Archive for April, 2016

Why I’m Not Worried about Trump (Or Clinton or Sanders, etc…)

April 27, 2016

It looks like the Republican Primary is wrapping up, and it’s highly likely that Trump will be nominated to run for president as the republican nominee. There could be an upset, but I think it’s highly unlikely, and given Trump’s ability to turn Cruz victories into defeats, I feel safe saying Trump is it.

The Democratic Primary has been in Clinton’s favor for a very long time. It’s extremely unlikely that Sanders will get the nomination.

Lots of people are asking me, “What do you think will happen if Trump gets elected?” Or Clinton, or Sanders, or Cruz.

The answer: Not a whole lot!

The Founding Fathers were absolutely political geniuses, unparalleled in any time before or since as far as we know. They built a system that would work even when most of the controls were removed or ignored.

The president only has a small amount of power. Sure, people, including voters, think the president can do a lot of things, but the truth is, the president does very little. Even Obama, who I would argue tried to extend the power of the presidency way beyond anything previously imagined, has been relatively harmless. Trump will likewise be harmless. Same goes for Sanders and Clinton.

The real power in the federal government is found in the House of Representatives. They control the budget. They control spending. If they don’t agree to it, it doesn’t happen. Of course, our house has tried to pretend they have no power, but it’s a deception fabricated by people who don’t want people to pay attention to them.

The Senate also wields tremendous power, and has been a thorn in the president’s side. While the house worries about re-election, 2/3rds of the senate knows that elections are too far in the future to matter. Better still if senators were appointed by the state legislatures as originally written in the constitution. (Repeal the 17th!) While the senate has the will to fight the president, they really don’t have very much power to do so. If the senate really wanted to flex their muscles, they would do it by providing cover for the house so that they can do the right thing despite the will of the people.

That’s right — despite the will of the people. I am no democrat. I do not believe that mob rule is best rule. I believe that uninformed, low-attention voters do not deserve the final say in every matter. We should give our leaders a chance to figure out a good resolution first that satisfied the people and whatever other interests are at play. In cases where they cannot persuade the people that their interests are being represented, then the people should revolt (hopefully through the ballot box, and not with ammo boxes.) Thus, in severe cases, the people do have final say, but it takes a lot to get to that point, and wise rulers can avoid it.

Our American government has existed and will continue to exist as long as we realize that we’re not a democracy. We’re not a plutocracy. We’re not an aristocracy. We’re not an autocracy. We’re not an oligarchy. We are all of those things combined. Each of these forms of government have something valuable to contribute, and the net result, if properly combined, can be a republic. This word is very special, coming from res publica, meaning “public affair”. Government should be something that everyone is invited to participate in, not just uneducated, under-informed people. The Founding Fathers wanted to create a republic where no one style of government could dominate the rest. They did a really good job.

I should list, I suppose, what I do consider as real threats to our future, both America’s and the world.

  1. A Worsening moral atmosphere. The more people that don’t dedicate themselves to doing what’s right for rightness’ sake, and don’t sacrifice their lives for the good of the people around them voluntarily, the worse we will be. Selfishness simply cannot sustain any society. The tragedy of the commons says that if you intend other people to yield so that you can exploit the common resource, you are going to be very disappointed. How many of us today are living in a way that we hope others do not behave like we do? This has got to end.
  2. A lackadaisical approach to politics and government. America can sustain ignorance and silliness, but only for so long. We need serious thinking when it comes to government and politics, and we need these voices to drown out the unreasonable or even evil voices out there. As it is, we’re seeing more and more people who should be involved disengage because of outright hostility. We should make government a “safe space” for those who disagree.
  3. A penchant to violence. America needs to be militarily superior to all others because we are abnormally disposed to peace and trade. The moment we become the belligerents, I’ll be looking for some other group of people that should wield the mighty sword. “Speak softly and carry a big stick” should be our motto. America’s right to rule the rest of the world is purely a product of our generosity and desire for equality of rights with all people.

I should probably make a case to explain point #3 more clearly to my European and Asian and African friends, but let me put it this way. Suppose that it was a requirement we must choose one person to rule the entire world. What kind of person would you choose? At the very minimum, he must be militarily competent, able to lead armies to victory, otherwise, the world would devolve into chaos and violence. But also importantly, he must be a peacemaker, someone who genuinely wants to forgive and forget and get along peacefully with everyone else. America has held that title since WWII because we have shown ourselves, as a society, worthy of wearing it. I worry that we have forgotten both of these important concepts, and so we are watching the world fall apart back into the old ways of divide and conquer.

I don’t think Donald Trump or Hillary Clinton or Bernie Sanders or Ted Cruz can save us. None of them have the power to change any of the three points I outlined above. They do, however, have the ability to make things worse. But my trust is not in one person, but that hundreds of millions of Americans will make the right choice when the rubber hits the road regarding those three things, and I don’t think it matters who calls themselves president when it’s time to act.

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What would a free market health care system look like?

April 27, 2016

People accuse the US of having a free market medical care system. If you’re going to accuse someone of something, try to show some evidence.

Our system is hardly free market. We have a heavily regulated, heavily subsidized, heavily limited health care system. I won’t even try to show the ways our system is not a free market, so let me show instead what a free market system would look like.

First up, medical professionals. Where would they come from? What training would they have? At the very least, the government would have nothing to say about it. Anyone could start a medical college. Anyone could call themselves a doctor. There would be no restrictions at all.

How would you tell you are seeing a doctor who knows what they are doing? The free market would provide mechanisms to certify the quality of doctors. There are examples of this in the real world, albeit in different industries. You may notice that your electric devices might have a “UL” logo stamped on it. Go to their website to see where that comes from and what it means. It isn’t hard to imagine concerned doctors getting together to form a private company that would certify doctors. I would imagine there would either be one company that dominates the market by maintaining the highest level of professional standards (as UL does) or there would be competing ones reflecting the various philosophies of medicine. IE, chiropractors would have their own certification company, acupuncturists, natural medicine practitioners, etc… each have their own as well, in addition to modern medicine.

Whatever the solution to the certification problem, we would be certain that it would be up-to-date and relevant. If ever the certification company grew out of date or out of step with modern practices, doctors would be quick to remedy the situation.

Certification would extend way beyond doctors. I am sure there would be companies for certifying drugs, devices and medical procedures as well. Right now, we look to the FDA to tell us what is and is not safe to experiment with. I’ve often wondered why we want the one organization we entrust with the power to kill the bad guys to have the same power to tell us what is healthy or not. I would much rather prefer individuals think carefully about what level of medical care they would want to receive, and private organizations certify that level of medicine. With government operating, by force of law, the one institution with any power to declare what is safe or unsafe, we run the risk of people losing faith in that system and having no alternative to turn to. If instead we allowed certification companies to compete, they would advertise, heavily, why their methods are best and their competitor’s lacking, relying on the power of persuasion alone, not force, to convince people of the rightness of their cause. The FDA simply sucks at this.

So, going full free market by removing government restrictions on what is medicine and who is allowed to practice it wouldn’t remove certification programs with strict requirements designed to protect the public. If anything, it would usher in a renaissance of innovation and safety, with not the least of the benefits being that the organizations involved would have to rely solely on persuasion to convince people of the rightness of their methods.

Let’s continue delving into what a free market system would look like.

Next stop, insurance companies. Insurance companies today are heavily regulated. They translate these regulations into onerous requirements that often interfere in the doctor-patient relationship. I can’t think of a reason why someone would want to have a medical insurance policy in a free market system. After all, any insurance policy would, at best, only smooth the spikes of unforeseeable events. If you lead an unhealthy lifestyle, or if you were genetically or culturally predisposed to higher medical costs, the insurance company wouldn’t be able to forgive you for that. You would, of necessity, end up paying more because you cost more. In that system, medical insurance doesn’t seem like much of an advantage.

Nevertheless, those who are risk-averse would probably prefer some sort of insurance policy. In my mind, the kind of insurance policy I would like to have would look more like a disability or life policy. I get paid a lump sum when it is discovered I have a rare disease. The money would reflect the cost of treatment and the loss of freedom or opportunity due to the disease. This is what an actual insurance policy would look like.

That’s not to say that the other function of health insurance policies would go away. Today, health insurance is more of a “health club” membership. Oftentimes, they want you to do an annual checkup or give you advice on how to be healthier. I assume that this function could be relegated to a separate entity that people contract with. I don’t know what that would look like, but I do know that people are willing to pay for actual health club memberships, so it seems natural to extend that to regular medical care as well. Imagine what it would be like if your physical fitness coach worked for the same company as your primary doctor.

One of the reasons why so many people have health insurance is because it is provided by the companies they work for. The reason for this is because government heavily regulates businesses, and all but demands that employers offer health insurance at reduced rates to their employees. In a free market, this connection would be severed. People would compete with each other in a broader health insurance market, if they decided to participate at all.

I think the effect of free market on health insurance can be summarized as follows. One, we would see innovations in what health insurance even meant. Two, we would see innovation in how people choose to manage their health. And three, we would see a broader market with more choices and opportunities, including the choice of not participating at all.

Finally, let’s look at the heart of medical care: The doctor-patient interaction. In a free market system, the only reason a doctor would ever see a patient is because the patient could successfully bid for their time. The only reason a patient would see a doctor is because the doctor offered a price low enough to satisfy them. The price of the interaction would be determined almost completely by free market forces. Doctors would be encouraged to keep their prices very low, slightly above cost, and patients would be encouraged to seek out the best doctors. If prices start to rise, signalling a greater demand for doctors and a diminishing supply, then you’ll see doctors will sacrifice more time or more people will be encouraged to become doctors. At the same time, patients will reduce their consumption of medical services. On the other hand, if medical prices are falling, then patients would increase their consumption and doctors would give less time and fewer people would be encouraged to become doctors. It would all balance out such that the price would reflect the demand and supply of medical services.

I don’t think people realize this, but as it is now, there is little in the way of basic supply and demand interactions, and the prices are not set by market forces. This leads to shortages when the prices are too low, meaning you can’t see the doctor when you want to. It also leads to problems predicting exactly how many doctors we’ll need in the future. But most importantly, since the prices are not set by mutual agreement between patient and doctor, we see all sorts of other inefficiencies and perverse incentives. If doctors and patients alone determined prices, then there would be incredible market forces that would keep prices down by reducing cost and increasing efficiency.

To truly understand what I am saying, consider the smart phone you have in your pocket. The only reason you can even afford such a device is because of market forces. The companies that produce those devices know that if they can lower the price slightly, they can capture more of the market and make even higher profits. In order to lower the price, they look for ways to manufacture the phone even more cheaply, while maintaining some level of quality control. As these same forces play out throughout the entire supply chain, each component and sub-component’s prices gradually fall, and eventually, you get what you have in your pocket.

These same forces can work for us to reduce the cost of the doctor-patient interaction. It can play out throughout the entire medical industry, from medicines to medical supplies, to colleges and certification boards. That is, if we truly embraced a free market approach.

Now, a few final considerations. What of the poor and the needy? The elderly and the sick? One, a free market would keep prices low while keeping innovation high. Thus, poor and needy people would have more medical care available than any other way. The elderly and sick likewise. But as in all cases, capitalism cannot work, and indeed does not work, unless the people are themselves charitable. As has been done countless times in countless ways, a small, voluntary sacrifice on the part of those who “have” is all that is needed to supply all the needs of those who don’t have. However, and this is key, it can only work if there is an oversupply and abundance, and that can only happen in a free market. So the very problem that free markets introduce is solved with free markets as long as people have some modicum of charity in their hearts. Since the American people have proven themselves to be the most charitable in the world, I declare that we should be the first country to truly embrace a free market approach to medicine.