Wednesday, December 30, 2009

Health-Care Reform and Wealth Re-distribution

One of the biggest contributors to personal bankruptcy in America is health-care debt. This can be created in a number of ways: an accident, such as breaking your arm; as people get older their bodies begin to shutdown; people can be born with conditions requiring constant medical care; and in many cases people choose to use medical services such as in the case of an intentional pregnancy. My wife and I recently had our second child. Considering the expenses involved in child-birth, we would be on the hook for the equivalent of a new mid-sized sedan had we not had health insurance.

The reasons medical services have gotten so expensive have been analyzed by various economists. According to Milton Friedman, "The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment." These third-party payers include insurance companies and governments. So involved is government in health-care, that Friedman characterizes the American health-care industry as half-way to "completely socialized medicine." And as anyone who understands Socialism knows, it's a political system founded on the principle of the equal distribution of wealth. It is obvious to me, because I understand this, as well as the concept of "insurance," that the goal of health-care reform is the re-distribution of wealth.

What Is Insurance?

As mortal beings unable to see the future, our lives are filled with uncertainty. Risk is defined as "exposure to the chance of injury or loss." Since no one spends their lives in a sealed bubble, completely safe from injury or loss, we all encounter risk. We don't know what injuries or losses we may suffer, so we purchase insurance. An insurance policy is a contract with others that guarantees a covered injury or loss will be indemnified. It requires everyone to contribute a certain amount of money each, called a "premium," to an insurance pool. When a policy owner suffers an injury or loss, funds necessary for indemnification are withdrawn from the pool. This is how risk is transferred to others. The insurance market has created several types of coverage. There is insurance for risks associated with owning and driving an automobile, owning a home, and dying, among others.

The root of the concept of insurance is uncertainty about the future, when there is risk. When someone experiences an unforeseen injury or loss, their insurance protects them from the resulting burden. Most health insurance policies sold today include payments for things that cannot be characterized as risk, the exposure to the chance of injury or loss. Health insurance coverage includes foreseen things like annual checkups and, as I recently experienced, planned pregnancy. This can hardly be defined as insurance. It is more closely related to some type of discount card or club membership benefit. And, as Friedman explained in his article, health-insurance coverage is the equivalent of payments to cut your lawn or change the oil in your car. He also explains why the health-insurance market has evolved this way, that "the states and the federal government have increasingly specified the coverage of insurance for medical care to a detail not common in other areas." I recommend his article for a full explanation of that.

What Is The Aim of Health-Care Reform?

This brings us to the current attempt in the United States to reform the health-care industry. The goal of reform was explained by President Obama, "It will provide more security and stability to those who have health insurance. It will provide insurance to those who don’t. And it will lower the cost of health care for our families, our businesses, and our government." The various ways promoted by President Obama to accomplish this include: requiring, by law, that everyone purchase health insurance or pay a fine (the homeless too?), provide taxpayer-funded insurance called the "public option," and by making it illegal for health insurance companies to deny coverage based on pre-existing conditions. This is the general scope of health-care reform.

Why Is It About The Re-distribution of Wealth?

Whatever the principledeconomic or Constitutional arguments against the version of health-care reform sponsored by President Obama are, it must be understood that it has nothing to do with expanding health insurance coverage, and everything to do with the re-distribution of wealth. Why is that? Understanding the purpose of insurance, to protect ourselves against risk, expanding what the health insurance industry has become has nothing to do with risk. By forcing everyone to purchase insurance, the government is re-distributing wealth to insurance companies. By providing "insurance" through a public option, the government is re-distributing wealth from taxpayers to health-care consumers. And by making it illegal for health insurance companies to deny coverage based on pre-existing conditions, the government is re-distributing wealth from the healthy to the unhealthy. The Socialist (impossible) goal of the equal distribution of wealth is what is being sought. And because it has nothing to do with real insurance, the version of health-care reform sponsored by President Obama can only be a mechanism to re-distribute the wealth owned by everyone in America. Such is the (claimed) goal of Socialism, and such is the goal of socialists.

Tuesday, December 22, 2009

The First Christmas - A Libertarian Event, Too

Christmastime is arguably the best time of the year. We all know the reasons why, though many forget. My intention with this short essay is not to examine those, the most important parts. Rather, what I thought I'd share here are the details that make the Christmas story a libertarian event, too.

The mere birth of Jesus Christ upset the local government authority, King Herod. In the Gospel of Matthew, chapter 2, we read, "Now when Jesus was aborn in Bethlehem of Judaea in the days of Herod the king, behold, there came wise men from the east to Jerusalem, Saying, Where is he that is born King of the Jews? for we have seen his star in the east, and are come to worship him. When Herod the king had heard these things, he was troubled, and all Jerusalem with him." Herod immediately schemed to slay the babe because he believed he was a threat to his throne. As we can plainly see, Christ's first enemy was the state.

Thankfully, this scheme was revealed, "The angel of the Lord appeareth to Joseph in a dream, saying, Arise, and take the young child and his mother, and flee into Egypt, and be thou there until I bring thee word: for Herod will seek the young child to destroy him." One of the first events in the new child's life is nothing less than a protest against the aggressive hand of government. Just how aggressive is this hand? You decide, "Then Herod, when he saw that he was mocked of the wise men, was exceeding wroth, and sent forth, and slew all the children that were in Bethlehem, and in all the coasts thereof, from two years old and under, according to the time which he had diligently enquired of the wise men." The state is often on the giving end of such atrocities, and Christ survived it.

As James Redford described the situation, "If it were not for Joseph and Mary's intentional act of defying that which they knew to be king Herod the Great's will and escaping with baby Jesus from out of Herod's mid as fugitives to the land of Egypt, then Jesus would have been mercilessly killed and needless to say His ministry and the fulfillment of Scripture would have never come about. Thus in the most fundamental of regards, there is a great antagonism from the very start between Jesus and government (to say the least): Jesus was born into the world as a criminal and would later be killed as a criminal--a criminal as so regarded by the government, that is."

As wonderful and important as the first Christmas was, it would have been for naught had the family not defied and escaped the grasp of Herod. Let us not only remember the true meaning of Christmas, but also this very important lesson from the birth of the Savior of the world.

Monday, December 21, 2009

In Defense of Ebenezer Scrooge

I couldn't believe it when I saw it. A defense of that universally-loathed villain Ebenezer Scrooge. I recently came across this exceptionally written piece and absolutely must share it. I should warn you, however, that reading this may well destroy for you what is regarded as a well-beloved Christmas story. It did for me. No more do I have the same opinions of Scrooge or even Bob Cratchit. Actually, although it's caused me to remove this story from favorites list, I'm glad I've read this piece as it has connected my study of economics with my childhood. Written by Butler Shaffer, an excerpt:
It is instructive that Dickens tells us virtually nothing about the nature of Ebeneezer's business. We know that he is something of a banker or financier, but we are told nothing about the nature of his investments. Even if he has not been a creative entrepreneur himself, he has, presumably, been responsible for financing many successful enterprises, which have not only benefited the rest of the community in terms of goods and services they provide, but afford employment to countless individuals, including Bob Cratchit. For all that we know — and it would seem to be beneath Dickens's sensibilities to ask such a question or care about the answer — Scrooge may have provided capital for researchers seeking a cure for the very ailment from which Tiny Tim suffers. (Read the entire thing here.)

Tuesday, December 15, 2009

Preamble to The Bill of Rights

In celebration of today, Bill of Rights Day, I share the preamble of the Bill of Rights of the United States Constitution (emphasis added):

The Bill of Rights
The First 10 Amendments to the
Constitution as Ratified by the States
December 15, 1791

Congress of the United States
begun and held at the City of New York,
on Wednesday the Fourth of March,
one thousand seven hundred and eighty nine.

THE Conventions of a number of the States having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best insure the beneficent ends of its institution

RESOLVED by the Senate and House of Representatives of the United States of America, in Congress assembled, two thirds of both Houses concurring, that the following Articles be proposed to the Legislatures of the several States, as Amendments to the Constitution of the United States, all or any of which Articles, when ratified by three fourths of the said Legislatures, to be valid to all intents and purposes, as part of the said Constitution; viz.:

ARTICLES in addition to, and Amendment of the Constitution of the United States of America, proposed by Congress, and ratified by the Legislatures of the several States, pursuant to the fifth Article of the original Constitution.

Monday, December 14, 2009

10 Tenets of Freedom

Fantastic list created by Jacob Hornberger of the Future of Freedom Foundation, detailing 10 tenets of freedom. Excerpts from each tenet, read the entire 2-part article here:

Income Taxation
How can a person be considered truly free if the state has the power to take whatever percentage of income it wants from him? Whether the state sets the percentage at 5 percent or 100 percent, the principle remains the same: By wielding the power to set the percentage, the state effectively becomes the master of the people, who in turn become the servants.
Free Trade
From the standpoint of individual freedom, why shouldn’t people be free to trade their money and other property with others, anywhere in the world? It’s their privately owned property, right? It doesn’t belong to society, or to the majority, or to the state. They earned it. It belongs to them. By freely entering into trades with others from around the world, they are not only exercising an important right, they are also improving their economic lot in life.
Repeal it all. No reforms. No modifications. No ridding the programs of waste, fraud, and abuse. Abolish every single program in which people receive largess from the government. That includes Social Security, Medicare, Medicaid, farm subsidies, education grants, food stamps, small-business loans, bailouts, and every other welfare-state program.

The welfare state has been a disaster for the American people. For more than a century, Americans were characterized by such values as self-reliance, independence, and voluntary charity. That was the era in which there were no paternalistic or socialistic programs.
Economic Regulations
Ditch them. Get rid of them all, including minimum-wage laws, price controls, rent controls, antitrust legislation, licensing laws, insider-trading laws, banking regulations, product-safety regulations, and stock regulations. In fact, the best thing would be to enact a constitutional amendment stating, “No law shall be passed respecting the regulation of commerce or abridging the free exercise thereof.”
Open Immigration
Why didn’t most 19th-century Americans consider open immigration to be unusual? Because they understood that the free movements of people across borders were simply another aspect of economic liberty and free markets, a philosophy that they were applying to other parts of American life.
Gun Control
It would have been more appropriate to have made the Second Amendment the first amendment to the Constitution. Without the right of the citizenry to keep and bear arms, the fundamental rights enumerated in the First Amendment are worthless. When the citizenry are well-armed, government officials tend to exercise caution in infringing such fundamental rights.
Civil Liberties
As our Americans ancestors understood so well, civil liberties protect the citizenry from arbitrary arrest, imprisonment, and punishment at the hands of government officials who are doing their best to quell dissent and criticism of wrongful government conduct.
The Drug War
After more than three decades of drug warfare and the ruination of countless people with drug problems, what do drug-war proponents have to show for their efforts? Nothing, except death, destruction, corruption, violence, and the ruination of countless lives... There is one — and only one — solution to this craziness: the legalization of drugs. The restoration of liberty in America necessitates an immediate end to drug-war prohibition.
The Monetary System
What would a free-market monetary system entail? The repeal of all legal-tender laws, the dismantling of the Federal Reserve System, and, best of all, a constitutional amendment guaranteeing a permanent separation of money and the state.
Militarism and Empire
The solution is simple: abandon all the foreign military bases, bring all the troops home, discharge them, close the bases here at home, discharge those troops, and rely on well-trained, well-armed citizen soldiers in the highly unlikely event that the United States is ever invaded by some foolish foreign regime.

Friday, December 11, 2009

The Debate Continues

I've been involved in a small debate over at The introduction to my latest contribution:
Caleb Smitherson, Chris Brown and I have been involved in a debate of sorts regarding what the Book of Mormon says regarding tax and limited government. Caleb’s position is that God has authorized some coercive taxation and limited government. Chris Brown’s position is that Caleb Smitherson has misinterpreted his quoted Book of Mormon passages. This debate continues with Caleb Smitherson’s latest, found here.

My own views on using scripture to justify public (secular) government are laid out here. As well, a look at the libertarian principle of self-ownership by Caleb Smitherson is here, which kicked off this discussion (with my response). Whatever the merits of Caleb Smitherson’s And Chris Brown’s arguments, I leave those to them to refute. The purpose of this short article is to make a few corrections to Caleb Smitherson’s explanation of libertarianism and his interpretation of scripture regarding it. (Read the rest here.)

Saturday, December 5, 2009

O = W

Just made this graphic. Pass it on.

Thursday, December 3, 2009

Imagining Liberty

No one says it quite like Mencken:
The fact is that liberty, in any true sense, is a concept that lies quite beyond the reach of the inferior man’s mind. He can imagine and even esteem, in his way, certain false forms of liberty–for example, the right to choose between two political mountebanks, and to yell for the more obviously dishonest–but the reality is incomprehensible to him. And no wonder, for genuine liberty demands of its votaries a quality he lacks completely, and that is courage. The man who loves it must be willing to fight for it; blood, said Jefferson, is its natural manure. More, he must be able to endure it–an even more arduous business. Liberty means self-reliance, it means resolution, it means enterprise, it means the capacity for doing without. The free man is one who has won a small and precarious territory from the great mob of his inferiors, and is prepared and ready to defend it and make it support him. All around him are enemies, and where he stands there is no friend. He can hope for little help from other men of his own kind, for they have battles of their own to fight. He has made of himself a sort of god in his little world, and he must face the responsibilities of a god, and the dreadful loneliness. Has Homo boobiens any talent for this magnificent self-reliance? He has the same talent for it that he has for writing symphonies in the manner of Ludwig van Beethoven, no less and no more. That is to say, he has no talent whatsoever, nor even any understanding that such a talent exists. Liberty is unfathomable to him. He can no more comprehend it than he can comprehend honour. What he mistakes for it, nine times out of ten, is simply the banal right to empty hallelujahs upon his oppressors. He is an ox whose last proud, defiant gesture is to lick the butcher behind the ear.
( Mencken)