Friday, July 24, 2009

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.

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