Tuesday, August 4, 2009
10:12 pm
Daniel J. Summers
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 have now finished my first 10K! It was quite warm, though a little wind and cloudcover made it not quite at hot as it could have been.
I had settled in to my place in the group, and then the 5K runners caught us. It wasn't particularly pleasing to be passed by hundreds of people who weren't even sweating yet! However, I told myself that my goal was to finish, and I did. I didn't feel particularly excited or pumped when I crossed the finish line, which surprised me - this morning, though, I do feel much better about it.
My oldest 2 sons also did the Kids K - both of them ran the entire way. I was very proud of them.
My next race will probably be the Albuquerque Cross-Country Classic 3 on 16 Aug 09, assuming my wisdom tooth surgery recovery is as quick as they've said it should be.
I got registered for the 10K I had decided to attempt first! I tried to register online yesterday, but the 10K wasn't showing available anymore. Through some research, I saw that you could register in person. I went by The Athlete's Edge, and there was room! I was able to pick up my materials right there as well. Here's the t-shirt that I got…(Active's community is no more; so long, pictures…)
And, I feel so official - my number!
The race starts at 1900 (7pm) tomorrow evening. I'm excited, and a little nervous. :)
I've been doing a big push to improve my fitness as of late. A friend pointed me to Active.com, where you can search for things to do in your area. One of the things that came with the membership on that site is a fitness blog. I've decided to use it to chronicle my fitness activities.
I'm hoping to have the posts appear here as well - kind of a self-aggregating thing, if you will. However, if they don't, the URL for my fitness blog is was https://community.active.com/blogs/daniel-j-summers.
Welcome to my new fitness blog. This will be a spot for me to record happenings in my continuing adventures in fitness.
I've had a love/hate relationship with fitness - I enjoy the way I feel when my fitness level is up, but I don't always feel motivated to keep myself in that shape. It's had a negative affect on my career (I'm military), and I've decided that enough is enough. I recently got myself within the standards that my branch of the military has set, but I'm not going to stop there. My goal is to be able to pass their test any day they come to me and tell me that it's time.
To keep myself motivated, I'm going to register for a 5K / 10K at least once per quarter - this will help me make sure that I always have a goal no more than 3 months away. I'll be doing my first one before my birthday, which is September 14th.
I found this over at House of Eratosthenes, with the full title “Thirty Ignorant Opinions That Are Nevertheless Somehow Popular.” As Morgan is moving soon, making the preceding link dead(Edit: link fixed), I've reproduced the list here. The remainder of this post is the excerpt - I agree with 28 or 29 of them.
[These opinions] are the opinion equivalent of driving several miles down the highway with your blinker on.
30. Together, we can take on global warming and we can win. Save the planet. Together we can do this.
29. We've got to get some more money into the education system, because our children are worth it.
28. Seventy languages in use in a school district is a sign that it is a rich tapestry of diversity, and that is good for everybody.
27. Any statement that qualifies “tax cuts” as an expenditure, such as comparing the “Bush tax cuts” with real spending plans.
26. We're going to need a bigger stimulus.
25. The trouble with our justice system is that the people who decide the cases don't have enough empathy.
24. We've got to do something to help the unemployed, like taxing the snot out of the businesses that just might hire them.
23. It's going to take Barack Obama a long, long time to fix all this stuff, and He is trying His best.
22. If women were in charge of the world there wouldn't be any wars.
21. FOX News tells lots of lies, but I can't come up with any examples.
20. You know what we really need to change? If a guy has lots of sex he's a stud, if a woman does the same thing she's a slut. SO unfair!
19. Everything that needs inventing has been invented. Men, drop out of school, learn to rap and do your crunches.
18. We've got to change our policies because our (unnamed) allies in Europe don't like us.
17. I can't approve of Barack Obama's policies. But I still like Him personally, and that's what really matters.
16. We must all be forced to call gay people “married.” It's a civil rights issue. For them. Not for anyone else. Just for them.
15. We have to raise the tax rate on the rich, because that makes us all a better people.
14. The Earth is sure to be doomed if I use traditional sandwich baggies. But it's got a fighting chance if I use these ones that are 25% lighter.
13. Sarah Palin isn't a real woman; she's a Republican.
12. I know exactly what my thousand dollar car needs: Three thousand dollar rims.
11. If we drill, we won't see a single drop of oil for x years. Besides, adorable polar bears, penguins, pristine environment blah blah blah.
10. We should not have attacked Iraq because Iraq didn't attack us.
9. I wanna watch American Idol!
8. Hooters? Isn't that a strip bar or something?
7. The second amendment is out of date because all them founders couldn't have envisioned nukular weapons and what-not
6. Those illegal aliens are just trying to make a better life for their kids so we should coddle them all and make them citizens.
5. Vote for Obama! Hope! Change!
4. If your kid doesn't feel like paying attention it's a learning disability. Medicate him.
3. No one's going to be safe until we get rid of all these guns we have lying around.
2. Culottes and clamdiggers. That's what hip fashionable hot looking women should wear this summer. Who wants to see a gorgeous woman's bare thigh anyway.
1. Palin quit because of a scandal. Yup. After all that digging, months and months, the entire Fourth Estate...they left one hidden. Boy, do they feel foolish.
This is the first time my blog and Facebook accounts have crossed. If you're not a member of Facebook, you may not know exactly what I'm talking about. However, you know my enjoyment of economic discussions, and this is a good learning opportunity.
Recently, several of my Facebook friends joined a group called “We Will Not Pay for Facebook.” They're not alone - this group boasts over 4.4 million members. The group had articles referring to the profit that the current owner is making on the site, and various purchase offers. Then there was this…
Because of Facebook's huge popularity Mark Zuckerberg is getting a lot of offers from people wanting to buy Facebook. People Who WILL turn it into a paysite.
The assumption here is that if anyone buys the service, they will change it to a pay site. This is FUD*, and to illustrate this, we'll look at Facebook compared to another site, Classmates.
What makes Facebook valuable is its large (and exponentially growing) user base. Facebook can charge advertisers a premium for ads placed there, and if they make it paid-per-view, they make even more money, because they get lots of eyes on them. There are people who, like me, pay for very few websites (the only one I'm currently paying to use is Geocaching), and were Facebook a pay site, would not have signed up it. With this high user base, and high business value, comes the innovation - while few people I know like the new “stream” home page, there are things that Facebook can do that few other sites can match.
Contrast this with Classmates - this site has been up longer than Facebook, does pretty much the same thing as Facebook, yet is nowhere near as hot a commodity or as valuable a business as Facebook. Why is this? The fee model. Classmates requires a fee for an account (or at least they did when I looked at them, which hasn't been recently).
If someone bought Facebook and changed it to a fee model, it would kill the business value of the site. Sure, you'd have people who got addicted to the free stuff and would pay to maintain their addiction, but you'd have other people (myself included) who would simply let the account go. I have other ways of doing pretty much anything that site can do. It's nice to have it all in one place, but it's not worth $3.95/mo to me. All this would severely stifle the growth of the site, thereby reducing its business value.
If this happened, there would then be demand - demand for another free bring-it-all-together social networking site. The entire science of economics is defined as the study of the allocation of scarce resources. Demand causes resources to be allocated - whether it was “iShare,” or “Friends and Family,” or “Facepedia,” some other site would sprout up that would provide the services that Facebook used to provide.
That being said - I don't see Facebook going to a fee model, whether it changes hands or not. It just doesn't make economic sense. And, if the owners decide to go that route, it still won't be a big deal, as something else will rise up to replace it. Don't believe the FUD. :)
Thursday, April 30, 2009
12:03 am
Daniel J. Summers
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.
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.)
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?
Wednesday, March 11, 2009
9:20 am
Daniel J. Summers
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.
