Wednesday, October 27, 2010

New Videos!

It occurs to me that I've not only forgotten to post my newest video from CitizenA Multimedia Production on here, I've forgotten to post my video on "America's Economics Knowledge Deficit" produced for the Foundation for Economic Education!

First... Learn about the importance of economics education to America's future right here:

Then check out my election-related video and when the time comes next week, please, please, please vote for a smaller, less intrusive government!

Thanks for watching!!

An Answer...

Facebook "Questions" is an interesting new feature of the social networking site that for the most part, I think is pretty filled with silly issues like "What's your favorite movie" and other nonsense. But today, a question came up in my filter that I felt was really interesting and worth seriously answering.

The question was this:

What would be the social and political impact of the development of cheap, near limitless power generation with little to no pollution?
And this was my response:

I've seen a number of answers here that deal with the physics of this question, and a number of silly answers reflecting people's world-views on the societal impact, but coming from an economics perspective, virtually unlimited energy would be one of the single greatest advancements for human prosperity ever developed.

A few people have discussed the possibility of such power being withheld by a small group of people... This is an extremely unlikely prospect for a number of reasons. First, because governments are the only group capable of keeping people out by force and they are the least likely group to successfully develop such a technology. Secondly because fears of business collusion (absent government protections) are largely unfounded in reality. Let's say that 5 companies are capable of producing virtually unlimited energy at almost no cost and they each agree to price their energy higher than what most people can afford.

They are still subject to competitive pressures of older forms of energy (so any pricing that is higher than conventional energy is already going to be a loss for these companies), and more importantly - if any single one of those businesses decides to break away from the agreed-upon pricing scheme, their lower price will out-compete their competitors for the same service... So those issues are really not significant.

The BENEFITS, however, are unimaginably good.

Not to state the obvious here, but energy is the means of generating work, and machinated work means that the potential for production of goods will become virtually unlimited as well. Contrary to what most people seem to believe, and even an issue confused by many mainstream economists, real wealth constitutes the goods and services that benefit people's lives. The world suffers in general from an amazing lack of material goods... Most people do not have enough food, clothing, houses, transportation, or any of the other basic stuff that they need to survive and thrive.

The limited availability (and thus higher price) of energy in most of the world is the root contributor to the lack of material goods available to most people.

But it goes so far beyond providing for the basic needs of people. Just consider one of those needs: Transportation. If everyone in the world had access to adequate transportation, opportunities for those people to work and create businesses for themselves would be exponentially improved. Instead of being stuck with the school or opportunities within walking distance they would be free to go where the best opportunities for themselves and their families were. Trade would balloon, production of goods beyond the essentials could be the focus of people's lives instead of barely scraping by just to have a home or food.

One comment was that if no one had to work to produce basic goods like energy, why would they keep working?

Because we're human beings! In America, the vast majority of people do not have to worry about staying fed or having a house to live in, or a car to drive. Yet we haven't just stopped working. Instead, we have been able to innovate new ideas and spend our time on other inventions. It's not like we're even close to a point in human development where everyone has everything they need, much less everything they might want. Cheap, or even free energy will mean that far more of people's money will be freed up to use on other things... Less on food and shelter means more on education, on entertainment, on innovation. You name it.

This is a goal we should all strive to achieve.

Sunday, October 24, 2010

NY Times Editorial Fail

One of the great things about being on the editorial board of a major newspaper, I imagine, must be the ability to write whatever the hell you feel like without having to actually make any sense or be accountable for what you've said.

The New York Times editorial board contributed a mindboggling piece of partisan stupidity yesterday, in an attempt to influence the upcoming mid-term elections around the country.

In this editorial, titled; "Health Care and the Campaign", the author(s) write:
"Republican candidates and deep-pocketed special interests are spreading so many distortions and outright lies about health care reform that it is little wonder if voters are anxious and confused.

Here are a few basic facts that Americans need to keep in mind before they go to the polls, and afterward."
But I'm here to tell you... the "facts" they'd like you to keep in mind aren't particularly... well... factual. Worse than that, however, they are horrendously poorly reasoned and - as should be expected from the employer of Paul Krugman - utterly ignorant of the basic principles of economics.

The article goes through a list of supposed "lies" being thrown around about health care... I'm not really here to defend specific politicians, especially not Republican ones, but it is worth examining what the New York Times believes is misleading to the American public. So I'll just go through each of their little points in order... Here goes.

The first point, the NYT claims is "Pure Nonsense":
John Raese, the Republican candidate for the Senate in West Virginia, is claiming that the law will require patients to go through a bureaucrat or panel to reach a doctor. That is flat out untrue. You will still choose your own doctor or insurance plan without interference. Nor, despite other claims, will the law provide subsidized insurance to illegal immigrants. They are precluded from using even their own money to buy policies on new exchanges.

The Obama administration will not be compiling a federal health record on all citizens, including each individual’s body mass index, as Ann Marie Buerkle, a Republican running for a House seat in upstate New York, has claimed on her Web site. The administration is offering incentives to doctors to record various vital statistics in electronic medical records and report the data in the aggregate, to help understand national health trends."
Well... What John Raese said (which frankly, I couldn't care less about) might be mostly nonsense... Certainly the phrasing is probably nonsense. But... To a large degree, the NY Times' response is just as awful.

"You will still choose your own doctor or insurance plan without interference"?? What?! That's not been true for the past 50 years, and it's much worse now. The state has its fingers all over the doctors and insurance plans available and the new legislation only exacerbates that issue with ever-more complicated rules and mandates. It may very well be true that you won't physically have to talk to some bureaucrat about which doctor your allowed to see, but that's precisely because that bureaucrat or politician already made the decisions about what's available to you before you even started looking!

This is a fundamental point, and one the NY Times predictably avoided... To be fair, it's also not the point that John Raese made, but it's the point that needs to be made here.

Likewise, it's also may or may not be true that the government will be compiling detailed health records on citizens as Ann Buerkle apparently claimed, but let's take the ridiculous leap and imagine that the folks at the New York Times would prefer a "single payer", fully socialist (state owned & operated) health care system. Well, if that were the case... the government actually would need to keep such records, now wouldn't it?

What's more amusing is that their very next point is about the so-called "insurance exchanges" that are supposed to be set up and run by the government. Not exactly sure what that would entail, if not keeping detailed records of people's health for the purpose of "helping" them find the "right" insurance plan for them, but that's not even the major failure in the following segment, which the New York Times disastrously called "We Call That Capitalism":
"Republican politicians never tire of denouncing health care reform as a “government takeover” — or socialism. What is true is that the law relies heavily on private insurers and employers to provide coverage. It also strengthens regulation of those insurers and provides government subsidies to help low- and middle-income people buy private insurance on the exchanges.

Those exchanges will promote greater competition among insurers and a better deal for consumers, which last time we checked was a fundamental of capitalism."
Uh... WHAT!???

No, New York Times... We don't call that "Capitalism"! We could call this "corporatism", or even quite realistically, (economic) "fascism". We could go old-school and call it "mercantilism". When the government provides immense regulations, takes control over a market and then provides subsidies and special protections to favored companies, that is actually the OPPOSITE OF FREE MARKET COMPETITION!!

How is this difficult to understand, liberals/progressives?  Yes... I'm calling you out specifically because it's always you guys anymore who claim that the health care bill will increase competition. It's the most ridiculous idiocy I could have even conceived of. It is utterly Orwellian double-speak!

That legislation was one of the most anti-competitive laws I've ever even heard of being foisted on an ignorant public in any country in at least the past 200 years. These so-called "private" insurance companies are now getting about half of their paychecks directly from government to begin with, and after this bill fully comes into effect, I have no reason to think it won't rise to around 70-80%.

You know what that means right?

Consumers are even further detached from their own health care decisions - and more importantly, from the costs and the services they're "buying". Insurance companies aren't now (and certainly won't be in the future!) going to be competing for your vote in the market by offering services that benefit you... No no... They are competing for government approval and public funds. Setting up these exchanges, which we have no reason to believe will be run any better than your local State unemployment department's jobs board, will not improve competition in any way that benefits the consumer on tiny little bit. It is pure fantasy to think otherwise.

This isn't Capitalism, New York Times... Not by a long shot. Try again.

Next up is "What About McDonald's?":
Conservative commentators pounced after the fast food chain and several other large employers that provide skimpy, low-cost policies to their workers warned that they might drop their health plans entirely if forced to comply with the new law. They particularly objected to a requirement that they begin raising the low annual limits on what their plans are willing to pay for health care.

In response, the administration has granted some 30 waivers for one year (Rush Limbaugh promptly accused the administration of allowing these employers to “break the law”) and has signaled willingness to smooth out other bumps on the road toward full reform. In 2014, all plans will have to meet minimal standards and large employers will have to provide coverage or pay a stiff fine."
I already had this conversation with a few people who started out (thanks I believe also to another New York Times editorial if I'm not mistaken) claiming that McDonald's wasn't actually going to drop their coverage, but the editorial response here radically misses the point.

First off, why are there any "bumps" in a 2,000+ page law that was sooo damn important to pass, congressional democrats resorted to playing tricks with procedural rules in order to get it done no matter the cost?

Secondly - and this becomes a running theme for the rest of this editorial's comments - are we suddenly living in magic unicorn land where there's no negative consequence to forcing enormous new costs on people? I mean geesh... This isn't rocket science. People, even (especially?) major employers like McDonald's respond to incentives. This really shouldn't be news...

Right now, they have X dollars available to pay for labor. And make no mistake, "X" is an incredibly large number... But here's the thing... It's not an unlimited number! Overreaching politicians and idiots who support them really need to start with the understanding that an employer doesn't actually care all that much in what specific arrangement his labor costs are dispersed. I would imagine that the easiest way for everyone would be to just do 100% in wages... But alas, that's not what the labor market wants or what the government demands. Instead, some percentage of "X" will go to wages, some to taxes, some to benefits, some to training, some to uniforms, some to OSHA, some perhaps even to the INS... It gets complicated.

Here's what doesn't get complicated though. "X" is a finite number for every company. Every hour, every day, every year.

So what does that mean? Well... If government mandates that 10% of "X" must be spent on health care benefits (or whatever else politicians deem "important") then only 90% of "X" is left for other things like wages or training. Government is not magically making "X" a bigger number... So McDonald's, when required to pay more for one aspect of their labor, such as health benefits, must cut back in some other area - such as wages.

Unfortunately for a company like McDonald's, the government also fixes the low-end price of wages so they can't offer lower salaries either. This puts them in an interesting position where they need to find alternatives - many are available to be sure, but it seems that the most effective one they've discovered is to get a government-issued waiver, exempting them from the new law.

Go figure...

The elegance of this solution from McDonald's standpoint really shouldn't be understated... As one of America's biggest employers, they've used their special connections to get them a specially issued exemption to a rule that is extremely costly... Did I mention that it's an exemption that their smaller competitors (think: Inn & Out) have absolutely no hope of getting. Cool, huh?

Of course, let's say that in 2014, that waiver is dropped and MickyD's is required to pay for higher levels of health benefits. Where will the money becoming from?

Well I can't know for sure... But I'm guessing that step one will be reductions in hours, or manipulating the status of their employees into whatever category has the lowest requirements. Step two might involve raising prices to cover the gap (assuming that the price increases won't negatively impact overall revenues, since that would be counter productive). Or who knows? Maybe their lobbyists will just get indefinite extensions on their little waivers - at some point the media will have forgotten anyway.

I know you might be thinking that "X" could be increased if they'd settle for a reduction in their profit margin... This may or may not be an option (lots of reasons why not, actually), but in reality - for better or worse, it's not a very likely one.

The problem of "X" being static is one politicians, especially currently the "progressive" variety don't really seem to understand.

Now... "What About My Premiums?":
Some Republicans are also claiming that health reform is driving up premiums. There have been sharp increases in some states, primarily in response to soaring medical costs. Some insurers may also be trying to increase their profits before the reform law holds them in check. A few very welcome provisions that take effect early, like requiring insurers to cover preventive care without cost-sharing, will play a minor role in premium increases for next year.

Reform has also energized federal officials and many state regulators to challenge and force down big increases sought by insurers. The Justice Department just filed suit against Blue Cross and Blue Shield of Michigan for allegedly using its market power to drive up costs for its competitors and its own subscribers."
It is quite true that a lot of the cost increases are coming "prematurely", in the sense that companies are planning ahead and trying to anticipate future costs. Gee, why ever would they do that? The NY Times makes it seem like there are people out there arguing that it's a 1:1 sort of a thing where if an insurance company raises premiums before some new provision is actually activated as part of the changes in the law then the cause must be something else.

Guess again editorial board.

Companies have to think several years in advance and attempt to predict the environment that their services will be provided in - including the legal landscape - in order to continue operating successfully.

And then of course, the editorial board praises the Justice Department for prosecuting Blue Cross & Blue Shield for "price gouging" (Seriously? Are we living in 1940s Russia??), when in reality that's utterly ridiculous. The problem with Blue Cross & Blue Shield is that they hold special privileges that the government has granted them which no other insurer gets - it's no surprise that they wind up being part of the top-tier of insurers in every single state where typically 2-3 companies hold 90% of the market share.

Insurance is a cartel... And it's not because of their greed, or because they are good at doing what they do... They are a cartel because the government controls and "regulates" the industry to an immense degree, giving special protections to favored companies and prohibiting competition in virtually every meaningful way.

In a free market, prices tend to drop across all services & goods because companies compete to offer consumers what they want in better and more affordable ways... There are plenty of ways to drive customers to your business, of course, but the main ones are obviously price and quality. Insurers don't face much in the way of competitive pressures and as a result, they rarely work towards increases in efficiency or make any systematic changes that would provide consumers with a better product at a lower price.

And why should they? 50% of their revenue already comes from government! There is very little that ties health insurers to the end-user of their services. You can thank bad policy over the last several decades for creating that situation, though... Whining about their price increases after-the-fact is just idiotic.

Moreover, there are tons of mandates and other requirements in this legislation that are incredibly costly.

I spent months trying to explain this - and now that the consequences are starting to become somewhat apparent, we get papers like the New York Times desperately trying to tell us that the Emperor's bare ass is covered by a fine fabric we're just not smart enough to see. Bah!

I'm going to skip over their parts on "Medicare & Medicaid Scare Tactics", and move right on to their conclusions. The final segment of the editorial claims to expose, "What They're Not Saying":
"Health care reform has already brought substantial benefits, mostly starting in late September. Insurers are now barred from dropping coverage after a beneficiary becomes sick. Dependents can stay on their parents’ policies until age 26. Insurers must cover preventive services and annual checkups without cost-sharing. Lifetime limits on how much insurance plans will pay for treatment are gone.

The major benefits start in 2014, when tens of millions of the uninsured will gain coverage through Medicaid or by buying private coverage — with government help for low- and middle-income Americans — on the new competitive exchanges. If you lose your job, you will no longer lose access to insurance. And with government help the coverage should be affordable.

Far too few Democrats are explaining this on the campaign trail. The barrage of attack ads are hard to push back against. But the voters need to know that health care reform will give all Americans real security."
How in the hell are any of these things ultimately beneficial?? We are simply back into the territory where the New York Times' editorial board pretends that the government mandates can replace production by some magical process where making hundreds of new rules for companies to follow, ballooning the supposed benefits that must be provided by force and subsidizing consumer demand will somehow not result in huge price increases.

The reality is much different. Skyrocketing prices for care will necessarily make it harder for the poor to afford adequate treatment, and the government subsidies and expenditures (such as the already massive $800 Billion we spendon Medicare every year) will come at the expense of current & future prosperity as Americans must be taxed more and more to pay for all of this nonsense. The result will be entirely the opposite of "beneficial". For all their supposed good-intentions, this foolishness is going to cause some remarkably severe damage to a lot of people - all because our ruling class and their various lapdogs don't seem to be able to grasp basic logic. It would be a lot more funny if it wasn't so devastating.

As a side note... How is it that the New York Times doesn't grasp the irony of whining about things like McDonald's dropping coverage for their employers, who are nearly all teenagers working their first jobs while still living with their parents, and then touting the greatness of letting "kids" stay on their parents insurance until age 26?

By age 26, I had been living on my own for 7 years already... Is America really at the point where we're calling people closer to 30 than 20, "dependents"?? This is just pitiful.

The Times wants to have their cake & eat it too.

They spend the whole editorial pretending that fears about government-takeovers and massive cost increases are fictional and silly, while then explaining that by 2014, there will be a miracle shift in health care in the United States that provides everyone with everything they need at no extra cost. They make all the classic mistakes in economic reasoning here... They focus on the short-run and ignore the long term, they fail to grasp that mandating this or that doesn't actually make what they want to do possible, and they avoid even trying to deal with the obvious consequences of punishing production and encouraging consumption.

This article is a fine enough attempt to make some (probably idiotic) Republican politicians look bad - and no doubt a lot of them deserve to be highlighted... My response here really isn't designed to "defend" any politician and certainly not partisan ones who are barely smart enough to tie their own shoes, but the Time has just made themselves look utterly ridiculous. They've definitely created an editorial that is about as enlightening   as hitting oneself in the head with a brick.

But hey, at least we have this to look back on in 4 years after prices continue to explode in health insurance and all the magical benefits that were supposed to help people don't actually materialize.

At least I'll be able to say "I told you so", cause you know... that makes the destruction of quality health care in the United States worth it.


Saturday, October 9, 2010

What Inflation?

Just thought I'd share this...

For the last two years, the government and their parrots have been claiming that regardless of how much money has been printed, we won't have to worry about inflation, because the real bogeyman is "deflation". That's always been nonsense, which is why I bought some silver at $12.80 an ounce and have since watched the price rise to over $24 an ounce in a year. 

That wasn't really a "guess" on my part or a coincidence, it was just common sense... If you print and disseminate trillions of new dollars into an economy that hasn't actually produced any more goods, the end result will be that prices go up. More dollars chasing the same amount of real resources will do that to you... 

But, for the last couple years, the majority of news stories, and prominent "economists" like Paul Krugman, Christina Romer, Larry Summers and basically anyone else working for the White House have been claiming that no inflation would result from their policies. They've often even been on the offensive, demanding "Where is the inflation?" from those of us who see it on the horizon and yet they've ignored all the evidence for it we've already seen by cherrypicking industries, averaging in the fall in house prices (which were overvalued thanks to the bubble to begin with, and looking only at things like the Consumer Price Index, which omit commodities.

And they've spent considerable effort pretending that gold & silver are just "bubbles", not to be trusted, rather than legitimate rallies reflecting both the lack of confidence of investors in the US Dollar and the real devaluation of it as a currency.

But fortunately, over at Kitco, Howard Ruff lists a few other commodity price increases that should make you sit up and take note:

"For example, Agricultural Raw Materials are up 24%, The Mineral Index is up 25%, The Metals Price Index is up 26%, Coffee is up 45%,Barley is up 32%, Oranges are up 35%, Beef is up 23%, Pork is up 68%, Salmon is up 30%, Sugar is up 24%, Wool is up 30%, Cotton is up 40%, Palm oil is up 26%, Hides is up 25%, Rubber is up 62%, Iron Ore up 103%. Those are prices at the wholesale level."
Consider just the last two on this list... Rubber & Iron Ore. 

Rubber & Steel anyone?
Exactly how many of the goods & services you use EVERY single day contain or require rubber or steel? It's still a little early to see the full effects, but these raw-materials price increases keep going up and will soon be reflected in more and more of your final goods sale prices.

So if you're thinking about building a new house, you'll probably want to do it now instead of later since the coming price increases in the materials needed are going to go up, and that will be reflected in the house price eventually and this time they aren't just a bubble that will pop later, but the long term consequence of a devalued currency (although this will probably apply more to *new* houses rather than the price of existing ones for sale since those are probably still overvalued thanks to sellers who refuse to accept that the market won't pay what they think their houses are worth anymore and thanks to policies which reinforce that foolish belief). 

Also, if you have money saved up anywhere... I would hope you have some, or a lot of it saved in a form that isn't quickly killing itself (i.e. something other than US Dollars). I hear the Singapore Dollar is doing nothing but going up right now....

It's often very hard for me to find a silver lining in a lot of what's going on out there right now, but to all my friends: Good luck.

Friday, October 8, 2010

"Unintended" Consequences

I have a problem... But I guess in light of my lack of blogging consistency lately, I should probably go back a few steps first.

Here's the brief, but important, background you need to know: At the end of July, I moved across the country from Los Angeles to Connecticut. I did so to be with a woman who I intended to be my partner in love, in life, and in business... Unfortunately, and without going into the sordid details, despite my best possible efforts; my dreams of partnership were... let's say....... not adequately shared.

This was a chapter in my life that I can truly say, I went into expecting a completely different ending. Yet as these  kinds of painful experiences often remind me, life laughs in the face of the plans of men. I can't even begin to describe what's happened, and it would be pretty inconsiderate of me to get into much of it publicly anyway, but for me at least - it was devastating... So much so that staying in Hartford was just no longer a viable option. That city was a place I moved to out of love for someone incredibly special to me, and now it is synonymous with pain, betrayal, loss and loneliness. It was never a city I was moving to because of the city, and once my reason for being there was stripped away and my heart broken, it really had nothing more to offer.

Where I am... Ish.
A couple weeks ago, I went to visit a good friend in Catskill, New York and at my friend's invitation and based on the much more comfortable, homey and inviting environment of the little villages up & down the Hudson River Valley, I decided it best to leave Hartford and move 2 hours away to this lovely part of New York.

And so far, the move has taken me away from drama and problems that have been making me miserable for weeks and being happier makes me more productive and a better person to be around in general... It's all been a big win so far....

However... Personal anguish aside, this move has presented me with a number of other significant and somewhat unanticipated roadblocks. For instance, I have had to get a new cellphone on an individual plan to replace the shared, "family" plan I was on before, and I've had a lot of other standard moving expenses, a few business hassles and of course a ton of personal trials...
Good bye, lovely office :(
But boy was I unprepared for the problem that is the subject of this blog today!

Apparently, after just getting health insurance in the State of Connecticut, I need to (or at least, probably should) cancel that subscription and find a new plan in New York.

Yes... I know how absurd it is for people like me who have only changed geographical location by 70-80 miles to have to rearrange big expenses like health insurance - much less anything else - but thanks to decades of ridiculous anti-competitive policies, the minute I crossed that arbitrary boundary into New York state, I'm no longer legally supposed to have a Connecticut insurance policy - regardless of whether or not I'm pleased with the price or services as compared with my options in my new location.

So that is what it is... I've done it several times before, and each time I've been able to fairly quickly & easily find a basic (real) insurance plan that hedges against serious illnesses without costing me too much per month.

Until now...

When I began searching for a health plan again in the state of New York, I discovered that where I used to have dozens of options for individual plans, now I only had six... And none were remotely what I'd consider "affordable" (one was over $900 a month!). I was confused... and while poking around a bit, I found a possible explanation for this sudden change. From Connecticut's Blue Cross & Blue Shield's website, I was informed of the following:
‎"Please note effective 9/17/10, Anthem Blue Cross and Blue Shield will not sell Individual health insurance plans until we receive final approval from Connecticut Department of Insurance on our plans that include Health Care Reform mandated benefits"
I'm not entirely certain this is the cause of my problem finding insurance in New York, but this behavior isn't exactly uncommon among insurance providers and other health care professionals at the moment, is it?

I spent months writing thousands upon thousands of words on health care, and the misnomered plans to "reform" the system in the United States.

I'm not alone in this, but I can certainly say that I tried very hard to inform people in my immediate sphere of influence that the results of the bill that was passed would be uniformly bad as the already abysmal set of incentives created by the past 50 years of government intervention in to the health care market would be made catastrophically worse.

Thanks to an accident of fate, I am now going to wind up being a bit of a casualty in this problem purely because I have to change my insurance policy at the worst possible time.

In spite of the numerous times we were all told that if we like our current plans, we don't have to change them, that's obviously not the case. Granted, I'd have had to change my plan anyway thanks to the system already being set up as a cartel, but historically I'd have been able to find something comparable... And now I can't. Now as I can figure it, I have basically 3 options...
  1. Try to figure out a way to keep my CT plan and go across state lines any time I need to visit a doctor, or pretend I'm "traveling" to NY when I need care.
  2. Go broke trying to afford one of the limited options for NY health insurance that are available to me... or...
  3. Drop my health insurance coverage entirely and if/when I find myself in need some kind of serious medical care, and assume that in the 2,000-plus pages of mandates there really are those vaunted provisions forcing insurers to cover people with "pre-existing" conditions.
The funny thing about option three is that it's clearly the one that the new incentives most promote for someone in my position. I cannot afford the insurance options currently available, I don't really want the hassle or problems associated with trying to keep insurance in a state I'm not living in, and I know that my risk as a healthy, 27-year-old man with no history of serious illness and no chronic medical needs... So why keep the expense?

The past several years I've kept the expense because it was moderate, affordable and in the off-chance that I have needed any kind of health problem taken care of, it made my unforeseen expenses a little bit lower. I visited the doctor for the first time in 5 years about 4 months ago, and my out-of-pocket expenses were perfectly reasonable... Nothing wrong with that.

But the game is changed now... And not just for me... Millions of Americans are about to experience some serious disruptions in their health insurance.

McDonald's and a host of other major corporations have already applied for (and received) waivers exempting them from the new health care bill, 3M and a few others have already started dropping and modifying their employee benefits and insurance companies across the United States are already significantly modifying the options they're offering to their customers, for instance by dropping child-only coverage plans... Oh, and prices for insurance coverage have already gone up significantly!

Out of some pretty astounding and sometimes hilarious naiveté, a number of my acquaintances are employing a few different tactics to deflect any criticism of the law and the new incentives it created by alternatively pretending that no one is really making any changes, or admitting that things are changing significantly but claiming that the changes are all going to be good in long-run.

This is right in line with the double-speak coming from the Obama administration about the law anyway, though, isn't it?

Obama repeatedly said things (exactly) like this:
"Let me be exactly clear about what health care reform means to you. First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan.  Nobody is talking about taking that away from you."

Then why bother with changing things? 

OF COURSE the new health insurance legislation was designed to force changes to the system! That's the whole point... Why pretend otherwise? The answer to that question is easy enough: The vast majority of Americans were/are relatively happy with their coverage.

A few years ago, a Washington Post/ABC Poll found that:
"Among insured Americans, 82 percent rate their health coverage positively. Among insured people who've experienced a serious or chronic illness or injury in their family in the last year, an enormous 91 percent are satisfied with their care, and 86 percent are satisfied with their coverage."
Now, the same poll found that a majority of Americans were dissatisfied with the overall state of health care/insurance and they would prefer a single payer system... Of course, when it comes to single-payer ideas:
"support, however, is conditional: It falls to fewer than four in 10 if it means a limited choice of doctors, or waiting lists for non-emergency treatments."
All this really shows is how ignorant of economics Americans (and most people around the world for that matter) tend to be...

What it's really saying is that a lot of people want someone else to pay for all their health care bills and cover everyone, and they want more choices, and no waiting lines, no rationing and better quality of care, AND they don't want their taxes to go up.

I wanted a magic lamp with a musical, wish-granting Groucho Marx in it after seeing Aladdin when I was 9, too.

The real problem here is that people engage in a lot of fantastical thinking when they ponder this topic, in large part because they never bother to understand or learn the principles of economics involved. Obama can take advantage of people's poor understanding by talking out of both sides of his mouth. On the one hand, if you like what you've got, keep it - on the other, everything needs to change!


I really wish it were possible to live in a world where everything just magically works out and everyone gets everything they've ever wanted without working for it, paying for it, or even producing it. Such a world would be wonderful indeed... We could all laze about and eat grapes while having our every material need & want instantly provided for. Alas, we live here in the real world where resources are limited by what has actually been produced and is available for consumption.

In this case, we've created a situation where producing health care goods & services is severely limited and bottlenecked. There are government mandated limits to how many doctors & nurses can be licensed each year, limits to drugs & vaccines produced, limits to the number of clinics & hospitals built, limits to competition in insurance and limits on which treatments insurers must pay for and thus limits on how affordable insurance will ever be.

At the same time, we've subsidized buyers of health care and artificially ballooned demand for insurance to a massive degree, promising everyone basically anything they want at no cost to them.

Out here in the real world, what that does is cause supplies to diminish, and prices to rise... A lot.

To this day I cannot figure out why anyone thought this would be a good policy to pursue. And perhaps I overestimate people's logical reasoning abilities, but considering I spent the last year trying to warn people about the consequences of the new incentives - I cannot see how the consequences we're seeing today and the ones we're going to be saddled with for the foreseeable future (higher prices, poorer quality, lower access to actual health care - regardless of how many people are "insured") are "unintended".

That's always the problem with ignoring economic reality... In a few months, all the people I know who are still defending the health care bill will claim that all the new problems are just those greedy, evil insurance companies seeking "profit over the people".

Blah blah blah... They will never own up to the incentives that were already in the system, or the massively worse ones that are now propelling us towards a true health-care disaster. When that disaster comes, they will claim that "no one" saw it coming, and that all the "experts" were so sure that this would work, and if only those dirty businessmen hadn't changed their behavior in "unpredictable" ways everything would have worked perfectly just as the planners had designed it to.

And history repeats itself... The longer I live to see this cycle play out, the less credulous I am when people want me to believe that the bad results of their ideas are the result of good intentions. Politicians and their "advisers" who promise undeliverable miracles are either remarkably stupid, remarkably cynical (seeking power at any cost, regardless of how many lies they have to tell their constituents), or they are undeniably evil. 

I'm not a big fan of any of those selections... Are you?