Archive for the 'Politics' Category
June 30th, 2010 by Ron Pisaturo
On Sunday, June 27, New York Times columnist and Nobel Prize-winning economist Paul Krugman—I state his credentials at the risk of being accused of ad hominem—wrote this in his piece, The Third Depression:
… over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
… officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, …
Rather than allude to unspecified speeches, I cite this data from the U.S. Government:
Budget of the United States Government: Historical Tables
Summary of Receipts, Outlays, and Surpluses
Source: http://www.gpoaccess.gov/usbudget/fy11/hist.html
Hoover was President from March 1929 to March 1933. His successor, Franklin Roosevelt, accelerated Hoover’s wild spending (and other interference in the economy by government), prolonging the Great Depression for well more than a decade.
For many important facts about government’s role in the Great Depression, see Great Myths of the Great Depression, by Lawrence W. Reed.
For an essentialized refutation of Keynesian theory, which underlies Krugman’s position, see my post (perhaps my best), The Jobs Job: I explain that Keynesianism, like Marxism, denies the role of the mind in production.
June 21st, 2010 by Ron Pisaturo
Private Property is the Solution
For this blog entry, let me leave aside the following facts, which are oil and water under the bridge.
BP’s off-shore oil leases, like all off-shore oil leases, are leases to use federal property. (Hat tip to this article in The Freeman.) The land and water are owned by the government. Federal bureaucrats—that is, mediocrities and incompetents with no ownership stake in protecting property that they have not earned, could never earn, do not understand, and have no market-based means to value objectively—decide what to lease, to whom, and under what terms. No regime, Obama or otherwise, could teach anyone—let alone the power-lusting, incompetent scoundrels who become regulators for the government—to do this job well. (Update, June 24: (For background on the evil of regulation and regulators, read Capitalism: The Unknown Ideal by Ayn Rand. If you’ve already read that book, also see here and here.)
Federal law—see Clean Water Act Section 311 and the Oil Pollution Act of 1990—makes it the U.S. President’s responsibility to stop an oil spill and clean up the mess, and also limits a company’s liability for an oil ‘spill’ such as BP’s to $75 million plus cleanup costs. (Hat tip, via Flopping Aces, to Mike’s America, which has much useful information about the disaster.)
BP’s campaign to plug the oil leak has been a fiasco. (By the way, the only thing I knew about BP before the oil spill was from its incessant environmentalist commercials, which had persuaded me to avoid BP gas stations if I ever would encounter them.) BP, evidently performing economic calculations and making business decisions based on the above-mentioned laws, clearly was unprepared for such a disaster. In its attempts to plug the leak, BP spent weeks—while more oil gushed— building needed equipment that could have been in inventory before the blow-out occurred. Like financial institutions before the housing crisis, BP apparently counted on the government to bail it out in case of disaster.
As it bailed out AIG and other financial institutions in the housing crisis, the government stepped in to manage the cleanup of the oil spill. But, as with AIG and other financial institutions, the government changed the rules after the fact, and punished the company it had promised all along to bail out. The legal limit of $75 million on liability notwithstanding, the government has shaken down BP (video here) into putting up a $20-billion escrow account for future claims.
Meanwhile, though it blames BP in particular for the oil spill, the government has declared a moratorium on all deep-water drilling.
The government’s management, with BP, of the oil spill has been a fiasco. As of Thursday, June 19, sixty days after the blow-out, the government reports (“more than”) 6,100 “active response vessels.” The size of the oil slick is now roughly (by my estimate from the map I link to) 20,000 square miles, so the government has roughly one vessel for every three square miles of oil slick. As of May 20, thirty days after the blow-out, the government reported that “more than 1,000 vessels are responding on site.” That is, more than 5,000 of the 6,100 vessels now on site did not show up until the second month. Of the more than 6,100 vessels now deployed, “more than 440” are skimmers; that’s less than one skimmer for each 40 square miles of oil slick. The government—probably from loyalty and subservience to labor unions—has declined to suspend the Jones Act, thereby declining assistance from much-needed specialized vessels owned by foreign companies.
In his speech from the Oval Office on June 15, Obama said, “We now have nearly 30,000 personnel who are working across four states to contain and clean up the oil.” Meanwhile, a half million people are deployed to take the census.
(For some other good sources, see my News page.)
So much for the oil and water under the bridge. What should we do right now, at this moment, to deal with the disaster?
What we desperately need is capitalism—that is, private property.
We should take all of the federal land in the Gulf of Mexico—and all the water on top of that land—and declare it one large block of private property owned by one new corporation. The new corporation—let’s call it Gulflandia—would in turn be owned by the individuals and businesses that currently exploit the Gulf; such individuals and businesses would include oil companies, fisheries, and owners of beachfront property. Ownership of Gulflandia could be apportioned according to the amount in taxes paid by its owners over the past decade. (The precise rule for apportioning ownership is less important than that the property be owned privately instead of by government; those who value the property most highly would soon buy the shares of initial owners.)
As the owner of the property on which the oil spill exists, Gulflandia should be allowed to request a court injunction to remove the inept and obstructionist federal government from the clean-up effort, and to hold authority over BP in BP’s effort to stop the leak. (BP and the government are the two best organizations to blow up another oil rig, but not to solve the problem from the last blow-up.) Gulflandia’s assets would be worth hundreds of billions—perhaps trillions—of dollars, which means that it would have the financial means to entice greedy entrepreneurs from all over the world to devise ways to stop the leak, clean up the mess, and preserve the value of the property. (In contrast, the government currently relies mainly on government agencies and volunteers working for free or for daily wages.) Overnight, virtually all of the world’s entrepreneurial engineering firms would turn their attention to solving this problem.
At the same time, all of the individuals and businesses suffering from the loss of fishing, tourism, and oil drilling (because of the moratorium), would have immediate relief. Their share of the new multi-trillion dollar asset would be something they could sell or take to the bank.
For more depth and details on the reasoning behind such a capitalist solution, see my article on applying the capitalist principle of private property to the challenge of space exploration; that article, Mars: Who Should Own It, is in turn based on an idea by philosopher Harry Binswanger. Also see Ayn Rand’s essay, “The Property Status of the Airwaves,” in Capitalism: The Unknown Ideal.
That no one in government is discussing a solution remotely like mine illustrates how far from capitalism we are.
April 26th, 2010 by Ron Pisaturo
In his remarks on Wall Street Reform last Thursday, April 22, at Cooper Union in New York City, President Obama said this:
I’m going to quote: “Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed… would rivet upon their institutions what they considered a monstrous system… such a system, they felt, would not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.” That appeared in Time Magazine in June of 1933. (Laughter and applause.) The system that caused so much consternation, so much concern was the Federal Deposit Insurance Corporation, also known as the FDIC, an institution that has successfully secured the deposits of generations of Americans.
If Obama had been President in 1860, perhaps he would have also mocked this statement made by John Jay generations earlier, in 1786:
It is much to be wished that slavery may be abolished. The honour of the States, as well as justice and humanity, in my opinion, loudly call upon them to emancipate these unhappy people. To contend for our own liberty, and to deny that blessing to others, involves an inconsistency not to be excused.
–John Jay, letter to R. Lushington, March 15, 1786
Perhaps Obama would have spoken of slavery as an institution that had successfully secured the assets of generations of plantation owners.
As John Jay was right, the “big bankers” cited by Time Magazine in 1933 were right. The FDIC violates individual rights, forcing individuals to pay for the failure of others. The FDIC, along with the Federal Reserve System (begun in 1913) and all the other government controls of the banking industry, has turned Americans—including bankers—into complacent dependents on the government for assessing and guaranteeing the solvency of banks. What American today assesses the solvency of a bank before deciding to deposit with that bank? What banker doubted that the government would ultimately back the toxic mortgages bought and sold by the government-sponsored enterprises, Fannie Mae and Freddie Mac, which were created expressly to carry out the government’s welfare-statist policy of making homes affordable to more people?
In the same speech, Obama said this:
we‘ve produced a proposal that by all accounts is a commonsense, reasonable, non-ideological approach to target the root problems that led to the turmoil in our financial sector and ultimately in our entire economy.
By all accounts!? Could such a statement, in a prepared speech, possibly be honest?
I might grant that Obama’s proposal is, in a sense, “non-ideological”—that is, unprincipled. But, by my account, and by many accounts surely known to Obama (see here and here from just one day of The Wall Street Journal earlier that week), the proposal certainly is not commonsense or reasonable.
What does Obama think the “root problems” are? This paragraph offers his assessment:
Now, one of the most significant contributors to this recession was a financial crisis as dire as any we’ve known in generations—at least since the ’30s. And that crisis was born of a failure of responsibility—from Wall Street all the way to Washington—that brought down many of the world’s largest financial firms and nearly dragged our economy into a second Great Depression.
And what was this “failure of responsibility” born of? It was born of the Federal Reserve System, the FDIC, and what I described above: the complacent dependency on the government for assessing and guaranteeing the solvency of banks.
What is Obama’s solution? His solution is fifteen hundred more pages of regulations, so that Americans can be even more complacent and dependent on government to do their thinking for them.
Is anyone surprised that, of the fifteen hundred pages of proposed new regulations, not a word applies to Fannie Mae or Freddie Mac? As I wrote in February 2009,
The essential cause of the housing crisis was Fannie Mae and Freddie Mac—directed by long-standing welfare-state policy, and in effect using banks as their sales reps—making trillions of dollars in loans (“they own or guarantee roughly half of the nation’s $12 trillion mortgage market” [The New York Times in 2008]) to people who could not afford to buy a home in free society.
Fannie Mae and Freddie Mac are GSEs—government sponsored enterprises. The government turned them into pseudo-corporations solely for the deception of removing their expenditures from the official federal budget. The GSEs are agents of government welfare-state social policy.
In the past decade, Democrats (such as Bill Clinton and Barney Frank) in the federal government encouraged these GSEs to run amuck, and fought against attempts to regulate the GSEs. So here is Obama’s “logic”: Government failed to regulate government; therefore we need more regulation of citizens. Obama has the mentality of a tyrant. He makes no distinction between limiting government and limiting freedom of citizens.
Perhaps I was wrong. Perhaps Obama does make a distinction: he will not limit government, and he will limit freedom.
Consider one more, revealing statement from Obama’s speech:
We do not have to choose between markets that are unfettered by even modest protections against crisis, or markets that are stymied by onerous rules that suppress enterprise and innovation.
Obama opposes “markets that are unfettered”; that is, he is for “fettered” markets. But how does one fetter a market? A market is an association of consenting individuals, as are friendship and romance. The only way to fetter an association is to fetter the individuals who would associate.
When politicians, economists, and commentators depersonalize the idea of freedom, when they speak of free or unfettered markets but never of free or unfettered people, then freedom becomes easier for them to attack or more difficult for them to defend.
April 7th, 2010 by Ron Pisaturo
Rob a man who fishes, and you feed yourself for a day. Trade with a man who fishes, and you have a potential source of food—and so many other things that this free, thinking man might create—for a lifetime.
Of course, trading requires that you work to produce something worth trading for. Well, that’s life. Life requires work. Fortunately, though, you have a mind. Use it.
March 29th, 2010 by Ron Pisaturo
This is from a press release by the Florida Attorney General on Tuesday, March 23:
Attorney General Bill McCollum today filed a lawsuit against the U.S. Department of Health and Human Services, U.S. Department of Treasury and the U.S. Department of Labor alleging the Health Care Reform bill signed into law by President Obama this morning is unconstitutional. …
The Attorneys General from South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, and South Dakota joined Florida’s lawsuit … .
The complaint alleges the new law infringes upon the constitutional rights of Floridians and residents of the other states by mandating all citizens and legal residents have qualifying health care coverage or pay a tax penalty. By imposing such a mandate, the law exceeds the powers of the United States under Article I of the Constitution and violates the Tenth Amendment to the Constitution.
Virginia Attorney General Ken Cuccinelli, filing a similar suit, said this:
The unconstitutional aspect is that the individual mandate on Americans that they must buy health insurance or face penalties overreaches the authority of the Congress under the commerce clause.
In short, the States object to forcing people to buy insurance policies that those people don’t want to buy. But the States don’t object to forcing people to sell insurance policies that those people don’t want to sell.
Why do these lawmakers not object to forcing insurance companies to sell policies to people with pre-existing conditions? Where have these lawmakers been for the past decades, while insurance companies have been mandated by States to include expensive coverage—for ‘illnesses’ such as drug addiction and pregnancy—that many customers don’t want?
The sad, obvious truth is that the lawmakers against Obamacare are not against coercion on principle. They are not in favor of an individual’s right to liberty—which includes his right to trade with others by mutual consent—on principle. Evidently, they think of ‘rights’ only for the largest voting group: the group consisting of patients, not insurers or doctors.
Perhaps these lawmakers would say, “No one is coercing insurance companies, because they always have the option of not selling insurance to anyone.” Of course, constraining the insurers’ liberty to such an alternative is a violation of rights, akin to saying, “Unless you will sleep with every man, we won’t let you sleep with your man.”
Indeed, under socialized medicine, if the state cannot afford to give a certain medical treatment to everyone, it gives the treatment to no one—except perhaps someone with political pull.
Yesterday, Florida Governor and U.S. Senate candidate Charlie Crist, a Republican, said this:
I think one thing that’s very important—and I think everybody agrees on this, Chris [Wallace of Fox News]—that preexisting instances should not be a discriminatory tool that’s used by insurance companies to not give people insurance.
Note Crist’s phrase, “give people insurance.” Could Crist have sustained his evasion if he had used the more appropriate phrase, “sell people insurance”? Clearly, selling health insurance to people who are already sick is a money-losing proposition. As I have noted, selling health insurance for sick people is a contradiction in terms, like selling life insurance for dead people.
If the Republicans somehow manage to repeal or overturn Obamacare, expect them to enact something else that violates individual rights almost as much. Virtually all Republicans agree with the evil notions that ‘health care’—forcing others to care for your health—is a right; that if insurance companies insure some people, they must insure all people; and that taxpayers should be forced to pay for everyone to be insured. (See my post, Republicans to the Rescue of Evil , from September 2009.)
What courses of action then remain for rational individuals? I can think of two: a strike in the style of Atlas Shrugged, and/or civil disobedience.
March 20th, 2010 by Ron Pisaturo
Yesterday, speaking on a university campus, Obama said this:
You know, the naysayers said that Social Security would lead to socialism. [Laughter.]
The audience laughed with Obama. Of course, if they were to laugh at all, they should have laughed at him. Of course Social Security has been leading to more and more socialism.
Look in any dictionary for the definition of ‘socialism’. Here, for instance is the definition from Merriam-Webster Online:
any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.
Of course, every welfare-state program has led to the next, to more “governmental ownership and administration of the means of production and distribution of goods.” The acceptance of Social Security led eventually to the acceptance of Medicare. (If we should give money to the old, we should also give health care to them.) The acceptance of Medicare led to Medicaid. (If we help the old poor, we should help the rest of poor.) This led to out-of-control expenditures, which led to more and more government controls on the health-care industry, which has now led to Obamacare.
Indeed, Obama made some of this very argument in his speech yesterday:
So previous generations, those who came before us, made the decision that our seniors [through Medicare] and our poor, through Medicaid, should not be forced to go without health care just because they couldn’t afford it. Today it falls to this generation to decide whether we will make that same promise to hardworking middle-class families and small businesses all across America, and to young Americans like yourselves who are just starting out. [Applause.]
Furthermore, according to Obama himself, Obamacare will lead to a “single-payer” system. For example, Obama said this in 2007:
It is my belief that not just politically but also economically, it’s better for us to start getting a system in place—a universal health care system—signed into law by the end of my first term as president and build off that system to further—to make it more rational—by the way, Canada did not start off immediately with a single-payer system. They had a similar transition step. [See the video here.]
Who will be the “single payer,” the single decider of what to buy and for whom? The government will, of course. If this is not socialism, what is?
Some may say that even a single-payer system is not socialism—that, even in a single-payer system, the government will not own everything in health care. But the government will control everything. Individuals may own some things de jure, but the government will own everything de facto. In fact, control is ownership. The Nazis understood this fact. Former Nazi Hermann Rauschning (1940, pp. 291-293) quotes Hitler as follows:
Let them own land or factories as much as they please. The decisive factor is that the State, through the Party, is supreme over them regardless of whether they are owners or workers. All that, you see, is unessential; our socialism goes far deeper. … It establishes a relationship of the individual to the State, the national community. …
It gives us also a special, secret pleasure to see how the people about us are unaware of what is really happening to them. They gaze fascinated at one or two familiar superficialities, such as possessions and income and rank and other outworn conceptions. As long as these are kept intact, they are quite satisfied. But in the meantime they have entered a new relation; a powerful social force has caught them up. They themselves are changed. What are ownership and income to that? Why need we trouble to socialize banks and factories? We socialize human beings. [Hermann Rauschning (1940), The Voice Of Destruction, New York: G. P. Putnam's Sons.]
Whether Hitler actually said these words is secondary, for these words in fact capture the essence of Nazism.
Has America reached full socialism yet? Of course not. We are a mixture of capitalism and socialism. The amount of capitalism keeps decreasing, and the amount of socialism keeps increasing. (The trend will continue unless enough individuals reject altruism and embrace the ethics of rational selfishness; read Ayn Rand.)
Some may say, “Okay, we are socializing healthcare, and education is socialized, and banking and energy and the auto industry are getting more socialized. But these are essential services. We still have capitalism for luxuries such as yachts and fancy vacations.” In short, we should have socialism for anything important, and freedom only when it doesn’t matter much anyway.
I have never heard (until today—see later) Obama offer an actual argument that his policies are not socialist. All I have ever heard him do is mock the charge. Or perhaps he is mocking his own followers, enjoying the extent to which they will follow him with blind unreason. After all, his followers were charmed by such mindless, vacuous slogans as “Hope,” Change,” “Change We Need,” and “Change We Can Believe In.”
In his speech yesterday, Obama continued as follows:
There were cynics that warned that Medicare would lead to a government takeover of our entire health care system …
He offered no argument that his plan is not a takeover of our entire health care system. Again, is Obama just mocking his gullible followers, or thrill-seeking to see how brazen he can be in fooling them?
If his plan is not a takeover of the entire system, why does he call his system “a universal health care system”? And remember, his “ universal health care system” is only a “transition step” toward what he says he really wants: a single-payer system. What part of this system is not being taken over?
Today, in his speech to the Democratic Caucus in the House of Representatives, Obama did give a brief argument that his plan is not a total takeover: he said that you will be able to keep your doctor. But every other American, even if he “couldn’t afford it” before, will be able to have your doctor too. You will have to share your doctor with all these additional people. And what will your doctor be able to “keep”? Certainly he will not keep his freedom, or what freedom he still has left today. The government will be his ‘single payer’. The government will not pay him enough to see only you and those others who can afford him. To be able to afford to stay in practice, he will have to cut the time he spends with you in order to see those who could not afford to see him before. He will not be free to prescribe what he judges is best for you, unless the single payer agrees to pay for that. You can bet that the single payer won’t pay for what is best, because the best is too expensive to provide for everyone.
Let us address one more instance of unreason on the part of the Left. Recall Obama’s statement, quoted above:
So previous generations, those who came before us, made the decision that our seniors [through Medicare] and our poor, through Medicaid, should not be forced to go without health care just because they couldn’t afford it. [Emphasis added.]
In other words, they should not go without health care just because they have not earned it.
To Obama and his audience of university students, professors, and staff, being able to afford things, not being able to afford things—such matters are trifles. Let the rich businessmen worry about that stuff. What’s important is not what people earn, but what they need: to each according to his need. That is socialism.
But there is only so much wealth. There are only so many doctors and medical machines and supplies. There is not enough of these scarce resources to meet everyone’s full needs. There is never an end to need. Everyone ultimately dies of some ailment, of some lack of health care to cure that ailment, whether that lack is a limited supply of a doctor’s time or an existing drug, or the lack of medical research needed to have discovered a cure. If being able to afford things is irrelevant, how then are the scarce medical resources to be allocated among the citizenry? Will the resources be allocated equally, or by age, or by someone’s notion of ‘intelligence’, or genetics, or political leaning, or influence? In any event, we know who will decide: the single payer, the government.
If it no longer matters what each individual can afford, it will matter instead what society can afford, as determined by government.
But let’s not call this “a government takeover of our entire health care system.”
Obama’s tactics are those of tyrants before him: promise prosperity without limit, with the old limits removed, and impose his own limits later.
And if it no longer matters what each individual can afford, what each individual earns, who will bother to work at all?
To Obama’s followers, reality will be a cruel avenger. Reality will not serve up goods without limit or without work. Reality will not yield to laws enacted by governments.
Yesterday, Speaker Nancy Pelosi said this:
As the bill comes into effect, there will no longer be caps on what you can receive, but there will be caps on what you pay in.
I grow weary, and will leave an analysis of this statement as an exercise for the reader.
Update, 3/24/2010: For much more on how the ideas of National Socialist (Nazi) Germany are taking hold in the United States, see the writings of Ayn Rand. See, for example, “The New Fascism: Rule by Consensus,” published in The Objectivist Newsletter, May and June 1965, and reprinted in Capitalism: The Unknown Ideal, New York: Signet (pb), 1967, pp. 202-220.
See also this book: Peikoff, Leonard (1982), The Ominous Parallels: The End of Freedom in America. New York: Stein and Day. This book cites and analyzes many writings (including the book by Rauschning quoted above) of Nazis and their philosophical progenitors.
The election of Obama as President is a large step down this deadly road to a Nazi-style state.
March 18th, 2010 by Ron Pisaturo
Today Pelosi, Hoyer, and other Democrats introduced another guy who needs the government’s help to pay for health care. He is Ed Morris, a small business owner who says he cannot afford to pay for his employees’ health insurance anymore because of skyrocketing premiums.
Let’s leave aside that, as one conservative blogger noted, this guy’s company is getting a big government grant to expand its facility.
What about business owners who really cannot afford to pay for health insurance anymore? How much are these business owners and their employees paying in personal income tax, corporate income tax, payroll taxes, property taxes, and countless other taxes—not to mention deficit spending—that go to the welfare state? If these people did not have these taxes to pay, they certainly would be able to afford health insurance and many other things.
Health care is one sixth of the economy? The welfare state—federal, state and local—is one half of the economy, not to mention all the coercive controls on the other half.
Doctors, patients, the owners of insurance companies—we all are victims of the government’s confiscations and controls.
They rob our dollars until we fight each other over dimes.
March 18th, 2010 by Ron Pisaturo
Yesterday, in an interview with Fox News, Obama said this:
[T]here are a lot more people who are concerned about the fact that they may be losing their house or going bankrupt because of health care.
Earlier in the week, Obama and numerous other Democrats made a big deal about how a particular woman, ‘Natoma’ (Canfield), had to choose between continuing her health insurance payments or her mortgage payments to keep her house.
Let’s leave aside that many Americans, myself included, are financially responsible enough to realize that we cannot afford our own house, yet Obama wants to force us to pay the government so that this woman and others like her can keep her house.
Instead, let’s ask this question: What about the taxes that this woman is forced to pay and has been forced to pay in the past? This woman had a job and presumably paid thousands of dollars annually in income tax and payroll taxes all her life. She presumably paid thousands of dollars annually in property taxes on her house. The vast majority—far more than four fifths (at the federal and state and local levels)—of taxes today go to the welfare state (Medicare, Medicaid, Social Security, food stamps, welfare payments, public housing, public education, etc.) instead of to the military, courts, and police (the only proper functions of government). Certainly, this woman has always paid more for the welfare state than for her own health insurance. (And the price of her health insurance has skyrocketed surely for the same reason that mine has: because of all the government mandates on what health insurance policies must cover.) Why didn’t Obama and the other Democrats say that this woman had an alternative of paying for her own health care or paying for the health care, education, and ‘welfare’ of others chosen by government? Why isn’t this choice the choice that our politicians offer to Americans?
That’s a ‘choice’ I face this year. I can afford health insurance or taxes, not both. What will the IRS say to me if I tell them that I could not pay income tax because I paid for my own health care instead? Or if I pay income tax instead, and lose my health insurance, and get sick and die, will Obama blame my death on high taxes? He should, but he won’t.
According to Obama and other Democrats, many Americans are dying every day because they could not keep their health insurance. But our politicians continue cavalierly—on the most frivolous of projects—to spend money taxed from such Americans, money that such Americans could otherwise have used to keep their health insurance.
In effect, the government is requiring that private citizens give their life for the welfare state.
Of course, this line of thinking never even occurs to Obama and his cronies. Of course, none of them would ever think even to inquire into how much their sad woman ‘Natoma’ paid in taxes. Whenever they talk about the economic hardships that so many hard-working Americans face, they never talk about how much of the hard-earned money of these families is taxed and spent by government, even when this taxing and spending ends in death.
March 15th, 2010 by Ron Pisaturo
As the Obama regime and Democrats in Congress this week make another thrust for more socialized medicine, in the fascist style of exerting control over ‘private’ businesses and individuals, it seems that America’s only hope for the failure of this thrust is that the tyrants in both parties might fail to agree on the precise form of the tyranny and the way to distribute the plunder: Will abortions be funded by government? Will the government implement the tyranny in one fell strike (as Democrats want) or implement it in stages (as Republicans want)? As a private citizen, I feel like a kidnap victim whose best hope is that my kidnappers will continue to fight each other over how to kill me.
Both political parties want to give health insurance to every individual—whether the individual has earned it or not—by taking more freedom from taxpayers, insurance companies (yes, those current ‘greedy’, ‘money-grubbing’ scapegoats) and doctors. Such a policy is as moral as giving a wife to every man, by taking freedom from women.
Both parties agree that individuals have a right to health care. Yes, an individual has a right to care for his own health. But he does not have a right to force others to care for his health, any more than he has a right to force others to care for his sexual needs. In a free society, social intercourse of any kind (including economic and medical) requires mutual consent.
Both parties agree that insurance companies should be forbidden from denying health insurance based on pre-existing conditions. But selling health insurance for sick people is a contradiction in terms, like selling life insurance for dead people.
Democrats are worse than Republicans in one respect. I don’t think that most Republicans (with notable exceptions such as Theodore Roosevelt) would have dreamt up such an evil as socialized medicine on their own. But once Democrats had dreamt it up, or resurrected the dream—or nightmare—from Soviets and National Socialists (Nazis), the Republicans have not known how to argue against it; Republicans agree with Democrats on the ethics of altruism. For the antidote—rational selfishness—read Ayn Rand.
I have blogged on the issue of socialized medicine often in the past year; for instance, see these:
Immoral, Impractical Socialized Medicine
Obama-Care: A Tyrant’s Notion of ‘Choice’
Republicans to the Rescue of Evil
A Tyrant’s Notion of Competition
In the small hope that my thoughts will help someone influence a Republican or moderate Democrat before the looming next vote in Congress, I am writing a little more.
When Republicans have charged that further socializing of health care will lead to rationing, Democrats have responded that health care is already rationed now. For example, George Stephanopoulos recently said this:
You can’t deny that rationing happens every single day in America right now.
Obama himself went even further this week when he said this:
The insurance companies continue to ration healthcare based on who’s sick and who’s healthy, on who can pay and who can’t pay.
Not only is selling health insurance to sick people a contradiction in terms, but so is selling something to people who cannot pay for it. Obama is condemning insurance companies for selling insurance, for being insurance companies instead of charities.
Regarding Obama’s use of the word ‘rationing’, consider that free individuals—including the owners of insurance companies—have a right to ration their own time and property. Rationing of goods and services is wrong when the rationing is done by government, when government controls the goods and services rightfully owned by private individuals. This equating of a private indiviudal’s rationing of his own resources with the government’s seizure and subsequent rationing of those resources exhibits a mentality of a tyrant (a mentality I have discussed here, here, here, here and here). This argument is like saying, “Your wife has forbidden this other man to have sex with her; therefore, the government may forbid you to have sex with her.”
Romance and physical affection are basic human needs, certainly more basic than health insurance. Given an alternative between the fulfillment of either of these two kinds of needs, most people would choose romance and physical affection, and with good reason. What then of the millions of people without romantic partners? By the socialist’s argument, the government should provide for these people, and a desirable woman has no right to ration her affections only among men (or with one man) that she desires.
Imagine if, instead of seeking the mutual affections of some woman of his choosing, a man had to go before a government panel and request a woman of the panel’s choosing? Imagine the plight of that man, and that woman.
Yes, in a free society, every individual must ration—that is, manage and use judiciously—the scarce and precious assets that he owns: his time, his body, and the property he worked and traded for. Coercion by government does not make these assets less scarce and precious, but merely transfers ownership and control.
Freedom does not shield an individual from the unbending absolutism of reality. In a free society, individuals must work intelligently and hard or face the likelihood of death—by starvation or by disease. But in a free society, every individual is free to keep his earnings and to seek the trade—and even the charity—of every other individual by mutual consent. Under socialism, individual ownership and mutual consent are replaced by the edicts of a board or a panel. But the unbending absolutism of reality remains. When not enough people work intelligently and hard—and intelligent work is not possible at all under a system in which decisions regarding production are made under coercion, and people are not allowed to keep what they produce—then many people must die. Which people?
One very famous darling of the Left, George Bernard Shaw, provides this candid implicit answer on an old video recording played on the Glenn Beck Program:
I don’t want to punish anybody. (INAUDIBLE) an extraordinary number of people whom I want to kill. I think it would be a good thing to make everybody come before a properly-appointed board, just as they might come before the income tax commissioner, and say every five years, or every seven years, just put them there, and say, “Sir, or madam, now will you be kind enough to justify your existence?”
If you’re not producing as much as you consume or perhaps a little more, then, clearly, we cannot use the big organizations of our society for the purpose of keeping you alive, because your life does not benefit us and it can’t be of very much use to yourself.
At the White House health-care summit on February 25, Sen. Tom Harkin (D- IA) made this perceptive and revealing argument:
The last two things I just want to address myself to is this idea that somehow we can do a little bit; we can take an incremental type of an approach; somehow we can do insurance reforms but we don’t have to do anything else.
Well, quite frankly, if we want insurance reforms, you can only do that if everybody’s in the pool. You can only get everybody in the pool if you make it affordable for middle-class families and others. You can only make it affordable for middle-class families and others if you have cost controls.
What I’m saying, Mr. President and others, is this all hangs together. You can’t pick one out and do it without doing it all together. It all hangs together.
If Harkin understood freedom, he would understand that his own argument reveals the evil of the plan he supports. Harkin’s argument illustrates how each new restriction on freedom begets the next one. To “get everybody in the pool,” the government must force people to buy insurance, and force healthy people to pay as much as unhealthy people pay. But then healthy people must pay a lot, and then the government must institute “cost controls.” Here, Harkin ends his analysis, but let us continue it.
The government cannot control costs, because the government does not create better, cheaper medical techniques; instead, the government controls prices. It makes the price of health care for all people—even sick people—artificially low; it makes the price of health care to poor people zero. This artificially low price increases demand drastically, since people can never get enough of a cheap or free good; also, people have reduced incentive to live healthy lifestyles, since the government will take care of them no matter what. At the same time, the government controls the prices paid to doctors and medical suppliers, and makes these prices artificially low too. These artificially low prices decrease the supply of doctors and medical equipment and supplies, as doctors and suppliers leave the industry or cut back on marginally profitable activities.
So then there is not enough health care to go around. Therefore, the government dictates lifestyle choices—what to eat and to do to be healthy, how many children each particular person may have, what careers are safe enough to pursue, and what careers are needed to support the inadequate health-care industry—and decides who gets what health care. Thus we arrive at the solution proposed by George Bernard Shaw.
Whether or not death panels are stipulated literally in the current health-care bill, they are the inevitable result.
January 26th, 2010 by Ron Pisaturo
Here is some elaboration on this statement from my previous post, in which I wrote that Obama’s statement at his “Job’s Forum” could be boiled down to this: Tell me what to tell you to tell people to do.
Obama was asking for advice on what to do on the economy. But the only proper role of government in the economy is the protection of property rights as part of protection of life and liberty. Any government action beyond this role amounts to using coercion to tell people what they must do with their lives. And so Obama is asking people to tell him what to tell people to do.
Furthermore, Obama was asking specifically for help from businessmen in creating jobs. In creating a job for someone, a businessman gives someone instructions on what to do in order to be productive; in short, the businessman tells someone what to do. And so Obama is asking people to tell him what to tell them to tell people to do.
(Note that a prospective employee too can create a job, when the prospective employee explains to a prospective employer how the employee can make money for the employer.)
But, one may, ask, why is Obama’s plea so wrong?
For one thing, it is not the job of businessmen to create jobs for others, as it is not the job of American citizens to create profits for businessmen. Republicans are as wrong as Democrats on this issue. As I wrote last February,
To the Republicans, like the Democrats, the job of productive geniuses is to provide jobs for everyone else. The idea of the welfare state has reached a deeper level. According to this idea, the “people” must be provided not only with products and services such as food, shelter, and health care, but they must also be provided with a job so that they can hold the illusion that they are earning their living.
A businessman rightfully tries to produce at the lowest cost possible, which generally means with the lowest number of jobs possible. A good businessman tries constantly to reduce the number of jobs needed to produce a given supply of goods, just as any person tries constantly to reduce the number of hours needed to complete his household chores. Often, of course, a prosperous business needs to create more jobs in order to produce and sell more goods that its customers are demanding. But even in these cases, “job creation” is not the business’s goal but rather an unavoidable cost; the business’s goal is profit. And a business may also prosper not by increasing production at all but instead by cutting costs by cutting jobs. These facts are such simple common sense that it is unconscionable for any politician or commentator to speak of “job creation” as a proper goal of business. Yet politicians and commentators speak this way almost unanimously.
Another, worse thing wrong with Obama’s plea can be seen by observing the difference between mutual consent and coercion, analogous to the difference between consensual sex and rape. A businessman is free to create a job or not, and offers some of his own wealth as payment for the job. When the government “creates” a job, the government offers wealth that was robbed (through taxation) or stolen (through deficit spending and ‘monetizing’ its debt) as payment for the job.
The ongoing public debate, between Democrats and Republicans, over whether the government really has saved or created the jobs that it claims to have saved or created, is a false alternative. Any job “saved” or “created” by government—apart from the job of protecting the life, liberty, and property of its citizens—should not exist.
Some might protest that the government’s creation of jobs is not at all like rape; after all, no one is forced to accept a government job. But citizens are forced to turn over their wealth. And suppose the government said this to you: “We are taking your husband away from you. But don’t worry, the government will provide another man for you. Now, we are not forcing you to take this man; but if you want a man, this is the man you can have. But no one is raping you.”
The wealth robbed or stolen from private citizens and then spent on a government job is wealth that cannot be spent or invested by the rightful owners of that wealth.
What if you cannot find a job in a free society? Well, what if you cannot find a man (or a woman)? You keep trying, or you do your best on your own. You don’t resort to rape or to kidnapping another woman’s man for a chance at that woman.
The average rental price for cropland in New York State in 2009 was $41 per acre, per year. That means that for $400 per year, or roughly a couple of months of saved-up food stamps, a man could rent more than enough land to subsist on and possibly even support a small family—even without expensive modern equipment—through his own hard work. (Families in China today subsist on less than an acre per person.)
One failing of modern education is that most people today have no inkling of how to survive on their own. They have no idea of how to grow food or hunt or raise livestock, how to build or maintain a shelter, how to make or even mend clothing. More importantly, they somehow feel unable to learn how to do these things, things that even primitive savages somehow learned how to do. Most importantly, they have no appreciation for those who do know how to do these things, and who offer their goods and services to them. Today’s ignoramuses condemn landlords, but demand the shelters that these landlords build and maintain; they condemn energy companies, but demand the fuel and electricity these companies provide to heat their homes, fuel their cars, and run their appliances; they condemn drug companies and insurance companies, but demand the drugs and insurance that these companies create. More generally, they condemn businessmen, but demand that businessmen provide them with a job, as if to say, “We don’t know how to survive on our own. Somehow you do know how to survive; you must be privileged or something. Tell us what we must do in order to be useful. And then drop dead.”
The model product of modern education is Barack Obama.
When the financial crisis hit in late 2008, individuals realized that their savings—especially their stocks and their homes—were not as valuable as these individuals had thought. These individuals then acted rationally: they cut back on their spending. They refrained from buying things that they did not need: things such as vacation trips, dinners in restaurants, home entertainment centers, and new automobiles. They cut back on these luxuries in order to rebuild their savings for things that were more important to them: things such as education for their children; or a nest egg for a rainy day; or a nest egg for their retirement, when they would need savings in order to pay for food, shelter, clothing, and health care.
Businesses that offered the unneeded goods and services suffered. The government’s “stimulus plan” was designed (at least ostensibly) to spend government money—acquired through borrowing on behalf of taxpayers—on these suffering businesses so that the employees of these businesses could keep their jobs. And the employees’ jobs consisted of continuing to produce things that rational individuals had decided they did not need.
And so, while rational individuals thought that they were replenishing their savings by cutting back on luxuries, the government has been surreptitiously spending these replenished savings in order to keep producing what the savers do not need. The savers believe that their saved dollars can be redeemed in the future to buy the food and health care they will need. But instead, these savings will have to be spent on paying back the debt that the government incurred when the government kept people working at making unneeded things. Just as in late 2008, only more so, the savers’ savings today are not worth as much as the savers think.
One might ask: “But what if the government defaults on its debt?” (Such a scenario is very likely, since ‘monetizing’ the debt—creating more dollars and paying the debt with them—is one, devious way of defaulting.) Then, won’t the savers be off the hook and not have to pay off the debt? Well, but there are many savers who have put some of their savings into government bonds. Many savers have done so without even realizing it, since the companies in which they own stock have done so. If the government defaults on its debt, then the savers who own bonds have less savings than they think they have. However you slice it, many, many Americans today have much less wealth than they think they have.
One day, there will not be enough real savings—that is, real capital equipment and fuel and supplies—remaining, and factories and mechanized farms will no longer be able to run, and prosperity will end.
As people, even ‘wealthy’ people, die for lack of drugs or medical equipment or trained doctors, the last factories to go dark will be the government-subsidized ones making fancy new automobiles and home theatre centers.
Why is our government taking us down this suicidal path? One of the government’s arguments is economic. Here is Obama on April 14, 2009:
To begin with, economists on both the left and the right agree that the last thing a government should do in the middle of a recession is to cut back on spending. [This false statement would have been true if, for “on both the left and the right,” Obama had substituted “among both hard-core Marxists and semi-socialist Keynesians.”] You see, when this recession began, many families sat around the kitchen table and tried to figure out where they could cut back. And so have many businesses. And this is a completely reasonable and understandable reaction. But if everybody—if everybody—if every family in America, if every business in America cuts back all at once, then no one is spending any money, which means there are no customers, which means there are more layoffs, which means the economy gets even worse. That’s why the government has to step in and temporarily boost spending in order to stimulate demand. That’s exactly what we’re doing right now.
But people don’t stop spending altogether. They stop spending on things they don’t need. Yes, there are layoffs; there are layoffs of people who are making things that customers don’t need. People stop buying today what they don’t need so that in the future they will be able to buy what they do need. Likewise, in a free society, people stop making what customers don’t need so that they can begin to make what customers do need.
The process of transitioning from the production of unneeded things to the production of needed things takes time, but the process must be allowed to start. The time that managers and laborers continue to spend on making home theatre centers is time that they cannot spend on learning to be doctors’ assistants or to make medical supplies. The money that an investor gives to government to buy a ‘safe’ Treasury bond (used to keep an auto company going) is money that he won’t invest in building a new facility to train nurses.
A favorite argument for stimulus spending is an argument from Keynes, alluded to by Obama in his passage above. In an economic recession, according to Keynes, there are idle resources. Factories are operating at under full capacity, and people are unemployed. According to Keynes, if the government can somehow coax the economy to put those idle people and machines to work, then extra wealth will be created at no cost. According to this argument, such government spending does not ‘crowd out’ private investment; the resources paid for by government spending are not being taken away from some private use, because these resources had been idle anyway.
The basic error of this argument is the basic error of Marxism: the denial of thought. Marx was a (‘dialectical’) materialist. To Marx, the means of production are machines, arms, and legs, but not minds. Working entails sitting or standing at a machine and pulling levers, or swinging hammers. To materialists such as Marx and Keynes, thinking—about what to make and how to build new machines to make those things—does not count as work. ‘Worker’ is synonymous with ‘manual laborer’.
In a free society, free individuals may choose to let their obsolete machines idle, but their minds do not idle. A laid-off laborer lives off of his savings (which he did not squander on HDTVs and a new SUV and trips to Vegas) while he teaches himself a new skill. A manager who made cars starts planning to make ambulances. And so on. But again, individuals cannot do this new teaching and planning while they are still doing the old ‘working’.
The irony of Keynesianism is that, in the act of trying to achieve ‘full employment’ and ‘full capacity utilization’ of existing machines, it achieves the complete idling of the one truly precious resource: the human mind.
What if the government had not bailed out auto companies and banks, and had not ‘saved’ other jobs through the stimulus plan? Many people would have lost jobs. Those with inadequate savings would have had to cut back on expenses drastically. And that would have been a good thing. The stimulus saved these people from even having to think of ways that they should have cut back. For instance, not only would they have had to cut out SUVs and cell phones and plasma TVs and cable TV and beer and football, but they might have had to move in with their parents or their neighbors, and live two or three families in a one-family house. The former factory worker might have had to become a handyman hustling jobs from the whole neighborhood, working 80 hours a week instead of his usual 40, while studying another 10 hours a week to be a paramedic, and thinking another 10 hours a week about a new idea for low-cost mobile offices for doctors. The children might have had to do all the household chores while their mother worked 80 hours a week helping out in the emergency room and learning to become a nurse. And all of these things would have been good.
But by ‘saving’ the jobs of these ‘workers’, the government ‘saved’ these individuals from the responsibility—and the rewards—of thinking.
It is difficult to say who are the most harmed by the government’s ‘jobs stimulus’: those of us who have to pay for these obsolete jobs, or those who remain in them.
The above is a partial elaboration of my One-Sentence Memo on ‘Stimulus’ Spending, which I wrote last February:
Government spending enables some people to acquire what they have not earned, deceives other people into thinking they can afford to buy what they don’t really need, and stimulates people to work at making things that people have not earned or don’t need.
So there we have the economic argument for the government’s job stimulus, and my rebuttal. The economic argument does have to be rebutted, but remember this: The only reason that Keynesianism, an absurd doctrine, has influence is that it is a rationalization for statism. And the politics of statism rests on the moral code of altruism, which has been expressed by Obama, for instance, in two of his ready slogans: “We are our brother’s keeper” and “shared sacrifice and shared prosperity.”
Fortunately for mankind, the ethics of altruism has been refuted by Ayn Rand, the champion of rational selfishness. If only more of mankind would discover that fact.
I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy. Nor to any achievement of mine. No matter who makes the claim, how large their number or how great their need.
I wished to come here and say that I am a man who does not exist for others.
It had to be said. The world is perishing from an orgy of self-sacrificing.
[Howard Roark in The Fountainhead, by Ayn Rand, 1943.]
