Questions and Observations

Free Markets, Free People

Racism and Crying Wolf

As we discussed on the last podcast, as well as in various posts here at QandO, the biggest missed opportunity in the whole Gates kerfuffle was to draw attention to the civil liberties issues. By immediately crying racial profiling, Prof. Gates clouded an otherwise sympathetic view of his standing as a homeowner. Of course, if he hadn’t behaved the way that he did (calling Sgt. Crowley a racist cop), then he likely would never had been arrested in the first place. Nevertheless, what we should have taken from the l’affair Gates was that scenes such as the following are all too familiar:

Pepin Tuma, 33, was walking with two friends along Washington’s hip U Street corridor around midnight Saturday, complaining about how Gates had been rousted from his home for not showing a proper amount of deference to a cop. “We’d been talking about it all day,” said Tuma. “It seems like police have a tendency to act overly aggressively when they’re being pushed around,” Tuma recalled saying.

Then the group noticed five or six police cruisers surrounding two cars in an apparent traffic stop on the other side of the street. It seemed to Tuma that was more cops than necessary.

“That’s why I hate the police,” Tuma said. He told the Huffington Post that in a loud sing-song voice, he then chanted, “I hate the police, I hate the police.”

One officer reacted strongly to Tuma’s song. “Hey! Hey! Who do you think you’re talking to?” Tuma recalled the officer shouting as he strode across an intersection to where Tuma was standing. “Who do you think you are to think you can talk to a police officer like that?” the police officer said, according to Luke Platzer, 30, one of Tuma’s companions.

Tuma said he responded, “It is not illegal to say I hate the police. It’s not illegal to express my opinion walking down the street.”

According to Tuma and Platzer, the officer pushed Tuma against an electric utility box, continuing to ask who he thought he was and to say he couldn’t talk to police like that.

“I didn’t curse,” Tuma said. “I asked, am I being arrested? Why am I being arrested?”

It should come as no surprise that, in fact, Tuma was arrested on a charge of ‘disorderly conduct”:

D.C.’s disorderly conduct statute bars citizens from breaching the peace by doing anything “in such a manner as to annoy, disturb, interfere with, obstruct, or be offensive to others” or by shouting or making noise “either outside or inside a building during the nighttime to the annoyance or disturbance of any considerable number of persons.”


Tuma spent a few hours in a holding cell and was released early Sunday morning after forfeiting $35 in collateral to the police, he said. A “post and forfeit” is not an admission of guilt, and Tuma doesn’t have a court date — but the arrest will pop up if an employer does a background check.

So, adding insult to injury, Tuma gets arrested for expressing his opinion on a public street, spends the night in jail, and then is “legally” pickpocketed by the police. This is a problem, just as it was with the Gates mess, and is the real issue that should be discussed.

Forget racial profiling and other obscurants for a moment and contemplate just how much power has been granted to the police here. Is that a wise decision? Surely we want the police to be able to use their judgment in a given situation, but when a law is drafted so broadly as to provide cover when a cop feels insulted then such law flies in the face of constitutional protections.

Furthermore, situations like this really undermine the concept of police being “professionals”. Having the power to arrest someone because they get a little mouthy is not a power any real professional should want or need. Being a professional means being able to negotiate the situation through one’s abilities, not through one’s grant of extraordinary power. I mean, could you imagine if lawyers had the ability to throw people in clink for insulting them? Who would be safe?

The fact of the matter is that there are just too many laws to begin with. Cut down on number if infractions cops are expected to enforce, and you will cut down on the number of incidences where the police overstep their authority. When the only thing in danger is a cop’s feelings, then I think it’s safe to say that incarcerating anyone is a monumental waste of time and resources that could be better spent going after real criminals.

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Welfare Statism Update

I showed you the chart yesterday – here are the numbers and trends behind it:

The top 1 percent, those earning over $410,000, consists of 1.4 million taxpayers, while the bottom 95 percent contains 134 million.

In 2000, before the 2001 and 2003 tax cuts that some claim disproportionately benefited the rich, the top 1 percent paid less than 38 percent of income taxes while the bottom 95 paid almost 44 percent. Since the tax cuts, the top 1 percent’s share increased over 2 percentage points while the bottom 95 percent’s share decreased 5 percentage points. Those that argue the tax cuts solely benefited the rich are mistaken.

President Obama plans to raise the top 2 marginal tax rates on those making over $250,000 a year, and Chairman Charlie Rangel (D-NY) wants to slap a 6 percent surtax on top of that to partially pay for a government take over the health care system. These tax hikes, in addition to damaging the already badly weakened economy, will further shift the burden of the income tax to the highest earners.

In contrast, the bottom 40% of taxpayers pays no income taxes on average. In fact, they get money from the tax code well above anything they paid in because of refundable credits. And President Obama’s Make Work Pay credit, passed as part of the stimulus, will increase the money redistribute to these non-taxpayers.

So you have 1.4 million paying more in income taxes than the bottom 134 million. And 40 million of those 134 pay nothing and, in fact “get money from the tax code well above anything they paid in”, which, of course, would be any withholding.

Fair? Of course not. Additionally Democrats are interested in increasing the marginal rate by 2% on those making $250,000 a year (can you even begin to imagine how many small businesses that will impact?) with Rangel all for piling another 6% on top of that.

And yet the economic picture is looking up?

I’m emphasizing this story because of the impact it has on this obvious movement from less freedom and more welfare statism. This is directly out of that playbook. Like the old saying goes, the problem with, in this case welfare statism, is at some point you run out of other people’s money.


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Dan Rather Petitions The Government

From my favorite drama queen:

Rather called on President Barack Obama to form a White House commission to help save the press Tuesday night in an impassioned speech at the Aspen Institute.

“I personally encourage the president to establish a White House commission on public media,” the legendary newsman said.

Such a commission on media reform, Rather said, ought to make recommendations on saving journalism jobs and creating new business models to keep news organizations alive.

At stake, he argued, is the very survival of American democracy.

“A truly free and independent press is the red beating heart of democracy and freedom,” Rather said in an interview yesterday afternoon. “This is not something just for journalists to be concerned about, and the loss of jobs and the loss of newspapers, and the diminution of the American press’ traditional role of being the watchdog on power. This is something every citizen should be concerned about.”

Here’s a novel idea Dan – why doesn’t the “public media” commission its own commission on saving itself without dragging the government into it?

For such an advocate of a “truly free and [an] independent press” why are you courting the government as your savior? No strings in that approach are there?

In effect, this is Dan Rather implicitly trying to lay the groundwork for a government bailout of the press – and then he’d demand afterword that we all consider the product a “truly free and independent press”. Yeah – like GM is a truly free and independent car company, huh Dan?


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“Cash For Clunkers” Is A Clunker To This Point

What got us into the financial mess we’re in today? Well all the experts and economists tell us it was overspending and debt.

So what’s the solution? Why encouraging more consumer overspending and debt incentivized with your tax dollars of course.

I’m speaking of the “Cash for Clunkers” program – a $1 billion dollar government program that gives a $3,500 to $4,500 cut in price, obviously subsidized by your taxes, to owners of old “gas guzzlers” that meet a certain criteria as an incentive to go into debt for a new more fuel efficient and environmentally friendly car.

You say a billion bucks in the big scheme of things isn’t much. Of course that’s not the point. The government has no business giving your tax dollars away to subsidize someone else’s car purchase. None.

And here’s another point to consider:

But dealers reported problems with the government’s online system to get the transactions approved by the National Highway Traffic Safety Administration (NHTSA), which is running the program.

Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was “astounded” to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.

“We had dealers representing 1,500 to 2,000 transactions,” he said. “We asked how many had a deal approved yet, and not one hand went up.”

Lambert said the government has created a program that’s “so big and cumbersome that it can’t find a way to accept anything. We’re sending in good, reliable deals.”

It’s nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

This is a crummy little billion dollar program that began July 1st and the government (why is the NHTSA in the car business?) has yet to figure out how it is supposed to work and how to reimburse dealers who’ve apparently followed their guidelines and laid out hundreds of thousands of their own dollars in anticipation of being reimbursed by the government.

In the meantime, what government has managed to create is a giant and apparently unresponsive bureaucratic mess.

And this is the crew you want running your health care?

All I can say to the dealers is you should have known better.


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Of “Greed” and “Fairness”

One of the reasons we’ve reached a tipping point between freedom and welfare statism is because much of the country pays no taxes and increasingly the burden of taxes is being shifted to a smaller and smaller percentage of the population. Now I’m not a tax advocate by any stretch. But it is obvious we’re not going to be able to avoid them, especially with this new crowd in town who wants to tax just about everything.

But back to the point – if you’re not paying taxes, but the government is taxing others to your benefit, why wouldn’t you want more stuff? Oh I know the moral argument and I agree with it. What I’m describing is a dynamic which plays on human greed. It’s funny, we hear politicians talk about the “greed” of Wall Street, or the “greed” of big oil or the “greed” of big pharma.

But what is never discussed is the “greed” of those who don’t pay taxes but demand more benefits paid for by others. Or how politicians have “incentivized” that greed.

How ridiculous has it gotten?

Check this chart out:


Yes, that’s right – the top 1% pay more taxes than the bottom 95%. And the plan is to have them pay even more as this health care boondoggle comes on line.

So the next time you hear your favorite “progressive” begin their “greed” or “fairness” nonsense, show them this chart. If that doesn’t shut them up, nothing will.


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A Friend’s Loss

I‘ve gotten to know Jim Hoft at Gateway Pundit through a couple of trips he and I have been on together – one at a Milbloggers Conference in DC and the other at the Offshore Technology Conference in Houston.

Jim’s a great guy and a formidable blogger. Jim lost his mother this week. I want to send my sympathies to him and his family. Go by and give your condolences as well. May she rest in peace, Jim.


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The Shape Of Things To Come

A short little blurb in the WSJ:

The medical costs of treating obesity-related diseases may have soared as high as $147 billion in 2008, the Centers for Disease Control and Prevention said Monday, as its new director set a fresh tone in favor of more aggressively attacking obesity.

Fresh my rear end. The only thing “fresh” about it is another bureaucrat discovering a “fresh” new area in which to intrude.  A little reading between the lines is required.

Note the name of the agency. Is it a stretch, given what we’ve seen lately, to imagine this agency recommending that obesity be classified as a “disease”?

Why else would the director of the CDC even address the issue?

Of course once it has been declared a disease, all sorts of “prevention” can be legislated – for your own good, of course. And to “cut medical costs”.

The cost of treating obesity doubled over a decade, signaling the rising prevalence of excess weight and the toll it is taking on the health-care system. The medical costs of obesity were estimated to be $74 billion in 1998, according to a study by federal government researchers and RTI International, a nonprofit research institute in Research Triangle Park, N.C.

Hmmm can taxes on food – sugary drinks, high calorie foods, etc – be far behind? Right now that may be a little more difficult and problematic because the government doesn’t have control of health care in this country. But, with that in the offiing, I think the new director of the CDC is just anticipating this “fresh” direction once said legislation is expelled from the bowels of Congress.

Just keeping you up to date.


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The “Obama Economy”

If this NPR poll has any validity, it removes, once and for all,  the “I inherited this mess” meme from Obama’s rhetorical quiver. Americans see this as his mess now and they’re not particularly happy with how he’s handling it:

In another part of the poll, respondents were asked which of two statements on the economy came closer to expressing their view. The first statement: “President Obama’s economic policies helped avert an even worse crisis and are laying the foundation for our eventual economic recovery.” The second statement: “President Obama’s economic policies have run up a record federal deficit while failing to end the recession or slow the record pace of job losses.” A plurality preferred the second statement, 48 percent to 45 percent.

Another indicator of the point:

Greenberg and Bolger found that 38 percent considered the country to be going in the “right direction,” while 54 percent saw it on the “wrong track.” But that 15-point negative reading was the least negative of any NPR poll in more than year. The portion saying “wrong track” had been nearly 90 percent in the NPR poll done in the fall of 2008.

The principal reason for negativity appeared to be the economy. Asked to assess the current state of the economy, 49 percent called it poor while 42 percent opted for “not so good.” Only 8 percent said it was good and only 1 percent said excellent.

While NPR tries to soften the news, the fact remains that a solid majority think the country is on the wrong track. As mentioned above, there’s a 15 point difference between right and wrong track polling.


The so-called generic ballot question was also very close. Asked whether they would support a Democrat or a Republican for Congress in 2010 if the election were held today, 42 percent said they would choose a Democrat and 43 percent a Republican, a difference well within the poll’s margin of error (plus or minus 3.4 percentage points for each number in each question).

All three areas show a trend that has to be troubling to Democrats and the administration. In political terms, 2010 is right around the corner. And yes, it’s still early in the administration, but after the honeymoon, it appears those polled are not happy, for the most part, with what they’re seeing from either Congress or Obama.


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Maxine Waters – Political Rocket Scientist

I ran across this today and got a good chuckle:

Liberal frustration started to boil over in the House on Tuesday as negotiations over healthcare reform with centrist Blue Dog Democrats dragged into a second week.

The delay prompted Rep. Maxine Waters (D-Calif.) to lash out at the Blue Dogs as hypocritical and even hint that more liberal Democrats might challenge them in primaries.

Apparently Ms. Waters doesn’t quite understand why they’re called “Blue Dogs”:

Asked if she would recruit more liberal candidates to run against Blue Dogs, Waters said, “That’s normally not done.”

But she added: “There may be people out there listening and observing all of this who may get motivated based on what they’re seeing and throw their hat into the ring.”

Yeah, well, unless they too are “Blue Dogs” its unlikely they’ll be able to take a conservative district. And the present BDs know that if they’re a party to a liberal government program being stood up on their watch and with their support they’re not long for DC either.

But I’m sure Republicans would love to see a more liberal type take on a BD and help spend their war chest in the primary effort. It would only make the mid-terms a little brighter for the GOP in those districts.


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Health Care Blast From The Past – Hayek Has His Say

Here’s a post I did in January of 2007. It is very appropriate now that the health care reform business is well afoot.

So here’s ” Friedrich Hayek on Universal Health Care“, January 2, 2007:

As the 110th Congress prepares to convene and the run for the ’08 presidential nominations begins in earnest, we’re seeing far more appeals from the left, both from politicians, bloggers and opinion makers to address the supposed “health care problem”.

The appeals range from governmentally run universal health care to single-payer (again government) health insurance. The reasons given are also varied from the emotional “for the children” rhetoric favored by some to the technical “it would be more efficient and less costly” sobriquet.

Reading through Friedrich Hayek’s monumental “The Constitution of Liberty” again over the holidays, I revisited his discussion of the topic. And, willing to risk boring you out of you skull I thought I’d share it with you. Fair warning: Long post follows.

One of the most important thoughts he has on the subject gets to the crux of designing a system which would supposedly provide equal care to all. Health care cannot really be quantified and thereby presents peculiar problems which must be understood:

“They result from the fact that the problem of “need” cannot be treated as though it were the same for all who satisfy certain objective criteria, such as age: each case of need raises problems of urgency and importance which have to be balanced against the cost of meeting it, problems which must be decided either by the individual or for him by somebody else.”

And therein lies the great dilemma and the greatest threat to liberty. Because in a state run scheme it is the latter which will, indeed must, prevail.

He approaches the topic of health insurance and “free health care” by saying:

“But there are strong arguments against a single scheme of state insurance; and there seems to be an overwhelming case against free health service for all. From what we have seen of such schemes, it is probable that their inexpediency will become evident in the countries that have adopted them, although political circumstances make it unlikely that they can ever be abandoned, not that they have been adopted. One of the strongest arguments against them is, indeed, that their introduction is the kind of politically irrevocable measure that will have to be continued, whether it proves a mistake or not.”

That line is one of the most important points about this entire debate and one of the major reasons that many, especially among libertarians and fiscal and small government conservatives, resist the implementation of such a plan. Witness Medicare, Medicaid and Social Security. Once it is in place there is no turning back even if it is an outrageous mistake.

Fine, you say, but other than resisting it, to this point, because it may turn into an expensive and inefficient debacle, what can you offer to at least lend credence to an argument against such a system?

Fair question. And for that, I offer Hayek’s argument, an argument that is well reasoned, not emotional, and provides some unique insights.

He begins his critique by pointing out that the case for free health service is based on two fundamental misconceptions:

“They are, first, the belief that medical needs are usually of an objectively ascertainable character and as such that they can and ought to be fully met in every case without regard to economic considerations, and, second, that this is economically possible because an improved medical service normally results in a restoration of economic effectiveness or earning power and so pays for itself.”

But, as he argues, both miss the mark because they mistake the nature of the problem involved in decisions concerning “the preservation of health and life”:

“There is no objective standard for judging how much care and effort are required in a particular case; also, as medicine advances, it becomes more and more clear that there is no limit to the amount that might profitably be spent in order to do all that is objectively possible.”

Now make sure you’re clear on his point here. He’s not claiming it is profitable (or rational) to spend what is necessary to do all that is objectively possible. He’s arguing that if you agree that even marginal improvement, no matter how small, is “good” (“no objective standard”) then there is no limit as to how much you can spend for marginal improvement. Without an objective standard for making judgments as to how much care and effort are enough care and effort, the want is infinite.

He continues:

“Moreover, it is also not true that, in our individual valuation, all that might yet be done to secure health and life has absolute priority over other needs. As in all other decisions in which we have to deal not with certainties but with probabilities and chances. We constantly take risks and decide on the basis of economic considerations whether a particular precaution is worthwhile, i.e., by balancing the risk against other needs. Even the richest man will normally not do all that medical knowledge makes possible to preserve his health, perhaps because other concerns compete for his time and energy. Somebody must always decide whether an additional effort and additional outlay of resources are called for. The real issue is whether the individual concerned is to have a say and be able, by an additional sacrifice, to get more attention or whether this decision is to be made for him by somebody else. Though we all dislike the fact that we have to balance immaterial values like health and life against material advantages and wish that the choice were unnecessary, we all do have to make the choice because of facts we cannot alter.”

The fundamental issue he confronts here is the right of individual choice and the attack on that right which programs such as “free health care” pose. In essence individual choice is, at some point, overruled by collective choice. As Hayek implies in his discussion of “objective standards” and the real lack of them in judgments of how much care and effort are required in a particular case, those sorts of standards must be part and parcel to any “free health service”. Infinite need/want meets finite fiscal and physical resources in such a system, and consequently some method of defining the limits of “health care” within those fiscal and physical constraints must, of necessity, be made. Individual choice then is reduced to those standards and the freedom to pursue “additional sacrifice” in terms of spending more on your health is removed from your array of choices.

Even when such “objective determinably standards” are outlined, they prove not to be well considered or, as Hayek says, have any “relation to reality:”

“The conception that there is a an objectively determinable standard of medical services which can and ought to be provided for all, a conception which underlies the Beveridge scheme and the whole British National Health Service, has no relation to reality. In a field that is undergoing as rapid change as medicine is today, it can, at most, be the bad average standard of service that can be provided equally for all. But since in every progressive field what is objectively possible to provide for all depends on what has already been provided for some, the effect of making it too expensive foremost to get better than average service, must, before long, be that this average will be lower than it otherwise would be.”

Why the US continues to be the gold-standard for the most progressive and best medical care available instead of the British National Health Service is to be found in that paragraph. When their health is involved, people will rarely, if ever, chose the “bad average standard of service” over one which provides them the opportunity to access the best and most progressive. Health care, as provided by any universal scheme can, at best, only offer that “bad average standard of service”.

Hayek then addresses another part of the base misconceptions he identifies above:

“The problems raised by a free health service are made even more difficult by the fact that the progress of medicine tends to increase its efforts not mainly toward restoring working capacity but toward the alleviation of suffering and the prolongation of life; these, of course, cannot be justified on economic but only on humanitarian grounds. Yet, while the task of combating the serious diseases which befall and disable some in manhood is a relatively limited one, the task of slowing down the chronic process which must bring about the ultimate decay of us all is unlimited. The latter presents a problem which can, under no conceivable condition, be solved by an unlimited provision of medical facilities and which therefore must continue to present a painful choice between competing aims. Under a system of state medicine this choice will have to be imposed by authority upon individuals. It may seem harsh, but it is probably in the interest of all that under a free system those with full earning capacity should often be rapidly cured of temporary and not dangerous disablement at the expense of some neglect of the aged and mortally ill. Where systems of state medicine operate, we generally find that those who could be promptly restored to full activity have to wait for long periods because all the hospital facilities are taken up by the people who will never again contribute to the needs of the rest.”

Or who are presently too young to contribute.

What Hayek says, without saying it, is even in a system of “free health service”, there must and will be a system of rationing. Of course one of the main objections to our present system is we ration health care by price. But it doesn’t matter as the nature of health care, unlimited need meets limited means, requires it in every scenario imaginable short of a magic solution of some sort.

If we deal just in the economics of such a system, that which makes the most sense is to give priority of treatment to those who can recover quickly and contribute. That wouldn’t be the retired and children. Or stay at home moms. And those, usually, are the ones first identified as needing this sort of a system. But they are the very reason such systems fail to deliver on the promises made.

Hayek hints that such a system has an outside chance of working if it focuses on “restoring working capacity” and not much else. If and when it becomes focused on the “alleviation of suffering and the prolongation of life”, economic justification is impossible because the need/want for that is unlimited.

Such a system that gives priority to restoring those able to work productively would give further priority to treatment of the immediate problem and not necessarily the treatment of the chronic problem, if there is one – not if it wished to remain economically viable.

Thus far then, with such a system we’re reduced to a “bad average standard of service” which will, in some way, be rationed and in which individual choice will be abridged.

Last point, and privacy advocates should zero in on this:

“There are so many serious problems raised by the nationalization of medicine that we cannot mention even all of the more important ones. But there is one the gravity of which the public has scarcely yet perceived and which is likely to be of the greatest importance. This is the inevitable transformation of doctors, who have been members of a free profession primarily responsible to their patients, into paid servants of the state, officials who are necessarily subject instruction by authority and who must be released from the duty of secrecy so far as authority is concerned. The most dangerous aspect of the new development may well prove to be that, at a time when the increase in medical knowledge tends to confer more and more power over the minds of men to those who possess it, they should be made dependent on a unified organization under a single direction and be guided by the same reasons of state that generally govern policy. A system that gives the indispensable helper of the individual, who is at the same time an agent of the state, an insight into the other’s most intimate concerns and creates conditions in which he must reveal this knowledge to a superior and use it for the purposes determined by authority opens frightening prospects. The manner in which state medicine has been used in Russia as an instrument of industrial discipline gives us a foretaste of the uses to which such a system can be put.”

Now scoff if you wish, but that is the inherent risk any such system has because of its very nature. Such access to information is ripe for abuse, and, as Hayek notes, the fundamental change in the relationship of the doctor to the patient in this scheme makes such a risk of abuse more likely instead of less. The authority in this process is no longer the patient for whom the doctor used to work, but the entity which instructs the doctor on what he can or can’t do and pays him for the service. And the authority which makes such decisions must and will have access to all the information necessary to make them. What was once privileged information shared between doctor and patient would become shared information within the bureaucracy with possible potential abusive uses of which Hayek reminds us. Some may see those abuses as far fetched. I see their potential as a logical result of the system. One of the arguments we constantly make about corruption in the Congress is that the problem is systemic. It comes from the very nature of the institution its structure. This system is of similar construct and cannot help, at some time, becoming corrupt. Such corruption would most likely see the information within its databases used for purposes other than the treatment of patients.

An example? How hard do you suppose it would be to sort all the new mothers out of the population and offer them a choice of limited future service or complying with a government mandate that they see a doctor regularly? Some might argue that’s actually good. Ok, how about obese people? Alcoholics? Drug users?

Oh, wait, couldn’t the list of drug users be used for other purposes?

Yes. And so could a lot of other lists.

While all the lure of “free” health care sounds wonderful, especially to those who may not have access to health care at the moment, it is an emotional appeal which ignores the huge down-side such a program imposes on a society. No one argues that the system we have is perfect, and it certainly isn’t the least expensive, but, it appears it is the most responsive and provides access for most to the best and most innovative medicine available. There are some obvious things which could be done to improve it (remove health insurance from the realm of the employer, for one). But given the power of Hayek’s arguments, it should be a little more clear that putting our health care into the hands of the government is not one of them.


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