Killing the Golden Goose: An economic primer in free market capitalism for Elizabeth Warren wing of the Democratic Party

When I was in college, back when Religion and family was still a mainstay of traditional society, I had professors singing the praises of Marxism and decrying the excesses of capitalism. They appealed to the softer side of human nature. They were appalled by the rise of the “corporate culture”. Every corporation was a predator, which disregarded the human being in a never ending quest for profit. Corporations you understand measure their success by profitability. It is their metric to measure their success. They saw the government as the only savior from this corporate plague. The force of government could intervene and by placing its finger on the economic scale insure the net worth of the individual was respected. All praise be to populism as long as it was the bicoastal populism at that time headquartered in the northeastern part of our country. The bi-coastal elite prioritized government entitlement programs over economic productivity.

News flash, Liberals! People in government cannot and will not agree on creation of an entitlement utopia. Government is flawed. It is extremely divided and will be for the foreseeable future.

We live in a country where, the citizens have a diverse system of values and by a slim majority still believe in economic freedom, although thanks to educational brainwashing, they are frequently unable to articulate this precise principle.

The principle of economic democracy, which is the cry of the social justice crowd, is simply a disguise for populist economic tyranny. (Exercise of governmental authority to limit economic freedom. Yes, government by necessity is an exercise of power over the populace,) they advance uniform business practices, which encourage an uninformed consumer, and which are in line with a liberal social agenda. Businesses can either adopt the desired policies and practices or face a prohibition of their business model. There is no room for initiative and product improvement or expansion through increased efficiencies. i.e. Let’s use 1938 wage and hour practices in today’s economy because a portion of the populace choose a union to represent them, so there can be no economic advance beyond this model. The primary method of advancing their economic engineering agenda is the corporate and individual income tax code. Doubt me? How many economic decisions are made solely based upon the tax code. When you start a new employment, think about the number of documents you sign because of the federal tax code.

The federal income tax code is based upon a flawed model. It punishes the very vehicles, which create wealth. Why don’t we tax only individuals (flesh and blood people), when funds are disbursed to them as income (money for their personal use). If income is used in a business for a business purposes, (a means to produce a product or service) it is moving and should be encouraged and not taxed. When it moves to an individual for their personal use, it should be taxable. The rich would pay more because of the progressive tax system. We could retain the capital gains provisions to encourage investment. We would encourage dividends. They are a good income source especially for those, who are too old to actively be employed as well as for those seeking to save for their daily lives. We would no longer view the corporation as a wealth store, which can be raided by liberal lawmakers to advance their entitlement agenda. This removes the hidden tax that plagues consumers of US businesses

Their promotion of their form of economic democracy is killing capitalism. It is akin to death by one thousand cuts. Their policies limit economic expansion and kill wealth creation and ultimately jobs. They assume a one size fits all approach serves the diverse US population. They espouse biblical principles to guilt the populace into complying with their collectivist ideas. Their mantra: corporations are evil and government is the answer to the corporate greed problem.

How do they guilt the populace? They point out that we are the wealthiest country in the world and never acknowledge that our wealth has established a standard of living, which is the envy of much of the world. They point to biblical teachings and claim that government should provide for all. They obviously forget that biblical teachings are directed toward the individual and not the government. Doubt me, see Mathew 22:21. Give to Caesar. Additionally, the free market offers opportunity for the individual through their effort (service) to give to others. We don’t need the government telling us how to best help our fellow man. Our creator gave us free will. If the right of free will is acceptable to him, it is also acceptable to me. There is room for charity. Charity is a voluntary giving versus government, which is enforced and imposed taking for a majority agreed upon endeavor. (Usually a moral compromise) Government was to be used as a last resort and for limited purpose) See the US Constitution enumerated powers provisions.

It is also popular they say something is a right. I.e. healthcare. Natural rights are not dependent on the services of others to accomplish. Who will you coerce to render care for those who cannot pay? Is it okay to require involuntary servitude to enforce this right? If the populace doesn’t produce enough to cover shortfalls, how is the shortage rationed in the population? The free market allow for rationing through price. It also affords opportunity to increase the country’s wealth thereby raising all. It is pointed out that some will get great amounts more. This is greed! Each person has the responsibility not the requirement to give back. This is free will. It works in this country. Witness our standard of living versus the collective society such as the former USSR.

What about European socialism? Our country has many diverse cultures. Many of the “success stories” surround cultures with a less diverse culture. Perhaps one size fits all is acceptable to their populace, but it cannot be imposed here! We as a people do not subscribe to a single set of values and this country permits one to give back as he or she sees fit and still we have a very high standard of living for all.

What about a minimum wage? Why should we prohibit someone from contributing because they seek less compensation? Is it better to have someone not contribute or to contribute and receive less compensation? Don’t different levels of compensation encourage increase in skill levels in order to increase compensation, if that is what is sought? No say the liberals you should be able to support yourself on a federal minimum wage! Maybe even a family of four without regard to your productivity and without regard to whom you exclude from the workforce by your imposition. “From each according to their ability and from each according to their need.” This is the cry of the Marxist populace clamoring to increase their rightful share of the pie. But who decides need and who decides the ability? This is Marxist utopian idealism, which doesn’t take into consideration differences in religious values, cultural norms or family values and even some might argue differences in work ethics. I refer the reader to the fiction “Atlas Shrugged” by Ayn Rand specifically the chapter about the socialist auto company experiment. Click the link to read a short excerpt. This excerpt is a thought provoking exercise about what happens, when needs exceed ability in a socialistic situation.

h2>Conclusion

Government involves use of force by a political majority over an entire populace. The US federal Constitution promotes a minimal use of this force for limited purposes.

The US population is diverse with different religious and moral values, which are not suited for one size fits all solutions.

Christianity does not demand government intervention. It requires individual action. If you believe in Christianity, then you believe in free will. Exercise of free will requires individuals to do unto others… If our creator saw fit to allow us to choose for ourselves how to live, why should we not respect the individual’s right to choose?

Minimum wage is a flawed one size fits all solution, which sounds good, but fails to account for differences in individual circumstances and discourages growth and economic inclusion by effectively barring some classes of workers from the workforce under the auspices of assisting the poor.

Corporations and businesses are vehicles to creating wealth. They are neither good nor bad; their practices are determined by their ownership. They can be great wealth creating vehicles or hoarders of wealth. Their judgment is left to the populace, who decide by their purchases. Their individual choices aggregate and determine business success. These choices taken together are vastly superior to any political choice made by government officials (Remember, politics is defined as who gets what, when, where and how.)

Healthcare Reform: More than simply redistribution of insurance cost!

1) Accept that life is not fair and government can not make it fair.

2) Accept that markets are efficient allocators of resources, which will reallocate human and capital resources to meet needs and allows for individual freedom and is not dependent on political power to meet those needs.

3) Accept that human systems are not perfect. There is a place for charity. Charity fills in the gaps or fills in during intervals between resource reallocations. Charity maybe individual,familial,or institutional. It is different from governmental programs because it is based upon a voluntary exercise of personal choice and not an exercise of majority power,

4) Accept that insurance companies are not the sole driver of cost. Health insurance is not and should not be equated to healthcare. Access to insurance does not equal good healthcare. Insurance companies are not inherently good nor are they inherently bad. Health insurance itself is not the sole answer to provision of adequate healthcare and it should not be treated as such.

5) Big government solutions are exercises of power and societal promises that even when outdated they are not rolled back and seldom evaluated in light of a changing environment.

How long will we persist in our belief that government can care for individuals from cradle to grave?  We continue to prop up  every failed government progam and deceive the public as to their long term sustainability.

Now we are on the verge of ushering into permanency unsustainable government health insurance for some unknown number of additional insured’s at the expense of all.  The true costs of this program cannot be determined.  (Congressional Budget Office (CBO)projections have proven themselves inaccurate.  See initial Medicare cost estimates as one example and Obamacare projections as a second example of inaccuracies) Democrats argue that the system would be sustainable with just a little more income redistribution and single payor solution just like the unsustainable medicare program.   (Perhaps the Democrats should campaign on a new more robust second coming of the VA Health system.)  The solvency of the Medicare trust fund is only guaranteed at 100% to 2024.

It is argued that this is the best system available because it removes the profit motive of the private sector. Please consider this.  There are already non profit options available in the insurance universe and when a government solution is adopted, it is seldom evaluated to determine its cost effectiveness or its sustainability.  Only a crisis precipitates second look at a program, then the program is reinvigorated with additional taxpayer funds, but never seriously scrutinized for efficiency and effectiveness.

Never is there consideration given to the lost opportunity cost, when adopting such  programs.  What do I mean by this?  Programs are adopted institutionalizing payment structures and distribution techniques available at the time of adoption,   This means a fee for service structure will be perpetualized in any health insurance solution.  Innovative cost and life saving measures will not be pursued, as long as a government subsidized consumer base is guaranteed to insurers and health care providers.

Insurance principles are supposedly built into the healthcare system except in instances, where the outcome is disliked by the citizenry or seen as “unfair”  e.g. Insurance is about many paying a small amount (premium) for protection against unlikely risk.  If the cost (risk)is guaranteed, it is no longer insurance.  It is redistribution.

Life is not fair and we can not wish and make it so, nor can we design a human insurance system to handle all circumstances without creating staggering insurance premium increases.  We refuse to allow those with chronic preexisting conditions to pay more in premium as required in the private insurance market,(even if the chronically ill potential insured’s have the ability to pay more) so we mandate acceptance at prescribed rate despite the built in additional cost of insuring these individuals.  This guarantee increases premium for all and prices many out of the market or provides coverage with obscene deductibles.

We demonstrate our distaste for the economic facts by characterizing any, who oppose this type of (health insurance) socialism as discriminators or haters, who wish others to go away and die.  Be honest!  This is a small group of individuals.  Most will be absorbed into a group plan through employment.  Some have the ability to pay increased premium or will be self paying.   Some will be treated in poverty programs and some may need charitable assistance.  Finally as a last resort, some may need assistance from a non insurance health assistance fund.  Why demand change to the entire health insurance industry to cover these relative few.  Please be honest and admit some of these individuals simply are not insurable for the same rate as the general population.  We may not like it, but it is not discrimination and it is an economic fact

We ignore the insurance principle of adverse selection, which states those most in need of benefits will flock to secure them especially, when available at an artificially low cost, while the young and healthy will simply assume the risk and move forward without coverage.   We attempt to overcome this hurdle by an employer mandate and an individual non insurance penalty.  The mandate so repulsive to many, so we push back compliance dates and minimize repugnant penalties in a dishonest effort to avoid electoral consequences. The penalty is so minor that many simply opt to pay it.  Meanwhile many potential insureds wait and upon receiving a diagnosis of cancer, diabetes (insert your chronic ailment here), then secure coverage post diagnosis and guaranteed future costs are spread over a small individual state market unfit to absorb the these extensive costs.  There is no urgency to sign up prior to need, when acceptance post diagnosis is guaranteed at the same cost.  Cost is distributed to the individual state market place raising the cost for everyone in that subgroup of insureds.

Remember politics is who gets what, when and how.  The market is the result of billions maybe trillions of choices made by individual consumers and families.  Each consumer or group of consumers acting in what they believe to be their best interest.  If a need arises, it is in the interest of someone or group to fill the need or the need maybe altruistically filled by voluntary giving.  (that’s right voluntary as opposed to entitled receipt.  Witness such charitable organizations as St. Jude’s Hospital, American Cancer Society and numerous other charitable non profit and individual healthcare benefactors.)  The private company or group in the private market is  rewarded for their risk taking by reaping a profit.  (not evil in fact frequently is distributed to shareholders including workers, who invest their savings in companies and insurance products.) Government planning and action can not better decide allocation of resources.  I would argue it never will be able to accumulate and weigh the number of variables necessary to replace the market.

Government muddles through! Merriam Webster’s Dictionary defines muddling through as to achieve a degree of success without much planning or effort.  (Doubt me?  Consider many in government service positions are career employees (carryover employees, not true believers), which means during any administration they may not agree with the agency activities or even the  stated goals of any department or agency.  How much effort and planning should you expect from this group.  Then consider Congress, which seldom agrees on the means to accomplish any single objective and may not even agree as to the goal itself)  The result of all this cognitive dissidence is government muddles through its tasks and inefficiently utilizes resources and seldom, if ever accomplishes its stated purpose.  This is hardly an acceptable replacement model for any market, let alone something as important as the health insurance market.

So what is the answer?

1) Accept that life is not fair and government can not make it fair.

2) Accept that markets are efficient allocators of resources, which will reallocate human and capital resources to meet needs and allows for individual freedom and is not dependent on political power to meet those needs.

3) Accept that human systems are not perfect. There is a place for charity. Charity fills in the gaps or fills in during intervals between resource reallocations.  Charity maybe individual,familial,or institutional. It is different from governmental programs because it is based upon a voluntary exercise of personal choice and not an exercise of majority power,

4) Accept that insurance companies are not the sole driver of cost. Health insurance is not and should not be equated to healthcare.  Access to insurance does not equal good healthcare.  Insurance companies are not inherently good nor are they inherently bad. Health insurance itself is not the sole answer to provision of adequate healthcare and it should not be treated as such.

5) Big government solutions are exercises of power and societal promises that even when outdated they are not rolled back and seldom evaluated in light of a changing environment.

Conclusion

Repeal of Obamacare is a necessary first step. We can always tinker at the edges of the system and provide means for those, who fall through the cracks in the system. (While writing this blog entry, I was watching a news reporter state that preexisting conditions handled in high risk pools totaled 115,000 policies. This is not an unmanageable number and gives credance to the idea that many with chronic health conditions are covered under the existing group plans or covered under existing poverty programs or medicare for seniors. If there is a requirement to immediately address an unfulfilled need i.e. preexisting conditions. There is more likely to be a better solution, if it is addressed as an individual issue. You can more easily identify the scope of the problem and limit the solution. The issue is not better addressed in all encompassing comprehensive legislation. (What about a deal?) Some Democrats maybe moved to lend support to gain this coverage, since the signature Obamacare legislation would be lost to them.

If there is no essential benefits package, perhaps there will be no need to keep children on their parents plan well into adulthood and if there is such a need perhaps a small adjustment in premium could produce the same result without a permanent unpaid governmental mandate. Some individuals could secure catastrophic coverage and choose to self insure by savings for some smaller medical expenses rather then pay into a massive one size fits all government mandate.

 
Educate the public that the majority of Obamacare’s insurance increase stems from the welfare healthcare expansion. That is medicaid. Is this how we want to cover these folks long term?  Remember this expansion was accomplished by a massive federal assumption of the expansion cost. This can not be permanent. Medicaid expansion merely kicks the can down the road with no road map to permanently assist this group to get permanent healthcare. The need for help for this group should be realistically assessed. Perhaps funding could be sunsetted as innovative healthcare delivery models are advanced to provide more affordable care.

Demand your state governments remove impediments to healthcare delivery. Examine professional licensing requirements. Examine state medical curriculum. Make certain they address healthcare needs and are not merely justification for professional fee increases!  Modify your tort laws to decrease malpractice insurance expenses.

Think strategically Republicans. Time to man up

Republicans need to Man Up and learn to govern like winners rather than pandering to voters.

I have heard many commentators state that Republicans don’t know how to win. This is not true.  They simply retain the challenger’s mindset. They don’t act like victors.   Never has this been more evident than with the proposed healthcare legislation.

Republicans leaders have been in the minority so long that they have forgotten what you do, after you win elections.  This leadership group spent years passing bills to repeal “Obamacare”.  They placed a defund and partial repeal on President Obama’s desk in 2015, which was vetoed.

Now they have electoral majorities in both chambers of Congress and a Republican in the Oval Office and they have lost sight of their goal to shrink government involvement in the lives of the populus.  They worry about how Democrats will portray their legislation. They worry rather than message and educate.

Really, what about adopting a winning strategy!

Use the reconciliation process and defund Obamacare now!  It will only take 51 votes and it is ground, which was already plowed in 2015.  After defunding Obamacare,Democrats will have lost their signature law and you can realistically say you have reset the healthcare system.

Once you have defunded and reset healthcare.  You will be in a position with a good incremental healthcare change bill to pull some Democratic House and Senate votes by compromising on the timing of the phase out of some benefits in exchange for substantive market reforms.  This will lead the Democrats to compromises, which will enable Republicans to pass such important initiatives as universal interstate insurance sales as well as changes that will permit trade and other groups of consumers to purchase healthcare as part of an expanded group insurance market.(See Senator Rand Paul’s replacement plan https://www.paul.senate.gov/news/press/dr-rand-paul-unveils-obamacare-replacement-act)
An immediate repeal will encourage Republicans to take their time and avoid “the rush to do something” and “Comprehensive Legislation”, both of which have become the hallmarks of big government and known breeders of unintended consequences.

Take your time. Confront issues as they present themselves. Utilize feedback loops as you make small changes. There was never a great healthcare crisis and simply throwing public money at a problem does not solve it!

Don’t forget Obamacare was supposed to promote universal healthcare. How did that work out? If higher premiums declining insurance choice and increased dependence on the poverty healthcare program, medicaid, is your definition of promoting universal access, then Obamacare was a success. If not, then why adopt the same legislative formula,”comprehensive legislation”.

Simply redistributing wealth and giving the redistributed funds away for health insurance purchases does not lower healthcare costs. It does not increase the number of healthcare providers nor does it lower the costs of drugs or treatment. Republicans would do well to reset to the pre Obamacare situation, then implement small insurance changes. Look at methods to assist the states in their efforts to increase private healthcare providers and increase the availability of drugs for treatment. Trust the private market for once to meet demand. Remove federal regulatory impediments to provider service expansion. (Please see my previous post about the FDA)

I mentioned increasing providers. This is a task, which must be accomplished primarily by the states. Medical licensure is a state function. The federal government can provide much needed information about costs and education. The Feds can inform states of best practices to assist them in their efforts to increase the number of providers

The main point of this post is the Republicans don’t govern because they retain a “loser’s mindset”. Their actions remind me of one of the verses of the old anti war ballad, ” Where have all the flowers gone” Particularly the verse,”…when will they ever learn”

Yes, Republicans promise small government and free market solutions, but when the time comes to govern, they act like Bicoastal Democrats. Lite Democrats, but they act like Democrats just the same. They increase spending and government reach and have never seen a program they can’t sign on to, perhaps just at a lower level than your common “Bicoastalcrat”.

Republicans lack a winner’s strategy.  They learn from defeat only that some of their numbers can remain in power even after it.  Victory for them is a time for caution.  It is a time to preserve your gains.  Priciples take a back seat to voter pandering,

Now is the time to reset the healthcare marketplace and shrink government!

Don’t make the time-honored error of using comprehensive legislation to replace Obamacare. Act decisively! Defund, reset then bargain with the Democrats and only act incrementally. Use feedback to honestly judge whether your program is successful. The country deserves a free market healthcare alternative.

Please put the country and the economy ahead of your personal reelection ambitions!  Man up! Act on the principles that got you elected!

Just Repeal Obamacare

Repealing Obamacare allows the free market to develop innovative healthcare solutions.
It will allow the free market to provide financially sound ways to cover groups like 18 to 26 year olds.

It is a sound political strategy,which forces Democrats to the table and promotes inclusiveness.

It frees the Congrss to change focus and look at other outdated healthcare practices, which raise costs unnecessarily.

Recently we have seen the Republicans roll out their own version of healthcare reforms.  The new plan is not what was promised to voters.  This plan does not completely repeal Obamacare.  It creates a new healthcare entitlement utilizing a tax credit in place of the subsidy.  (Witness the problem that is the earned income tax credit.  Hardly a success for those advocating for individual self reliance and the free market)  While the new proposed bill will allegedly remove the one size fits all mandates of Obamacare, it fails to allow the free market to operate and to innovate to produce lower costs.

Why can’t we simply repeal Obamacare.

Our healthcare system was not broken, when Obamacare was passed.  There were areas that required tweaking to allow better access to health insurance in the individual healthcare market.  There was also a risk allocation problem with preexisting conditions. Senator Rand Paul has been proposing some free market changes to assist individuals with preexisting conditions and small businesses by allowing them to secure group health insurance by forming large consumer associations. (This is a free market solution to help spread out risk.  This would allow insurance companies to properly price their product to fit the group insured) These newly allowed insurance negotiating entities would consist of large groups of consumers.  These associations could negotiate for their members for better premiums and provide a diverse consumer base to avoid the adverse selection problem that has plagued the individual marketplace. (Adverse selection occurs, when a large group of sick people flood the risk pool and cause a death spiral for the insurance group because the cost of benefits paid out exceeds the available premium generated from the entire group.  Insurance is risk spreading.  If everyone uses all they contribute, then you merely have a payment transfer intermediary not a viable insurance risk pool.)

Who says the idea of keeping children on their parents plan until the age of 26 is a good idea?  Parents like the idea because it provides access to healthcare for their unemployed or underemployed children, or those, who haven’t yet found their way into the workforce at no cost to the parent.  It was embraced because it was the only game in town.

People want access to inexpensive health insurance for this group of young people,who frequently has less income to buy insurance.  There is however no such thing as a free lunch.  The extra cost of this insurance provision is  passed on to all and along with the other mandated services.

Twenty-six is  a full four years after many graduate.  This is pure legislative over reach.  If twenty-six is good, why not forever?  Will we ever require these young people to find their own way in the world?  Stop being helicopter parents and let the young seek their own way.  There are plenty of free market ways to cover this desirable demographic and allow for personal responsibility.  Please see some free market options below.

These individuals are as a group the healthiest in our society and are a desirable consumer for their own inexpensive catastrophic insurance policy.  Catastrophic insurance is inexpensive health insurance and was formerly available through Universities and other groups prior to the Obamacare services manndate.  Repeal of Obamacare with its coverage mandates will allow these individuals to buy catastrophic health insurance through their colleges, trade schools and other associations, especally ,if the Rand Paul approach to purchasing group insurance is adopted.

Since this is a desirable demograhic for the health care provider, it is likely insurance riders would become available to parents for this group for a minimal premium increase.  The young adult coud bear the cost of this inexpensive insurance add on.  This approach promotes personal responsibility and provides inexpensive insurance coverage for this group.  When joined with the ability to have health savings accounts, perhaps funded with help from their parents from birth, these solutions could provide for the young in the insurance market.

Finally, while it is widely accepted that the government is the provider of the social safety net, there remains a place in the healthcare for charitable giving.  Why?  Charity is the voluntary application of capital by the citizenry to help out their fellow citizen.  Charity is the ultimate altruistic act of an individual within our society in as much as it is not motivated by the use of government force (whether that is the dictates of the majority or the dictates of an individual be he beneficent or tyrannical.  There is a reason why we have a republic.  Protection is sometime needed from the whims of the many or the one.) Charity has a place in healthcare.

Let’s not forget a legitimate use of the interstate commerce clause.  It was established to prohibit states from setting up barriers to the goods of their fellow states.  It should be used to curb the excessive use of the state’s safety and health authority to squeeze out health insurance competition.  Many states tailor their laws to prefer some or one healthcare provider over others.  Some state laws by their requirements make entry into their market economically impossible. We must allow companies with adequate reserves to sell their products across state lines.  Reasonable reserve requirements will have to be closely watched to prevent out crony capitalism by state statute.

Congress must not assume health insurance is the sole reason for rising healthcare in the US.  Congress must look at the FDA and reform it.

The FDA needs to be overhauled.  While Democrats hail the FDA, as our savior, which keeps us safe.  It is also a political organization, which limits individual’s choice of treatments and makes political decisions, which raise costs and limit treatment alternatives for consumers.(Yes, I said political.  Politics is defined as who gets what, when, where and why.)  The decisions made by the FDA dictate, which drugs are available for use and for what diseases, they can be used.   Wherever possible the FDA, should be limited to serve as source of drug and medical practice information.  Individuals in a free society should have the right to treat as they see fit and doctors should have the ability to innovate.  Prohibition should be a last resort, especially when life saving treatments is involved.

Democrats will point to the decrease in safety involved in deregulation, but totally dismiss the costs to the individual of the bottleneck that is the FDA.  No one can measure the loss of life caused by the prohibition of innovation, which is caused by the FDA.  Democrats assume the consumer is stupid and must be guided by the expert in Washington.  If only these sycophants would realize this.

The emperor has no clothes!  There are and always will be snake oil salesmen.  There will always be those, who prey on the uninformed.  We already have fraud statutes, with both civil and criminal penalties to deal with these bad actors.  The ultimate answer to this type of slick operator is information and training.

Information about treatment success should be the task of the FDA, so the agency can provide the best uncensored information to the medical professional and the consumer.   Training new advice providing medical professionals should be the role of our educational establishment with the guidance of our state governments.  While I do concede there is a minor role for federal government here, Inspection and information dissemination not prohibition should be the primary government role.  Knowledge is the best social disinfectant!

The FDA should arrange studies and inspections to insure drug purity and provide information about drug treatments and adverse drug reactions. It should become the ultimate health care information provider  resource as opposed to its current role as the chief driver of drug expense and innovation limiter.   The Agency would facilitate and coordinate information about foreign drug agency approvals and adopt those recommendations, it finds to have been responsibly adopted.  We should establish its role as an information clearinghouse rather than an innovation bottleneck.

We must reject the tired clichés of the Democrats that Republicans are for less safety and dirty water and dirty air.  Democrats deny the new information age.  They stifle by their insistence on government control the creation of new jobs, which could provide pharmacological and new treatment advice.  Many in the medical industry believe Pharmacists are currently under utilized. Perhaps there is room here for an expanded role for them.  Doctors are too busy treating patients and can’t be expected to know all the latest information about new drugs and alternative treatments.  Perhaps we will even witness the creation of a new group of medical/pharmacological professionals to fill this new informational need.

This is the bottom line of this post.  Repeal Obamacare Now!  It is a sounder political strategy.  It would require Democrats to come to the table, if they want some of their ideas to be included in healthcare reform.  Trust and allow the people to solve healthcare problems through the free market.  The market will respond.

Remove old fashioned pre information age notions that only certain professionals can have valid opinions about drugs and alternative treatments.  Better utilize Pharmacy Doctoral graduates as well as those with other advanced bio medical degrees as information disseminators.

Make the FDA and inspection and information clearinghouse not a decider of acceptable treatment.  Adoption of free market principles will create a more informed and healthier society with maximum utilization of human and capital resources.

Hey Ohio, Capitalism starts at Home

Capitalism starts at the local level. The federal government is an economic macro player with large impact, but this fact does not excuse localities from acting in a manner that maximizes the creation of wealth through grassroots entrepreneurial activity.

One of the amazing universal lessons I learned from Social Psychology was that all groups in our society experience “Diffusion of Responsibility”.  This phrase is a technical way of saying “Someone else will take care of it” or if in the workplace “That’s not my job”.

The result of this failure to take personal responsibility is the delegation of our local duty to advance our community’s economic well-being to the federal government.  After all, the national government casts a huge economic footprint with many of its decisions leading to the creation or demise of entire companies or small communities.  (Doubt me, remember the dire forecasts for the demise of companies or communities, when defense contracts are threatened or military bases even rumored to be relocated.)  (See San Diego Tribune Article: http://www.sandiegouniontribune.com/news/politics/sdut-military-base-closures-looming-again-2012may16-htmlstory.html)The federal government is an economic macro player with large impact, but this fact does not excuse localities from acting in a manner that maximizes the creation of wealth through grassroots entrepreneurial activity.

How does this apply to local capitalism.  Since and even during the national election, emphasis has been on creating jobs for our citizens.  Please notice the phrase “creating jobs” is not the same as generating wealth or increasing our gross national product.   Let’s start our conversation with a controversial statement. Creation of some jobs may actually impair real economic growth.  It is simply a method of wealth distribution.  Doubt me, witness China building empty shopping malls and unoccupied residential buildings.  Please review this article available at Forbes.com.(http://www.forbes.com/sites/kenrapoza/2015/07/20/what-will-become-of-chinas-ghost-cities/#70b1a2b0751b)   This is misallocation of resources on a grand national scale based upon the strategy of fulfilling a national plan.

Would it surprise you to learn that many US localities exercise this same economic folly?   It is done with the best of intentions and utilizes zoning laws as well as eminent domain to impose the vision of local elites upon its populace.  Why is it so widely accepted?    Individuals in our society seek to control their physical and economic environment. We are taught, since childhood the value of planning for the future, so it is counter intuitive to allow for the seeming chaos that is true capitalism.  Finally,the freedom that capitalism allows promotes uncertainty of outcome.

Residential and Commercial property owners seek certainty in their lives.  Property owners seek to grow the value of their investments by restricting the property rights of others.  How is this accomplished?  Use zoning laws to restrict competition by limiting the number of commercial sites available.  This is supply and demand at work.  If by using the force of government,  (government is majority force: witness the effectiveness of laws without consequence if you doubt this) you restrict the number of commercial sites available, then you raise the price and thereby the investment value of the already existing sites.  (fewer sites equals higher price.  More sites means greater competition and a lower price)  What is amiss here is the role of government in limiting the market by depriving property owners of use of their property as they see fit.

Does this mean there is no role for community control of its environment?  No, what it means is that the power of government should be used only in circumstances, where safety is at risk.  No property owner has a right to impose a real nuisance upon its neighbors.  This idea has been corrupted to mean that any use, which lowers property value is sufficient reason to restrict property rights.  We now have government elites crafting master plans for communities.  These are planned communities.  ( Sounds like well meaning Soviet economic planning and suffers the community with the same result.  i.e. ( use shortages, resource misallocation.)  When the local government is asked to select winners and losers, the result is no better than when the national government does so.  Why, because choices  made are based upon limited existing information and with built in biases.  Capitalism is based upon a  different idea.   Individual choices made in the property owner’s best interest will result in maximum economic benefit for all.  The net result of master plans is misallocation of local resources and lost opportunity for economic growth.

Why is this capitalistic idea so universally opposed by so many?  The answer is simple.  The community believes in control and planning has been promoted in all aspects of life, so surrender to capitalism is counter intuitive and threatening because it allow uncertainty.  Residential property owners fear that a “biker bar” or a “convenience store” will be placed on their block threatening the safety of their children or a factory or commercial property increasing traffic or other pollution to a dangerous level.  These are real concerns.  Coping with them requires creation of  a more flexible method of adjudicating nuisances.  Courts and lawsuits are too slow.  Zoning boards are too easily swayed against the proposed use in our modern democratic society.  Remember NIMBY (Not in my back yard) This is why here we have a limited republican form of government.  Democracy can be as tyrannical as any dictator.  It is merely tyranny by many rather than by a few or one.  (Please think about that!  The will of the many can be as restrictive as any despot).

Zoning laws must be crafted to be minimalist in scope.  It must impose use restrictions only when there are greatly increased (demonstrable)health and safety risks.  There will be errors as with any human system.

Why do I say greatly increased risk?  Consider how past break through inventions might be perceived today in our risk averse culture.  There would be no automobiles, if a risk free environment was sought.  Who would sanction high speed projectiles hurtling through population centers with a volatile payload.  (gasoline)  Remember all economic activity engenders some risk.  The only truly risk free life is conducted under a rock in a cave with limited human interaction.  (this assumes your cave and rock are structurally sound.  Life is short, measured in days, but certain and relatively risk free).

Sure, there are now and will be errors. Please remember the community can be damaged greatly not just by the results of economic activity.  i.e. car accidents or diminished air or water quality.  Some may even lose their lives as a result of lost economic activity.  The scope and extent of this loss by decreased economic activity is indeterminable and as such is dismissed out of hand.  i. e.( it is impossible to account for the number of deaths caused by the failure to mass produce a beneficial product i.e. a pesticide or more food).  I postulate that property owner’s right must prevail absent a showing of greatly increased risk.

This sounds cold compared to the liberal platitude, which states if it costs one life the risk is too great.  The fallacy of this statement becomes evident, when it is considered in historic perspective.  Consider the number of lives that would have been lost had this standard been applied to building projects, (Yes, people die in construction) automobiles ( a big killer) or electricity production.(ever hear of an electrical fire or electrocution)  So what is right.  There is not always a clear good or bad.  I am suggesting we weigh with a presumption in favor of the property owner’s rights.  That presumption of benefit from economic freedom can only be overcome by a demonstration of greatly increased risk to the public health or safety.  Wherever possible where real concerns exist compromises should be crafted to accommodate the use, while reducing the risk to the public.  (This is not an endorsement of the status quo, where property owners are subjected to community exploitation for more parks at the owner’s expense or outright seizure by the public of a portion of the property owner’s land in exchange for a use.  Demands should be directly related to the diminution of the demonstrated risk (not just perceived risk)(remembering that some risk will always be present.)

What will result from the absence of a master community plan is growth, which will inure to the community’s benefit.  This is controversial and I expect many parents and residential property owner’s will be opposed because this approach, while promoting economic growth also promotes uncertainty of value and use.  As I indicated earlier, certainty is always the easier path and economic growth requires risk taking.  Remember along with growth comes the many benefits of a modern society.  i.e. more food, more shelter and even cleaner air and water

Your comments are welcome, whether in agreement or opposed.  No judgement here!