Monday, December 09, 2013

A reply from Mr Karl Denninger

         I'm struck by the vehemence of opposition to so-called "Obamacare".
Why are you struck by vehement opposition to anyone putting a gun in your face and demanding money? Can I send a few brigands over to your home because they need something and tell them it's ok to stick you up this evening? After all, it's for their children.
Am I correct in supposing that you are not in principle against the idea that poor, sick people might receive appropriate medical treatment?
 Define "appropriate" and, incidentally, how much of that medical care is necessary due to self-inflicted injury and illness? For example, it is clear that someone who has Type II diabetes requires treatment. Exactly why should they be able to force someone else to pay for it when the condition is evident because they have voluntarily eaten a crap diet for 30 years and weigh 350lbs?

Note that the real issue here isn't care -- it's cost. Even very poor people have access to some cash flow for the most part in the United States; those who don't (e.g. truly homeless) either are typically so by choice or relatively-severe mental illness. The former is a choice, the latter is a disease but in terms of percentages is a vanishingly-small percentage of the whole, and absent compulsion they don't want treatment.

It's not illegal to be crazy (nor should it be) so long as you don't harm others. Voluntary charity is more than sufficient to cover both needs in the main; it was for hundreds of years in the past and it is today -- provided we stop jacking up the cost.
Isn't the real problem, the fact that drug companies, doctors, medical lawyers, medical malpractice insurers and health plan insurers all make and take so much money that healthcare for the common man is seen to be unaffordable?

Yes, but.

If you look at the facts (as opposed to the rabid nonsense coming from the left and apologists for asset-stripping the entire nation to cover this crap) you will find that, for example, a routine birth in 1963, repriced under the CPI from 1963 to today, could be had (complete, all costs included) for under $1,000 US.

Now in 1963 this included not only the epidural and other medications and such but also all doctor charges and three nights in the hospital!

Today that same routine procedure cannot be had in this country for less than 500% of that price and they kick you out of the hospital within 24 hours. The only reason that's the case is monopoly protections, which in theory are illegal under The Sherman and Clayton Acts. The medical industry has finagled itself exemptions to said laws. If I tried any of what they do every day when I ran an Internet company I'd STILL be rotting in a federal prison (and with good cause.)

Now consider the poor couple. They have few assets or funds, but I refuse to believe that given nine months notice they could not come up with $1,000. Sure they could. They might have to give up the beer and smokes for the duration, but they can do it. Difficult? Yes. Impossible? Not even close in a nation (ours) where "poor people" have Xboxes, 60" flatscreen TVs and cars with $3,000 rims on them along with iPhones and $1,000 annual service plans (which, incidentally, is most of those so-called "poor") not to mention the Earned Income Tax Credit that is refundable, meaning that they typically get thousands in actual cash every year from the government in excess of the taxes they paid.

But can they afford an $8,000 bill for the same thing? No -- but they can afford a $1,000 bill.

So where does the problem lie? It's not in their cash flow, it's in the monopoly pricing.

Malpractice and lawsuits (e.g. "tort reform") along with "uncompensated care" are often thrown around as the cause of this. That's a knowing and intentional lie; you could cut both to ZERO (the former of which would deny legitimately injured people compensation) and it would amount to less than 10% of what we spend on medical care. The problem simply doesn't lie there but it's a convenient foil for both the right and left to avoid talking about where the problem really DOES lie.
 Over here in the UK, the American Right seems insanely hard-hearted, homicidal even. And your general stance viv-a-vis the crookery of politicians and banksters doesn't seem to gel with your passionate denunciation of widening medical cover.
Of course it does. Theft is theft, fraud is fraud, and both are supposed to be illegal whether or not they are undertaken for a given person's benefit or not.
Is the explanation that you think the latter is actually OK as a project, but the way it's been done is misguided?
Not at all.

If you remove the monopoly games then even the poor can afford to pay cash, in the main. And virtually everyone who chooses to would be able to buy a catastrophic medical policy to cover the rare but possible situation that can arise, because it would cost a few hundred dollars a year. Those who choose not to do so, taking their chances, have the right to do exactly that.

But you have to break the monopolies and demand that insurance actually be insurance or you solve nothing.

Obamacare is designed to perpetuate theft in this portion of the economy and provide these firms and individuals involved in it with the guns of government. At the end of the day all monopolies and similar schemes rely on force of some form -- the medical industry ran out of their ability to use fear to power more extraction from the average American, and thus turned to government (literally, they wrote the bill) to continue the scam.

More to the point if we don't stop this the economy is doomed and so are federal, state and local budgets. That's a matter of arithmetic and no amount of trying to patch it by stealing one person's money to pay a monopolist will change it. We either cut this crap out or it is a mathematical certainty that our economy and the medical system will both collapse.

Incidentally, I assume that since you published this letter to me you intend to also publish, in full and unedited, my response.

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James Higham said...

Good value, Karl, is he not?

Sackerson said...

Yes he is, and we had further discussion after this.

Paddington said...

He mentions the wonderful system, in which the insurance companies negotiate much lower prices than those who pay cash. In what other business does that happen?

Sackerson said...

Isn't he saying the opposite? But I got a little confused myself, because at one point he talkes about saving up for a cash payment and at another about being able to access a cheap insurance policy. I think he's saying that if the medico-insurance-legal complex was subject to a competition regime then prices would have to plummet.