Monday, March 29, 2010

So you've just been force-fed health care "reform". Now what?

Well, the debate is over. The big health care reform bill is now the law of the land. Like most Congressmen, I can't wait to see what they've done. No more predictions, no more theories. Nothing left to do but watch. Either everything is going to be great...or it's not.

We can still theorize and predict spin and tactics though. Step one was to go public with nasty emails, making it seem as though a bunch of psychos suddenly have come out of the closet to threaten Democrats. The only problem is that lawmakers on both sides of the aisle, and pundits and news anchors, have been getting nasty emails and phone calls as far back as anyone can remember. Both parties received their share in recent weeks and the Sergeant at Arms for the House of Representatives stated there has been no notable increase recently. So why all the commotion? The idea was to make it look as though those who opposed this bill are very bad people.

Next, it's time to demonize corporations again. AT&T, Verizon, Caterpillar and others have announced that they'll be taking big charges against earnings and possibly cutting benefits, jobs or both. Now there are calls for Congressional hearings to make the CEO's of these companies explain themselves. I'll save you the trouble. When a socialist leaning lawmaker sees a company post a $3 billion dollar profit, they think "Well, they can certainly afford a $1 billion, new expense." In reality, if you reduce a company's earnings potential by 33%, you reduce the value of the company by 33% and the stock price will eventually reflect that. It is the job of management to maintain and grow earnings on behalf of the shareholders or owners (the guys they work for). Naturally, they have to take defensive action.

This will be portrayed as "putting profit before the welfare of employees". Maybe that's so, but why do people start and invest in companies? To provide for employees? No, they do it to make money. They pay employees to help them make money, not just for the sake of paying employees. Why do you get up every morning and go to work at the chip assembly plant? Because you feel some duty to humanity to provide them with computer chips? No, you do it to make money. In fact, if you're taking home more than you need to just barely stay alive, you're being greedy as well.

That's where this is going. Once the profit has been removed from business, you're next. Your government will decide how much you need and deserve and that's all you're going to get. Then they'll be flying around in their private jets, meeting at the best of hotels with their entourages in tow, thinking of just the right words to use to convince you how much better life is than it was before.

Sunday, March 21, 2010

How “exceptionalism” killed the American experiment

Our founding fathers embarked on a great experiment when they created the United States of America. What if the individual citizens held all the power? What if government were required to be responsive and accountable to its citizens? What if individual rights trumped the interests of the state? What if individuals were free to pursue happiness by their own definition. Of course, with individual freedom comes individual responsibility. Hence we started making exceptions.

Over the decades and centuries we decided that individuals are responsible for themselves, except that we’ll have Social Security, and welfare, and Medicare and Medicaid and unemployment insurance and a host of other safety nets, grants and entitlements. Individuals are free to enjoy their private property except when doing so conflicts with the “general welfare”. For example if society can make better use of your land than you by building a new road, or even a shopping center, you’ll just have to give it up for the greater good. Individuals shall be free to engage in trade, except that they’ll do so in pre-designated zones, and collect the proper taxes and pay various fees, and obtain proper licenses and comply with the appropriate regulations. Citizens have the right to bear arms, except when they don’t. Taxes shall be imposed in a uniform manner, except when the government decides to use tax credits, penalties, incentives and varying rates to influence behavior.

Now we’ve made the ultimate exception by deciding that the government is responsible for ensuring everyone gets health care. In this debate, the cost, whether or not to cover abortion, tax rates, fees and other clauses were really side issues. The underlying issue is power. The government now has legitimate justification to regulate every aspect of your life. If we’re all providing for each others health care, anything that might impact the cost or delivery of health care becomes everyones business. The food you eat, the car you drive, the recreation you engage in all have the potential to do me financial harm in the form of increasing health care costs and so I now have a vested interest in them. It’s now up to the government to ensure that the impact of your activities on me is minimized. Your activities will have to be monitored and regulated. Think this is hyperbole? When the President signs the bill on Tuesday, the IRS will officially be in charge of monitoring whether or not you have the proper health care plan, and doling out penalties if you don't.

We are in the midst of a substantial shift, from a society that put the individual on top, to one in which the individual is irrelevant. Society is no longer a tool for the individual to make use of when and if he or she chooses. It is now a master to be nurtured, fed and obeyed. You are called upon to “serve something higher than yourself”. After all, your self is insignificant. It’s others that matter. Others means everyone except you. We still choose our leaders in democratic elections. But, those leaders are now charged with serving the greater good through the power of the state, not with protecting the rights of any individual. Individuals are expendable.

Many people are very pleased with this evolution. They believe that a collectivist society can work if it’s implemented correctly and gradually. To me, it’s like a kid believing that if they move their finger to the hot stove slowly enough, it wont burn this time. People gravitate towards the socialist ideal because they believe that somehow, they’re personally going to come out ahead. All you have to do to get things from “society” is demonstrate that you’re more needy than others. Predictably socialism has demonstrated a great capacity to increase neediness. I don’t believe that the results at this latest attempt to create a collectivist Utopia will prove to be an exception.

Sunday, March 7, 2010

Was it the spending or the war that ended the Great Depression

With our national debt currently at around 86% of Gross Domestic Product and rising, many are concerned about the fiscal future of our country. Others point to the 1940's, when spending on World War II skyrocketed national debt to 120% of GDP and pulled us out of the Great Depression. They credit massive government spending with saving the economy.

If you look only at the statistics, that's true. But you have to put the spending in context. World War II was an endeavor that most individuals in the country had to be personally involved in. Millions of able bodied adult males were drafted and the women worked the factory jobs. We didn't have drones, satellites and assembly line robots. We had to use people. As a result, a huge segment of the population was taken out of its comfort zone and exposed to new ideas, new people, new places. It was a nation-wide life changing phenomenon even greater than the internet.

The massive spending was not on "make-work" projects. We needed specific things for our very survival. We needed air craft carriers, ships, vehicles, bombs. We had to reverse engineer whatever the enemy came up with. We needed to do it better and throw it right back at them. It was a highly motivated population working at absolutely necessary endeavors. We were not building bridges to nowhere, studying ketchup flow or planting flowers in the highway medians, just to keep people busy.

All of these things together created a huge jump in productivity and we were able to overcome the massive debt we had created. We are in a very different circumstance today. Spending alone will not fix our economy any more than recruiting one member of the New Orleans Saints will get you a Super Bowl win next year.

Perhaps fending off an invasion of extra-terrestrial invaders could have a similar impact. But, I don't think banking on that scenario is a good idea. It's time to reign in the government and its spending and remove the overhanging burden of massive debt from the marketplace.