Why Do "They" Expect Different Results?

"American bureaucrats are no better than those of any other nationality when it comes to making socialism work.  It can't be done."

Paul L. Poirot (1915-2006)

Not yet anyway!

And why not?  Is Dr. Poirot's statement that "it can't be done" correct?

What are socialism's hallmarks?

• Control.  The Wizards Of Wonderfully Smart take from one to give to another, yet not taking from themselves.  In fact, the Wizards GIVE to themselves!  Even after nothing is left.
• It operates in contravention to the natural tendency of all people - the desire for freedom and the free will to act for oneself.
• Thinking to bureaucratically control a vastly complex market or system which is entirely capable of controlling itself perfectly.  No bureaucrat can possibly control all of the jillions of activities it takes to efficiently distribute goods and services.
• Force.  When the "masses" don't buckle under they have to be forced to buckle under.
• Shoving whatever is "best" for the "masses" down the "masses" throats, when the "masses" want no part of it.  Think, um, "affordable" "health" care?
• Socialism's bureaucracy is layered with more bureaucracy, on top of complexity, then heaped with  vaunted praise, all of which only the Wizards Of Wonderfully Smart can understand.  Do they really understand it?  Well, no!  But don't look at the man behind the curtain, or you will be labeled extremist and lunatic.  Do they demand praise?  Well, yes!  Of course!  "They" are Wonderfully Smart!

I suppose we could go on.  And on.  And on, ad nauseum.

Since, historically, socialism does not, and cannot, work, why is it so popular among the statists?  Well, aside from the fact that they ARE statists, that is.

Because, obviously, the Statist Wizards Of Wonderfully Smart are so smart, and immeasurably so, that they think their "new" ideas simply have not been tried before by the right people!  No wonder it hasn't succeeded!  The right people have not been implementing it!  Why wouldn't everyone want to enjoy the "NEW" ways of the New Elite Wonderfully Smart Statists!?  Each time a "new" Wonderfully Smart Wizard comes along, we are all told how smart they are, why, dontchaknow, they are the smartest to have EVER come along!

And anyone who doesn't buy that, especially if they are trying to convince people otherwise, well, they are just stupid.  And held up publicly as stupid.  Why, I can name a few American STUPIDS in just the past 20 or 30 years - "stupid" all!  Oh, and don't forget the dunces.

The Wizards Of Smart are just the right people at just the right time.

And who are the "right" people at just the right time?  The Wizards Of Wonderfully Smart!

And who appointed them the Wizards Of Wonderfully Smart?

The Wizards Of Wonderfully Smart did!

You see how this works?

There is no evidence that they are smart; there is no previous demonstration of successfully implementing smartness; there is no new idea; there is no simplicity (smart is usually deceptively simple); yadda, yadda.

But there is the PROCLAMATION of all that!  And from whom do such proclamations come?  The Wizards Of Wonderfully Smart!

And we are to think we have been blessed by, well, such Wonderful Smartness!  And shame, shame on us if we don't...

But think - do the people in socialist societies have their standards of living raised?  Do new inventions and innovations come from their people?  Is wealth created?  Do they lead the world in whatever the field?  How about rich and new poetry, music, art, intellect, scholarship, science, medical breakthroughs, you name it - is any of this offered to the world in abundance?  Are the people who live there happy?

Are boatloads of people escaping the rest of the world to go to these Wonderfully Smart realms of Happy and Wondrous Smartness?

It seems to me that conditions are created to keep the lucky people IN the realms of Happy and Wondrous Smartness and prevent them from getting OUT!

Gee, why is that?  Who wouldn't want to be with, live with, and mimic the Wizards Of Wonderfully Smart?

Why do we in America, founded on the exact opposite of all this, continue to move toward and have socialism forced upon us?  Since it's so Wonderfully Smart...

Don't Trammel On Me!

 "Falling prices through increased production is a wonderful long-run tendency of untrammeled capitalism."

Murray N. Rothbard (1926-1995)

Untrammeled seems like a wonderful word to use here!  Understanding it as used in this context, but not familiar with the definition, I looked it up.

Oxford says that untrammeled is an adjective which means, "not deprived of freedom of action or expression; not restricted or hampered."

We call untrammeled enterprise by another term - FREE ENTERPRISE!

The knee-jerk reaction to that definition would be that this must never happen!  Why, in an untrammeled  economy the evil capitalists would mercilessly put their jack boots to everyone's face, grind them down, steal their money and their will, and move ahead with their stolen, ill-gotten profits!  The rich will benefit on the backs of the poor.

Not much could be further from the truth.  Where allowed capitalism has historically, and morally, and fairly, raised all boats in the sea of standards of living, and brought wealth and opportunity to those who participate.  Yes, capitalism demands participation.  Some participants do better than others, but societies, as a whole, advance without fail.

We have all had the experience of waiting until the price for something comes down over time.  But given the upward slope of the supply curve, and when demand increases for something, the price suppliers can ask for that product will go up.

For some things that will always be true - pristine baseballs autographed by Honus Wagner or an authentic, one-of-a-kind doodle by Michelangelo.

But for lots of things that will never be the case.  When I was in college we waited an entire semester for the price of a particular calculator to go down.  The demand for calculators was going up, but prices were generally coming down.

How could that be?

If I invented a new product, different in size and shape and abilities and ease of use, and called it the Incredible Product, I would really want to market it.  What better way to get into the minds of the buying public than to create a new-word paradigm and market it?  What if I called it the I-Prod?

And it catches on right away!  People see it, understand how it can change their lives, and want it.  They want it now.  Given what we know about supply curves, since I am the inventor and supplier, I can ask a higher and higher price.  I am riding high!  Market demand is pushing up the supply curve, and given what we know about the supply and demand graph, higher prices happen as more I-Prods are produced.  But this only happens to a point.

What's that point?  In untrammeled capitalism others want to benefit from the opportunity of providing this great product too!  They want a piece of the action.  And, untrammeled because it's a new market these new manufacturers enter the market with their version of my I-Prod.  

THEY HAVE BEGUN TO COMPETE WITH ME!

The nerve!  Their products look like mine, but they do different things!  More things!  Some better things!  And they steal my new product word - but they call their products different names.  They market their products.  One sells the Really Cool I-Prod, and another the Much Better I-Prod.  One comes out with the Super Fast I-Prod with lots of colors!  And my sales begin to decline.  Holy Cow!  Free enterprise is causing me to lose market share to competition!

I am forced to do two things - lower my price AND improve my I-Prod!  Why?  Because these new untrammeled entrants into the I-Prod market have effectively increased supply at the original given cost, which affects price.  They have shifted outward the entire I-Prod market (called aggregate) supply curve!  We have much more I-Prod supply, and all kinds of different ones!  As the demand curve is sloping downward, this increase in aggregate supply lowers price.

And, as Dr. Rothbard says, a hallmark of capitalism is "falling prices through increased production."

We didn't even talk about increased employment, more discretionary money for things other than I-Prods and increased standards of living.  Remember, economics is a system of interacting generalities, and in a capitalist economy everything affects everything else.  Of course everything affects everything else in a controlled economy as well, but only the capitalist system handles the causes and effects more efficiently because people are freely acting out of self interest.  They are LESS TRAMMELED!   And wealth is created!  All boats are lifted.  There is free enterprise.

So, when you are considering my I-Prod against all the other I-Prods remember - mine is better, the price will likely continue to come down so please wait for my next big sale, and when you finally decide on mine over the others it will be obsolete the moment you buy it.  My newer, cheaper version will be out soon.

Says he, with an untrammeled wink in his eye.

I Hope Santa Comes

"From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. (…) Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will have to foot the bill themselves for the subsidies. (…) An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole doctrine of interventionism collapses when this fountain is drained off. The Santa Claus principle liquidates itself."

 Ludwig von Mises (1881 - 1973)
From "A Treatise On Economics" page 852-855, written 1949

I learned there was no Santa Claus when I was young and I learned it on my own.  It seems to be a principle of economics that we all learn in our own ways.  Some never learn, and some of those grow up to become bureaucrats.  Those who don't become bureaucrats become the recipients of "Santa's" largess.

Growing up in Washington DC, every December we would venture from our home in Chevy Chase downtown to the Woodward & Lothrup Department Store.  Why there?  Because that is where the "real" Santa was.  There were other Santas in other stores, but Woodies had the real Santa.  The others, I was told, were helpers.

That area was quite the annual production, with all the window displays and decorations in the street.  And Santa was quite the production too.  Parents would dump the kids, I mean pay for the photograph and happily drop their children off, to stand in the long line to wait for their turn on Santa's lap.  Then we'd spill our guts, proclaiming how good we were all year and deliver our huge list of wants.  Always huge.

I remember being dropped off with the charge, "After you see Santa, you and your brother wait for us over there," with my mother pointing to a spot.  And we did.  Hopefully Santa's line would give them enough time to shop.  They planned the visit for the time that the lines would be the longest.  So did everyone else.

One December I was snooping around in my grandmother's frightful cellar.  There was a wooden closet down there, with an open grill on the top, with a door that was always locked.  That's probably where they hid the booze from the kids.  Going over to it, I found it to be unlocked and ventured in.  What I found was a shock - everything I had asked for from Santa was in there!  Along with my brother's list of things.  What's this?!  When I brought it up to my mother, she told me to not go back in there and NOT to tell my brother.  Which I ran and did right away.

However, I grew up understanding there is no Santa Claus!  And there isn't!  Many "adults" don't understand that.  THERE IS NO SANTA CLAUS WHEN IT COMES TO GETTING GUBMENT GOODIES.

I recognize that there are those in gubment, and those who believe them, to use Dr. von Mises's phrase, who think that "soaking the rich" and giving their earned property to someone else is sound and to-be-expected gubment policy.  But it can only work for so long!  Well, it never works at all.  Never has, never will.

Sooner or later, as Margaret Thatcher reminded, this practice, socialism, only works until Santa runs out of other people's money!

Ah, the new "health" "care" legislation may have gotten us to the point where the von Mises prediction above has come home to roost!  The "fountain" is necessarily "drained off" when it comes to the huge, and huger than anyone now imagines, medical expenses that will have to be paid!  And notice, the definition of "rich" has shrunk.  I bet it now includes those who make $36K a year or more.  RICH, um, used to mean rich!

Yes, everyone understands the lies.  Of course you can't have a new system where you can expect to keep your old stuff, from doctor to insurance policy, with premiums cheapened by $2500 annually, along with more and better "health" "care" to be provided more efficiently than ever before!  It can't be done!  Never mind in an actuarial sense!  The logistics don't work!  Really, more for less? 

But that is what "the people" voted for!   Or thought they were.  The Four Legs in the barnyard mostly said that they want what the Two Legs would provide!  And provide everything because, after all, it's free!  Why did they vote for that?  Because the Two Legs said they would!!  Well, good luck with that.

In the last election one party found out that logic and adult thinking cannot compete with Santa Claus.  And never will be able to compete with him.  Think carefully.  Have we reached the TIPPING POINT from which there is no return?

Recently the Washington Times published comments from a Democratic Underground website.  You know the one.  Here are a couple:

"What happened that my Social Security with holdings in my paycheck just went up?"
"My paycheck just went down by an amount I am not comfortable with.  What happened?"
" I know to expect between $93 and $94 less in my paycheck come the 15th.  They lied."
"Many of my friends didn't realize it either.  The payroll department in our company didn't prepare us well."

Of course not!  Now think carefully.  Which group will be footing the "health" "care" bill for the tens of thousands of Baby Boomers who are retiring every week?  And many of that new Santa group did not realize it!  And they will be forced to provide.  There will be no opt out.  Remember, statism doesn't work voluntarily.  It HAS to be forced.  And will be.

Do I NOW think I can look forward to Santa, only that he is coming from another direction?  No.  The real work will be taken over by a panel.  Call the panel what you will, but it's a panel nonetheless.  They will decide who gets what, and for how long.  It's written into the "law."  Should they call it the Santa Panel?

Enjoy.

P.s.  If you don't understand the Four Legs/Two Legs reference, which I often refer to in my posts, read George Orwell's book Animal Farm.  He was a committed socialist who got, um, disillusioned with the whole idea.  Socialism would have worked, until those darn Russians ruined it.  Bummer.

What If Health Savings Accounts Replaced The "Affordable" "Health" Care Act?

"Health Savings accounts (HSAs) are like personal savings accounts, but the money in them is used to pay for health care expenses.  You own and control the money in your health savings account.  The money you deposit into the account is not taxed.  HSAs and high-deductible health care plans were created as a way to help control health care costs.  The idea is that people will spend their health care dollars more wisely if they're using their own money.  In addition, doctors and other health care providers will have an incentive to lower their rates because they are competing for business." 
     
                                          The Mayo Clinic

The idea of health savings accounts has been floating around for some time.

Why hasn't it taken hold generally?  There is a one word answer:  politics.

Why has politics squashed the general acceptance of health savings accounts?  There is a one word answer:  control.

As with everything, there are advantages and disadvantages.

HSA Advantages:

• People are in control of their own money and how it is spent.
• Employers can contribute to your health savings account as a company benefit, but since people own the money in the account there is portability from employer to employer.
• The money is always yours.  If, for example, all of the monies contributed to the account are not spent in a given year, it rolls over and becomes part of the next year's account.
• The money, deposits and all, is not taxed.

HSA Disadvantages: 

•  What happens if there is a dramatic and expensive illness that costs more than the account can pay?
•  People would be required to research and decide on their own health care.
•  Many people cannot afford to put much money aside in such an account.
•  Some might avoid needed health care simply to maintain the money in their account.
•  If/when money is withdrawn from the account, instead of paying for health-care-related expenses, it is taxed.

Does anyone understand how quickly the free market, and free enterprise, would spring up companies and organizations that would completely handle those disadvantages?

When I was a kid my mother had a health insurance policy through her work, but it did not cover huge expenses, the "dramatic and expensive illness" above.  For those, which we fortunately never had to use, she had another policy called "major medical."  It was an additional policy, but as such a small population of the entire insurance pool used it the costs were minimized.

If there are those who would say that researching and deciding on individual health care paid for by HSAs is too difficult for some, the free market would provide its own "navigators" (as provided now by the "Affordable" "Health" Care Act) who would not be politically rewarded or motivated.  Experts would develop and operate businesses that would help people navigate health care decision making.

Can anyone say that researching personal health care needs within an HSA is more complicated than a system devised by bureaucrats, in secret, with zillions of pages of rules and regulations, with intentionally hidden regulations, fees and costs, personal data collection, with identity theft, and with hundreds of new bureaucracies and tremendous uncertainty as regards peoples' futures?  If that case can be made, let me know.

Make it so HSA monies cannot be withdrawn until a certain age - 65, or 68, or 70 - and then at a lower tax rate.  And make it so any monies left over at death can be bequeathed as inheritance.  It would be private property.

How about this idea:

The gubment claims to have spent many years, a $Trillion to set up a system, and more than $650 million to develop a website that still doesn't work (plus advertising).  We know the website is substandard because it was recently touted that the website was "fixed" and operating with speed and efficiencies similar to websites in the private sector.  Wow, what?!  That is a huge admission that the private sector could have done it better, but I digress.

And it STILL is not operating anywhere near to what people expect from websites.  Will it ever?

The more cynical among us would say that the current chaos surrounding the implementation of the "Affordable" "Health" Care Act, and the website, is intentional.  The more cynical would say the chaos is right out of the Alinsky Model.  The more cynical would say that there are those in gubment who follow the Alinsky Model religiously and who think that a "crisis should not be wasted."  The more cynical would say that the problems are baked into the system so that the only entity big enough and wonderful enough to "fix" it is gubment, which then rides in on its white horse to "solve" the problems.

Do the problems ever get solved?  Or are they more exacerbated?

Here is the idea.  What if, instead of spending $3000 per person, per year, to develop this chaos, that instead, INSTEAD, the gubment lets people choose for themselves.  If they want, some can choose the AHCA.  But what if another choice was a personal Health Savings Account into which the gubment starts off the individual HSA accounts with $9000 per person?  Forbes a year ago calculated that annual per capita health care expenditures are nearly $9000 per person.  That will only increase.

Currently only $3000 per individual, or $6000 per family can be contributed annually toward an HSA.  How about starting off an HSA with a one-time gubment contribution of $9000 per person?  PER PERSON!

If the gubment is going to spend the money, why not spend it wisely?

Yes, a family of four would start out with $36000!  And, AND, the owned account is portable state to state, employer to employer and can be bequeathed as inheritance.  When a child leaves the family to start out on his/her own life, their share of the money goes into their own, new personal/family HSA, or the rules extend to creating a new, one-time contribution toward the new start.  Additionally, and with the HSA, the family can purchase a major medical policy.

Imagine the relief and comfort of knowing we have such monies available?  Would not most health care worry disappear?

Now certainly there would have to be rules.  But let the market and experts, not bureaucrats, decide the rules!  I can think of a big one - that only bona fide American citizens receive such money.  No phony balonies.  No moochers.  No illegals.  No money sent to people overseas.     

AN AMERICAN HSA ACCOUNT IN AN AMERICAN FINANCIAL INSTITUTION OWNED ONLY BY BONA FIDE AMERICAN CITIZENS! 

And don't say it would be too complicated.  And don't say it would be more difficult than what we have now.  What we have now is going to be so burdensome and so expensive that it will be what some have called a train wreck (and what the more cynical among us would say is an Alinsky-model-planned train wreck). 

But, you say, there would be fraud - there is always waste and fraud with gubment anything!  Then privatize it!  Once the gubment gives Americans back some of their own money, it gets out of the HSA program and free enterprise manages the system.  I bet it would operate at the "speed and efficiencies of the private sector."  And nobody in gubment would have to "apologize..."

WHAT SAY YOU?  WHAT'S YOUR BETTER IDEA?  

I'M INTERESTED! 

What Will Happen When The Debt Piper Calls To Play His Tune?

"I place economy among the first and most important virtues and public debt as the greatest of dangers to be feared.  We must not let our rulers load us with perpetual debt.  We must make our choice between economy and liberty or profusion and servitude."

          Thomas Jefferson (1743 - 1826)

In the profusion of gubment debt, particularly over the last five or six years or so, what has been our (and by "our" I mean the people) choice?  Have we had a choice?  Do we have a choice?

Don't tell me that we do.  My vote cannot elect much in the way of influence or sway when gubment is particularly disposed to spending.

We have, to use Mr. Jefferson's word, "perpetual" debt out the ears.  Entitlement debt, foreign debt, interest debt - you name it.  Perpetual!  And it is larger than many imagine, and worth generations of effort to eliminate it.

And it is growing!

So this "choice" of "the people" has been servitude.  Well, we didn't actually make the choice as "the people."  It was made for us!  In our, um, best interests!

Really, our best interests? Profligate and senseless, politically-motivated spending is in our "best interests?"

Gubment debt is no different than household debt really.  The debt piper will soon call to play his tune.  And when our ability to pay is outstripped by our need to pay, what do we do?

This gubment will blame others! 
This gubment will say it isn't debt at all! 
This gubment will ask us all not to look behind the curtain!

Because, after all, we the people would be wrong to question the brilliance of our "leaders."  I use the word leader very, very loosely.  Perhaps incorrectly.

We are being led, for sure.  Down a path of destruction.  And servitude.  And it is intentional.

We are NOT led to economy and liberty, as Mr. Jefferson feared.

What happens when a household's ability to pay its debt is outstripped by its need to pay? 

The very word economics comes from Greek words which, when put together, mean "household management."  The household may be the very definition of microeconomics.

And when households "manage" to get into terrific and un-payable debt, what do they do?

In our society they foist it onto others!  It gets blamed on advertising, credit cards, easy credit, financial predators, misunderstood contracts, you name it!  What doesn't get blamed is profligate and senseless and tyrannical and irresponsible spending.

Do we expect our gubment, when the day arrives that debt is greater than the economy's ability to produce payment, as surely it will, do we expect our gubment to act differently?

Well, do we?