We may have the dumbest people in America running the country. Even most of the politicians pushing for the expanded Fed powers admit that the Fed caused the housing bubble. So, what is their fix? I think most rational people would say let’s take power away from the Fed. Oh no, not the geniuses sitting in the Capital. They want to give the Fed more power to screw up the economy. Apparently, this disaster isn’t bad enough yet. They want to see if the Fed can collapse the entire system.

By SUDEEP REDDY

WASHINGTON — Get ready for a fiery debate about the role of the Federal Reserve.

The latest financial-regulation legislation moving through Congress would give the Fed new oversight powers, including the authority to force large firms to shrink if their size threatens the broader economy.

The draft bill, released this week by House Financial Services Committee Chairman Barney Frank (D., Mass.) gives the central bank more direct authority than outlined in a proposal earlier this year.

The expansion of the Fed’s role is sure to become a flash point in the debate over the overhaul of financial regulations.

On one side are Mr. Frank and Treasury Secretary Timothy Geithner, who favor giving the Fed broad authority. On the other side are lawmakers who want power spread out among agencies. Many also charge that the Fed’s regulatory missteps helped to cause the financial crisis.

via Congress Weighs Scope of Fed’s Authority – WSJ.com.

As I’ve explained in previous posts, the free market in order to make the most profit utilizes resources to their highest and best benefit. Efficiency reigns. Government always has the opposite effect. Government intervenes in order to divert resources for political means. What this does is lower our economic output and value, in other words, it lowers our standard of living below what it would other wise be. Here is a perfect example of the government not caring what’s best, but instead they care what is politically best for the politician. So much for self-interest being the purview of the free market.

By NEIL KING JR.

Montana Rep. Denny Rehberg was no fan of the $58 billion federal rescue of General Motors Co., saying he worried taxpayer money would be wasted and the restructuring process would be vulnerable to “political pressure.” Now the lawmaker says it’s his “patriotic duty” to wade into GM’s affairs.

Along with Montana’s two Democratic senators, the Republican congressman is battling to get GM to reinstate a contract with a Montana palladium mine nullified in bankruptcy court. “The simple fact is, when GM took federal dollars, they lost some of their autonomy,” Mr. Rehberg says.

Federal support for companies such as GM, Chrysler Group LLC and Bank of America Corp. has come with baggage: Companies in hock to Washington now have the equivalent of 535 new board members — 100 U.S. senators and 435 House members.

Since the financial crisis broke, Congress has been acting like the board of USA Inc., invoking the infusion of taxpayer money to get banks to modify loans to constituents and to give more help to those in danger of foreclosure. Members have berated CEOs for their business practices and pushed for caps on executive pay. They have also pushed GM and Chrysler to reverse core decisions designed to cut costs, such as closing facilities and shuttering dealerships.

via Politicians Butt In at Bailed-Out GM – WSJ.com.

Wow, can’t wait till these jackasses taking over health care and are making political decisions with our lives.

In a great article on Reason.com, the view that the Fed caused our current crisis is highlighted in great detail. While the article focuses on the anti-Fed movement in general, you can see from the quotes and understanding of politicians and economists that the Fed is responsible for the housing boom.

Blame-the-Fed sentiment now stretches across the spectrum of economic thought, from Keynesians such as DeLong to monetarists (who generally want the bank to maintain a fixed rate of money supply growth). In October 2008, the monetarist Anna Schwartz, co-author with Milton Friedman of one of the most important books of monetary economics, A Monetary History of the United States, told The Wall Street Journal: “If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset. The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest rates that induced ordinary people to say, well, it’s so cheap to acquire whatever is the object of desire in an asset boom, and go ahead and acquire that object.”

While Anna Schwartz believes the Fed is neccessary, she admits that the Fed’s expansive monetary policy causes a boom in an asset market, the most recent being the housing market. The last one being the tech bubble.

Even the Obama administration has gotten into the act. “Monetary policy around the world was too loose too long,” Treasury Secretary Tim Geithner told PBS interviewer Charlie Rose in March. “And that created this just huge boom in asset prices, money chasing risk. People trying to get a higher return. That was just overwhelmingly powerful.”

Even Geithner, although he doesn’t blame Greenspan and the Fed directly, basically said the Fed’s low interest rate policies caused the spike in housing prices and encouraged the risk that politicians now blame on greed. Did Geithner forget he was on TV?

In this time of political ferment, Stephen Axilrod, a longtime Federal Reserve staff director and monetary policy guru, has issued a memoir from MIT Press titled Inside the Fed. Axilrod admits that Fed interest rate actions precipitated the crisis without letting that fact dent either his admiration for the institution or his belief in its necessity. Still, Axilrod notes something that should encourage Fed skeptics of all varieties: that “a country’s monetary policy is almost necessarily limited by conditions generated from the political, philosophic, and social ethos of the time.”

Here former Federal Reserve, and lover of the Fed, admits the Fed’s actions caused the housing bubble. He then says the Fed is only as powerful as political, philosophical, and social conditions permit.

But the Fed doesn’t have a stellar track record of timing monetary shifts with scientific precision, and any actions that rein in inflation, thereby cutting off the short-term stimulative effect that governments love, are bound to be politically dangerous both to the Fed and to the president who appoints its overseers. As Bernanke admitted at his televised town hall meeting in July, the Fed can maintain its independence only if it can “show that we are producing good results,” and while he added lip service to independence, the people he must show those results to are Congress and the administration. Though he was appointed to a new four-year term in August, if he flubs inflation, Bernanke will be facing a whole new wave of political attacks.

Bernanke states here that the Fed must show results to Congress and the Administration, which highlights the biggest problem with the Fed. While we have plenty of confirmation that the Fed caused the housing bubble, we still have politicians that want it to exsit. Why?

Because they want the Fed to, as Bernanke said, “produce good results.” What are good results? Was all Americans owning a home a good result? Was refinancing your equity away to drive up consumer spending a good result? Was as Austrian economist show, driving up unwarranted business investments a good result?

This is at the heart of the problem for any government institution. While the Fed claims its independence, it is swayed by politics.  The market delivers based what billions and billions of individual transactions say. It is fine tuned by every transaction made. Government on the other hand tries anticipating what the market needs, and it is always wrong. This is why communism was an abject failure. Government cannot conceive of the circumstances and motivations of billions of transactions. There is no difference in the ability of communist dictators trying to decide the right amount of light bulbs to be produced, and the Fed trying to decide what interest rates should be. Both of them are trying to decide for the market what they believe should be over what would normally be decided by millions of individuals acting in their own interest.  It has never worked, and it will never work. It eventually led to the collapse of the Soviet Union. Now let’s hope it leads to tearing down the wall of the Fed.

While Obama has declared H1N1 a national emergency, the government as usual has caused the delay in vaccines being delivered to the public. Whether you agree or disagree with vaccinations is not the point. The point is when government is involved there is always a negative effect. We are told this could possibility be a pandemic, but because of government regulation, everyone who wants a vaccination has to sit on their thumbs and hope they don’t get sick for months as vaccines are finally released to the public.

By SCOTT GOTTLIEB

Though the swine flu is widespread in 46 states many Americans are still waiting to get their vaccines. The Obama administration blames the shortage on manufacturing delays at the five firms making these products. But production issues only explain part of the shortfall. Also to blame are a series of policy decisions that reflect our extreme caution when it comes to these products.

From a regulatory standpoint, vaccines are unique in many ways. Since we distribute them widely to otherwise healthy people, they deserve careful oversight. But right now we are shunning new, superior vaccine science by being overly cautious.

On Saturday, when President Obama declared the outbreak a national emergency, he enabled the suspension of federal rules in order to speed the distribution of treatments. Yet less than half the projected vaccine has been actually shipped. Supply is far below the government’s estimate of 40 million ready vaccines by November.

The first fateful policy decision, made last spring, was to forgo vaccine additives—called adjuvants—that activate the immune system and make shots more potent. Adjuvants allow a smaller supply of vaccine stock to be stretched across more doses. These adjuvants are included in H1N1 vaccines world-wide, but not in the U.S.

Why do adjuvants matter? An adjuvanted H1N1 vaccine being used in Europe contains 3.75 micrograms of vaccine stock. The same vaccine in the U.S., without the adjuvant, requires 15 micrograms of vaccine for equal potency. If we used adjuvants, we could have had four times the number of shots with the same raw material.

The second cautious decision was to require that the H1N1 vaccine be a single shot. The government demanded single-dose syringes because they contain smaller amounts of thimerosal than multi-dose vials. This mercury-containing vaccine preservative continues to stir concern it can trigger childhood autism, even though this has been firmly disproven.

The third policy decision was to stick for too long with a proven, but slow process for making flu shots that uses chicken eggs to grow the raw vaccine material. Shots can be made much faster using mammalian cells to grow vaccine, and this process is already being used in Europe. The cell-based vaccines are unlikely to be approved in the U.S. Our precaution when it comes to vaccines means we don’t easily embrace novel technologies, even if the Europeans would part with some of their limited supply.

How can we improve our regulatory process to prevent such shortages? First, the Food and Drug Administration (FDA) needs to create a review pathway for adjuvants that can become components of multiple vaccines. One, called monophosphoryl lipid A, was recently the first modern adjuvant to be approved in the U.S.—in this case as part of a vaccine for cervical cancer. We’ve been slow to integrate vaccine additives, bowing to imprudent activism and litigation. The European strategy of having adjuvants preapproved, as part of mock up pandemic vaccines, was smart. We should adopt it.

Second, the FDA requires vaccines to sit for weeks after they come off the manufacturing line to make sure they haven’t grown bacterial impurities. This is why most of the H1N1 vaccine supply is released in waves and won’t be ready until later this winter. The FDA can work with manufacturers to develop better standardized tools, called assays, to quickly assess new vaccine.

Finally, we need to invest in more modern facilities for manufacturing flu vaccine, particularly cell-based facilities. These plants can be scaled more quickly, enabling rapid production. A certain amount of these facilities should be built here at home. In a full-blown pandemic, with a very deadly strain of flu, it’s hard to imagine that foreign nations would allow limited supplies of vaccine to be shipped outside their borders.

The Obama team deserves credit for ordering vaccines early last spring when H1N1 first emerged. They contracted properly for the shots and negotiated a fair price. But passing all the blame for our current vaccine shortage onto manufacturers is unfair. The administration needs to take responsibility for improving our current system.

Dr. Gottlieb, a practicing physician and resident fellow at the American Enterprise Institute, was deputy commissioner of the FDA from 2005-2007. He is partner to a firm that invests in health-care companies.

via Scott Gottlieb: Why You Can’t Get the Swine Flu Vaccine – WSJ.com.

I think the writer misses the market a little here. While he rightful shows how bad policy has caused the shortage, he misses the point that the government always gets it wrong. If these vaccinations were delivered in a free market, they would be delivered efficiently and quickly to those seeking them. In the free market, different variations of the vaccine would be delivered based on varying concerns and needs. Those who believe mercury based preservative can lead to childhood autism would choose a vaccine without the preservative.  Adults could take the vaccine with the additive.

The author mentions different types of cells that might work better for the production of the vaccines. In a free market, resources would be brought together and utilized to their highest efficiency. If chicken eggs have their benefit, some vaccines would be developed that way and others using mammalian cells.

The problem you run into is government can never coordinate and organize resources more efficiently than the free market. They try cramming one size fits all policies on vaccine production. So if this truly becomes a pandemic, you can thank the government that your a sitting duck while waiting for your vaccination to be produced as inefficiently as possible.

Are we really going to hand over health care to a government who enslaves our future generations to bail out their buddies on Wall Street? TARP was sold as a bailout of banks in respect to freeing up credit. It turned out to be a slush fund to spread the wealth around to the wealthy.

The Troubled Asset Relief Program will expire on December 31, unless Treasury Secretary Timothy Geithner exercises his authority to extend it to next October. We hope he doesn’t. Historians will debate TARP’s role in ending the financial panic of 2008, but today there is little evidence that the government needs or can prudently manage what has evolved into a $700 billion all-purpose political bailout fund.

We supported TARP to deal with toxic bank assets and resolve failing banks as a resolution agency of the kind that worked with savings and loans in the 1980s. Some taxpayer money was needed beyond what the FDIC’s shrinking insurance fund had available. But TARP quickly became a Treasury tool to save failing institutions without imposing discipline (Citigroup) and even to force public capital onto banks that didn’t need it. This stigmatized all banks as taxpayer supplicants and is now evolving into an excuse for the Federal Reserve to micromanage compensation.

TARP was then redirected well beyond the financial system into $80 billion in “investments” for auto companies. These may never be repaid but served as a lever to abuse creditors and favor auto unions. TARP also bought preferred stock in struggling insurers Lincoln and Hartford, though insurance companies are not subject to bank runs and pose no “systemic risk.” They erode slowly as customers stop renewing policies.

TARP also became another fund for Congress to pay off the already heavily subsidized housing industry by financing home mortgage modifications. Not one cent of the $50 billion in TARP funds earmarked to modify home mortgages will be returned to the Treasury, says the Congressional Budget Office.

via TARP Should Not Be Extended – WSJ.com.

Those who love the government and think they will serve justice up on a platter of compassion, need look no further than the scam of TARP that was pulled on the American public. I’m sure the Wall Street Journal was all for the bailouts, and now they say the government didn’t enforce discipline. How do you force discipline on companies by bailing them out. The free market delivers discipline by the prospect of failure. When that failure option is removed by the government, discipline goes with it. This is a great lesson in A) don’t trust the government when it tells you something has to be done right away or society will suffer and B) government would sell your children in to slavery quicker than you can say TARP if that is what it takes to bailout their buddies. Don’t believe me, that is exactly what they did.

Treating the productive job creators of our society like criminals, the IRS is creating a new group to see if they can confiscate more money from the rich. Obama wants jobs so bad, he thinks if he can steal more money from the rich, they’ll decide they need to hire more accounts.

By MARTIN VAUGHAN

WASHINGTON — A new Internal Revenue Service enforcement unit targeting the very wealthy will help the tax agency decode partnerships, offshore trusts and other complex techniques used to hide income, IRS Commissioner Doug Shulman said Monday.

Dubbed the Global High Wealth Industry group, the unit will launch “a small number” of audits of individuals with assets or income in the tens of millions of dollars, Mr. Shulman told an accountants’ trade group. An IRS official said the group would begin work on these initial audits in the next month.

The high-wealth group, housed in the IRS’s large- and medium-sized business division, marks a sharpening of the IRS approach to auditing the very wealthy. Its creation is a response to the complex web of entities and transactions many high-net-worth individuals use to manage their financial affairs.

“You cannot assess compliance among the nation’s wealthiest individuals by looking only at their 1040s [tax returns],” Mr. Shulman said. “Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise.”

Wealth advisers questioned how much the new IRS approach adds, since in some cases, even under the old structure, an audit of a high-net-worth person may have looked across multiple income sources and asset classes.

However, “audits can sometimes be quite insular and silo-like,” said Ronald Aucutt, a partner at the law firm of McGuire Woods. In particular, gift-tax audits and income-tax audits are usually not coordinated, he said.

The reorganization is part of a multifront IRS effort to crack down on tax evasion by wealthy Americans. The agency is now sifting through the results of a partial amnesty program that netted 7,500 disclosures by Americans who held offshore accounts.

Write to Martin Vaughan at martin.vaughan@dowjones.com

via IRS Brings New Focus to Auditing the Rich – WSJ.com.

What is it that makes the government believe they have a right to every red cent you have? I find it funny the article says the IRS has a hard time deconstructing the complex structures the rich setup. Have you ever looked at your damn tax code? Talk about complex structures. Money goes where it is treated best. The quicker our government learns that the more we can bring it back home.

Since the mortgage crisis began, the left has used the repeal of the Glass-Steagall act as a battering ram to break down the pro-free market argument. The left, the media and even some conservative politicians claim it was not having enough regulation that caused the mortgage crisis and ultimately the economic melt down that we are currently experiencing.

This really is a silly argument on its face. How does removing an act, which separates commercial and investment banking, cause risky behavior? Causation is what the statists are claiming. This would be like saying removing a guard rail is what caused me to drive off the road and into a tree. I’m sure we can all agree, it wasn’t the guard rail. It was my reckless driving. Similarly, it wasn’t the removal of the Glass-Steagall act that caused the current mess, it was the risky behavior. But, why was there risky behavior? Why would I drive off the road and hit a tree? Something must influence these actions.

In the case of driving off the road and hitting the tree, maybe I was drinking, or maybe the speed limit sign said 100mph. Both of these influences would be considered the the causes, would they not? Also, by the standard of the left, removal of the guard rail would cause every driver to drive recklessly and hit the tree. If all drivers fly off the road and hit the tree, surely there must be something that causes them to do so. It would have to be a 100mph sign heading into a blind bend, or maybe a mandatory rest stop where all must fill up on liqueur before heading back down the road. Either way, both would cause the reckless behavior.

Similarly, in the mortgage crisis, something influenced the behavior of the entire market. Bankers didn’t wake up one day and say, “Hey, let’s be really risky.” Bankers were enticed into being risky by the government. The government encouraged the risky behavior with artificially low interest rates by the Fed and legislation (ie. regulation) by congress that was trying to promote so called affordable housing. “Everyone should own a home” was the mantra of the past decade.

First, the government and community organizing groups through their power of controlling and influencing how banks operate forced the banks to lend to borrowers that would otherwise be deemed risky. This was not just the left. The Bush administration jumped on board with similar pushes. Fannie Mae and Freddie Mac’s purpose was to push affordable housing, and they are the ones who basically establish the market in which bankers operate. Who do you think created the mortgage backed security instrument of which this monster was created?

Second, another part of the Glass-Steagall act that everyone forgets, but which everyone loves is the establishment of the FDIC. While it may seem like an excellent idea, how does saying, “Don’t worry. If you fail, the government will bail out your depositors.” effect behavior. Would that not increase risky behavior, knowing that you cannot harm the customers? Doesn’t that make customers less critical of who they deal with for their banking knowing that they have nothing to lose?

Third, the Federal Reserve artificially lowered interest rates to a historic low, reaching a negative real interest rate. In order to lower the interest rate, the Fed increase the money supply and encourages the banks to push out that money via loans. The whole point of this is to cause an expansion in the economy. Well, we got an expansion alright. As, Thomas Sowell says, “You can open the flood gates, but you can’t control where the water goes.” In this case, the water went into real estate. One could argue that the government did control the water somewhat with their push for affordable housing and their everyone should own a home legislation.

Another problem for the statists argument is if the guard rail of the Glass-Steagall act was still there, would we have still had a meltdown? While I cannot prove something that didn’t occur, one only need to look at the last meltdown with the dot com bubble. That was also Fed induced with money flooding the market. With the Glass-Steagall act in place, the money was forced into another sector, and we still had a meltdown. One can say it was not as big of a meltdown as our current one. The problem there though is the argument is just a matter of proportion. We didn’t have the historic low interest rates in the last meltdown and we didn’t have government passing legislation saying, “Everyone should own dot com stocks”.

Now we could get into the consequences of our entire banking structure and the problems with fractional reserve banking, but that would require too long of a post, and it would probably take me into deeper waters than I’m prepared to swim. The point of this post is to demonstrate that the anti-free market crowd doesn’t seem to understand causation. You can’t hold the free market accountable for something it did not create. Removal of the Glass-Steagall act was not the cause, just like removal of a guard rail doesn’t cause the driver to hit the tree. It both cases, it is outside influences, and in our current meltdown causation lies with the government.

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.

A must read. Now go read it!

How They Are Turning Off the Lights in America by Edwin X. Berry.

If only we had a President who actually participated in private enterprise before being elected as President of the world’s largest economy.

By MAYA JACKSON RANDALL

WASHINGTON — President Barack Obama, in his weekly radio address, took time out to highlight the importance of small businesses, saying too many small companies are still finding it difficult to obtain the loans they need to keep their businesses running.

“While credit may be more available for large businesses, too many small-business owners are still struggling to get the credit they need,” the president said in his prepared remarks. “These are the very taxpayers who stood by America’s banks in a crisis–and now it’s time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs.”

Mr. Obama said it is time that large banks, who have already received substantial aid from the government, take the necessary steps to enable the recovery to take hold.

“Our economy as a whole can’t move ahead if small businesses and the middle class continue to fall behind,” he said, noting that small businesses have been hit hard by the recession. Many entrepreneurs can’t get the financing they need to start up their own companies and small firms have lost hundreds of thousands of jobs, he noted.

via Obama Seeks Support For Small Business – WSJ.com.

No amount of prodding by our socialist-in-chief is going to help small business as long as he continues his anti-free market policies. You cannot ask businesses to borrow money and banks to lend money when the environment for entrepreneurship is under attack. Costs will skyrocket on small businesses with Obama’s so called taxes on the rich, socialized medicine, cap and trade, card check, and…… We are only nine months in. If you are a small business or a bank, do you feel comfortable that you can accurately assess what the future economy will look like. Banks and companies make investment decisions based on risk and reward. If they cannot accurately assess risk, they will not invest.