Health Care Reform – Answering My First Critic

Posted by Jason | Posted in Economics, Government, Health Care | Posted on 25-10-2009

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Apparently, one of the tweeps I was debating on Twitter was so hot and bothered by my blog, he thought he would set me straight. The problem for him is when debating, feelings don’t count and distortions are against the rules. Here is the criticism with my response and corrections interspersed.

The other day I had an interesting back and forth on Twitter about healthcare. The debate was whether to let the free market have its way or whether the Federal government should have a stronger hand in a “Medicare Part E” plan for everyone. At the end of the discussion I was pointed to an article on Jason’s The Proud Profiteer website entitled Health Care Reform – The red herring of the pre-existing condition. I read every word of the article and have some thoughts about the free market as it exists today and where I think the author is wrong about where we should go.

Wow, the author couldn’t even get out of the first paragraph without showing the weakness of his argument. Saying “some thoughts about the free market as it exists today” shows the the author doesn’t understand the free market. I was not arguing for the status quo. I was arguing the problem with the current health care isn’t a lack of government meddling but too much government. The government currently accounts for 50% of all health care spending. If government was the solutions, we would have already seen improvements. The fact that health care costs have risen above inflation since the government inserted itself into the market shows the government actually makes the problem worse. It also proves that the problem isn’t the free market. The problem is you don’t have a free market. As soon as you introduce government coercion, you no longer have a free market. It is no different than if the government took away you freedom of speech. You technically are still free, but you are less free than you were.

I’m all for freedom and principles in this country. The author is correct in pointing out that the country was founded on the freedom and the need to get away from tyranny, taxes and religious persecution. Now the drumbeat throughout certain people in this country is that free markets and freedom will be the pill that will cure the country’s ills. Just get government out of the way of everything but defense and we will be a better place for it. Make it “small enough to drown in a bathtub,” to coin a phrase used by one of our most memorable politicians.

One of the ways we applied these principles was to allow mortgage companies, insurance giants and auto makers to, as the author says it, be free to succeed or fail. They’re good at what they do, so why not turn them loose to thrive and then we can all benefit at their success. So how do you explain the story of Goldman Sachs, AIG and the Freddie/Fannie debacles? Weren’t these companies free to pursue their own fortunes? And what would’ve happened if they were allowed to just fail? I guess those that would’ve allowed the complete meltdown wouldn’t mind what is happening in their free market 401(k).

Surely, this part had to be a joke. The author, if he has any understanding of the free market, would not have used the examples above to discredit the free market. The entire mortgage crisis was created and encouraged by the very government that the author claims is the solution. The artificially low interest rates by the Fed spurred on by affordable housing legislation and pressures caused the bubble, and it was only a matter of time before it burst. While the author may think he had me nailed here, people that know me, know that I predicted this bubble was going to go down very soon at the height of the housing bubble. The thing is if you understand economics, you can recognize business growth from bullshit.  This disaster was the culprit for the so called failed examples above. Freddie and Fannie are government sponsored agencies for pete’s sake. They are told what to do by the government and they are the ones who invented the securitization of mortgages that the evil banks were selling.

“But we should still get out of the health insurance company’ way,” you say. “Once they have complete freedom they’ll offer a virtual cornucopia of health insurance options that every thirst will be slaked. You’ll see that there will be lots of companies and options.” If you Google health insurance company monopoly, you will quickly discover that for several years large companies have had a lock on providing health care for people. If we get out of the way, what do the Blues, Aetna and the rest do? Do they allow rigorous competition and thousands of new companies to spring up? I think they either buy up those companies to stifle competition or squash them. I was told in the Twitter conversation that we should force these companies to compete with each other. So which is it – get out of their way with no regulation or force them to compete?

Hmm, not sure who said you have to force competition. It sure wasn’t me. My whole point in my post was that force is the evil. The role of the government is to prevent force from being used by one person against another. If you are tying in another conversation you had, don’t credit it to me. As far as your argument, again you are talking about a market that is not free. Companies cannot acquire a monopoly and stifle competition unless they have government backing, or they are the absolute best at what they do. If they are a monopoly because they are the best at what they do, then we all benefit.

The fact that health care and insurance are so heavily regulated now is what prevents many competitors. What you don’t seem to realize is regulation equals costs. When you have extensive regulation the costs get so high that they are a barrier to entry and only the big boys can afford to play the game. Don’t blame the free market for lack of competition. Your argument is easily disproved by looking at less regulated industries, such as the IT industry. The less regulation you have the more innovation, the more competition, and the quicker you see costs driven down.

If government is our own worst enemy as the author’s comments point out, why not just get rid of everything? Courts – who needs them? You’ve gotta beef with someone, handle it yourself and if you don’t get anywhere, kick the person’s ass or kill them. If one of those purely good companies make a product that turns out to seriously injure or kill people and you’re one of the poor schmucks that gets hurt or killed, tough luck bud. Like I just said, take a truck of Anthro and fuel and have at it.

Police and fire – we don’t need them, right? I’m sure there’s a security company that would be glad to give you your own security detail cause it’ll “fill a need.” Don’t have enough money to hire a security agency? Deal with it. There’s lots of crime victims out there. Go find the turkey yourself and dispense justice.  The 911 system is a socialist, government run system – get rid of that too. You’re having a heart attack, stroke? Get someone to put you in their car and drive you to the doctor. We don’t need no stinkin’ government run ambulances and medical staff. Hire some doctors and paramedics to stand by if you think you’ll need them.

Like you all say, for every need there’s someone to fit the bill at competitive rates, and since we’ll all be SO much more profitable when everyone gets out of free market’s way, we’ll be able to afford all these new things, right?

“But these are all ESSENTIAL government services,” you say. “You can’t take that away!” You know what, here’s where I want you to draw the line. Black & white. Think of all the things that you might need in life. Tell me why you would keep or privatize them. Then tell me why health care is not as important as 911, police, fire & paramedics. Why would you want to keep 911 as a government service but leave health care – the ability to live or die – as a FOR PROFIT endeavor.

Here is where you take my arguments and just completely distort everything. My argument is governments role is to prevent coercion. Now where does that say get rid of the courts? Where do you think government would enforce laws against coercion? Where do you think contract breaches would be adjudicated? Again, you take my argument and add a bunch of your own ridiculous arguments to it. Where did I say handle it yourself, kill people, etc? I’m pretty sure that would be included in the coercion I said the government should prevent, which is the whole point of founding a government. Your argument is very childish.

This police argument is not new. You haven’t had a brilliant brain fart. This is the typical response from socialists. The problem is police are a part of the government role to prevent coercion. What the hell do you think police do? As far as fire, in most communities the fire department is funded by charity. They hold fund raisers, and the fireman are volunteers. Apparently, you think that is socialism? In cities, this could be privatized, and it would probably be cheaper than paying your taxes. It would be no different than paying for security monitoring on your house. I’m not sure if you’ve read a newspaper lately, but there are many “government” services, such as trash collection being privatized. Do you think it’s being privatized because it’s worse?

Lastly, even if you leave these as government roles, which I personally don’t have a problem with, they are not federal programs. Apparently, you don’t seem to recognize the difference between local services provided and agreed upon by local citizens, paid for by their local taxes with Federal entitlement programs.

If you can’t afford heath insurance, Jason says that you’ll have to turn to charity. Leukemia and unemployed – charity. Stroke leaving you the inability to walk, speak or do your job – charity. Born with cerebral palsy or autism and your parents or unemployed/underemployed – charity. Jason, do me a favor, a little experiment. Take you & your son down to a doctor’s office you’ve never been to before. Tell the receptionist that you’re out of work and need your child seen for whatever – you name the illness. After they get done telling you to pay cash or you don’t get seen, take the amount of money the doctors wants you to shell out and start calling some churches. Give them the same story and tell them that you’ll probably need that same amount of money each month since your child might need special ongoing treatment. When you find the charity that’ll dole out that money month after month, let me know. The difference in your opening paragraphs – each of these families you mention probably has at least ONE working member in the household providing pay for health insurance. If I’m wrong, tell me how they’re handling things on charity.

To start, I said in my blogs that you should pay out of pocket for day to day care, and you should buy a low cost catastrophic insurance plan for things, such as the ones mentioned above. The purpose for insurance is to be there for catastrophe. Again, you distort my argument.

Second, I can guarantee you I have way more experience dealing with health care than you do. My son does have cerebral palsy, and while you and Obama discredit doctors as profit seeking devils, I’ve seen first hand the charity of doctors. Doctors don’t go through 8 years of schooling followed by years of residency because of the money. It’s a calling, and they do it to help people. Most of them already do charity. Also, charities already help people every day. You many want to check them out. Most liberals claim to love charity, but it’s usually only the charity from someone else’s pocket via goverment coercion. Who do you think fled down to New Orleans after Katrina? It was the charities on the front lines getting the hard work done, while the government, as usual, stumbled and caused more harm than good.

In addition, my argument talked about charitable donations exploding because of more money remaining in the pockets of citizens. Do you think a rich guy who’s kid died from leukemia, wouldn’t setup a foundation to research and help other parents with children who have leukemia? Where do you think charitable foundations come from? Have you ever heard of Shriners? I’m pretty sure they offer health care and are a charity. How about this report, that charitable donations reached a record in 2007 under the Bush tax cuts. Oh, and that doesn’t even take into account time and labor. You may want to give your fellow man a little more credit.

When I’m buying a car or a toaster, I want free market competition. I want the government to stay out of the way UNLESS what those kind folks are selling is hurting people. When I’m having a heart attack or stroke, I want an ambulance and crew to show up as quickly as possible and save me life! I don’t want to have to think if I paid my premiums that month or that some FOR PROFIT company “with my best interest in mind” will deny me life saving treatment.

How does a publicly traded company, beholden to its stockholders and profits, have my best interest in mind? If I’m a stockholder that’s easy. If you’re a CEO with complete free market freedoms, how do you take care of people with serious medical problems and still make your bottom line? How would Ford survive as a company if most of the vehicle they sold were Pintos or some other high maintenance vehicle? What incentives and marketing schemes would they contrive to make it profitable?

via RIAsults may vary: Health Care Reform – The AIG, Freddie & GM pill. Take two of these and don’t call me in the morning.

You final argument just demonizes businesses. It’s silly to act like business people are evil, and that some how government people are angels. You may want to challenge your assumptions. Government employees and especially politicians have their self interest in mind as well, and it is more often than not detrimental to the public good. Private capital is rewarded by efficiency, which means it addresses the most needs at the least cost. That is why you can buy your toaster so cheap. This does not take place in government. In government, politics and inefficiency are rewarded, resulting in less needs being met.

While I appreciate the time you took to respond and I enjoy the debate, I really wish you would keep your arguments away from your feelings and would not distort my arguments. We are talking about a gigantic issue, and we cannot make this decision on feelings. We have to make it on reason. Just because you get a warm feeling in your belly when you talking about everyone having health care doesn’t make it so. You may want to read my other blogs on health care, where I talk about what the real problems with health care are and why government intervention will only make things worse. Then again, I’m sure that doesn’t feel good.

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Comments (4)

Jason, I was the other side of his twitter debate, and I stated that if gov’t got out of the way and stopped allowing these gov-sponsored monopolies to exist, it would force those companies to compete with each other.

So I did state the gov’t should force these companies to compete, but in an pro-consumer manner.

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John, well getting out of the way, which will have the effect of forcing them to compete is much different than the government actually taking an action to forcing them to compete. You are right in that the government is the reason they are as big as they are, and the government is the reason for the lack of competition. You are also right that getting the government out would force them to compete. But that is not forcing really, its just letting the market do what it does. Glad to see you are out there fighting the fight man. Keep it up. The author appears to have distorted your meaning as well. Typical.

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You’re right. I should be more cold & matter of fact instead of emotional when talking about peoples’ ability to live or die. And yep, you’ve got me pegged straight on. I’m 41 and in the 2 1/2 decades I’ve been dealing with insurance, my family & I have dealt with and am currently dealing with high blood pressure, high cholesterol, interstitial cystitis (yes, you’ll have to look this one up – you’ll love it! It’s the pain gift that keeps on giving!), brain tumor, asthma, etc. So even though you don’t know anything about me other than I’m “typical,” you called that one right. I’m a definite noob when it comes to insurance.

Here is what I have boiled our discussions down to: we are SO far apart on our thinking about health care, insurance companies & free markets that I’m not sure that our two sides can EVER hope to win any arguments in the debate. Each side is firmly entrenched in their thinking and we are all working off of two different sets of facts, so we’ll never agree on anything. The one problem that we both have is that we’re speculating on what will happen if things change. But you did persuade me to change my position about one thing.

I was firmly against states being able to opt out of whatever plan the government comes up with. You have made me do a complete turnaround on this topic. Here’s what I propose (and I will write my politicians about it): Bring the opt out option into the bill. Let those states that opt out also be able to do the following:

1) Disband their state health insurance commission oversite. Complete deregulation will be the norm and insurance companies can do as they please.

2) Allow the people in those states to buy plans across state lines with other private insurance companies. In true corporate fashion, litigation will be done in the corporation’s state. If you’re in Oklahoma and your health plan in Alaska does something bad, you’ll have to litigate in Alaska.

Public plans in opt-in states are available to citizens in their state only. Additional taxes to pay for the public plans will not be taken out of peoples’ pockets in opt-out states.

The proof will be in the pudding. Let’s run this for 10 years or so and see what happens. If I’m wrong, I’ll eat crow. To those people who want to opt-in in an opt-out state, my apologies. To those of you wanting complete freedom, my hopes are that you already live in a state that will opt out or you’ll be moving to one when the time comes.

And oh, by the way, Shriners is a charitable organization with a SPECIFIC purpose AS STATED on their website:

“Children up to the age of 18 with orthopaedic conditions, burns, spinal cord injuries and cleft lip and palate are eligible for admission and receive all care in a family-centered environment at no financial obligation to patients or families.”

Don’t have any of these conditions? I doubt they’ll pay for it.

My local county fire department is 100% volunteer. But lookey here, they’re partially funded by the government: http://insidecharmcity.com/2009/10/19/final-homeland-security-conference-report-includes-338000-for-calvert-county-emergency-operations-center/. Wonder what would happen if all those millions didn’t go to the departments? I guess we’d all make that up in donations.

http://riasults.blogspot.com/2009/10/health-care-reform-aig-freddie-gm-pill.html?showComment=1256603160304#c7383691524126854031

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It’s not a matter of being cold. It’s a matter of what best works for society. You shouldn’t let you feelings based on your own circumstances guide what policy should be instituted on all Americans. My son has cerebral palsy. Do you think I’m cold and say to hell with him. No, I know what works best to meet his needs and the needs other people who have different circumstances.

You are also right that we’ll never agree. You have this conception that people who serve society through business and generate profits are evil, but then somehow other people who claim to serve society via public policy are not evil. Politicians grave power. Power is what corrupts, not money. While you may think that angels will put health care in place and take care of everyone, I see a power grab by politicians that want to control people and increase their power. I’ll trust a greedy rich man to create a product or service that his fellow man wants any day over a power hungry politician who creates nothing but claims he’s our savior.

As far as your plan, you are moving in the right direction. A federal policy is a disaster, a one size fits all disaster. If states what to implement socialism, let states do it. At least then, you can see what works best (take a look at Massachusetts). That’s what is great about Federalism. You have 50 states that can experiment and learn from each other’s mistakes and successes.

Lastly, Shriners may serve a particular purpose, I never said they do all health care. It’s an example of a charitable group that does a lot of health care services. The point is there will be plenty of charity. The good thing is the charity is voluntary, which means its driven by true compassion and a calling. It will be delivered better, and the charity will seek to offer services to as many people as it can.

As far as fire departments, again I said they would probably be more efficient if they were privatized. Also, I said I don’t have a huge problem with local services being delivered and paid for locally by the local citizens. Apparently you think the free market cannot come up with solutions by itself without the wisdom and compassion of politicians. That is a seriously flawed belief. The free market delivers solutions to meet the most needs. Government focuses on what gives it more power and the ability to get re-elected. There is a huge difference. For instance, my local government in Pittsburgh thought the dumb public didn’t know any better when it said no to public funding of two stadiums. Apparently, we’re just too stupid. Politicians ignored the vote and confiscated more money from the people to put stadiums up for rich sports teams. Why did they do this? They did it for power. This is going to be no different with health care. With the free market, the stadiums would have received money only if it produced enough benefits to society that society was willing to spend their money on what it offered. Society is much smarter at knowing it’s needs and allocating money and resources to create and pay for those needs.

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