Demonize and Divert

Nancy Pelosi has attacked the insurance industry, an easy target for demagogues. It is so obvious: demonize and divert, a well-known tactic of power-seeking extremists who cannot persuade using reason and facts. That was why Hitler targeted the Jews.

Every time Pelosi makes a pronouncement, it is an embarrassment to the position of Speaker of the House. I am no fan of contemporary politicians or the role that they have assumed to run our individual lives and take our money to do it. But there have been many solid people, even if they were liberals, who held the position that were respected by the public and their peers -- Sam Rayburn, John McCormack and Tip O'Neill, for example. None of them were loudmouths. Most exercised quiet leadership. And none of them stood before the public and spewed such silly, irrelevant nonsense. She is a caricature, a stereotypical radical left-wing demagogue. Even Ted Kennedy's style is more reserved these days.

I have never been a fan of insurance companies either. My bias comes from sad and extensive experience with them in the area of commercial liability insurance, where the companies' written procedures revealed their dark side in surprisingly candid terms: they were in business simply to take your money, keep it and give you nothing in return.

My experience with major liability carriers was especially revealing. Once I sued 18 of the largest carriers in the United States; and, because it was clear that they were denying my client's claims with no justification whatsoever, we were able to force them to settle the claims -- but only after a protracted battle in which they attempted to overwhelm the client with legal costs. It did not hurt our case that a key public decision of a state insurance commissioner, which had mysteriously vanished from the commission's files, somehow appeared in the confidential files of the insurance industry's trade association. The resulting implication that insurance companies might steal official files or otherwise not engage in honest litigation or practices left me with a life-long bias that "insurance companies are evil." When representing a client, I need to be persuaded otherwise.

But it would be an over generalization to extend my bias against liability carriers to, for example, automobile insurance (where my experience has been positive) and health insurance (where I have had only a few minor negative experiences). And any bias, whether against liability insurance carriers or others, needs to be regularly confirmed by the contemporaneous facts.

Too many of us, even (and perhaps especially) in the area of health insurance have bitter memories that still make our blood boil. Do you think this will get better or worse if a government bureaucracy is placed in charge? Pelosi is pandering to people's anger at the petty, misguided bureaucrats who gave us such a hard time about intensely personal matters. But in recent years, in my experience, health insurers have done a better job at communicating in advance what they cover, which leads to improved understanding and less contention. But even if the insurance companies were perfect, it wouldn't fix the system.

When interviewed recently Nancy Pelosi said, "Let me assure you: There will be a health care reform bill passed and it will make a big difference in the lives of the American people." No doubt, if a bill is passed, her prediction will be correct, except that the difference will not be positive when compared to the existing system.

As explained by Shikha Dalmia, except for those without health insurance (who use the emergency rooms for free), our health care payment system is a private insurance system which removes from the consumer the responsibility for negotiating the price or controlling the cost directly. She compares the systems in France, Germany and the USA:

For the same flat fee—regardless of whether it is paid for primarily through taxes as in France in Germany or through lost wages as in America—patients in all three countries effectively get an ATM card on which they can expense everything (barring co-pays) regardless of what the final tab adds up to. (Catastrophic coverage plans are available in America, but the market is extremely limited for a number of reasons, including the fact that most states have issued Patients Bill of Rights mandating all kinds of fancy benefits even in basic plans.)

Thus, in neither country do patients have much incentive to restrain consumption or shop for cheaper providers. In America and Germany, patients don't even know how much most medical services cost. In France, patients know the prices because they have to pay up front and get reimbursed by their insurer later—a lame attempt to ensure some price consciousness. But since there is no cap on the reimbursed amount, the French sometimes shop for doctors based on such things as office decor rather than prices, according to a study by David Green and Benedict Irvine, researchers at Civitas, a London-based think tank. (Green and Irvine reported this as a good thing.)

The health care system in the U.S. needs to be fixed to enable the consumers to pay for and control the cost of their own health care and for physicians to treat their patients without the state dictating the terms, access or methods. In other words, the government should get out of the way rather than imposing more control. Cliff Asness, in a lengthy article (see Health Care Mythology), which is worthy of study, has said it better than all others.

It appears that the Senate will approve a health care bill. Then it ultimately will end up in Conference where the bill will be changed to one that can be subscribed to by both houses. The problem with Conference is that negotiations between members of the two houses are behind closed doors. The phrase, "Nellie, bar the door," comes to mind. If they get out, "it will make a big difference in the lives of the American people."

This is not a time to be a sheeple unless you want your children and grandchildren to be sent like lambs to the slaughter. It is time to become politically active and persuade others so that many, many respectable voting citizens can have their voices heard. Remember, numbers is the only thing your elected representatives respect.

SIGTARP Shines the Light of Day on the Cost of Bailouts

The Special Investigator General for the Troubled Asset Relief Program, known as SIGTARP, reported to Congress last week that the total cost of the combined TARP bailouts could reach as high as $23.7 Trillion! His report was quickly criticized and disputed by the murky Treasury Department, of course. Read all about it, including links to the SIGTARP's Report and testimony in the American Spectator.

Lobbying And Health Care Reform

I received a recorded telephone message from the AARP this week. I hung up as soon as I heard "This is the AARP." As a retired person, I probably should have listened; but I knew what the message was going to be -- support the health care bill. The AARP has spent more that $6 billion lobbying health care since April 1.

The Lobbyists have opened their checkbooks. Those who hope to gain big from regulation and wealth transfer are on the front lines.

The Congressional response to the credit crisis and the effort to nationalize health care, which represents over 15% of the economy, are just two examples of a government that recognizes no bounds. The presumption of government power that has most recently accelerated to a level never (in their wildest imaginations) contemplated by the Founders creates a nasty scramble for the fruits of your labors, which Dr. Edward Hudgins has described as a war of all against all:

To understand the paths to social conflict and harmony respectively, we must understand that all ideologies—and the governments on which they rest—are not created equal.

The government devised by America’s Founders sought to protect the lives, liberties, and property of the citizens, that is, to ban the initiation of force—the essence of conflict—by individuals against one another. All relations between people should be based on mutual consent. In the economic realm this means that individuals must produce and trade goods and services voluntarily with one another. The situation is not a zero-sum game. The only way I can prosper is to convince you to part with your money by offering you something you want.

But when government is allowed to manage and manipulate the economy and to redistribute wealth from one individual or group to another—the essence of Obama’s policies—we have a system that is by its nature contentious. You win only because I lose.

****

This is a politicized economy. Decisions about our economic lives and affairs are taken out of our hands and decided by raw political power, pitting us against one another, creating winners at the expense of losers.

Individuals look more often to government—that is, to their fellow citizens—to help them meet the economic challenges in life that should be their responsibility as individuals—education, career, financing a house, saving for retirement. We become burdens on our neighbors or they foist burdens on us.

There is nothing wrong with lobbying per se. The Founders established it as a First Amendment Right. But it was established in the context of a constitutional scheme of limited government. DeToqueville warned that the American system of democracy was subject to abuse and could lead some day to the majority's voting money out the pockets of the minority. And it has now come to pass. The right to petition the government for a redress of grievances has spawned a huge industry that corrupts the political process and causes citizens to assume that everyone in Congress is a crook. Big money flows into the coffers and elsewhere for the benefit of someone's re-election campaign. It happens because of the huge resources the government commands (taxation and inflation) and its presumed power to do just about anything.

The solution to this mess is to restore a government with limited functions, reduce taxes, balance the budget and have a currency that cannot be inflated.

Professor Michael S. Rozeff observes that there are some good lobbyists -- those who advocate that the government should do less, who oppose government transfer of money from those who earned it to those who didn't, and who resist the imposition of restrictions on voluntary trade and property rights, such as the NRA and National Federation of Independent Businesses. And there are some "bad lobbyists," one of them being the AARP:

The AARP’s lobbying is directed against budget caps, against entitlement caps, against cuts in Medicare, Medicaid, and veterans’ benefits. It is for the prescription drug entitlement. It is against any privatization of Social Security, including voluntary or mandatory personal retirement accounts. It supports the progressive income tax. The AARP looks upon tax measures in terms of their impact on government budgets (that is, tax cuts have a "cost"). It favors the income tax at the federal level. It favors reducing "tax expenditures," that is, revenue losses to the government that arise from deductions, exclusions, and credits, etc. In other words, it favors tax increases from this source. The AARP takes "the need to fund national spending priorities" as a given, for which Congress "must ensure an adequate revenue base." (AARP manages to use the words "need" and "must" in the same sentence.) AARP favors taxing capital gains at the same rate as ordinary income.

The AARP has positions on many more general areas such as housing, transportation, education, social services and utilities. As in the cases of entitlements and taxes, its positions are monotonously of one stripe – the government should do this and do that and do the other thing. It should regulate and control. Such an animal as a market solution that is unassisted or undirected by a government directive does not seem to exist in its view. In short, the AARP’s lobbying is thoroughly and one-sidedly in favor of big and bigger government.

The AARP lobby is unabashedly socialist, for it advocates controlling the income produced by the productive efforts of others. If one controls, one owns. The amazing thing about its calls for more and more and more directed to the "elderly" is that there is seemingly no upper bound. Economists tell us that wants are insatiable. They usually analyze cases where freedom to choose is present. We learn from the AARP that coercive satisfaction of wants also is insatiable. No matter how much misery is caused to those paying the bills, the master seeks to extract more from the slave. This seems irrational, so maybe there is an upper bound. The AARP hasn’t hit it yet.

And that is why I don't care to listen to the AARP's recorded messages.

Lighten Up. Take a Break from Seriosity

I have loaded my iPod (a gift from my daughter) with a wide variety of music -- classical, big bands, Sousa marches, rock & roll, bluegrass, blues, easy listening, and country. I use music to be uplifted and entertained, to give me a break from the demands the bad guys impose on us hourly.

Izhak Perelman's recording of Beethoven's violin concerto in D is my favorite. I refused to buy a CD player until it was issued as a CD. Then I added all of the Mario Lanza archives and the Three Tenors. Then Souza, a big time inspiration, especially the piccolo solo in the Stars and Stripes Forever. Wow! What memories of marching in those midshipman parades! And The Seldom Scene -- how much they evoke the images of my college days when the Anchormen appeared in national TV on Hootenany in Annapolis. Time passes -- one 0f the Anchormen, Connie Lautenbacher, is now a retired Vice Admiral (class of '64's last man ashore) and head of NOAA; but I have no doubt that he still plays a mean Dobro.

You undoubtedly have your own imbedded memories. Music takes us back and makes us laugh.

Recently (when you are over 65, 10 years ago is recent), I began to listen to country music again -- after a 50 year hiatus -- because I had ceased to enjoy the other popular formats. Quite a few contemporary country songs satisfied my preference for rational audio arts: melody, harmony, rhythm, intelligibility and lyrics. Many country lyrics are especially entertaining -- not because they are about mama, and trucks, and divorce, and jail, and trains, and getting drunk, but because they tell a story and are often humorous. And not infrequently they contain good poetry. I don't necessarily subscribe to much of the populist and hedonistic philosophy inherent in these songs, but I am discerning enough to overlook that and enjoy them as they are.

Poetry? Consider Toby Keith's Rodeo Moon. Here are a couple of kids who have struck out in their truck to earn their way in the Rodeo circuit. "Sometimes we stay at a hotel when we are riding that hot band of luck. Sometimes we crash at a friend's house. Sometimes we just sleep in the truck." But Keith creates images: "Our windshield's a painting that hangs in our room. It changes with each mile like a radio tune." There are many poetic country songs that can be appreciated as art and many more that are just plain fun.

And many blues songs also are full of good humor -- B. B. King's especially.

So, take a break. It's 5 O'Clock Somewhere. Download iTunes. Sample Toby Keith, Jimmy Buffet, Garth Brooks, Alan Jackson, Confederate Railroad, Brad Paisley, Kenney Chesney and many other contemporary country singers. They're a hoot.

The Velvet Glove Contains an Iron Fist

Coercion, pure and simple.

Robert Bidinotto, award-winning, independent author, sent a letter to his Congressman objecting to the health care bill. He explained his personal choice not to have health insurance, which for many thoughtful Americans is a personal decision about risks and individual circumstances. In his letter he said, "I currently opt not to have health insurance, for financial reasons. But all the pending proposals would force me by law to take on this additional burden, or pay a tax penalty -- or, I assume, go to jail if I refused to pay the penalty. That is simply tyrannical."

Bidinotto's concern is not mere rhetoric.

In a recent town meeting Robert's U. S. Senator, Ben Cardin, declined to say that you will not be fined (you go to jail if if you don't pay your fines) if you don't buy health insurance. As reported by WUSA9 ("Cardin Town Hall Meeting On Health Care Gets Angry"):

Perhaps the most controversial [question], came from Robert Broadus of Clinton, Maryland, an audience member who had lost his job and replaced it with one that paid him far less money.

"I decided not to get the health insurance. That's working out for me because I'm able to save that extra money and give it to my family members and use it on myself. Senator Cardin, I want to know are you going to tell me an individual...that I have to buy health care or else you're going to fine me $2,500 every year I don't get it? Our founding fathers assured us we have a Bill of Rights and I want to see you uphold that," Broadus said in an increasingly emotional voice and to scattered applause.

Cardin responded by asking Broadus what would happen if he became sick, broke a bone, had a car accident and ended up in an emergency room.

"You don't pay. You are part of the population that shifts its costs over to a person who does pay, and they're paying for you," Cardin said.

Explaining how hospitals have often to absorb those costs, Cardin said many hospitals would chose simply to leave the community.

"I just think the overriding public interest is to require you and everyone in this country to have health insurance," Cardin said.

It's about control, people. You WILL DO what they tell you to do, or else -- because they know how to run your life better than you do -- YOU IGNORANT STUPID DROOLING IDIOT.

Cardin's argument for restricting individual freedom to choose is a regurgitation of the helmet law argument: The State pays for the support of your family if you are injured because you did not wear a helmet. Therefore, the State may require you to wear a helmet to minimize its potential costs.

Check your premises, people. Why does the State (the taxpayers) need to support the families of injured cyclists, and just exactly how many families of injured cyclists did they actually have to support before restricting the liberties of responsible people? The truth is that helmet laws were passed on theoretical assumptions with no factual support. And no one challenged the basic premise that the State must support the families of injured cyclists, which they don't.

By the same token the proponents of universal health care and this bill argue that because the government underwrites much of the cost of health care, it can control and configure the entire health care system. But too few challenge the basic premise that the government should pay for any health care in the first place.

When I was growing up in the '40s and '50s, we had no health insurance. My mother was widowed in 1942 and was was left with my two older sisters and not much more when I was 4-months old. But she responsibly assured that my sisters and I remained sufficiently healthy to become self-supporting adults. She paid her bills. And the family doctor was a friend, not a Medicare Provider or an adversary.

My mother's uncle was a country doctor during the Great Depression. He was a professional. He took care of his neighbors and trusted them to pay him for his services in whatever way they could -- cash, chickens, hams (by the way, Tennessee country ham is better than gold), labor, etc. No Medicare paperwork, just eyeball to eyeball trust. And the system worked.

So if health care was not a right then, why is it a right now? If you believe that the concept of "rights" is relative to time or contexts, you have a flawed philosophy, or no philosophy, which is a deadly circumstance to be in.

Government does not have to be involved in health care at all. In any respect. Period. Do you want them involved? To decide who your physician is? To decide when or if you have an X-ray, a blood test, a mammogram, a colonoscopy, a knee replacement or whatever? Do you really want someone to preempt and make your personal/financial choices for you about these intensely personal matters? Or, are you the kind of person who wants it all, free, at the expense of someone else?

Turning those decisions over to the Government, whose ultimate recourse is coercion and force, after all, is an ethical decision. Will you turn the guns of the Government toward your neighbor, deny them the right to choose, and force them to pay for your medical care and the care of the people who those in charge deem entitled to receive it?

We started out with our freedoms protected. The only way to lose them is for a majority to give them up voluntarily. Are you willing to answer to your grandchildren that you were too timid to speak out to protect them?

Healthcare Bill: Socialism?

Michael Steele, Chairman of the Republican National Committee, when asked this week if Obama's healthcare proposal is socialism, responded, "Yes. Next question." A brouhaha in the press ensued as if the President had somehow been disparaged by the Republicans.

The term, with good reason, has achieved the status of an epithet because, it is widely acknowledged, socialism punishes individual productivity and achievement and rewards incompetence and sloth, killing the goose that laid the golden egg (i.e., a rising standard of living for everyone). Even the former head of the KGB, Vladimir Putin, warns that socialism doesn't work:

Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake.

True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

Do not be intimidated by those who want the Government (i.e., you) to pay for health care for the poor. Implicit in their justification -- and you are well aware of it -- is their presumed moral superiority for pursuing the notion that you should be your brother's keeper. But moral arguments used to justify socialism are simply wrong. Morality is about free will. There is no superior morality in being forced to be your brother's keeper. Please revisit What's So Bad about Socialism? Challenge the unstated assumptions of your friends who support socialist programs. Don't cede the high ground to them.

The main objection to making our health care system more socialist (than it is already is) is not that it will launch yet another permanent entitlements program which, together with Social Security and Medicare, is unafordable and will burden future generations. And it is not that the government rationing of health care will result. And it is not that your doctor will retire (shrug) in the face of new burdensome regulations and lower income. And it is not that you will lose the ability to pay for better health insurance or lose your present coverage. The main objection is moral. It takes money from those who earned it and gives it to those who didn't. Expropriation (thievery) and coercion are the hallmarks of socialism.

If you subscribe to the ideals of the Founders and the original concept of the U.S. Constitution -- individual rights and limited government -- the initiatives of the Democrat Congress and the Obama administration must alarm you.

For many decades our elected officials have drawn the population increasingly away from personal responsibility and toward dependence on government, making parasitism an institution. But the current moves to accelerate the trend are way over the top. If you don't object, loudly and publicly, you will contribute to the unraveling of the American Revolution.

Cap and Tax

Cap and Trade has been passed by the House and is before the Senate for approval.

Those who don't know what cap and trade is need to educate themselves. Read the Wikipedia article. The Bill is an attempt to reverse the effects of global warming by curtailing carbon emissions from man-made sources by legislating limits on emissions. It also establishes a market for trading emission allowances to encourage those who comply with the limitations to reduce emissions further so that they can sell their allowances. Wikipedia also discusses that.

To those who think that Al Gore deserves a Nobel Peace Prize, the scheme -- which the Europeans have already adopted -- is one of the key solutions to global warming. But let's check our premises: (1) An epochal change in the earth's climate, global warming, is taking place that is outside of the normal range of the earth's cyclical climate change (if such a thing is determinable), and (2) this unusual change is caused by mankind's industrialization of the planet, which produces carbon emissions that cause the greenhouse effect that will warm the planet to a disastrous extent -- to such an extent that it now requires emergency action to control industry. If you evaluate all of the scientific evidence and are objective, you must acknowledge that neither of these has been scientifically proven. So the logical foundations of the entire idea of man-made global warming have not been established.

To those supporting the legislation, the notion that global warming needs to be proved by objective evidence to a gnat's eyebrow is silly -- and worse, the calls for proof are part of the capitalists' schemes to escape government oversight so that they can continue to ravage Mother Earth for individual greed, a short-sighted, selfish, sociopathic attitude that is endemic to the capitalist creed: run roughshod over the powerless for personal profit. But rhetoric aside, the legislation establishes a new massive and expensive regulatory construct for which the taxpayers and consumers will have to pay -- based upon unproven premises. And this, at a time when the economy is faltering.

There are many reasons why this Bill should be defeated, not the least of which it its potential to create another bubble. The Heritage Foundation's site catalogues the criticisms of it in great detail.

Al Gore thinks that passage of the Bill will help bring about "global governance." But Sarah Palin agrees with Warren Buffet that "poor people are going to pay a lot more for electricity." (Hat tip to Robert Bidinotto.)

Too much big government is being rammed through Congress without due deliberation. The Democrats, led by Harry ("taxation is voluntary") Reid and Nancy ("Oh happy day, tax the rich") Pelosi, should cease being driven by fascist and socialist idealogues who yearn to bring down the successful and productive, and address the cost of Medicare and Social Security before they throw out more pork to buy the votes of illegal immigrants.

You have read on these pages that the profligate printing of money and out of control deficit spending will create price inflation to an extent not seen since the days of the Continental dollar. And it can happen in the midst of a deep recession or a depression because hyperinflation is a currency event, not an economic event. As wages and prices increase in response to a depreciating currency, taxpayers will experience something called "bracket creep." As your wages increase in a race to keep up with costs, it will push you up into a higher tax bracket so that a larger percentage of your earnings will be claimed by the government, even though you are receiving less value in your paycheck. And, guess what? You will be among the "rich" that have been tapped to pay for the Democrats' expensive new populist pork.

No one who knows anything about Washington believes the balderdash about taxing the rich. Even absent bracket creep, the estimates of the costs of these brave new permanent regulatory and entitlement programs is invariably, grossly understated. When the real figures come in, the Congress will simply raise everyone's taxes or lower the definition of who is rich, or both.

As Yogi might have said, if it doesn't stop somewhere, it will never end.

Capitalism, The Culprit?

A well used, and ultimately effective tactic in debates is to use the language in ways that it denies the opponent a means to succinctly refer to his position. In effect you steal the opponent's terms and redefine them to suit your purposes. Too many debaters fail to jump on the tactic because it would drag the debate into a philosophical discussion of epistemology, a subject with which precious few are conversant.

A good example is "capitalism." The classic economic definition of the term is private ownership and private control (i.e., no government control) of the means of production. Today, the enemies of individualism and private ownership and their willing accomplices in the press have (many intentionally) so perverted the use of the term, that they are now in a position to blame the credit crisis and our deteriorating economic woes on "capitalism." See my discussions in the archive: "Blame Capitalism?" and "Look Who's Blaming Capitalism." Also read George Reissman's essay, The Myth that Laissez Faire is Responsible for Our Financial Crisis. What they have done by corrupting the language is divert the blame in the opposite direction so that the culpable parties are in a position to do even more damage in the name of saving the economy. Government involvement created this mess and now they want more government involvement to reverse the excesses of "capitalism."

The latest example is another Michael Moore movie. If Thor Halvorssen were as outrageous as Michael Moore, he might get more press, but it seems that the integrity of libertarians keeps them intellectually honest, so they avoid the Big Lie and other public deceptions in favor of reason and truth. (Support Halvorssen, by the way.)

Moore's new movie is entitled "Capitalism: A Love Story." According to the releases, including the one on TheMovie.net --

Oscar winning documentary filmmaker Michael Moore has revealed the title for his latest film. On October 2 Capitalism: A Love Story, which addresses the causes of the global economic meltdown, will arrive in theaters.

In the announcement Moore said “It will be the perfect date movie”. “It’s got it all. lust, passion, romance and 14,000 jobs being eliminated every day. It’s a forbidden love, one that dare not speak its name. Heck, let’s just say it: It’s capitalism.”

The film is described as focusing on “the disastrous impact that corporate dominance and out-of-control profit motives have on the lives of Americans and citizens of the world. The film’s release date comes a year and a day after the U.S. Senate voted to approve a $700 billion bailout of Wall Street.

The opponents of capitalism, including Moore and the controlling socialists and fascists in the Bush and Obama administrations are bent on eradicating economic freedom for individuals so that they can divert whatever is left of the wealth in the country to their cronies and the drooling masses, the end of which is to buy more votes, to amass more political power, more control and more wealth appropriation, ad nauseum. But in the end it won't work. Who will create the wealth that these clowns want to steal? Ask Mr. Putin -- he knows. And so did Ayn Rand. Read Atlas Shrugged.

Capitalism, the "unknown ideal" is laissez faire capitalism. When you hear "capitalism," substitute "laissez faire" (and know what that means). If it makes no sense, someone is misusing the term, corrupting the language, misleading the population, selling you down the river and destroying the engine of wealth and human prosperity. Corruption of the language is serious business. It can ruin us all, and everything we have built. When you see it happening, speak out; don't be one of the sheeple.