Daniel J. Summers » Charter Member of the VRWC

I made a Facebook status update earlier today where I said I hoped that the mismanaged “Cash for Clunkers” program (C4C hereafter) had caused some people to think about whether they wanted the same people in charge of their health care.  Of course, with the limited space for status updates, and my double-dose of verbosity (which is genetic, I thnk), I really didn’t have room to flesh out my thoughts on the matter.

A review would be in order here.  C4C is a government program that gives incentives for people to trade in cars deemed older and less fuel-efficient on a new car that is more fuel-efficient.  A consumer group has a FAQ.  A controversial provision of this bill is that these trade-ins must be completely destroyed – no parts can be salvaged at all, no tires, no body parts, nothing.  One of my Facebook friends described the process they used – drain the oil, replace it with water, and run the engine until it seizes up.  Anyway, this program was funded at $1 billion to go from July 24th to November 1st of this year.  Yet, a short week later, the news begins to break that the program is almost out of money.  There is talk of adding another $2 billion – that’s $3 billion of our tax dollars to buy and destroy perfectly functional cars, because they don’t fit someone’s idea of a “good car.”

Regarding the way these cars are being destroyed – this is the classic broken window fallacy, the economic theory that says that vandalism is good for the economy.  A boy breaks a window; the shopkeeper must get it replaced.  This benefits the window maker, which can benefit others in turn.  However, the fallacy is that it does not look at what the money that the shopkeeper had to use to fix the window might have otherwise been used to do.  For example, while the window maker advances, the shoe maker and baker, who might have received the money the shopkeeper would have spent, are hurt.  (As an aside – wouldn’t it be better to keep the window maker in business by providing windows for new business?  Oops – that was the greedy capitalist in me.)

Now, let’s look at the health care issue.  Nearly every proposal I’ve heard coming from Washington decries the number of uninsured people in this country, how much we pay for health care, and how bad the insurance companies are.  There are many ways to go about this; I’ll look at each of these in turn.  As we do, keep in mind what happened to the “bad” cars in C4C.

We hear bad, bad things about the number of uninsured Americans – the latest numbers have it about 47 million.  That’s a lot, right?  Maybe, but maybe not.  One thing that these stats do not take into account is the number of people who choose to be uninsured.  Many college students are uninsured by choice (or by lack of giving it a thought – that would have been me right after high school!).  The census bureau said that the number of college students was 15.9 million in 2004.  How about single people?  I certainly didn’t worry about health insurance when I was single.  The census bureau said in 2007 that of the 92 million single people, 60% had never been married at all, and 15 million were over 65.  Certainly not all of these are without insurance, but a good many may very well choose not to have it.  That leaves the ones that can’t afford it – we’ll look at ways to make it more affordable in our third point.

Next up is how much we pay for health care.  Yes, just like our military prowess, America is #1 in the world at spending per-capita on health care.  We are also #1 in the world at medical advances and technology.  These things do not come for free – what is the incentive for a company to develop the newest bang-up drug if they aren’t going to be able to make enough money on it to fund the research it took to develop it?  Altruism may be nice, but it doesn’t put food on the table.  While the exchange of money for services seems to be distasteful to some people, you’ll look long and hard to find a better motivator.  Why do doctors put themselves through years and years of education after most people are already out working?  For a few, they may just love their fellow man that much, but for the most part, it’s that American dream of making it, and having the things they want.  How does one acquire things?  Money.

All this talk about money brings us to those evil, horrible insurance companies.  I’ve dealt with them just as many of you have, and it’s frustrating to have things denied because a t wasn’t crossed or an i dotted.  However, let’s look at what we expect from insurance.  Does homeowner’s insurance cover carpet cleaning, painting inside and out, and re-weatherstripping the windows?  Does auto insurance cover oil changes, new tires, detailing, and radio upgrades?  Then why must any health insurance cover check-ups?  The litany of required services on some insurance providers is astounding – and, the consumer has no choice.  I don’t think I could go to a state in the Union and get an insurance plan that didn’t cover maternity; as a male, I really don’t think that’s coverage I need.  People view health insurance completely different from any other insurance.  Why is it that, if something exists, people think that their health insurance should cover it?  Some of these treatments or experimental procedures weren’t even in existence when the policy was written, but people think that they’re entitled to them.

This is where affordability comes in.  Let insurance companies customize plans, so that people can buy just what they want (catastrophic coverage, for example) and exclude what they don’t (TMJ).  End the ridiculous “discounted rate” on the billing – doctors have artificially raised their rates because they know that, for the most part, their patients’ insurance will only pay a portion of it.  The price should be the same for someone paying out-of-pocket as it is for the insurance companies.  (Back to auto insurance, does Ford offer Allstate a discount?  Yeah right.)

What happens with this is the regular free-market benefits.  First, the availability of health care goes up, because the people who opted out of “hypochondriac” coverage will not take up a doctor’s time for every sneeze and sniffle.  Second, there is an incentive for providers to get into the business, as the playing field is more level and less laden with red tape.  Third, people will be so happy that we’ll never have to hear about this ridiculous socialized health care mess ever again!  (Well, okay, maybe that last one is a stretch.)

Now, let’s look at C4C health care.  You’ll have politicians and government paper-pushers determining what’s covered and what isn’t, with their decisions holding the force of law.  The thresholds will be hard – the qualifying line is drawn in the cement as it hardens.  It will cost 10 times what “they” estimate – at least.  Wait times will be through the roof, as anyone who qualifies for something will get in line for it, whether they need it or not.  Over five or ten years, there will be a shortage of providers, because doctors will decide that law is a much more lucrative field.  And, one of the founding principles of our nation will have been sacrificed on the altar of good intentions.

I know which one I’d prefer.

Yes, in 100 days I’ve gone from “skeptically optimistic” to hoping that 3 terms of Republicans can stem the tide from 4 years of our current administration. For all of the left’s making fun of Bush, and VP Biden’s history of gaffes, who knew that the current administration would make them look downright composed?  It’s Amateur Hour at the White House, and our kids get to pay billions of dollars for us to watch!

Economics: F (only because F- isn’t technically a grade)
You would think that this would be the current administration’s strong spot, seeing that they won the election last year based on the crappy economy (or so they’d have you believe).  Yes, the fiscal irresponsibility of the final year of the Bush v2 administration looks miserly compared with this stimporkulus and budgets we’re being asked to finance. The graph to the right gives an illustration of the impact of the current budget, compared to budgets under Reagan, Bush 1, Clinton, and Bush 2.  Just as the New Deal lengthened the Great Depression, these artificial attempts to “fix” the economy are actually doing it more harm.  Then they label those who are against it as dangerous – but more on that later.

National Security: D-
This one was not an F due to his quick response to the Somali pirates who had captured the captain of a US ship.  Regarding the F/A-22 cutbacks, these were being discussed even in the previous administration, and even so, the “cutback” still result in more airplanes being built and delivered to fill the order.  I don’t really have a good feeling one way or the other.  The F/A-22 has been in work a long time, and had a lot of money already.  To throw that away, when we used its predecessor for over 30 years, seems foolish to me.  However, with the services merging more and more operations, perhaps it’s smart to have a plane that’s built to specifications from all interested parties.  Time will tell.  The release of the CIA memos, though, was a bad move, which I discuss in the next subject below.

Foreign Affairs: F
How many ways are there to mess this up?  Maybe we should bow to another head of state.  Maybe we should give the Queen of England an iPod with your speeches?  How about giving 25 Region 1 DVDs to someone who can only legally play DVDs from Region 2?  Maybe we could use the term “England” to tick off a good portion of one of our strongest allies.  And these are the people who made fun of Bush?  Maybe they should’ve left some folks from the White House Protocol Office on staff to train the new folks.  I know that it was Kerry’s slogan and not Obama’s, but isn’t this the party that wants to make us “respected around the world”?  Ignoring years of tradition and protocol is not the way to make that happen.

And, the release of the CIA memos has made us look even worse.  We have people hyperventilating on both sides over whether waterboarding is torture.  The ones who do us harm know that they don’t have to do anything for a while, because we’re doing it to ourselves.  What the administration doesn’t seem to have thought through is that, though in this country, it may be easy to pin all that on the Bush administration, to the rest of the world, it’s still “America” that did it.  And, if they know that we don’t have the stomach for it (would it really have been that out-of-line to put a caterpillar in a room with a terrorist?), their job is easier.  The CIA agents are demoralized, and the enemy is emboldened.  Call it what you will – naive, oblivious, amateur hour – it’s dangerous, and it’s made our country weaker because of it.

And, to those hyperventilating – if you’re ever captured by them, you’d better pray that waterboarding is the worst thing they do to you.  Because we’re humane, we’ve come up with ways to make people think that they’re being tortured, when they’re really not.  Torture has lifelong implications to your health and mobility; John McCain can’t lift his hand above his shoulder – that didn’t come from waterboarding.

(Even the decision to stick by the Iraqi withdrawal timetable couldn’t raise his grade in this subject.)

Domestic Affairs: F
Janet Napolitano is a joke.  “Nonetheless, to the extent that terrorists have come into our country or suspected or known terrorists have entered our country across a border, it’s been across the Canadian border. There are real issues there.” “Crossing the border is not a crime….” Tax Day Tea Party protestors are dangerous right-wing extremists, and they could easily recruit returning combat veterans.  I don’t feel that our homeland is very secure – I feel that this department is now being run as a playground for political paybacks.  Then there’s Hilda Solis, the Labor Secretary confirmed because the Republicans just got tired of fighting.  I saw one interview on TV where she must’ve claimed “but we’ve only been here 5 weeks” about 7 different times.  That’s not the way a leader talks.  An amateur hour two-fer.

Social Affairs: F
I believe I covered Obama’s revocation of the Bush executive orders regarding federal funding for embryonic stem cell research.  (I’ve bolded the important parts, because I’m sick and tired of the liberal “You’re opposed to science!” mantra.  No, we’re not – we’re opposed to the government paying for research that destroys unborn humans, especially when it has shown no signs of finding anything, but other, similar, non-lethal-to-the-donor research has.  (And, check out #1 under “Adult Stem Cell Advantages.”)  What you fund, you get more of – fund more experiments on dead babies, you get more dead babies.  I happen to be against dead babies, born or unborn.)  When Obama rescinded that executive order, he also rescinded one that allows funding of ethical experiments.  A good analysis of what that means is here.

He gets a pat on the back for supporting traditional marriage; however, I think that battle is lost.  The demise of marriage came not from non-traditionalists, but from people who decided that a promise of forever can be undone by a piece of paper signed by a judge.

Well, he’s got a solid 0.2 GPA headed into day 101 – nowhere to go but up, eh?

First up is the latest column from Thomas Sowell entitled “Subsidizing Bad Decisions” in which he asks a very good question – “Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?”  Read the whole thing, particularly the part where he talks about “saving for a rainy day” and “sadder but wiser.”  I’d planned a longer post on the economy (and I still may do that), but this is pretty much the way I feel about it.

And, backing him up is some timeless advice from Adrian Pierce Rogers, via Neal Boortz…

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.

If only Washington, D. C. understood that simple truth.

This past year has been one of the most eventful years I can remember in the recent past. Continuing a now 3-year tradition, this is the first of three posts that comprise “2008 Year in Review – The Good, the Bad, and the Ridiculous.” I post them in reverse order, so that they make sense when reading them in the archives.

So, let’s look at that the things that went beyond bad (AKA ridiculous) this past year…

• Sarah Palin’s Treatment

In August, John McCain announced his running mate – a virtually unknown Alaskan Governor Sarah Palin. However, she was not unknown to those of us in conservative circles (even if we thought her name was pronounced PAL-inn instead of PAY-lin). In fact, I still credit Cassy Fiano with being prescient on this – she posted about her way back on June 23rd. We knew her story, her accomplishments, and her attitude. Although this was her first national campaign, she already had a nearly 20-year career in governmental leadership. With the opposing party running someone with 120-some-odd days in a legislative office, one would think that she would be dealt with on her merits.

But, as we all know, that’s not how it went down. From day 1, she was called inexperienced. Remember this press release from the Obama campaign, released the day her selection was announced?

Today, John McCain put the former mayor of a town of 9,000 with zero foreign policy experience a heartbeat away from the presidency. Governor Palin shares John McCain’s commitment to overturning Roe v. Wade, the agenda of Big Oil and continuing George Bush’s failed economic policies — that’s not the change we need, it’s just more of the same.

And, it didn’t stop there. The women who get attention from the media, AKA radical feminists, piled on, calling her everything but a woman. I’m not lumping the Saturday Night Live satires in with this; they spoof everyone, and they invited both McCain and Palin to be on the show (and they both did a great job). Her experience was ridiculed, her wardrobe maligned, her children jeered – and the list at this point is charitable. Rumors swirled that Gov. Palin’s special-needs child was actually borne by one of her daughters, fathered by her husband; and the rumor of her daughter Bristol’s pregnancy, while proved true, was played to make her look like a backwards hillbilly redneck. It was all truly despicable, which is why it leads this year’s list.

• Don’t Taze Bail Me Out, Bro!

Government interference in the private sector came to a head this year in a bad, bad way. Fannie Mae and Freddie Mac, entities that helped provide “sub-prime” mortgages (a euphemism for “loans people can’t really afford”), were providing these loans the same way they were in the late 1990′s, at the crest of the Internet wave. I remember a scare after 9/11, when the housing market really went south – but, we didn’t learn from that. Banks continued making loans they had no business making, to people who had no business seeking out such loans to begin with, for real estate that, contrary to the view of some in this country, is not an entitlement.

The bubble burst! (surprise, surprise) With the downturn in the economy (which even Bill Clinton understood – “It’s a crisis of confidence”), banks were having to foreclose on these loans to get their money, and people were being evicted from their homes (technically “the bank’s houses” at that point). I’m not completely heartless – losing a home stinks; but, the true heartlessness was letting them get it in the first place. Politicians demagogued the issue – how many times did you hear “Owning a home is the American dream!” – and people bought it, literally. With lots of foreclosures and slow sales, this snowballed from Fannie Mae and Freddie Mac to Lehman Brothers and AIG, and soon we heard about impending financial collapse.

Fast-forward to November – the “big three” auto makers say “Hey, we need a bail-out too!” The CEO for GM actually apologized for their making crappy cars (in a manner of speaking). The cause in this case is related in mind-set to the mortgage problem – an entitlement mentality. The United Auto Workers union had strong-armed these companies into providing compensation packages for their employees that, given their sales and profits, were unsustainable. The UAW refused to match packages that are successful for Toyota, Hyundai, and other manufacturers outside of Detroit, and Congress refused to give them money (quite possibly the best thing this current Congress has done). The Bush Administration has opened up money design for financial loans for these companies – we’ll have to see how that pans out into 2009; GM and Chrysler took it, Ford did not.

The biggest problem with all this is something I’ve been saying for years, which was only confirmed when I took my Microeconomics class last year. Government interference in free markets only causes problems. Oppressive regulations suppress innovation, and incentives create bubbles that cannot be sustained. So, in my opinion, the best way out of this is to let the bubble burst, clean up the mess, learn these important lessons, and move on. These packages, whether you call them “stimulus” packages or “bail-outs,” what they really are is rewarding irresponsible behavior, by taking money from those who have been more responsible.

• The 2008 Olympics

No, I’m not talking about Michael Phelps’ ridiculous display of athleticism. This is more for China and it’s show. The opening ceremony was certainly impressive, to the point of being creepy. Fake fireworks? Isn’t this the land known for it’s fireworks? Just because communist countries get Olympic games doesn’t mean that I have to like it – I remember the USSR games in 1980. But, to watch the coverage of these games, you wouldn’t know about China…

…except for their women’s gymnastics team. Although the IOC eventually determined that all of their team members were 16 years old, I’m not buying it. However, I’m glad they tried it – it brought their “reality is what we say it is” style of heavy-handed government to the attention of many, many people.

• Burma Refuses Aid after Cyclone

In the spring, a horrible cyclone hit Burma (AKA Myanmar), a nation in southwest Asia. Aid workers and aid began to pour in from all over the world, only to be rebuffed by the militaristic governmental dictatorship. Visas were held up or denied for many aid workers, and the government refused to allow aid to go directly to the people; rather, it mandated that all aid be given directly to the government, for it to distribute.

This is absolutely ridiculous. Even when nearly half a million (yes, that’s 500,000) of its citizens have lost their lives, the government continues to keep a stranglehold on this country. By not allowing aid into the country, the after-effects of disease brought on by contaminated water only added to the death toll. Even today, the country is still stiff-arming offers for aid, insisting that things are back to normal. I’d rather live through 100 Obama presidencies than live one day under a government like that!

What did you think was ridiculous in 2008? (Just a note – I’ll have the 2008 election in the “bad” entry…)

Neal Boortz provides validation today for those of us who claim that a higher minimum wage leads to lower employment.  It turns out that July turned out to be a really bad month for teenage employment – the typical person seeking minimum-wage employment.

Last month, President Bush lifted the ban on offshore drilling, and crude prices dropped $10/barrel almost overnight.  We can’t drill our way out of this situation, we kept being told (Morgan Freeberg makes mincemeat of that ridiculous phrase); but, when one of the two restrictions on offshore drilling are lifted, the price plummets.

The Godfather points out an AP release in which, all of a sudden, they determine that “trickle-down economics” actually exists!  When “rich” people don’t get as much money, they don’t give as much, or they don’t hire as much.

Hmm…

Wouldn’t it be great if today was just another day? (A pay day, no less, if you get paid on the 1st and 15th like I do!) There is an alternate tax plan called the FairTax that eliminates the IRS and the millions of dollars spent complying with today’s extremely complex tax code. (Do you realize that the cost of this compliance is embedded in both the cost of things you buy, and in the wages that your employer can pay you?) Neal Boortz, one of the co-authors of The FairTax Book and FairTax – The Truth: Answering the Critics, has put chapter 13 of the latter book online, where it can be read for free. It paints a vivid contrast between our current tax system and the FairTax.

If you’re ticked about the money you had to pay, take a look at the FairTax. If you like it, tell your friendly Congress-critter so.

A new study released today puts the lie to the common demagogic theme that the rich keep getting richer and the poor keep getting poorer. The Wall Street Journal has the details.