Thursday, May 22, 2014

The forest and the trees

We are definitely living in interesting times. It can be hard to see that from here though. We’re too close to it. We can’t see the forest. We’re too close to the trees.

Consider the whole Facebook, Twitter, LinkedIn, Google+, et al, explosion is only a few years old. Three D printers are cranking out body parts. There actually is a flying car on the market. The stock markets continue to hit new highs as some companies continue to reach record profit levels.

In average Joe land, things aren’t quite so fantastic. Unemployment (real unemployment) is still quite high, median income is dropping, grocery prices continue to rise as the official government position is that inflation doesn’t exist. Labor participation rates (percentage of people who can work that actually do work) are at historic lows.

What’s going on? Are these the best of times or the worst of times? These are transitional times. The people, by way of their elected government, have made hiring people more expensive, paper work heavy, lawsuit prone and generally less attractive than ever before. At the same time, technology has enabled companies like Google to earn more than most country’s GDP with just a handful of employees. Meanwhile, the people (again through their representative in government) have expanded the safety net, which makes the unemployed less likely to take very low paying jobs.

Where do we go from here? Eventually, there will be enough “gotta have it” new stuff coming to market that people are going to want to do whatever it takes to earn the money to buy it. They’ll also vote in more business friendly representatives to make getting the goodies easier. The economy will soar to new heights and whoever is in charge at the time will be hailed as an economic genius.

Stossel is right, things have been getting better over time if you take the long, or even mid-range view. It’s just more fun and better for ratings to focus on what’s wrong I guess. In fairness, you can’t let what’s wrong hang around too long, so it does deserve some attention. But, I think the only thing that could really do us long term harm is if we were no longer free. We’re still free enough to make mistakes, make adjustments and make new mistakes that in the long run, we get a lot of things right, even if we don’t realize it for a while. When we lose that ability to central control and force, game over.

Saturday, December 7, 2013

Bright sides and Green Chutes as 2013 comes to a close

 Bright sides and green chutes

For those of us who are free market capitalist types, this may be the "Winter of our discontent" but that means that Spring is just around the corner. There are signs that point to very good things ahead for liberty, vibrant markets and improved quality of life.

The phenomenon of the role out of the Affordable Health Care (Obamacare) is one great example. It's still possible to win elections and even get legislation passed using the tried and true spin machine, back room dealings, double speak and out right deception. But fudging beyond the actual implementation is almost impossible now. Especially when that implementation affects so many people so directly. The rise of the Internet, mobile and social media has made the spread of information and opinion from one coast to the other, almost instantaneous. You may believe you have only impacted 5% of the country, but once the posting, tweeting, sharing and emailing is done, 100% of the country is going to know about it and form and opinion about it. So long as we have freedom of speech and information flow, even the worst of ideas can be corrected in increasingly short order. This bodes well for almost everything and everyone going forward.

The unveiling by Amazon.com of their project to provide 30 minute delivery of products via drone has caused some excitement and some concerns. There are a number of issues that come up around it, but none of them are technological. Most have to do with how to manage a crowded sky or ensure privacy, not with how to make it technologically feasible on a commercial scale. It already is. Technology has gotten to a point where it is now progressing faster than we can develop protocols to accommodate it. This is also a good trend. It increasingly puts control of the product and service mix back in the hands of the producers and end users and takes it out of the hands of gate keepers and regulators. Soon, 3-D printing technology may well make banning individual products totally moot. If you can draw it or imagine it, you can have it.

The rise of alternate currencies like Bitcoin is another hopeful sign. As it turns out, creating and managing currency on a global scale is not something that is over the heads of everyone except the most enlightened of bureaucrats appointed by our wisest elected officials. In fact, Bitcoin is open source. It has no Central Banker, and it works. Will it become used by the common man on a daily basis? I don't know, but it did prove the concept. By borrowing more than they can ever hope to repay, leaving hyper-inflation as their only way out, governments have long counted on the fear of currency collapse to encourage people to "whistle past the graveyard" and perhaps put more of a value on currencies than they would if there were an alternative. If we develop a competitive, private global market of easily exchanged currencies, they can't play that card anymore. Collapse of the government's finances doesn't have to be much more than a temporary inconvenience. We throw the bums out and start over without any total apocalypse taking place.

Maybe the most hopeful sign is the decreasing tendency, especially among young people, to long-term commitment to a political party. Policy makers have lots of grand plans and schemes that they are confident will create a better world, if you'll just tolerate the transition long enough. Most of those plans involve taking money from one group and giving it to another. However, they pretty much completely ignore the aspirations of people who want more than a hand out and more than mere survival. You don't tell an ambitious teen ager in America "You only need a little success." Call it the American Dream, call it human nature, but a good portion of the population will not accept limits on their imagination, dreams and drive. They want to be free to do what they want to do. Even if they don't have well refined notions of the proper role of government or the private sector or informed positions on policy questions, they know what they like. What they like is things that work. What they don't like and don't have to accept is mediocrity. Some will, but they will be pushed aside by those who want more.

It all comes down to freedom. Freedom is what gives us the capacity to try new and different things. Freedom is also what give us the capacity to self-correct and it's much more efficient and a lot less bloody than the alternative. If we can only agree on one thing as Americans, it's that freedom must be preserved above all else, because even if you get all else wrong, freedom will let you fix it. We will right this ship, not because of a political party platform or some new legislation, but because of us; because we still give each other the right to be wrong so long as no party introduces force.

Sunday, November 10, 2013

Health Care Comprimise?

At some point, perhaps we'll get to an environment where solutions to health care industry issues can be logically and calmly discussed. One such idea might go something like this:

The 'no consideration of pre-existing conditions' is one quite popular provision of the Affordable Care Act (Obamacare). There is obviously demand for it. But, can it be provided in a sustainable (profitable) manner? I believe it can, with one condition. Consumers must be able to choose and providers must be able to offer, coverage for conditions a la carte, with prices reflecting the actual cost of treating everyone in the pool with said condition. No mandatory coverage.

Of course, the incentive from the consumer standpoint would be to not buy a particular condition coverage until after you've come down with the condition. This could still work. One condition could be a limited annual sign up window. You'd be responsible for your own expenses for up to the first 9 months or so, if you choose to wait. Also, plans would be based on actual costs, so your monthly premium might be quite high, but you'd only carry coverage for as long as you needed treatment for the condition.

This is very close to a direct purchase situation, except that the monthly price for treatment is based on the average monthly cost of treating everyone with the condition rather than the individual case. Providers could be organized as mutuals or trusts (as an option in addition to for-profit companies) and enabled to invest premium surpluses in order to offset treatment costs. Companies or coops could specialize in a particular condition and provide treatment directly for a flat periodic rate in a competitive marketplace. Of course this would not preclude other ideas/products for the provision of health care from entering or remaining in the market. The point is to expand the realm of possibilities, not restrict it.

Maybe this proposal is a real possibility. Maybe it can't work for some reason I haven't seen. But, if our goal is to actually create a healthy, vibrant, growing, innovating, thriving health care market, things like this will have to be objectively evaluated on their merits, not based on the logo sported by the individual who proposed it.

Sunday, September 1, 2013

Collectivism vs Individualism - What is your default position?

There is a long running battle in the arena of ideas between the advocates of collectivism and advocates of individualism. One trap that some individualists fall into from time to time is in accepting the premise that an individual never acts in the interest of a collective. Belonging to or acting in the interest of a collective does not make one a collectivist nor any less an individualist.

Most human beings oscillate between individual and member of a collective all day, every day. Sometimes you act purely in your own individual self-interest. Sometimes you act as a family member, a citizen, a parishioner or club member. When you act as a member of a group, association or collective, you put the interest of the organization or association as a whole first. This may or may not conflict with your individual self-interest at any given time.

How is this different from collectivism? Well, an individualist decides on their own if, when, why and for how long to take on the role of group member. One may make a decision favoring the group one moment and favor ones self the next. The oscillation is entirely up to the individual. Of course an association may choose to disallow one's membership based on one's actions, which is fine, so long as they do not disallow one's departure. An individualist chooses to join and maintain good standing as a member of a group because doing so suits their own self interest, as defined by that individual.

A collectivist always puts the group first. Acting in one's own self interest is considered a weakness; a transgression; something one should feel bad about. The group's interest are determined by leaders, elders, some group of elites who are more in tune with the greater good than the individual members. A collectivist serves the group out of a sense of duty. It is not for them to ask why, but simply to conform and to serve. Understanding may be helpful, but is not necessary. One does what the group wants because the group wants it. There are no other considerations.

To summarize, an individual is a member of a collective when and if it suits them. A true collectivist is never an individual, except in moments of weakness. The Progressive movement is an attempt to shift human behavior away from individualism and toward collectivism. I wont presume to tell you which you ought to be, but I think it's important to recognize the distinction.

Monday, August 5, 2013

Steroids in Major League Baseball - What's the Big Deal?

Another season, another controversy over performance enhancing drugs. Today Major League Baseball announced disciplinary action against a number of players that it has determined used banned performance enhancing substances, including one of its biggest stars, Alex Rodriguez.

So is the use of performance enhancing drugs really that big a deal. Yes, it is. For one thing, if the leagues says no performance enhancing drugs, that's that. It's their church. If you want their money, you play by their rules. But breaking those rules does damage not just to the integrity of the game, but to other players as well. Real financial damage.

Suppose you're a player trying to negotiate a new contract. What do you base your desired compensation on? Well, for one thing, you might look at players of similar ability and what they are being paid. Now if you have a bunch of players whose "ability" comes from a syringe, or is at least enhanced by it, they've distorted the curve. They've lowered your value by artificially inflating theirs. In fact, if you had clear evidence that the performance of one or more of these players was cited during your contract negotiations, you may well have grounds for a civil suit against that player or players.

The use of performance enhancing drugs in professional sports is akin to wearing brass knuckles under your boxing gloves. It's cheating, plain and simple. You can argue technicalities like the substance you used wasn't specifically on the list, but if you're taking something and you're not sick, you know you're cheating. You're violating the intent, if not the letter of the law. All the MVP awards, records, headlines, trophies now carry very little weight. In fact, they're especially tarnished because you may well have stolen them from someone who would have won them based on their natural ability. Yeah, it's a big deal. I hope MLB takes it further in the future and adopts a "one strike and you're out" rule.