Saturday, July 9, 2016

If "all lives matter", then why don't we have universal healthcare?


The phrase "all lives matter" is to say that violence against any peaceful person (regardless of ethnicity, age, gender, etc) is never justified. That's irrespective of healthcare, prisons or being homeless.

why don't we have universal healthcare?

Since the 1960s, healthcare has ceased to be a service provided by a market.

There's little if any competition, price transparency, comparison shopping, etc. There are many reasons for this, chief among them is that the industry is extremely regulated. As a result, it's extremely expensive. So expensive that most people cannot afford it on their own, and must rely on third party insurance. Consider that >90% of US adults have a cell phone and 87% use the Internet. How did that happen? Cell phones are so cheap that anyone who wants one can get one. This happened because the government (for the most part) did not interfere with the development and distribution of cell phones.

Additionally, governments can't overturn economic laws. There's only so many resources available, including medical resources and doctors. Simply waving the magic wand of passing a (political) law doesn't suddenly make it so there are enough doctors and medical resources for every single possible medical need. The only way we know that happens is through a market process.

There are some doctors who are trying to change this:

* Surgery Center of Oklahoma They list the prices of all of their services online.  
* AtlasMD, direct primary care practice You pay a flat monthly fee and you get 24/7 access to your doctor.

I recommend the book Primal Prescription: Surviving the 'Sick Care' Sinkhole.

why are prisons privatized?

Governments do not fully privatize services such as prisons. They purchase contracts from private firms to provide the services which have grown too costly for them to produce themselves. This is unfortunately called privatization by most policy makers and many academics. I can only guess that this is an attempt to poison the well for the idea of privatization, or simply because they are repeating what someone else said and don't bother to actually consider the distinction.

This topic is further elucidated here: https://mises.org/library/changing-guard-private-prisons-and-control-crime-alexander-tabarrok-ed and http://www.cato-unbound.org/2007/08/19/bruce-l-benson/privatization-versus-contracting-out

why are there still homeless people?

One reason is that people make poor choices and do not prepare adequately. This combined with government policy, results in homelessness. Consider the US government's initiative for the past several decades to "make homes more affordable". The effect of their attempts to make homes more affordable is to make them more expensive.

Sunday, April 3, 2016

Why econonic stimulus never works

During an economic downturn, it's believed that a proper role of government to is stimulate the economy back into health. This has been a standard practice for almost a century in the United States and is practiced world wide. There's another school of thought which proposes that the government should instead do nothing and permit the recession to correct on its own. Many people have a difficult time understanding why or how it could be better for the government to do nothing (especially politicians). If a person is unhealthy and needs medical attention, doing nothing can be fatal. Action, even incorrect action, is given preference over inaction. Yet as I'll demonstrate shortly, in the case of economic growth, the "do anything" attitude not only fails to correct the original cause of the downturn, it actually results in worsening conditions.

Consider that you're traveling in a car, driving south to visit family. You pull off of the highway into an unfamiliar area to refuel. In the process of getting back onto the highway, you end up heading back north instead of going south. Is it better for you to discover this mistake sooner or later? The later you realize the mistake, the more time and fuel you will have wasted going in the wrong direction. You might not even make it to visit your family.

Consider that at some point in your journey, you start to realize your mistake. You begin to slow your vehicle down to either stop to review the map, or to turn around completely. Now imagine that someone in the back seat of your car starts yelling at you to speed up. They tell you that you are headed in the right direction, and if you slow down you won't make it in time.

Should the person in the back seat keep quiet and "do nothing", allowing the driver to correct the mistake, or, should the person try to pressure the driver to continue driving in the wrong direction?

This is the effect of economic stimulus. Downturns or recessions happen for reasons: because of bad choices made on a large scale. Stimulus doesn't correct those choices, it enables them. Policymakers are more than happy to oblige, since it grants them greater power over the economy. Economists are also more than happy to propose stimulus too, because it gets them positions as advisors to policymakers.

The proper action for the government in the event of a recession is not just to do nothing, but to permit the correction to take place as quickly as possible. Stimulus does not achieve that end. 

Wednesday, March 30, 2016

Article review: "What Americans don't understand about Nordic countries"

I'm curious why the author left Finland and became a US citizen. He must have felt the US was a better deal in some respect, but exactly what is not made evident. Why would the author give up so many "free services" paid (paid + free in the same context is weird, isn't it?) for by taxes in exchange for what's available in the US, which is implied to be inferior?

Are the Nordic countries (Denmark, Finland, Sweden, Norway and Iceland) succeeding because of their welfare systems, or succeeding despite them? The article seems to just take it for granted that these countries are succeeding because of these systems and policies.

As mentioned in the article, these countries are actually very favorable to businesses. In fact, for most metrics, they are even more favorable than in the United States. Regarding corporate taxes, investment, property and other metrics, all of the countries except Iceland consistently rank higher than the United States.

Despite being more favorable to businesses, these countries are not especially very prosperous. Denmark, for example, if it were one of the states, would rank about 10th among the poorest states for per capita GDP. Finland would be approximately 5th, and Sweden 7th. It also is the case that the peoples of DFSNI have lower gross and disposable incomes. They earn less money before and after taxes. These countries also rank higher in terms of suicide rates as well, compared to the US.

Then there are countries like Switzerland, which is just on the south side of Germany. Denmark sits on the north side. Yet, Switzerland ranks higher on the economic freedom index than the US and all of DFSNI. It also has fewer people below the poverty line than the US and DFSNI. Why isn't Switzerland being held up as an example? Perhaps because smaller government doesn't generally serve the self-interests of politicians?

From the article: "In fact, as capitalist economies the Nordic countries have proven that capitalism works better when it’s accompanied by smart, universal social policies that are in everyone’s self-interest."

The key phrase "works better" is not really hashed out or defined, so I am left wondering: for whom and compared to what? Is the author claiming that higher taxes are better for society and that higher taxes can reduce poverty? The Nordic welfare systems weren't really established until the 1980's. Less than 40 years and already the verdict is ready? What did these countries look like before the 1980's? They grew rapidly and became very rich. Then government expanded, and their growth slowed.

We don't know what the countries would otherwise look like if they hadn't expanded their governments, but the implication is that various things would be be worse rather than improved. Why is that assumed?