Why Obama's health reforms are quite wrong

If you simply read and listen to many in the mainstream media talk about this story, you might ask whether any of them bothered to critically review the legislation passed by the Congress and signed by Obama on healthcare.

In the simple, binary world of so many the impression is given that health care in the US is a "privately owned fully commercial free market system where people are left to die on the streets unable to pay for ambulances or lying in hospitals not being treated because they can't pay".

This is a bold faced lie on multiple levels. How many say that half of all US healthcare is funded by government through Medicare and Medicaid, which provide healthcare for the elderly and poor families respectively? How many say that the budget for Medicare is 20% of the federal budget, with Medicaid being half that again?

How many say that the health market in the US is heavily regulated, with hospitals required to treat accident and emergency patients regardless of ability of pay? How many say that some states restrict the market to protect some health providers, so there isn't free and open competition across the country? How many talk about the burden that precedents to allow ridiculous tort law claims imposes upon the health sector? (In the last case the Republicans do, because high profile Democrats include tort lawyers).

The failure in the US is not about universality. As Libertarianz Leader Dr. Richard McGrath (himself a health professional) states:

"When the figure touted was 47 million uninsured, the breakdown was like this:

18 million earned over $50k (half of this group earn over $75k) and chose not to insure themselves;
13 million were illegal aliens;
8 million were under age 18 and had public cover available if poor;
leaving 8 million uninsured (3% of the population), many of whom were 18-20 year olds at low risk of medical problems."

So the REAL figure of those without insurance is far less than is bandied about by the press. The big issue in the US is cost, and the biggest source of cost inflation has been the public sector. Who says that? The Congressional Budget Office notes:

"total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and 19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary"

In other words, the GOVERNMENT side of US healthcare (which is largely ignored) is growing exponentially. The legislation signed by Obama doesn't touch this at all.

The Cato Institute solution is wiser. Its proposals are:
- Eliminate tax incentives for employer bought health insurance and apply them to individually bought health insurance. This means people have a vested interest in buying health insurance that meets their needs, and puts pressure on such insurance to not provide excessive cover;
- Eliminate restrictions that prohibit people buying health insurance from providers in other states, this is an unnecessary restriction on competition;
- Eliminate state specified minimum requirements for health insurance that in some cases include cover for procedures many would not wish (e.g. in vitro fertilisation) (indeed allowing interstate competition would produce strong incentives on states to do this);
- Licensing and regulation of what medical practitioners can do, and standards for licensing should be shifted towards industry driven accredited standards.

For example, it makes sense to be able to insure against accident or disease that is not predictable. Not to insure against self injury, or the consequences of heavy drug or alcohol consumption. No bigger incentive towards healthier lifestyles would exist than for people to notice that if they smoked, they might not get any health cover for respiratory diseases.

The Obama health reforms tinker with health insurance to make it compulsory for everyone to have health insurance, and to subsidise those who can't afford it. It does not address the cost escalation in the heavily regulated market, but especially does not address cost escalation in the US's own socialised health care - Medicaid and Medicare.

Expect future years to have healthcare remain a major issue in the US, because Obama is, for now, printing money and borrowing it, to pay for his grand plans. Living for now, letting future generations bear the cost - a curious metaphor for how so many of those living at the bottom treat their own lives.

Oh and while you consider that, it is worth noting that both the UK and New Zealand are rare among developed countries in not having an insurance based model for healthcare. The result of that is a continued growth in concern about significant groups of people who live unhealthy lifestyles, and a desire to tell them what to do in order that governments ration spending on diseases of lifestyle.

A better approach is for people to pay themselves, buy insurance and face higher premiums or the inability to get insurance because no one will sell it to them if they are eating, drinking, smoking and idling themselves into chronic conditions.

However, socialists prefer to treat such people as children, and for you to pay when they don't listen.

Internet scaremongering by newspaper

The Daily Mail has done one of its usual "the country is full of pedophiles" stories by having a journalist pretend to be a 14yo girl on Facebook, claiming "she" got umpteen requests from older men for sexual attention.

However, look at the comments section for the most popular, and you'll find oodles of people saying the likes of 'I'm unsure how this happened, my teenagers have been on Facebook for ages and don't have this issue as they know how to use it' or 'I used the internet since I was 11, occasionally had pervy attention and just blocked it or closed the window'.

In other words, Facebook isn't the problem. It allows you to control privacy settings, and most teenagers are smart enough to simply block unwanted attention. It's logical and rational, after all it is only words and images on a computer screen.

The bigger issue is clearly when teenagers ARE looking for this sort of attention, which is more a sign of issues with family, confidence and desperately seeking someone to listen to them and make them feel good about themselves. THAT is the issue, the seeking of self esteem from others, when it isn't effectively taught at home or school. A culture of sacrifice, altruism and belief that what matters is what you do for others, not yourself, encourages this.

Of course even with that some will be curious and daring, and make foolish mistakes. However, there are laws to prosecute people who engage in underage sex, and those who use the internet to meet young people for that purpose are leaving obvious trails to track them down and get them prosecuted. Curiously, some of the more recent cases of internet bullying have been with their peers, not adults. Will laws be created to prosecute teenagers for being mean to each other online? Or is it better to promote safe behaviour online, using defamation and harassment laws as they stand and let reason prevail?

The key point is that most teenagers most of the time look after themselves well online, and are more than competent to protect themselves and not meet strangers they find online alone in private places. The few who don't, do so for reasons that no law will fix, and those who care about them should provide means for them to be able to communicate what it is they want and why, in a non-judgmental and open manner. If they do stray, and do end up engaging in illegal behaviour offline, the criminal law remains to provide harsh penalties for those who exploit the young, and the internet is a fine tool for finding such people!

UPDATE: The Guardian reports the Daily Mail is facing the threat of a defamation suit because it initially claimed that it was Facebook that was used for this story.

Hedge fund manager puts socialists on the spot

Last night on BBC's Newsnight, a hedge fund manager, Hugh Hendry participated in a discussion about how he is speculating on Greece defaulting on its debt. He was joined by Joseph Stiglitz, a US economist, and Spanish Ambassador to the UK, Carles Casajuana.

Many on the left blame the likes of him who in speculating on Greece's public finances, when what he actually is doing is exposing the real risk. He is doing it with his own money and money of those who have chosen to trust him to manage.

That is the fundamental difference.

He has bet millions on the Euro, betting on it dropping if Greece defaults. As he says, if he is wrong, he and his investors lose. He expects nobody to bail him out. If he succeeds, it will be because he is right.

Why is he in a position to do this? Because the Greek governments, democratically elected for years, have been both lying about the public finances and been lax about getting those who elect them to pay for what they want.

However, the discussion on Newsnight last night was simply beautiful.

Stiglitz claimed there should be more borrowing and spending, and it is "absurd" to bet on a default. Hendry said simply:

"Look what happens - you get into difficulty and these guys over here [pointing at Stiglitz and Spanish Ambassador to the UK, Carles Casajuana] say, "hey we don't like it."

"Suddenly the truth hurts! Suddenly we want to abandon the truth. Suddenly speculation becomes a pejorative term!"

In other words, the politicians and some economists want reality evaded, the truth of the Greek government's inability to see that constant borrowing is unsustainable, is something they don't want to know - because what it really means is that spending must be cut, drastically.

Then he got threatened by the weasel who is the Spanish Ambassador who said "we're coming to get you".

He replied: "I see you champagne socialists when I travel business class, and the reason you're up in arms now is because you've got yourself into a crisis and cannot get out of it. So you're looking for scapegoats".

Indeed. The unaccountable reality evaders, statists both on the left and right, wont confront the truth that they are trying to defend mortgaging future taxpayers with their profligacy of today.

If the European Union decides to pillage taxpayers to save its members from default, then it will deserve the backlash that will be inevitable. Blaming entrepreneurs for betting with their own money for the failings of government is a lame attempt to cover up massive incompetence and failure by governments to spend within their means. Indeed, it would demonstrate once and for all the anti-business, anti-capitalist and pro-statist agenda of the European Union, except this time taxpayers are unlikely to stand for the machinations of those who like to spend their money for them.

Let Greece default, let Portugal, Spain and others follow.

Meanwhile, watch Hendry's excellent performance here and see the difference between someone who has made a success of his life and taken risks, compared to those who have spent their lives living off the back of others:



UPDATE: Here is Hendry again, for UK viewers only (through BBC iPlayer) pulling apart Poul Rasmussen, leader of the Party of European Socialists. The start is 22 minutes into the programme...

http://www.bbc.co.uk/iplayer/episode/b00rdynp/Newsnight_09_03_2010/

International Women's Day is a day to celebrate the private car

No objectivist could seriously consider there is any room for debate on whether women should be treated equally under the law to men. Furthermore, it is clearly irrational for private individuals to treat the deeds, skills, experiences or opinions of women as being inferior to men, purely due to the presence of different genitalia.

Having said that, there are many cases where discrimination on the basis of sex IS rational, simple things like personal preferences as to the sex of a doctor for sensitive issues, or quite simply human sexuality. As long as such a selection is rational, there is no reason to oppose it.

However, this post isn't about that, it is about how technology and capitalism have benefited women. Of these, one of the most beneficial inventions has been the private car.

The car has allowed more women to have access to employment, as it enables access to jobs that are NOT located in central business districts (which typically are accessible by public transport), and provides flexibility to engage in part time work around tasks many mothers undertake (such as the school run and grocery shopping).

Alan Pisarski notes that in the USA, the number of women with driving licences is approaching that of men, a trend which is not the case in many other countries. This access to personal mobility has been critical in women being able to access more and better opportunities for employment and business, as well as social opportunities. The presence of a second car in homes has particularly added to this, and that has been due to the ever declining real cost of purchasing and owning a car.

In most cases, it is quicker, cheaper and more convenient for women to access employment by car. This trend is unlikely to be reversed by the wishful thinking of supporters of coercively funded collectivised transport, which obviously has a role in assisting with people's mobility, but cannot ever replicate the flexibility that the car offers. It is that flexibility that has contributed towards expanding the horizons of opportunities for women.

Small mercies from new Auckland transport body

Now I've been damning of the creation of the Auckland mega city consistently. Quite simply, making councils in Auckland merge, whilst keeping their nearly unlimited power to enter into business, welfare activities, buy what they wish, set rates for whatever they wish, is a recipe for potentially untrammeled socialism at the local level. The last Labour Government gave local authorities a "power of general competence" (led by Alliance MP and Local Government Minister, Sandra Lee), which National and ACT opposed, yet both parties are now creating the largest government agency outside direct central government control in Auckland.

Transport is clearly one of the big issues for Auckland, but it is important to note the roles and responsibilities for that activity in the city. Bear in mind I am talking about urban transport, not intercity or international passenger or freight transport. Most of that operates quite well with little involvement of local government, except with local roads.

The creation of "Auckland Transport" as the new Council Controlled Organisation responsible for local body transport duties in Auckland has caused a bit of a stir with both Brian Rudman and Bernard Orsman opposing it. Indeed, it is noted that The Treasury, Ministry of Economic Development and Department of Internal Affairs all opposed it. Whilst the Internal Affairs opposition is unsurprising, the opposition of both Treasury and MED should put paid to any belief by those on the left that either agency is dominated by a "new right neo-liberal" agenda. For removing local transport operational matters from direct political interference WOULD be embraced by those who believe in less politics, less bureaucracy and more professional approaches to providing services.

However, let's be clear about what Auckland Transport will do.

It will operate Auckland's local roads, the roads that are not state highways. It will seek ratepayers money to pay for around half of the local road costs, and bid to the NZ Transport Agency (NZTA) for the rest (which gets its money from road users through fuel tax etc). It will contract out all of the maintenance and construction work (as usual). There will, in essence, be little change, except that like the state highways, they will be run at an arms length from politicians. Given New Zealand's state highways are acknowledged by the World Bank to be among the best managed in the world, this is no bad thing. The less political interference in managing the roads the better, as we have seen with telecommunications, electricity and postal services.

The second function is around public transport. Auckland Transport will contract subsidised public transport services, and regulate commercial ones. Buses, trains and ferries. It will own some infrastructure, but not the rail network (which is now Kiwirail). So it will do what ARTA does, decide what it wants to use ratepayers money to subsidise, seek funding from the NZTA for it, and contract services. Now as much as I believe that function should be phased out, it is exactly what you want to have at arms length from politicians. Why should politicians dictate bus routes, train timetables or the conditions for contracting services?

So why is Bernard Orsman upset? He doesn't like "unelected" directors making these decisions, yet this is exactly how half of Auckland's transport funds already get allocated, and how Auckland's state highways are managed - by the NZTA board. A board appointed by the Minister of Transport, but which is statutorily required to make its own decisions based on specific criteria such as economic efficiency. Other Auckland transport assets are run the same way, like the Ports of Auckland, locally owned but a company. Auckland Airport is a largely privately owned company. Kiwirail has a politically appointed board, but is a state owned enterprise. It's NORMAL for there to not be day to day political interference in the transport sector.

After all, look at the state of Auckland transport. The worst congestion is on the local road network, the network starved of investment in part because local government prevaricates about funding new capacity. In addition, it has been obsessed with introducing bus lanes, but showing no interest in allowing the capacity of those underused lanes to be shared with trucks or taxis.

A better solution would be to run the roads as a company, and give it the right to charge motorists directly (in exchange for refunding fuel tax and road user charges), and for property owners to take back the roads outside their premises in exchange for a cut in rates, but to be grateful for small mercies - at LEAST transport in Auckland will be one step less political.

Still politicians will raise rates to pay for roads and public transport. Public transport that if the roads were properly priced based on cost and demand/supply, wouldn't need to be subsidised. Roads that should be paid for mostly by road users, with property owners paying for accessways (for example).

Brian Rudman doesn't like having an arms-length organisation for Auckland transport, yet gives arguments as to why it should exist. There are plenty more. How many councils have roads fixed up to the point where a councillor lives, or a major friend of some politicians? How confident are you that YOUR needs are to be met by a local authority politician?

So there is no reason to worry, it might be slightly better than the way things are now, but not much. The left oppose Council Controlled Organisations because they see them as a step to their bogey - privatisation. It isn't that, unfortunately, but it is a step towards transport being driven by professionalism and delivering infrastructure for users, not meeting political demands first.

Those who oppose it might wonder why they seem to have no problem with it in so many other parts of the transport sector, or whenever else government provides infrastructure.