Tuesday, September 25, 2012

Jefferson quote on the function of government

Jefferson's quote
A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.
 
A liberal friend's commentary
A decent general concept but rather simplistic, don't you think?  Surely Jefferson didn't think the US could conduct foreign affairs, maintain a military, provide for the destitute, educate the young, promote public health etc. without taking at least SOME of the laborer's earnings.  The only points at issue are 1. how much? and 2. for what purposes?
 
My response
 
I think it's interesting that the Jeffersonian democrats have now switched places with the Hamiltonian federalists. However not even Hamilton would ever dream of the role played by our present national government. This is not an argument that the government should not exist, but exactly your point -- how much and for what purposes. Military and foreign affairs? -- well supported in the constitution and the Federalist papers. Education and charity for the poor --- not at all the job of the federal government. Public Health - maybe, but we're doing a lousy job of it. (And I'm not talking about medical care which should not at all be a federal responsibility)
 
The liberal idea it seems to me is that the founder's ideas were quaint but now outdated because of technological advances. I think just the opposite. Today's high tech will seem ridiculously primitive 100 years from now. But the concepts of the founders about how human society should be organized are enduring and I would submit are more important than ever in our media-immersed world.
 
The general concept is that we are free individuals who can decide what's best for ourselves as long as we do not interfere with the rights of another. Government certainly serves to be the insurer of individual rights against the majority, enforce contracts, resolve disputes and similar functions. The states agreed that there are some functions best done as a united nation but with specific limitations which is where the "wise and frugal" comment comes in. 
 
After all, what is the government except politicians and bureaucrats who are making their living through "contributions" from the citizens. Unless these "contributions" result in "investments" that give us better returns collectively than we can do for ourselves individually we are wasting resources that we could better use for our own purposes. And after all, it is our work and resources that are being used.
 
If the politicians (and bureaucrats) use our resources simply to garner favor with constituents who will continue them in their positions, then we have a perversion of the original concepts of our union's foundation. I believe that clearly we have long passed that point. With all this in mind I believe that Jefferson's point is absolutely right on the mark and is profound rather than simplistic. Sometimes simple concepts, like (e=mc2),  have unimaginably explosive meaning. It has meaning for our lives and the lives of our children and grandchildren.

Friday, September 21, 2012

Government handouts

All individuals exert their labor for goals and will continue their labor only so far as the goal is not met. This is the real pernicious result of the progressively increasing government handout. As the handouts increase more and more individuals are drawn into indolence. Everyone would eventually go on welfare if the payout level were high enough. But government handouts depend on the wealth of a society and that wealth is due to the labors of its individual members.

Wednesday, April 25, 2012

Friday, April 6, 2012



Comment on NEJM Article on Constitutionality of ACA

Fortunately in the United States we remain a society of laws rather than of men. The power of the federal government over the states and individual citizens is limited by our written law even if the men in the temporary majority feel that they have a wonderful idea that will be good for all. The Supreme Court, for better or for worse, is the mechanism in our written law for deciding where those limitations lie. The members of the Supreme Court are individuals of varying temperment, unelected but selected by a political process. This is our system.
The Obama administration and the Democrat party could have carried out their idea by levying a tax and purchasing "insurance" for those who did not have it. That clearly would have been constitutional and from the economic standpoint would have given the same result as the ACA. I believe this approach would have been their preference but was not considered politically feasable. The constitutionality question was a calculated risk which they took as the best available option politically.

On the payment issue: medical insurance is not insurance - it is a pre-payment scheme. It is the worst of all ways to pay for medical care.



Tuesday, March 27, 2012

letter to annals - constitutionality of ACA

Annals of Internal Medicine published an article by 2 Harvard economists claiming that the ACA is constitutional. The following was my response.


Drs Gruber and Cutler contend that the ACA individual mandate is essential for the integrity of the medical payment system which they favor but this is hardly the constitutional point. These Harvard economists should instead attend to whether the ACA comports with basic economic principles (as outlined in the textbook of economics written by their own Harvard colleague (1)) and leave the legal reasoning to others.
 Medical insurance is not insurance at all, but is a high priced pre- payment system. It is by far the worst way to pay for anything. It relieves the patient and physician from the trouble of making appropriate price motivated trade-offs and substitutions. The system requires large administrative cost for coding, billing and documentation, none of this with medical value. Inherent in all this is a large amount of wasted resources which could be directed toward useful alternatives. Price fixing produces waste, decrease in quality and loss of competitive forces that improve services and bring prices down.
It seems incongruous to contend that a citizenry who already pay for this system indirectly cannot pay for it more directly. Small items like lab tests and doctor visits and even small procedures are affordable out of pocket for the average individual and there would be less waste and lower cost if paid this way. Bona fide lower cost insurance that belongs to the individual could pay for high priced unexpected medical events.
Granted that persons with low income or serious chronic illness need society's help but total government command and control is surely not the best solution.
The ACA mandates an expansion of our present wasteful pre-payment price-fixed system to every individual. It forces free citizens to waste the fruits of their labor for the sake of a collectivist experiment. It will almost certainly raise the cost and reduce the availability of medical services for everyone.

1. Principles of Economics 2011 Edition. Chapter 1. N. Gregory Mankiw.


Monday, March 26, 2012

NUTRICARE

NUTRICARE -- A MODERN FAIRY TALE
(Published in 1986)

Once upon a time, in the country of Cornucopia, a longstanding dream of the progressive leaders of the people finally came true.  They had made large gains in the past but after that it had seemed that further progress had been stifled until the present victory.  In past years they had decried the scandalous plight of the Elders in this most bountiful country in history.  These unfortunate Elders, who had worked all their lives but in the end had little to show for it, had long suffered the ignominious  fate of having to fall back on the generosity of their families when they could work no longer.  And so the progressive leaders,  years before,  had convinced the people that the government could do the job better and more fairly.  The benefits were obvious.  The Elders had their independence, the children were freed from their  oftentimes burdensome obligations and the overflowing wealth of the country was put to good use.  A few grumbled about creeping socialism but the great majority saw which side their bread was buttered on and so Socicare had become the law of the land.

But this is an old story.  Although the Elders became more numerous and  the wealth of the country did not seem quite so unlimited anymore, Socicare was a way of life that none who were not receiving its benefits could remember being without.

What the progressive leaders were excited about now was the passage of Nutricare  after years of struggle.  For an Elder who had to live on Socicare alone, life, although proudly independent, was meager indeed and particularly at mealtime.  In their former dependant days they had shared the family meal, but now, alone in their small apartments, they had little appetite for cooking and mostly ate in cheap restaurants when they could afford it, and often in charity kitchens when they couldn't.  There were even the scandalous stories broadcast on  the evening news of Elders existing on cat food.  The progressive  leaders argued that the Elders who worked so many years to build the wealth of  this country had a right to eat in the same restaurants as everyone else, and surely there could be no citizen of Cornucopia, which fed the world with this bounty, who did not eat steak or lobster once in awhile.  Now the government would see to it than any Elder could eat his meals in any qualified restaurant.  Like Socicare, this was not to be charity; every Elder was obliged to participate, and all Elders, rich or poor, would be treated alike.

This time the opposition had been a little tougher.  The restauranteurs and waiters were an independent lot who liked running their own establishments and didn't like the idea of government interference.  They claimed that no Elders were truly going hungry, and that many low cost and charitable restaurants existed where waiters, especially apprentices, served Elders without expecting tips.  Opposition melted away however, when the government promised usual and customary menu prices and tips.  Everyone knew it was a losing battle for who was going to vote down a free lunch.

From the beginning Nutricare's success exceeded even the expectations of the progressive leaders.  Charity kitchens closed  down in droves  almost overnight as the Elders flocked  to nice, comfortable high class restaurants.  Incomes of restauranteurs and waiters catapulted due to large numbers of new customers who paid  the full fare.  Tables became scarce with long waiting periods.  To satisfy the new needs, much of the new profits, along with large supplements of government funds went into programs for building new restaurants and adding big additions to old ones.  New training schools for waiters were built and the apprentices now trained in good restaurants for a reasonable share of the tips.

The new restaurants were of highest quality as required by government specifications.  Teams of official inspectors visited regularly causing great flurries of preparation.  Committees of waiters were required for matters such as nutritional content and kitchen safety.  And most important of all, the food was magnifique.  The number of new utensils  and appliances in the kitchen knew no bounds, with new models replacing outmoded ones as fast as they could be built.  Chefs, cooks  and assistants of every type filled the kitchen.  Astounding advances in gastronomy led to demands and expectations for ever more.
                                                                                                                                                                                     

The Nutricare payment system was something new for the restauranteurs and waiters.  Formerly prices were set according to what the competition would allow, but under Nutricare customers cared little about the cost and demanded nothing but the best in large amounts.  Payments for services were increased periodically but only as long as prices were increased accordingly.  Those who failed to make timely increases were penalized by falling far behind, while those who raised  their prices highest and fastest  were rewarded by increased payments.

Who would have ever thought that a plan so well intentioned and so well thought out could go wrong, and yet as time went on  a disturbing problem began to appear.  Grumbling  began to be heard that the boundless plenty of Cornucopia was beginning to show limits, largely because the cost of eating, once almost laughably small, was now rising through the roof.  The progressive leaders angrily pointed out that the greedy restauranteurs  and waiters were ruining the system by their excessive prices and by inviting the customers to patronize the restaurants unnecessarily, and they set about to make  things right.

No longer would there be usual and customary menu prices and tips.  All menus would now be fixed price.  However, gourmet cuisine must continue to be served since this had now become the standard fare.  Restauranteurs understood that in order to continue to make ends meet this meant that tables were to be turned over faster and they went  about it with a vengeance.  Chefs and waiters were made to understand that time was of the essence.  No sooner was the last bite  of one elegant course eaten  than the next was served up immediately.  There would be no more lingering over that last cup of coffee, but the dishes were cleared from a table and the customer was ushered out, not quite sure if he was really finished.

Waiters and restauranteurs were sternly informed that their former laxness would no longer be tolerated and that they were not to serve any customer who was not truly hungry.  No one was to be served in a restaurant who had eaten within the last 5 hours.  There would be no more dropping in  from a day of shopping for rest and a snack.  Snacks were to be taken at sidewalk stands which were much less expensive.  Checks were scrutinized carefully for any evidence that the customer had not required a full meal and waiters were required to sign a statement on a check testifying that they had not written in any extra items.

In time, the increase in cost of eating was reduced, but still there was much dissatisfaction.  The Elders were unhappy because they didn't like being rushed through their meal and put out before they were satisfied.  Moreover, they didn't understand why, with so many empty tables, they couldn't have a snack indoors, sitting down.  Elders eat slowly, they argued, and they need more rest.  They remembered former days when one could sit all afternoon in a cheap restaurant, talking with friends, and nobody seemed to mind.

The restauranteurs and waiters were unhappy.  Their business had always required hard work but had given them security and independence in return.  Now the work remained, but the rest seemed to be fading away.  They had always considered serving the customer a nice meal to be a wonderful way of making a living, but now the joy was gone, replaced by criticism from all sides.

But most of all the progressive  leaders of Cornucopia were unhappy.  Their efforts to go down in history as benefactors of the people were going astray.  They knew that Nutricare would survive and prosper only if they took  firm control of the food service system.  They knew that, in the end, the only true solution to their problem was Pan Nutricare--for all.

Sunday, March 25, 2012

A Free Market Critique of Medicare

What exactly is the fiscal problem with Medicare? It has an almost complete monopoly over both eligible beneficiaries and service providers. Every medical procedure and device is coded and priced and must be justified by documentation. Yet the more closely the system has been controlled over the years, the more costly it has become. Check the link for the answer.  


https://skydrive.live.com/redir.aspx?cid=32f0b2d876214cbf&resid=32F0B2D876214CBF!145&parid=root

Are Humans Just Animals?

I know a lot about biology. I am familiar with taxonomy and comparative anatomy. Evolutionary theory sounds very reasonable in general especially when one sees the progressive relationship of various branches of the animal kingdom and when one studies fossil history. But some things about the concept of humans being simply just another animal with a bigger brain, a development in the chain of primates, puzzle me.

Humans protect themselves from the elements by devising clothing and constructing shelters. Are those developments simply adaptations to new environments? But don't all humans adapt some sort of clothing and construct some sort of shelters. Where is the perfect environment for humans that allow them to live without clothing or shelter like other animals?

And if humans adapt to new environments by making clothing and shelter why don't the smarter animals do the same, at least on a primitive level. If hominids adapted to their environment by these means where are the great apes that do at least a little bit of the same to adapt to a new environment where it might be safer or where more food might be available. Why are animals so enslaved to their inherited behavior that they never seem to want to make themselves a little warmer or a little more protected.

And why do humans cook their food? Is is simply an evolutionary adaptation to availability of different types of food in different environments? But other animals eat their meat warm from the kill and their grains right off the husk. Other animals are omnivorous but don't need food preparation. Certainly other smarter animals after millions of years have been exposed to meat cooked by accidental fires and yet they don't try to reproduce the finding.

In general why is human behavior so variable while animals keep doing the same thing over and over from one generation to another for millions of years.

There are many other similar questions but these suffice. Anybody have answers?