and operational safety regulations, among other things. Then tell everyone "It's for your own good."
24. (Done) Have prominent economists decry capitalism as either dead, on its way out for something better (Marxism), or in need of a great deal of restraint. *
23. (Done) Condemn competition as uncivilized, and force cooperation. * (Communism)
22. (Done) Tell the voters that government “creates” jobs. *
21. (Done) Tell the people the only thing needed to correct all of society's ills is just a little more government. Paint the government as a new messiah. *
20. (Done) Consider the desire for profit to be “greedy.” *
19. (Done) Let the media elect whichever politicians they desire most. *
18. (Done) Engage in costly and multiple military conflicts that ultimately no one has any specific need for, and are most likely to lead to extraordinarily expensive failures. *
17. (Done) Take away cheap labor. *
16. (Done) Allow special economic interests to manipulate lawmakers.
15. (Done) Allow lawmakers to stay in office no matter how detached they become, or how dissatisfied the electorate becomes. *
14. (Done) Guarantee all tax monies to those same lawmakers, despite the electorate's dissatisfaction. *
13. (Done) Tell the taxpayers that government "needs," or "deserves" their tax dollars.
12. (Done) Consider any monetary policy that might have an effect on the economy of less than half a billion dollars to be "chump change."
11. (Done) Force the biggest companies in the nation to forgo profit in favor of the political whims of politicians. * (Corporatism, or Mixed Economy)
10. (Done) Print as much money as you think you need. *
9. (Done) Punish businesses when you feel you can no longer trust them, or when you personally consider them “too big.” *
8. (Done) Publicly redistribute privately earned wealth, involuntarily making each neighbor responsible for all the ills of every other neighbor. Then tell everyone "It's for your own good." * (Socialism)
7. (Done) Think that a governing body, consisting of a small number of individuals, that cannot voluntarily control its own spending, will somehow be able to control the ins and outs of a multi-trillion dollar economy that consists of billions of individuals located all over the face of the earth. Pursue this idea, despite the fact that it has been proven throughout history to be a bad idea that fails every time it's tried. Then tell everyone "This time it will work." *
6. (Done) Run up massive debts and deficits, the depth and breadth of which have absolutely no comparison in human history, and consider them normal. *
5. (Done) Arbitrarily manipulate interest rates. *
4. (Partially done) Nationalize the banking industry. *
3. (Done) Let the government consume 40 percent or more of the country's GDP. * (federal tax rate is currently over 37 percent) (Promised 8.5 Tril. on Dec. 1st, for bailout - equal to 60% of GDP for 2007)
2. (Not yet) Nationalize The Federal Reserve.
1. (Not yet) Call for a “State of Emergency.” *
http://en.wikipedia.org/wiki/Corporatism
http://en.wikipedia.org/wiki/Mixed_economy
http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
http://www.bizjournals.com/sacramento/stories/2008/12/01/daily3.html
http://articles.moneycentral.msn.com/Taxes/Advice/YourRealTaxRate40.aspx
Friday, November 7, 2008
Red vs. Blue Financial Crisis PSA: Rock Bottom
Here is the funniest summary I've seen of our current financial woes. It takes about three minutes.
Wednesday, November 5, 2008
Obama Wins; and loses
Congratulations to President Elect Barack Obama. In winning last night's election, you have inherited:
The largest government debts ever seen.
An economy sinking into recession.
Rising unemployment.
Two unpopular wars, in which if we stay in country you will be breaking your campaign promise. But if we leave, the countries will almost certainly devolve into civil war and create more anit-american sentiment.
And the worst political divisions this country has ever seen.
Good luck, sir. You're going to need it.
The largest government debts ever seen.
An economy sinking into recession.
Rising unemployment.
Two unpopular wars, in which if we stay in country you will be breaking your campaign promise. But if we leave, the countries will almost certainly devolve into civil war and create more anit-american sentiment.
And the worst political divisions this country has ever seen.
Good luck, sir. You're going to need it.
Tuesday, November 4, 2008
A Trillion Dollar Health Care Lie
Crisis (kri sis), n., pl. -ses (sez) 1. a turning point, as in a sequence of events, for better or for worse. 2. a condition of instability, as in international relations, that leads to a decisive change. 3. a personal tragedy, emotional upheaval, or the like. 4. a. the point in the course of a serious disease at witch a decisive change occurs, leading either to recovery or to death. b. the change itself. 5. the point, as in a play, at witch the antagonistic elements confront each other. - Webster's Dictionary, 1990.
Intro:
You may not believe me when I say this, but... There is no such thing as a “health care insurance crisis.” It doesn't exist. It's a figment of the media's collectivist imagination.
Often I come across articles that seem to screech about how many people in the U.S. are foregoing health care insurance, and how dangerous and unfair this is. But this “crisis,” first, implies the notion that we are living with a lack of health care insurance. And second, at least in today's political climate, also implies that government needs to do something about it immediately, or there might be no relief from such a critical state. None of this is true.
First things first. Exactly how many people in the U.S. are uninsured? Official estimates by The National Center for Health Statistics states that “...55.3 million persons of all ages were uninsured for at least part of the year...” in 2008, up from the 45-48 million number that was being quoted just a couple of years ago.
Given the extraordinarily high price of gas over the summer, and the state of the economy today, the increase shouldn't surprise anyone.
Second, who makes up the bulk of these uninsured people? According to the U.S. Census Bureau, at least 17 million of the 55.3 million person total earn over 50,000 dollars per year. Nine million of those earn over 75,000 dollars per year. In one analyst's observation, health care coverage just isn't a “good buy” for them. With the money they make, they can choose their priorities, and apparently health insurance is not on their lists. These people, who for whatever reason, have chosen not to purchase this kind of product, clearly could afford it. They make up just over 30 percent of the total uninsured in this number. So when the total number of uninsured is cited, without bringing this statistic to light, the argument being made is disingenuous.
The real numerical lowdown:
In total, over 18 million of the uninsured are between the ages of 18 and 34, and choose to spend four times more on entertainment than on what it would cost them to obtain health care coverage. Fourteen million are eligible for government health care programs, like Medicaid, but choose to stay out. Twelve million (now more like 14 mil.) are “undocumented workers,” who don't buy health insurance, but, like poor legal citizens, ultimately can still get care, because federal laws demand that hospitals give care to those in need.
So how many are really uninsured? Today, about 11.3 million. Does roughly 3% of the population of the country going without health insurance sound like a “crisis”? Does it sound like “ a condition of instability...that leads to a decisive change.”? Not really. The legal system forces hospitals to care for those who are sick or injured, despite their ability or willingness to pay. They then write off the costs, or a portion of them, which is then passed on to you, the taxpayer. Or the costs are passed on through creative cost shifting (a.k.a. you), and/or higher insurance premiums.
This is insulting, but not enough to turn our health care system into a single payer system. The arguments here are that since the taxpayer is footing the bill anyway, why not just make the whole system, or the majority of it, controlled by government? Then they can decide how, when and in what quantity to use our tax dollars, so costs can be controlled. (I scared myself just writing that last sentence.) I'll dismiss, for now, the fact that the medical industry is arguably the most heavily regulated industry in America. The second part of the gov't controlled argument, is that other countries have similar systems. That prices, care quality, care distribution, taxes and all the rest are kept comfortably in check, while individuals reap the financial rewards of good ol' big brother's all-encompassing arms. If only such simpleminded market manipulations were true. Other countries have tried this. And failed. Many of them who thought that restrictive regulation could be a panacea are actively trying to disengage from a gov't controlled medical industry in its entirety. They've publicly learned a very hard lesson that economists summarize with the phrase "That free lunch is going to cost you."
The Crux of the issue:
But the trillion dollar question is: Is there a lack of health care insurance in the U.S.? No. The people of the United States spent 2.2 trillion dollars on health care in 2007. So the market exists. How about affordable insurance? Now that's a great question. Health care costs have risen roughly 98-100 percent in just the last 10 years. This is a huge problem. But what is the cause? According to many studies, regulation.
What the Cato Institute says specifically in their study is for every two dollars we spend on regulation, we get one dollar of medical benefit. Clearly, the laws of economics are failing to manifest in the medical establishment. According to the SBA, small businesses spend about 1-3, and no more than 5 percent of their revenues on regulatory costs. Large businesses spend less. If this doesn't give weight to the argument of over regulation, nothing will.
In addition, there is another, glaring indicator that a game is afoot in your doctor's office. But it's not your doctor's fault. S/he is just complying with the rules, and working within the market they're given. Here's my personal observation. When you walk into a clothing store, what do you see? Product, cash register, sales person, price tags. When you walk into a fast food restaurant, what do you see? Front desk, cash register, sales person, prices up high. Now walk into your doctor's office. What do you see? Any prices? None. Never. Why? Because you don't pay the price. Your insurance company does. And they can do it, much to their pleasure, behind closed doors, where you can't hear them negotiate.
We don't have a market for health care services in America. There simply isn't one. What we have is a market for health care insurance. All of it manipulated by our government, and protected by insurance special interests, while you get to foot the bill. You're being force fed the story of a “health care insurance crisis,” from the media, and one hand of big brother. All of this goes on while big bro's other hand takes the massive dollars you ultimately don't need to pay in premiums, from the insurance lobby, so they can legally solidify themselves into your lives even more.
There is no “health care insurance crisis.” But there is a crisis. There's no market at all for ordinary citizens to know up front what 10 stitches will cost; what several nights in intensive care will cost; what setting a broken bone will cost. At least not without all of the two dollars of reg's for one dollar of benefit distortions. The best way to get relief from the “critical state” that I talked about a moment ago is to demand less regulation, fewer special interests, and most importantly, total control over your medical care. The real “health care crisis” in our country is that you are not in control.
http://freemarketcure.com/
http://freemarketcure.com/blog/?p=317
http://cdhc.ncpa.org/
http://www.cato.org/pubs/pas/pa527.pdf
http://en.wikipedia.org/wiki/Health_care_in_the_United_States#Healthcare_regulatory_costs
http://www.sba.gov/advo/research/rs186.pdf
Intro:
You may not believe me when I say this, but... There is no such thing as a “health care insurance crisis.” It doesn't exist. It's a figment of the media's collectivist imagination.
Often I come across articles that seem to screech about how many people in the U.S. are foregoing health care insurance, and how dangerous and unfair this is. But this “crisis,” first, implies the notion that we are living with a lack of health care insurance. And second, at least in today's political climate, also implies that government needs to do something about it immediately, or there might be no relief from such a critical state. None of this is true.
First things first. Exactly how many people in the U.S. are uninsured? Official estimates by The National Center for Health Statistics states that “...55.3 million persons of all ages were uninsured for at least part of the year...” in 2008, up from the 45-48 million number that was being quoted just a couple of years ago.
Given the extraordinarily high price of gas over the summer, and the state of the economy today, the increase shouldn't surprise anyone.
Second, who makes up the bulk of these uninsured people? According to the U.S. Census Bureau, at least 17 million of the 55.3 million person total earn over 50,000 dollars per year. Nine million of those earn over 75,000 dollars per year. In one analyst's observation, health care coverage just isn't a “good buy” for them. With the money they make, they can choose their priorities, and apparently health insurance is not on their lists. These people, who for whatever reason, have chosen not to purchase this kind of product, clearly could afford it. They make up just over 30 percent of the total uninsured in this number. So when the total number of uninsured is cited, without bringing this statistic to light, the argument being made is disingenuous.
The real numerical lowdown:
In total, over 18 million of the uninsured are between the ages of 18 and 34, and choose to spend four times more on entertainment than on what it would cost them to obtain health care coverage. Fourteen million are eligible for government health care programs, like Medicaid, but choose to stay out. Twelve million (now more like 14 mil.) are “undocumented workers,” who don't buy health insurance, but, like poor legal citizens, ultimately can still get care, because federal laws demand that hospitals give care to those in need.
So how many are really uninsured? Today, about 11.3 million. Does roughly 3% of the population of the country going without health insurance sound like a “crisis”? Does it sound like “ a condition of instability...that leads to a decisive change.”? Not really. The legal system forces hospitals to care for those who are sick or injured, despite their ability or willingness to pay. They then write off the costs, or a portion of them, which is then passed on to you, the taxpayer. Or the costs are passed on through creative cost shifting (a.k.a. you), and/or higher insurance premiums.
This is insulting, but not enough to turn our health care system into a single payer system. The arguments here are that since the taxpayer is footing the bill anyway, why not just make the whole system, or the majority of it, controlled by government? Then they can decide how, when and in what quantity to use our tax dollars, so costs can be controlled. (I scared myself just writing that last sentence.) I'll dismiss, for now, the fact that the medical industry is arguably the most heavily regulated industry in America. The second part of the gov't controlled argument, is that other countries have similar systems. That prices, care quality, care distribution, taxes and all the rest are kept comfortably in check, while individuals reap the financial rewards of good ol' big brother's all-encompassing arms. If only such simpleminded market manipulations were true. Other countries have tried this. And failed. Many of them who thought that restrictive regulation could be a panacea are actively trying to disengage from a gov't controlled medical industry in its entirety. They've publicly learned a very hard lesson that economists summarize with the phrase "That free lunch is going to cost you."
The Crux of the issue:
But the trillion dollar question is: Is there a lack of health care insurance in the U.S.? No. The people of the United States spent 2.2 trillion dollars on health care in 2007. So the market exists. How about affordable insurance? Now that's a great question. Health care costs have risen roughly 98-100 percent in just the last 10 years. This is a huge problem. But what is the cause? According to many studies, regulation.
What the Cato Institute says specifically in their study is for every two dollars we spend on regulation, we get one dollar of medical benefit. Clearly, the laws of economics are failing to manifest in the medical establishment. According to the SBA, small businesses spend about 1-3, and no more than 5 percent of their revenues on regulatory costs. Large businesses spend less. If this doesn't give weight to the argument of over regulation, nothing will.
In addition, there is another, glaring indicator that a game is afoot in your doctor's office. But it's not your doctor's fault. S/he is just complying with the rules, and working within the market they're given. Here's my personal observation. When you walk into a clothing store, what do you see? Product, cash register, sales person, price tags. When you walk into a fast food restaurant, what do you see? Front desk, cash register, sales person, prices up high. Now walk into your doctor's office. What do you see? Any prices? None. Never. Why? Because you don't pay the price. Your insurance company does. And they can do it, much to their pleasure, behind closed doors, where you can't hear them negotiate.
We don't have a market for health care services in America. There simply isn't one. What we have is a market for health care insurance. All of it manipulated by our government, and protected by insurance special interests, while you get to foot the bill. You're being force fed the story of a “health care insurance crisis,” from the media, and one hand of big brother. All of this goes on while big bro's other hand takes the massive dollars you ultimately don't need to pay in premiums, from the insurance lobby, so they can legally solidify themselves into your lives even more.
There is no “health care insurance crisis.” But there is a crisis. There's no market at all for ordinary citizens to know up front what 10 stitches will cost; what several nights in intensive care will cost; what setting a broken bone will cost. At least not without all of the two dollars of reg's for one dollar of benefit distortions. The best way to get relief from the “critical state” that I talked about a moment ago is to demand less regulation, fewer special interests, and most importantly, total control over your medical care. The real “health care crisis” in our country is that you are not in control.
http://freemarketcure.com/
http://freemarketcure.com/blog/?p=317
http://cdhc.ncpa.org/
http://www.cato.org/pubs/pas/pa527.pdf
http://en.wikipedia.org/wiki/Health_care_in_the_United_States#Healthcare_regulatory_costs
http://www.sba.gov/advo/research/rs186.pdf
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