Who’s nuts the conspiracy theorists or the conspirators?

Posted by Jason | Posted in Government, History | Posted on 02-01-2013


Yet another secret of the US government’s evil doings has emerged. Why do people constantly think conspiracy theories are the musings of wackos, when it’s proven time and time again, the government has no qualms about destroying human life by the thousands and millions.

The United States and New Zealand conducted secret tests of a “tsunami bomb” designed to destroy coastal cities by using underwater blasts to trigger massive tidal waves.

via ‘Tsunami bomb’ tested off New Zealand coast – Telegraph.

These stories always come to light decades after they have taken place. One can only imagine the horror the government is working on now.


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Those Unpatriotic, Debt Free Americans

Posted by Jason | Posted in Economics | Posted on 23-10-2011


With the economy in the crapper and possibly heading into a double dip recession, the Wall Street Journal did some brilliant journalism this weekend pointing out who is at fault for this economic malaise.

American consumers’ long-running love affair with debt is on the rocks. And as they repent for their credit-driven Bacchanalia, the foundering U.S. economy is left to pick up the pieces.

Ah ha! The American consumer is repenting from their “credit-driven Bacchanalia”, and those bastards are destroying Obama and Bernanke’s economy.

I’m not the only one who had to Google Bacchanalia, am I?

Anita Bullock-Morley, a 36-year-old speech therapist in Atlanta, is one who talks about her old borrowing habits like a recovering drug addict: “My life is so much better not having that haunting debt.”

Well, we obviously know how selfish Anita is. That’s great your life is so much better Anita. What about the rest of America who is suffering because you won’t enslave yourself to the bankers.

Jason Jacobs and his wife Kathy Jacobs, at home in Richmond, Va., are among those who are reducing debt.

She used savings to help pay for her wedding last year. And after wiping out the balance on two dozen credit cards—and swearing off boutique-label purchases and fancy vacations—she is working her way through $50,000 in student loans and the $215,000 left on her mortgage. Ms. Bullock-Morley is among a generation of Americans who were taught the value of saving as children but had to learn the hard way how to spend wisely.

I guess her paying for her wedding from her savings doesn’t help the economy. It would have had she borrowed it though. As far as paying off $50,000 in student loans. She apparently didn’t go to school long enough. Maybe that’s why she is so ignorant about the benefits of borrowing.

Since the financial crisis erupted, millions of Americans have ditched their credit cards, accelerated mortgage payments and cut off credit lines that during the good times were used like a bottomless piggybank. Many have resorted to a practice once thought old-fashioned—delaying purchases until they have the cash.

I can’t believe these people are going back to the stone age. Next they’ll want to go back oral communications instead of texting.

As a result, total household debt—through payment or default—fell by $1.1 trillion, or 8.6%, from mid-2008 through the first half of 2011, according to the Federal Reserve Bank of New York. Auto loan and credit-card balances in August had their biggest drop since April 2010, the Federal Reserve said.

But doesn’t that mean as a society, we have actually become wealthier? I mean, if I’m trying to figure out my networth (wealth), I take my assets minus my liabilities. Doesn’t this mean that households have increased their networth $1.1 trillion in the positive direction? I would think that would be a good thing for the economy. Then again, that’s $1.1 trillion in future labor that the banks no longer get first dibs on. People will actually get the fruits of the labor.

The national belt-tightening, known as deleveraging, comes as the U.S. economy struggles to fend off a double-dip recession. Paying off bills slows consumer spending on appliances, travel and a slew of other products and services. Home sales, the engine of past economic recoveries, remain depressed.

Yes, but doesn’t it free up capital to be lent out elsewhere? If the problem is lack of credit being available, people paying off credit should free up credit for others to borrow. Also, it should lower interest rates, which in turn would increase borrowing. Of course, it’s hard to lower interest rates when the Fed has print so much money that interest rates are at historic lows.

Deleveraging should help the U.S. economy in the long-run, putting households on a sounder footing and easing the nation’s reliance on the savings of Chinese and other foreign nationals. But there are short-term dangers.

Yes, there are horrific dangers that Obama’s cronies over at Goldman Sachs will not have enough people enslaved to them. They won’t be able to earn the interest off money that was printed, given to the bank as bailouts, and then lent out to consumers to have to pay back through future earnings. This danger is almost as dangerous as the Iranians who have yet to start a war with anyone and all the sudden they are going to nuke us.

During the Great Depression, economist John Maynard Keynes warned of a so-called paradox of thrift: When everyone turns frugal, everyone suffers. Synchronized thrift slows the economy, according to Keynes, which hobbles income growth and makes people even stingier in a pernicious cycle.

Some experts worry that is happening now. Since the recession ended in mid-2009, the U.S. economy has expanded at a 2.5% annual rate, far slower than the average growth of 4.3% during the first two years of the previous four recoveries.

Let’s not even mention that the last four recoveries where no where near as bad as this one, which might explain why we’ve only had 2.5% annual growth. They aren’t calling it the Great Recession for nothing. I also don’t recall a world-wide collapse and debt crisis during the last four recessions.

No, let’s not mention any of that. No, let’s talk about John Maynard Keynes. I mean, who cares that the government was following Keynesian economics when this economic disaster occurred. Just ignore that and say, well what does Keynes say about this. If everyone turns frugal, what they are doing is saving. What happens when the banks are flush with savings? Do banks, especially under fractional reserve banking, like having everyone’s savings just sitting there? No. They want to lend it out, but if no one is borrowing (basically buying the banks goods) at the interest rate (price) the bank is offering, the banks will lower interest rates. Lower interest rates will eventually entice business investment and spending.

“Folks aren’t borrowing,” said Jim Ernest, executive vice president at Provident Credit Union in Redwood Shores, Calif. “They are paying down debt and continuing to save.” Since January, 12% of the credit union’s mortgage customers have made at least $1,500 in extra payments.

via Americans Debt Cutting Hampers Growth – WSJ.com.

Well, as you can see, the American people are a bunch of unpatriotic idiots haplessly destroying the economy because they refuse to enslave themselves to lenders. If you are one of these Americans, quit being selfish. Go down to your local bank and borrow as much money as you can. Then go buy a house you can’t afford. It worked so well last time.

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Is The Tea Party Over?

Posted by Jason | Posted in Government | Posted on 20-10-2011


The rising of the Occupy Wall Street movement makes me wonder what happened to the what appears to be the short lived Tea Party movement. I know. I know. They still exist. After all, they had a Republican Tea Party Debate.  That should tell you all you need to know about the Tea Party. They are a Republican caucus and a complete waste of a movement.

I may sound a little harsh, but what was the whole point of the movement. Unless I’m completely off base, the Tea Party’s one underlying message was to get control of government spending. They vowed to kick any politician who voted for TARP out of office.

Fast forward to the next Presidential election. Who does the Tea Party seem to be backing? So far, it looks like Mitt “Wall Street” Romney, Herman “9-9-9″ Cain, and for a short period of time Rick “Al Gore” Perry.

What are these supposed fiscal hawks proposing that will cut the deficit? I haven’t seen anything.  Have you?

Herman Cain just repeats 9-9-9 to every answer like a catchy commercial line. He has mentioned no cutting. He even says 9-9-9 is revenue neutral. Well, that’s great. So we’ll keep government taking the same percentage of the economy. On top of that, we’ll still be running trillion dollar deficits.

Romney, who constantly tells us he understand the economy because he ran corporate chop shops, then goes on to tell us he’s going to focus tax cuts on the middle class and the poor. Wasn’t this the Obama plan during the 2008 election?  He also mentions no cuts, although according to the Wall Street Journal..

Mitt Romney, a former Massachusetts governor, has called for an initial cut to non-security discretionary spending of 5%, or $20 billion.

Wow, that Mitt Romney is a real game changer huh? We’re running almost $2 trillion a year in the red, but watch out Romney is ready to cut $20 billion.

Lastly, Rick Perry, who was the darling of the Tea Party until he opened his mouth is proposing to cut…. Who the hell knows. Every debate hekeeps saying he’ll be laying out a plan, but has yet to do so. He does talk about energy exploration every chance he gets.  Not sure how that cuts the deficit, but I’m sure it gets energy companies lined up to fill his coffers.

Next to cutting the deficit, what was the next big issue for the Tea Party? Was it not TARP, the same issue that Occupy Wall Street seems to be upset about? They said they were kicking out anyone who voted for TARP. Well, how do the three candidates stack up with TARP?

All three candidates supported TARP.

Rick Perry is smart enough to at least lie about that support now, although it’s hard to lie after you sent a letter of your approval. Romney and Cain on the other hand still say they support it. Now, they claim that at the time they thought it was the right thing to do. Of course, they would have done it better. They would have not given as much to one bank and instead gave more to another. Now I see why the Tea Party thinks these guys are great.

What the candidates are basically saying is they would do TARP II when Wall Street comes knocking for another bailout. They are not against TARP because it’s fundamentally immoral and ineffective. They are not against TARP because it bails out the unproductive by stealing money from the productive. No, they are against the way TARP was handled, but only after Obama took it over. They would have bailed out the bankers, but they would not have bailed out those evil car companies, like that makes a dime’s worth of difference to our fiscal situation.

There is one candidate who has propose substantial cuts and was against TARP. That candidate is Ron Paul, who proposed $1 trillion in cuts his first year. He’s a guy who is literally talking about shrinking government, as his plan cuts five federal departments. He even threw in his own salary as President, knocking down the President’s pay to the median household income.


On TARP, Ron Paul was against TARP from the get go. If you know Ron Paul, you know he would be against TARP before it was even conceived. His beliefs are constant. You don’t need to question which way he’s going to fall on some government proposal. You know, because you know his beliefs.

So does the Tea Party back Ron Paul. Yeah, right. They have shown their true colors. The Tea Party is over. It’s nothing more than a rebranding of the Grand Old Party (GOP).

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Steve Jobs, The Artist

Posted by Jason | Posted in Miscellaneous | Posted on 06-10-2011


Steve Jobs was an artist. You may say that’s absurd, but what is an artist. An artist is someone who takes common, plain resources and makes something that only the artist could see in their mind until the masterpiece was completed and shown to the world.  Steve Jobs took a vision of something no one else could see and made it a reality. He worked with his palette of people, hardware, software, and processes. He arranged them in a way that created beautiful products that people could not wait to see, touch and share with others. While other CEOs focus on making a better mouse trap, decreasing costs, and increasing market share, Steve Jobs focused on creating his masterpiece.

I’ve heard many people say about rich people like Steve Jobs that they don’t deserve all that money. They couldn’t do it all by themselves. No one is an island. This is true. The painter could not paint his masterpiece without his paints and canvas that someone else might have made. The musician could not produce music we all sing to without instrument builders, producers and concert venues providers. Shakespeare would not be able to create his plays without actors, printers or the maker of his writing utensils.

Here is the problem though. All of those people and resources can be provided by anyone. The painter can get someone else to make the paint and canvas. The musician can find another instrument maker, producer or concert venue. Shakespeare could have found other actors, printers and writing utensils. And Steve Jobs could have found other programmers and hardware manufactures. The difference between the artist and everyone else is you can replace everyone else and still end up with the masterpiece. You cannot replace the artist. You cannot replace Steve Jobs.

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Sarah Palin’s Understanding of the First Amendment

Posted by Jason | Posted in Miscellaneous | Posted on 09-12-2010


It’s a shame that every time I hear Sarah Palin speak, my opinion of her goes to new lows. I do not hate her as liberals do, but I do think she’s a disaster for the Republican party and for our country if she’s ever President.

After her site was attacked by hackers in response to her calls to label Julian Assange a enemy combatant, she emails ABC News about her constitutional rights.

“No wonder others are keeping silent about Assange’s antics,” Palin emailed ABC News. “This is what happens when you exercise the First Amendment and speak against his sick, un-American espionage efforts.”

via Exclusive: Sarah Palin Under Cyber-Attack from Wikileaks Supporters in ‘Operation Payback’* – Political Punch.

So, Sarah Palin thinks her First Amendment rights are being violated by hackers? Does she not realize the Constitution applies to the government? Hackers responding to idiotic calls to label everyone a terrorist is not a government infringement on freedom of speech.

Next, does Sarah Palin realize what is in the First Amendment with the freedom of speech, freedom of the press? She literally wants the government to violate the First Amendment with Assange, but then says private individuals are violating her First Amendment rights. It’s actually funny how clueless she is when she makes statements like this. What’s not funny is how many zombies are shaking their heads yes while she says them.

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Responding to a commenter about taking profits out of healthcare

Posted by Jason | Posted in Health Care | Posted on 08-12-2010


In my post on why Bill Maher is an idiot, one commenter left the following comment. I figured I’d put my response in another post since it may get lengthy.

Keith G.

I still struggle with the for-profit model when it comes to insurance providers being owned by stockholders instead of policyholders. Is the point of insurance not to spread the risk as widely as possible (i.e. single-payer would be optimal)? Is it not a problem that insurance providers would profit more by paying out less in claims, leaving those that pay premiums fighting their insurance company at the time they need them most? Is it not a problem that my voting to provide insurance claims (dollars) to my fellow policyholder would lead to reduced profits, yet I want the same level of coverage (claims) when I get in the same jam? How do I balance these to seemingly counter scenarios? Having a pool of people with a vested interest in the profits, yet removed from the claims side of the insurance equation seems like a problem to me. What am I missing?

via Another REASON Bill Maher Is An Idiot, Profits | The Proud Profiteer.

Let’s take these comments one at a time.

1. “I still struggle with the for-profit model when it comes to insurance providers being owned by stockholders instead of policyholders.” Who cares who owns the insurance providers? It’s irrelevant. The only reason profits exist is because one person or company can deliver what someone is demanding at a lower cost than the person demanding it values the good or service at. This doesn’t change because it’s health care insurance. It’s profits that tell suppliers that consumers want more than what’s currently being supplied. Without profits, suppliers are blind to that fact and supply will suffer, which means consumer or in this case patients will suffer.

2. “Is the point of insurance not to spread the risk as widely as possible (i.e. single-payer would be optimal)?” The point of insurance is not to spread risk as widely as possible. The point of insurance is to insure yourself against unexpected risks, such as your house burning down. Everyone knows they will have to go to the doctor for the flu, cold, etc. These should not be insurable. Not everyone knows they’ll get cancer, so this is an unexpected risk, that should be insured. Part of the problem with health insurance is we are insuring daily maintenance of our bodies. How much would car insurance cost if you insured it to the point you could pay for oil changes and tires with your car insurance? Let’s not even get into all the government mandates that your insurance coverage cover all the garbage you don’t want or need.

To take this a step further and make the point more clear that insurance isn’t to spread the risk as widely as possible, the insurance companies could care less how big the pool is. They only care that they can cover the estimated claims and still make a profit. If the pool is only 10 people, they don’t care. The insurance company will calculate the likelihood of claims in any given year. Then they will figure out what the cost of those claims will average. Based on that, they will calculate what the insurance premium needs to be in order to pay for the claims. Insurance companies then collect premiums, and they invest them. This is one of the ways they make profits. Next they will figure out ways to reduce their cost of claims, say negotiating rates with service providers. This also increases their profits.  The larger the profit is the more likely another insurance company will pop up hoping to get in on the action. This will end up driving down profits as the new company does many of the same actions for less premium, which benefits the policy holders. Unfortunately, the government has closed the markets so we don’t get competition. You can’t even buy insurance across state lines let alone world wide, because of the government. That’s just another example of how government drives up the cost of insurance.

3. Single payer is a disaster and is the opposite of optimal. Who is this single payer? Why it’s the gov’t. Did you even read the post? It explains why the gov’t is so inefficient and always delivers horrible results given the resources they employ. This doesn’t change because the product delivered is insurance. Has it never occurred to you that since the government has intervened more and more into health insurance and health care that it has continually gotten more expensive and less efficient?

4. “Is it not a problem that insurance providers would profit more by paying out less in claims, leaving those that pay premiums fighting their insurance company at the time they need them most?” Yes, insurance companies will profit more by paying out less in claims (not less claims, but less in cost of claims), as I stated above. They typically do this in beneficial ways though as some of the examples I listed above show. Insurance companies cannot change your policy while it’s in effect. If you are fighting with them, then you are fighting over something that isn’t included in the policy or has certain requirements that weren’t met. I’m not saying that companies never lie or try to get away without paying rightful claims, but it isn’t good for business to do so. If they did this, it would end up driving customers away to a competitor who doesn’t deny rightful claims. Now, you have to look at it from the insurance company who is providing insurance based on expected risks, as I stated above, and they are constantly be forced to cover things that weren’t originally covered when our wise overlords tell them they have to. Because of this, health insurance is renewable every year. Does it have to be this way or is it a result of regulation and government interference? Is life insurance that way? No, I setup a term even to the point of covering my whole life without premiums ever changing. Couldn’t an insurance company offer a life long plan to policy holders that cover a long list of medical risks? Of course they could in a free market, but unfortunately this isn’t a free market. The government constantly changes the rules on them and forces them to cover things that weren’t initially in the policy.

Also, you can thank the government that the policies are so complicated that policy holders never read them nor could they understand them if they did. Then when they think something is covered, they find out it isn’t. If only they would have read the legalese on page 150 of their 200 page policy.

5. “How do I balance these to seemingly counter scenarios? Having a pool of people with a vested interest in the profits, yet removed from the claims side of the insurance equation seems like a problem to me. What am I missing?” What you are missing is there is nothing special about insurance that isn’t the same for any other good. How do you balance the counter scenarios of a pool of vested people interested in profits yet removed from the claims side of auto insurance, life insurance, or home insurance? Insurance operates all the same, except the government has heavily involved itself in health insurance and policy holders want maintenance covered for their bodies but not for their auto or home insurance. You may want to look at my post from last year on the root causes of the health care crisis. Also check out my proposed solutions, part 1 and part 2.

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Jefferson Schools Palin

Posted by Jason | Posted in Foreign Policy, History | Posted on 08-11-2010


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Is This A Revolution?

Posted by Jason | Posted in Government, History | Posted on 02-11-2010


The word revolution seems to get bandied about regularly at election time. Currently, the Tea Party is considered by many to be a coming revolution, but is it really?

When you talk to about revolution, the American Revolution stands as the greatest example. For those who are a little more historical, they may also look at the French Revolution as another revolution. They typically will explain that the French Revolution was a bad revolution, where the excitement of the people took over the ideology of revolution leading to the beheading and murder of many and ultimately to tyranny.

While I don’t want to get into the particulars of each revolution, there are a few things that stick out to me that separate the two.

The dictionary definition of revolution is “an overthrow or repudiation and the thorough replacement of an established government or political system by the people governed.”

Within this definition, you can see what separates the two revolutions. One was a repudiation and the other was an overthrow. Why did they differ?

The American Revolution was basically a secession, much like the south did prior to the civil war. The colonies, based on their declared belief “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government”, decided to break ties or secede from the Britain. The government they were seceding from resided across the Atlantic. This provided an easy demarcation for the colonies. It gave them an area to defend against the coming invasion by those they just distinguished themselves from.

With the French Revolution,  you did not have this. The French rulers and the people resided in the same borders. This would make it much harder for a separation. In France, they decided to overthrow the government. Apparently, they didn’t believe repudiation was going to be possible. This leads to the second distinction.

I constantly hear people talk about peaceful revolution. They say let this, our current supposed revolution, be a revolution of ideas. The problem here is they are making it sound as if during the American Revolution we had violent revolution and somehow we are doing it different. The American Revolution was a peaceful revolution until the British crown decided to use violence against the colonies. The colonies didn’t look for over throw. The colonies wrote a document declaring why they were separating. They did not go waging war or violence against the government. The French Revolution was starkly different. It was waged in violence by those looking for a change in government.

At it’s roots, these two revolutions were fundamentally different. One was righteous while the other was violent. One was a revolution of secession, while the other was a revolution in blood. The Founders revolted by withdrawing their consent, while the French revolted by murdering the rulers. These are the fundamental differences between the American Revolution and the French Revolution.

So, which type of revolution is the Tea Party? I would have to say neither. While they love to quote the Founders and talk about revolution, there is nothing revolutionary here. They are not against oppressive government. They are for a little less oppressive government. They aren’t against a government’s idiotic drug war. They aren’t against our idiotic foreign wars. They aren’t against a legal plunder like welfare, Medicare, or social security. They are only against additional legal plunder. Ask most Tea Party participants if they want to get rid of any of these programs, and I bet the majority do not. For example, Real Time with Bill Maher had it’s first Tea Party person on the show. Did she represent a revolution? She said she would not cut one dime from military spending. She railed against new spending, but she had no fundamental disbelief in government plunder. She didn’t call for the ending of any government programs. She called for nothing revolutionary.

I guess what I’m really saying is while the media may like to hype of the Tea Party, one side saying they are a coming revolution for good governance, while the other side thinks they are a bunch of hicks wanting to take down a black President, neither side is right. They are not revolutionary. They are not looking for any real changes in our current government or the course we are heading. They are not looking to repudiate our government nor overthrow it.

If you are hoping for a sea change in our government, don’t hold your breathe, because all and all, this is no revolution.

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But How Would They Get Their Mail

Posted by Jason | Posted in Economics, Government | Posted on 24-10-2010


The other week I was debating a guy on Facebook, who was telling me how government has to provide certain services. I’m pretty sure it began because of the Tennessee fire fighters watching a house burn down. Of course as most of these arguments go, the Postal Service was brought up.

The argument he was making was that the private sector would not deliver mail because it is not profitable for them. I mentioned that I used to work at UPS whenever they first went public (this was my first IT job). I specifically remembered that UPS wanted to get into mail delivery, but of course I was told I was just flat wrong. Apparently, my own memory, the reality I was living in, is just propaganda.

I was told I was wrong because UPS and Fedex could not profitably deliver mail to certain neighborhoods. Yeah, it would work out for most New Yorkers, but how about the little people in Alaska (his term not mine)? While, I’m sure he felt good that he was looking out for the “little people”, is he really? I asked why a person in Iowa should have to subsidize mail for someone who chooses to live in Alaska. Of course that fell on deaf ears. He then proceed to tell me those who live east of Pittsburgh (where I’m from) would be lucky to get mail twice a week if left to the free market. As you can tell, now it is not whether the free market would deliver mail. It’s whether it would deliver it as frequently as some anti-free market thinker believes it should be. This puts to bed the idea that the free market couldn’t deliver mail profitably. It obviously could. It’s just a matter of how it would do it.

For the sake of argument, let’s say that some areas would only get mail once a week. Oh the horror. Bills and bulk mail only once a week. I’m in! We could even say once every two weeks. The point is this is completely arbitrary and whatever is profitable is what makes sense for everyone. If it’s unprofitable in the free market to deliver mail 6 days a week, then it’s even more unprofitable when ran by the government, which has no competition. As I’ve pointed out in my blog about profits, profit is what directs resources to the most efficient use. If UPS or Fedex could not deliver mail everyday to certain areas, it’s because those residents don’t need the mail six days a week at the cost it would take to get it there. There is nothing evil about this. These are choices that people make. They chose where they live. They choose what they can afford and want given their scarce resources.

Of course with the government in control of mail delivery, they just force those who make better choices, as far as mail delivery goes, to subsidize those who do not. Instead of a person who can be delivered to profitably being able to get the most out of their hard earned resources, say paying half of what they do for mail and using the other half to buy something else, they are forced to hand it over for someone else’s choice to live in areas where it costs more to deliver. That other 50% of their resources would have given them more for their hard work, and it would have created new production in the economy.

If someone wants to have mail delivered to some outskirt six days a week, they should pay for it. Why is this considered evil? As with most government arguments, anti-free market thinkers see everything as static. If mail isn’t delivered six days a week to every mailbox in the US, the world would collapse. This just isn’t so. If mail wasn’t delivered six days a week to some places, those people would adapt. If they really needed something, they’d pay more to have it delivered. If they didn’t need something right away, they’d let it come at regular intervals, which would be when enough mail has accumulated to justify the resources.

Also, this is the age of the internet. Why should most mail be delivered six days a week. Talk about locking yourself into an old idea and wasting resources. If the free market were allowed to deliver mail, it would have already innovated well beyond our current system. There is a good chance much of it would be paid for by advertisers since they are the ones filling most mailboxes. As far as personal mail goes, most people  use email, Facebook, text and that new innovation called the telephone to communicate. If something needs delivered urgently or someone purchases a product, they already typically use UPS and Fedex. Why? There’s a reason Dell computers don’t come through the post office. Ever see the first Ace Ventura?

There is nothing sacrosanct about mail delivery or the postal service. It is an old idea, whose time has passed. It is not economical, and actually hinders our progress. Private companies can provide everything people want as far as delivery services go. There is no service that is unprofitable that is at the same time a necessity. Profits only reflect the demand of consumers, and if there is no demand, there is no need. Unprofitable just means unwanted. I guess the best argument again the Postal Service, since it is unprofitable the way it is currently delivered, is no one wants it. Why should they be forced to have it?

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Another Example Of The FDA Driving Up Drug Prices

Posted by Jason | Posted in Economics, Health Care | Posted on 23-10-2010


While everyone complains about the rising cost of health care, most Americans look to the government for the solution. It’s sort of like asking your dealer to help you kick your drug habit. All one needs to do is look at the daily examples where the government steps in and distorts the free market. This intervention is what drives up prices, and here is one of the millions of examples of how the government does this.

ViroPharma Inc. said U.S. drug regulators declined to approve an expansion of the company’s manufacturing of the drug Cinryze, which treats a hereditary disease, as the agency asked for more information.

Cinryze was approved by the Food and Drug Administration in 2008 to treat hereditary angioedema, or HAE, a rare genetic disease involving potentially deadly swelling of various parts of the body.

ViroPharma, of Exton, Pa., has sought to more than double the supply of Cinryze. Earlier this year, the company applied for FDA clearance to commercialize Cinryze manufactured using a certain industrial-scale process that’s different from the current process.

ViroPharma had expected to receive FDA approval of the industrial-scale product by the end of this year, helping sales beginning in 2011.

But the company disclosed Friday that the FDA sent a so-called complete response letter, requesting additional details about the technical process and ViroPharma responses to “quality observations” from an FDA inspection.

“The questions raised in this complete response letter are answerable in a timely manner,” ViroPharma Chief Executive Vincent Milano said on a conference call with analysts. ViroPharma plans to schedule a meeting with FDA officials as soon as possible, but Mr. Milano said it was too soon to provide a more specific timeline for next steps.

Mr. Milano said ViroPharma would proceed with plans to begin manufacturing industrial-scale lots “at risk” in the first quarter of 2011, with the hope inventory will be ready for shipment soon after FDA approval.

ViroPharma’s currently approved manufacturing process alone yields up to 60,000 doses of Cinryze annually. The industrial-scale process would add another 100,000 doses.

Cinryze generated sales of about $75 million for the first half of 2010, or about 38% of total company revenue.

via FDA Rejects Expansion Of ViroPharma Drug – WSJ.com.

I would sure hate to be inflicted with this disease, because you just got screwed by the government. The company, in pursuit of more profits, wanted to more than double the supply. In case there are any bureaucrats on here, let’s revisit our trusty Supply and Demand curves again. What happens when supply is increased without the demand curve changing? Prices go down. So with this government action alone, prices will not be driven down, which is what would have been the result of the company’s actions.

No, instead our benevolent dictators decided those inflicted do not need the extra doses at a lower cost. I’m sure they think they have their reasons. After all, this red tape is there to protect us (or strangle us). So, now not only does this extra supply not make it to the market, but ViroPharma has had to have the extra cost of paying off the mafia in hopes of doing business. Sorry, I meant the government, not the mafia. Do you think they are going to just eat that extra cost? Of course not. It’s going to be passed on to the consumer.

This example doesn’t even take into account the original FDA process that drug manufacturers have to go through to bring their drugs to market. If we had no FDA, that supply curve would shift dramatically, lowering prices.

On top of that, who knows how many people are going to die now that the extra supply won’t make it to the market. Oh well. The government has to get its cut. If someone’s got to die, then someone’s got to die.

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