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.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

"Obamacare": an email to Mr Karl Denninger

Dear Karl

I'm struck by the vehemence of opposition to so-called "Obamacare". Am I correct in supposing that you are not in principle against the idea that poor, sick people might receive appropriate medical treatment?

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?

Over here in the UK, the American Right seems insanely hard-hearted, homicidal even. And your general stance vis-a-vis the crookery of politicians and banksters doesn't seem to gel with your passionate denunciation of widening medical cover. Is the explanation that you think the latter is actually OK as a project, but the way it's been done is misguided?

Yours faithfully

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

The sun also rises

Jesse:

... the governance of Britain which as we have said is semi-feudal, ruled by a few corporations and the wealthy elite in partnership with essentially a one party government.This will go a long way in helping to understand the "British disease" of economic stagnation. You start by crippling the middle class through debt indebtedness to a corporate elite.

So sorry, an error in transcription: for Britain and British, I should have written Japan and Japanese. Gomen nasai. But an understandable mistake, you may think. How much difference will a regime change in the UK make? The inclusion of Ken "fags and Bilberberg" Clarke on the Opposition team seems a deadly marker to me.

Returning to our muttons... Jesse has been focusing on the Land of the Rising Sun recently. He's pointed out that an ageing demographic structure is a major brake on the economy, especially with tight controls on immigration (though we in the UK may have have drawn the wrong conclusion from this); and today he looks at how the Japanese have organised themselves to reduce energy costs and oil dependency.

Especially the car: "I have long thought of cars as vampires sucking the economic life out of every household in the US. And the risk of death and serious injury from car accidents is about half what it is in the US (although the statistics may not be directly comparable)." And considered from a coldly economic point of view, think of the enormous overall costs of those deaths; and the possibly far greater costs of medical care and other support for the vast and growing army of injured and permanently disabled.

It's well worth reading the whole letter from Jesse's friend in Japan - not just about energy, but preventive healthcare etc. They walk to McDonald's - not waddle. They're organising themselves; so can we.

Why inflation is going to hit us

Scott Burns at MSN Money (htp: Michael Panzner) calculates that unfunded government programs for social security and Medicare ($46 trillion) represent a debt equivalent to around 90% of all consumers' net worth ($51.5 trillion). If Americans' net assets decline by a further 10%, then effectively the American citizen is bust.

Can anyone provide equivalent information for the UK?

Drugs: a rope to hang ourselves with

Unity at the Ministry of Truth offers 15,000 words to justify the legalisation of drugs, and is cheered on by Devil's Kitchen and (or am I mistaken?) by James at Nourishing Obscurity.

On the other hand, ex-Birmingham prison medic Theodore Dalrymple points out that no-one has ever died from coming off opiates; de-addiction can be achieved in a limited time; and it's criminals who turn to heroin, not heroin-users who turn to crime.

"Ah, but we only want the same treatment as smokers and drinkers," will be the cry. Well, seeing the damage that fags and booze did to my 20-years-too-early departed parents (and friends and acquaintances, and Looked After Children I've worked with), I'm inclined to agree; but not in the way the libertarians wish.

I'd be interested to know all the costs, expressed financially, of the harm done by "cigareets and whisky". I very much doubt that the tax covers the expense of the disbenefits. Here's an example, relating to alcohol: "For the UK, the external costs are likely to be in excess of the £20 billion figure and indeed taking loss of life into account and using more usual figures to value this loss could bring the total closer to £45 –50 billion for the UK as a whole. This is clearly way in excess of the revenue yield of £12 billion in 2000/01."

Instead of battening on the addictions of its citizens, the government could easily forego the £18 billion revenue on tobacco and alcohol - that's only the same cost as the ludicrously expensive and probably unnecessary NHS IT project, "Connecting for Health". Then, freed from this compromising financial interest, it could begin to tackle the problems seriously - not through the unimaginative approach of Prohibition, but through better education, and limiting the outlets of these harmful substances, as I have already suggested here.

As for other drugs, what is this campaign to encourage us to spend half our lives in a doze, daze or haze? Is there a plan to subvert society, to leave us in the land of the Lotus Eaters? Are we to sleep like the hare, while the Eastern tortoise wins the race? Is the opiate of the masses to be opiates?

B*lls to the Politics of Ecstasy; it's just an excuse for the spoiled end of the middle classes to indulge themselves further, leading (like the Pied Piper) hordes of less safety-netted proles into oblivion.

And why should libertarians support addictions, which imprison the will and distort reason?

They could be right, darn it

The British Government claims it wants to do more for our health.

There's the new Change4Life campaign, encouraging us to eat less fat, take more exercise and live longer; and there are the perennial pushes to give up smoking and (after they've extended the licensing hours and vastly increased the number of licensed outlets) reduce alcohol consumption.

On the other hand, we have the prospect of the State pension system hitting the buffers, thanks to millions of coffin-dodgers; not to mention the cost of care homes and the bed-blocker burden on the National Health Service. And if we all became totally abstemious, we would cost the State its £10 billion annual revenue from tobacco, and £8 billion from alcohol. At first sight, if you wanted to destroy the State, you'd follow its advice - a novel strategy of subversion by civil obedience.

Hence, tabloid-style contrarianism! I haven't found the evidence, but I expect that staying healthy (and working longer) will more than pay for itself, by reducing the costs of chronic ill-health and increasing revenue from taxes on income.

Worrying about the wrong things

We teach regularly in schools about drugs, guns and gangs... actually, the real threats to life - that we can do something about -are much less dramatic:


I packed in smoking over 30 years ago - but this coming year, I'd better do something about the weight.

A glimpse from the rich man's coach

Here is a letter to the NYT from the insouciant Don Boudreaux. Unfortunately the comments to this piece on Cafe Hayek are closed - I wonder why? So I'll have to note here that it stirred a memory...

‘Now, you know,’ said Mr. Bounderby, taking some sherry, ‘we have never had any difficulty with you, and you have never been one of the unreasonable ones. You don’t expect to be set up in a coach and six, and to be fed on turtle soup and venison, with a gold spoon, as a good many of ’em do!’

Hard Times, by Charles Dickens

And another, from Shaw's Pygmalion:

I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: 'You're undeserving; so you can't have it.' But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything.

The American Declaration of Independence states "all men are created equal", and of course it was obvious even then that they are not so, whether by birth, upbringing, education or natural talent. Not, in those senses; but the bold defiance of Nature and Society represented by the libertarian revolution of America, and of revolutionary France, is that they have, they should be given, equal dignity, as of right.

And unless a tenured economics professor who boasts of not voting, in a colony that rebelled on the principle of "no taxation without representation", wishes to see the poor squashed while the rich loot the country without fear of retribution, he will need to develop his thesis somewhat.

I do not see how a country can be composed exclusively of the well-off, nor can I imagine how, given all their disadvantages, the poor may rise up as one and join the middle class. There will always be inequality, so our debate should be about setting a minimum standard for the poorest, while motivating them to better themselves if they possibly can. That's certainly a circle that will take some squaring, and a benefit-trap-riddled Britain can scarcely present itself as a model answer.

But I don't see how air conditioning and two cars (what? all poor families?) quite make up for the miseries of ill-health, disability and a shorter lifespan. And it's not entirely down to consciously-made bad choices, in quite the way Mr Boudreaux implies. The ideal-world notion of rational choice has to take into acount real-world limited intelligence, inadequate information, poorer education and in many cases disharmonious emotional constitutions produced by poor parenting, lousy neighbours, failing schools and fear of crime and destitution.

Dives should not look down upon Lazarus.

Crisis report from a very credible source

I looked up an important official today, of whom most of us may not have heard. His job is to review on government spending and report to Parliament. His name is Sir John Bourn and his title is the Comptroller and Auditor General, at the National Audit Office.

Now imagine that this person was so worried about the unravelling of the country's finances that he began touring the country, warning the general public and trying to get the issue onto the agenda for the General Election. I think you'd start to worry, too.

This is exactly what's been happening in the USA, as commented on by Michael Panzner in his website. David M Walker, the Comptroller General, has been playing Cassandra for months. To see the 60 Minutes video about this man, click here.

Could someone tell me the situation here in the UK? We don't seem to have such frank and authoritative public discussion as in the US.

UPDATE

In the CBS video, David Walker notes not only the expense of US medical care, but how many people are uninsured, and the rate of medical error. If you'll also read some of my comments in the globalization thread on Cafe Hayek, you'll see I'm of the view that we should start taking better care of ourselves, rather than trust to Dr Kilpatient.