Archive for the ‘Government and Politics’ category

New Gov. Healthcare Regulations Will Not Cure The Results Of Previous Gov. Regulations

May 16, 2017

Politicians and bureaucrats are manipulated the masses into believing our healthcare costs can magically be lowered by bureaucratic edicts backed by the force of government. But our political betters fail to mention the high costs of today’s healthcare is a result of previous edicts by politicians and bureaucrats.

The reason we have been so easily manipulated is because, “ We’re All Born In The Middle Of The Story” (click here). Most people think history started the day they were born. They give little thought, or have no understanding of how the world that existed the day they were born came to exist as it did. Where we are today is the result of interventionist decisions made in the distant and recent past by individuals in government which affected previous decisions made voluntarily by individuals in what we can safely call our hampered (free) market system.

GOVERNMENT INTERVENTION INTO HEALTHCARE

How did we arrive at our current “healthcare crisis”? This article by Mike Holly titled How Government Regulations Made Healthcare So Expensive, gives a brief history of how political and bureaucratic intervention, backed by the force of government, has led to our current healthcare mess.

Government intervention, starting in the early 1900’s, has worked to restrict the supply of and increase the demand for healthcare. The result of restricting supply and increasing demand is higher prices. Since the previous interventions of politicians and bureaucrats have increased the cost, the present politicians and bureaucrats are trying to shift the costs to the already insured and to the taxpayers.

Here is an excerpt from the article:

“In 1910, the physician oligopoly was started during the Republican administration of William Taft after the American Medical Association lobbied the states to strengthen the regulation of medical licensure and allow their state AMA offices to oversee the closure or merger of nearly half of medical schools and also the reduction of class sizes. The states have been subsidizing the education of the number of doctors recommended by the AMA.”

  • “In 1925, prescription drug monopolies begun after the federal government led by Republican President Calvin Coolidge started allowing the patenting of drugs. (Drug monopolies have also been promoted by government research and development subsidies targeted to favored pharmaceutical companies.)”
  • “In 1945, buyer monopolization begun after the McCarran-Ferguson Act led by the Roosevelt Administration exempted the business of medical insurance from most federal regulation, including antitrust laws. (States have also more recently contributed to the monopolization by requiring health care plans to meet standards for coverage.)”
  • “In 1946, institutional provider monopolization begun after favored hospitals received federal subsidies (matching grants and loans) provided under the Hospital Survey and Construction Act passed during the Truman Administration. (States have also been exempting non-profit hospitals from antitrust laws.)”
  • “In 1951, employers started to become the dominant third-party insurance buyer during the Truman Administration after the Internal Revenue Service declared group premiums tax-deductible.”
  • “In 1965, nationalization was started with a government buyer monopoly after the Johnson Administration led passage of Medicare and Medicaid which provided health insurance for the elderly and poor, respectively.”
  • “In 1972, institutional provider monopolization was strengthened after the Nixon Administration started restricting the supply of hospitals by requiring federal certificate-of-need for the construction of medical facilities.”
  • “In 1974, buyer monopolization was strengthened during the Nixon Administration after the Employee Retirement Income Security Act exempted employee health benefit plans offered by large employers (e.g., HMOs) from state regulations and lawsuits (e.g., brought by people denied coverage).”
  • “In 1984, prescription drug monopolies were strengthened during the Reagan Administration after the Drug Price Competition and Patent Term Restoration Act permitted the extension of patents beyond 20 years. (The government has also allowed pharmaceuticals companies to bribe physicians to prescribe more expensive drugs.)”
  • “In 2003, prescription drug monopolies were strengthened during the Bush Administration after the Medicare Prescription Drug, Improvement, and Modernization Act provided subsidies to the elderly for drugs.”
  • “In 2014, nationalization will be strengthened after the Patient Protection and Affordable Care Act of 2010 (“Obamacare”) provided mandates, subsidies and insurance exchanges, and the expansion of Medicaid.”

“The history of medical cost inflation and government interference in health care markets appears to support the hypothesis that prices were set by the laws of supply and demand before 1980 and perhaps 1990. Even the degree of monopolization and nationalization promoted by politicians before 1965 was not enough to cause significant cost inflation and spending increases (Figure 2) until demands created by Medicare and Medicaid outstripped the restricted supply of physicians and hospitals.”

WHAT HAPPENS NOW?

Can we get back to a free market healthcare system, or are we going to end up with a government-run single payer system? The passage of time means there will always be change, so no one can predict where this ends because nothing is ever final. We had a free market healthcare system at one point in time. But eventually politicians and bureaucrats granted monopoly status to doctor licensing boards, medical schools, drug companies, and insurance companies, on the one hand, and subsidized the use of healthcare on the other. The incremental change over time was hardly noticeable. But decades later we are close to a government-run wingle payer healthcare system.

Now that “One-Third Of Americans Are On Government Healthcare” (click here), it will be difficult to get rid of this “entitlement”. We’ve already heard the Democrats talking about how all the people who have health insurance because of Obamacare, will lose it under the Republican replace bill. They neglect to tell you about how the increased premiums of the already insured, plus taxpayer subsidies are paying for it (That which is seen and that which is not seen – Bastiat).

If you add the entitlement of government granted monopoly positions in the supply of healthcare we can see that moving away from government central planning of healthcare and toward a free market in healthcare will be difficult. Change will happen either incrementally or categorically.

The American Healthcare Act (click here to see what is in the bill), passed by the Republican controlled house, is an attempt to incrementally repeal and replace Obamacare. It is not a very good attempt. Republican leaders can only muster enough courage to try incremental change at this point. The Republican bill is not enough to change the direction on the road we are traveling.

I think categorical change is the only thing that will turn us around and get us headed in the other direction. The inevitable collapse of our present healthcare system will bring about the opportunity for this categorical change back toward a free market healthcare system. The scary part about a collapse, is it also presents the opportunity for central planners to attempt the implementation of a government-run single payer healthcare system. How do we make sure a free market, and not a government run system, will rise from the ashes of a healthcare collapse?

PEOPLE HAVE TO BE EDUCATED ABOUT THE WHOLE STORY

Being born in the middle of the story doesn’t mean we have to be ignorant about the whole story. The election of Trump, or the rejection of the status quo embodied by Hillary, shows people instinctively know something is wrong with our healthcare system. Trump ran on the repeal and replacement of Obamacare. The fact that people instinctively know something is wrong provides an opportunity to help them understand how government regulations have led to our current healthcare system. How our current healthcare system is not a free market system. How more regulations are not the solution. How the best answer to our failing healthcare system is to allow free market solutions, which means getting rid of existing government healthcare regulations.

Growing numbers of people know something is wrong. They have to understand how we arrived at this point in time. Because when they are faced with the categorical decision between single payer or free market they won’t be fooled by political demagoguery.

Here are some articles about free market solutions for healthcare.

The Bill To Permanently Fix Healthcare For All. at market-ticker-.org

A Four Step Healthcare Solution. at mises.org.

The Impossible Healthcare Solution: Go Back To Cash. at oftwominds.org.

 

Related ArticleHealthcare: Market Solutions vs. Bureaucratic Decrees, at austrianaddict.com.

Related ArticleHow Would Government Run Healthcare Work? Look At The VA. at austrianaddict.com.

Related ArticleLet’s Look At Government Run Healthcare, at austrianaddict.com.

Danielle DiMartino Booth: “The Fed Has Crippled Our Middle Class. Completely Gutted It Out”

April 27, 2017

Danielle DiMartino Booth was a Dallas Fed Staffer. Her knew book – Fed Up: An Insider’s Take On Why The Federal Reserve Is Bad For America”, gives incite into the incestuous intellectual relationship Fed policy makers have with each other. She calls it “group stink”.

Dimartino Booth is interviewed by Jeff Deist of the Mises Institute in the video below.

Here are some excerpts from the video.

Deist:The fed is almost exclusively staffed by academics, by phd’s. That wasn’t always the case. Could you summarize this impact of academization of the Fed for us?”

Booth: “I think the end result of all of this, which stands in direct contrast to the mandates of the original 1913 Act…to insure intellectual diversity and industrial diversity on the board and among the fed leadership. But is has created what I call “Group Stink”. It is the inability to decent, the inability to say no. Most people inside the Fed think the same. They don’t take the complications of a global and very modern financial system into account…… It is a lack of appreciation for anything that you and I would consider to be on planet earth. And it is what has made the Fed so very out of touch, and angered so many people. They might not know it’s the Fed. But they know something has gone very very wrong with their financial well-being and who is in control of their financial well-being.

4:50 – Deist: “A huge percentage of these Fed economists are Ivy League graduates. So despite all thier book learning, do you think people in the Fed have read Austrian stuff…..have they read Mises and Hayek. Or is this just completely outside of their orbit?

Booth: “You know I think it might have in the index of one of their economic text books. But I would bring up the word ‘malinvestment’ and their eyeballs would roll into the back of their head.

My Take From 2013: Thomas Sowell calls it “credentialed ignorance”. He is being rather nice. I would call it an example of intellectual inbreeding. These Federal Reserve policy makers have earned their economic credentials from some of the “best” Universities. That fact means we should stand in awe of them? Unfortunately I don’t give my respect to people with “status” that easily. I think respect is earned. What I have observed is these people live in a continual feed back loop. They all think pretty much the same way because they were taught by professors who all think the same way. They are hired to work for people in Government who think the same way. They are very rarely challenged to think outside of their small tunnel of knowledge protecting them from their mountain of ignorance. A mountain that would crash down on them if their tunnel wasn’t there.

Deist: “Do you think they really in their hearts, believe that …..monetary policy can create economic growth in and of itself?

Booth: “If they don’t believe it, they do a really good job of faking it…. Because it is clear that they do not understand the damage that’s been done to the social fabric of this country, to the culture, to have driven down multiple generations throats the idea that the only way to get growth is through the creation of debt. That is not the American was. It is not what capitalism is based on….. And it has crippled our middle class. Completely gutted it out. While at the same time corrupting all manner of institutions; corporations, banks, pensions you name it.”

6:58 – Deist: “Do you think that your average Fed economist would view what the Fed does in terms of interest rate targeting as something that’s not capitalism. That sounds like something out of a Soviet Politburo?

Booth: “I think that… part of the problem……where a disconnect is born that the Fed leaders …..have to be on the receiving end of the policies they make. It is like congress not having to deal with the worst vestiges of Obamacare. They have platinum health plans….. So I think a lot of the leaders at the Fed can delude themselves into thinking that they are doing good-by the people whose financial situations they shepherd, when in fact they are not. But to your other point, they all study the same basic schools of thought and that is what is broken inside of our higher learning institutions.

12:55 – Deist: “Do you think there is any way the Fed can really unwind all the $4 trillion treasury debt or worse on its balance sheet?

Booth: “Unfortunately I think markets have become addicted to the notion, if you will, that every single bond that central banks, world-wide, have purchased. Every single bond has been expunged from the supply forever. Otherwise I don’t think we would have interest rates where they are. I think that the Fed can talk tough about reducing the balance sheet if it wants to play politics and push the economy into recession. But they consider that 4.5 trillion dollars to be their fortress, their power base. The balance sheet has gone to their head.”

13:42 – Deist: “Yellen is in a tough spot…..If she wants to raise interest rates the debt service for Congress can double…..But without raising interest rates, how does she continue to create a market for US treasuries…….She’s in a ship saw.

Booth: “It is an absolute dilemma. But it is a corner into which the Fed has painted itself. There were people on the inside saying it’s a slippery slope if you go to zero. This will not end well. The market is not screaming for lower interest rates. The market is telling you there is a liquidity freeze going on and that it needs other things. If you go to zero, you’re going to introduce distortions and make it extremely difficult, one day, to ever exit. And guess what’s happened. It has become the Achilles heel not just of Janet Yellen and the Federal Reserve, but I would argue the Bank of Japan, Bank of China, The European Central Bank, Mario Draghi. This is a shared global phenomenon.

15:00 – Deist: “Who becomes the central banks banker? Is it some sort of IMF scenario if they can’t work their way out of this?

Booth: “Yes but who funds the IMF. Again there’s nothing elegant I can suggest to you as a way out of this situation……If you speak to the academics who have the same school of thought they will tell you that we will just have to monetize the debt away. that there will be a gentleman’s agreement between the developed countries that have lots of debt ad that we will just walk off into the sunset and everything will be fine. I consider that the last stop on the currency war train and the next stop to be an actual world war…….I don’t think countries that don’t have high debt levels would stand still for it.”

Link to her web site – dimartinobooth.com.

 

EXPLAINING THE FED AND INTEREST RATES.

Related ArticleFederal Reserve Policy Makers Have An Incestuous Intellectual Relationship With Each Other, at austrianaddict.com.

Related ArticleA Tornado vs.  The Fed. Which Is More Destructive, at austrianaddict.com.

Related ArticleThe Role Of Interest Rates In A Market Economy, at austrianaddict.com.

Related Article0% Interest Rate x Eight Years = The Fed’s ZIRP Doesn’t Work, at austrianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

Related ArticleCapital Consumption, aka, Eating Our Seed Corn, at austrianaddict.com.

How Would Government Run Single Payer Healthcare Work? Look At The VA.

April 19, 2017

The VA is a government-run single payer healthcare system. It is a disaster. Obamacare is the last step before you get to a government-run single payer system. Here is a video from Prager University (here) which outlines the failure of our government-run single payer system known as the VA. Obamacare is going to suffer the same failure.

OUR CHOICES ARE?

The only way to lower the cost of healthcare is to repeal all 2500 pages of the Affordable Care Act (aka Obamacare). If we truly want the lowest possible costs, we should repeal every piece of legislation related to healthcare that has been passed in the last 100 years. A majority of people believe something as complex as our healthcare system has to be managed or regulated from the top down by experts (government experts). They can’t fathom a complex order created spontaneously from bottom up decisions made by individual consumers and producers (a market). The difficulty in understanding an abstract concept like spontaneous order, allows politicians and bureaucrats to pass top down concrete planning. Seeing a plan spelled out, no matter how complex, is easier to believe than someone not being able to show what a spontaneous complex market order would look like.

2014 VA SCANDAL

Remember the 2014 VA scandal? We wrote about what was taking place in VA hospitals in this article titled Incentives Matter (here). Here is an excerpt from the 2014 article: “The incentives and constraints transmitted through the market, are totally different from the incentives and constraints transmitted to bureaucracies. In the market the incentive is to provide what the consumer wants. A bureaucracy is a monopoly on a particular service, which means the person using the service is an annoyance rather than someone who has to be pleased……Firing Eric Shinseki and replacing him with a better “angel” won’t solve the problem, {if the problem is making sure the veterans are being taken care of}, because the incentive structure will remain the same.

INDIVIDUAL DECISIONS vs. GOVERNMENT SOLUTIONS

The Republicans failed repeal and replace bill was not much different from Obamacare. The truth is Republicans like the idea of government-run healthcare. They just like their version better than the Democrats version. Only decisions by consumers and producers of healthcare, made free of government coercion, will lower costs.

The 30 or so congressman in the Freedom Caucus are the only members of the House who want to get rid of government-run healthcare. All Democrats want Obamacare to stay as written. All Republicans, except the 30 in the Freedom Caucus, want Obamacare lite. The congressmen in the freedom caucus are all that stands between a permanent government-run single payer system and the possibility of a free market healthcare system.

Related ArticleHealthcare: Market Solutions vs. Government Decrees, at austrianaddict.com.

Related ArticleSpontaneous Order = Free Market, at austrianaddict.com.

Healthcare: Market Solutions vs. Bureaucratic Decrees

March 28, 2017

Modern thin line design concept for HEALTHCARE website banner. Vector illustration concept for healthcare diagnosis and treatment.

Our current battle over healthcare is being debated from a false premise. Most people have bought into the lie that healthcare is or should be a right. It isn’t a right as understood by most people. The right to keep and bare arms doesn’t mean someone else is obligated to supply a gun. The right to free speech  doesn’t mean someone else is obligated to supply a microphone, a stage and an audience. But for some reason we think a right to healthcare means someone is obligated to provide it.

The truth is healthcare is an economic good or service produced by individuals. These individuals own what they produce. It is their property. No one has a right to what someone else produces.

How can you gain possession of what someone else owns? 1) You can produce something they want and exchange it for what they have produced. 2) They may give it to you as a gift. 3) You can steal it. 4) You can have someone steal another persons production, exchange it for what you want, and have them give it to you indirectly. 5) You can have someone else steal it and give it to you directly.

Government intervention into the healthcare market, up to and including Obamacare, has been an incremental march away from the first two and toward the last two. Everyone knows that direct theft of another person’s property is unethical and immoral because it is illegal. But when we are one or two steps removed from the direct theft, for some reason we think it’s ethical and moral because government says it’s legal.

hand writing economic demand - supply graph on chalkboard

ECONOMIC REALITY OF HEALTHCARE

Healthcare is an economic good ruled by the laws of economics. Scarcity, subjective value, supply and demand are a few laws we need to look at in order to understand why government central planning isn’t the right process to ration the scarce good we call healthcare.

SCARCITY: Healthcare has to be produced. It is a scarce good. It isn’t like the air we breathe. Air doesn’t have to be produced by anyone. The abundant supply of air exists naturally. You might say the air I put in my tires Isn’t free. The air you put in your tires is first compressed and then forced into your tires. Compressed air has to be produced, therefore it is an economic good and not free like the air you breathe.

SUBJECTIVE VALUE: Everyone values healthcare differently. There is no objective value that can be placed on healthcare. The value for healthcare is subjective depending on each individual’s needs and wants. Both the demand for and the supply of healthcare is valued subjectively.

SUPPLY AND DEMAND: Since healthcare is scarce and valued subjectively, the law of supply and demand comes into play coordinating its production and consumption. The price reflects subjective valuations by individuals related to supply and demand. The subjective valuations at the existing price drives supply and demand to a new coordinating price.

The law of supply and demand states that more is demanded at a lower price than a higher price and more is supplied at higher price than a lower price. Price changes are constantly re-coordinating supply and demand according to the subjective valuations of individuals.

The supply of healthcare is limited by the scarcity of the resources, labor, capital and time needed to produce it. It is also limited by the demand for healthcare. If the demand for healthcare increases against a fixed supply, the price will go up in order to ration the scarce resource. As the price rises more resources, labor, capital, and time will be attracted to producing healthcare. As the supply increases to meet the higher demand a point will be reached where the price will stabilize and then decrease as supply outpaces demand.

The changing price sends information to consumers and producers about the scarcity of healthcare. These price changes are figured into the subjective valuations of how much each consumer will demand and how much each producer will supply.

Free market prices are the most efficient way to ration healthcare in a world of scarcity and subjective value.

government regulations, magnifier, pencil

GOVERNMENT INTERVENTION INTO HEALTHCARE

Government mandated healthcare subsidies, taxes and regulations distort the prices that would normally exist in a free market. Consumers demands and producers supplies are going to change according to these distorted prices. A mismatch of the supply of and demand for these scarce resources is brought about by government intervention.

What did you think was going to happen when more consumers were brought into the market by the Obamacare individual mandate? Subsidies also increase demand. Prices were guaranteed to rise as demand was artificially increased.

What happens when prices for healthcare services paid by Medicare and Medicaid are fixed below what they would be in a free market? The supply of health care would decrease at these lower prices.

Obamacare created more demand and at the same time created the incentive to supply less. What happens to the price when more is demanded and less is supplied? Even though our politicians told us costs would go down under The Affordable Care Act, anyone who understood basic economics could have predicted which way the price would go. And that isn’t even including paying for the government bureaucracy needed to implement the ACA.

NOW WHAT?

The failure of the Republican repeal and replace bill is a good thing. The bill was just an exchange of a set of not quite as bad new government regulations for the existing bad government regulations. Their is only one way to reduce the cost of healthcare. Get rid of government subsidies, taxes and regulations. Unfortunately all Democrats and a majority of Republicans don’t understand basic economics.

Quoting Ludwig von Mises – “Economic history is a long record of Government policies that failed because they were designed with a bold disregard for the laws of economics.

Republicans are also scared of political fall out when they get rid of healthcare entitlements. The Democrats and their accomplices in the main stream media will trot out all the sob stories of people whose ‘access’ to healthcare was taken away. Of course the MSM didn’t tell the stories of all the people who had their healthcare costs sky rocket under the ACA. These rising premiums paid for the increased costs and subsidies caused by government intervention.

Millions of families got crushed by the higher cost of healthcare. These were small businessmen and people who worked for small businesses in the more rural counties in America. These are the same people who were barely able to stay afloat when the economy crashed in 08. They cut their discretionary spending to the bone. Many had to use their savings and retirement accounts to make it through the recession.

When the Affordable Care Act was implemented after 2013 there was no spending left to cut to pay for the higher cost of healthcare. Wives had to go back to work just for the insurance. Men took second jobs for the same reason. These are the people in the swing states of Ohio, North Carolina, Florida, Iowa, and the Democrat States of Wisconsin, Michigan and Pennsylvania who voted for Trump. He was their only hope. They literally couldn’t afford to vote for Hilary.

Fortunately market alternatives to Obamacare are starting to appear around the country.

Read Here- Direct Primary Care, A No-Insurance Model.

Read Here – Florida West Virginia Lawmakers Take Interest In Insurance Free Approach.

Read Here – Atlas MD, Wichita’s Premiere Cash-Only Clinic.

As the price of Obamacare goes higher the demand for Obamacare will decrease. This higher price will also bring about lower cost market alternatives to the Government run system. These alternatives will be outside of the system. We can call these free market alternatives as long as Government doesn’t try to shut them down with regulations. If they do try to shut them down they will then become black market alternatives (the new free market).

Fracking is an example of a market alternative to the OPEC cartel and our Governments regulations on drilling off shore and on public land. When the price of oil rose to above $110 dollars a barrel it became affordable for hydraulic fracturing to take off on private land. Now that it is profitable to frack at $45 a barrel the OPEC cartel has lost its monopoly power. The high price of $110 was what eventually brought the price of oil down. Healthcare will be no different. The market will find an alternative as the price goes higher.

Read Here – Trumpcare Defeat Could Be A Small But Important Victory For Healthcare Freedom.

Read Here – Ryancare Is Failing -What Should Happen Next?

Read Here – Forget Obamacare, Ryancare, And Any Future Reformcare – The Healthcare System Is Completely Broken.

Economic reality will end Obamacare. Let’s hope the Government doesn’t end the market alternatives that have started to take root.

 

Walter E. Williams: “Liberty Is Not For Wimps”

March 22, 2017
Walter E. Williams

Walter E. Williams states in this article, Liberty Is Not For Wimps (read here): “Most Americans, whether liberal or conservative, Democratic or Republican, do not show much understanding or respect for the principles of personal liberty. We criticize our political leaders, but we must recognize that their behavior simply reflects the values of people who elected them to office. That means we are all to blame for greater governmental control over our lives and a decline in personal liberty.”

Our founders told us that eternal vigilance is the price of freedom. Since WWII we have not been vigilant at all. We vote and go back to living our lives. Being informed and active is the most important part of eternal vigilance. Voting is something that happens on one day every two years.

Why have not seen the growth in the power of Government over our lives? Because it has been an incremental increase.

When you see yourself in the mirror everyday you don’t realize how much you have changed over the course of 20 years. When you see a picture of yourself from 20 years ago you ask; “Who is that person?”.

This is what has happened to the growth of Government and the loss of our individual liberty. Unfortunately the majority of the people haven’t been shown a ‘picture’ of what individual liberty originally looked like. Their only picture from their past is a picture of Government solutions to every problem.

These people have not been taught about individual liberty in our schools and universities. In fact they have been indoctrinated into thinking Government is the end all and be all. They have to be educated about individual liberty before they can make informed decisions.

LIBERTY DEFINED

Excerpt from the article: “My initial premise is that each of us owns himself. I am my private property, and you are yours. If we accept the notion of self-ownership, then certain acts can be deemed moral or immoral. Murder, rape and theft are immoral because those acts violate private property.

“Most Americans accept that murder and rape are immoral, but we are ambivalent about theft. Theft can be defined as taking the rightful property of one American and giving it to another, to whom it does not belong. It is also theft to forcibly use one person to serve the purposes of another.”

“At least two-thirds of federal spending can be described as Congress’ Taking the rightful property of one American and giving it to another American, to whom it does not belong. So-called mandatory spending totaled $2.45 trillion in 2015. This, two-thirds of the federal budget goes toward Medicaid, Medicare, Social Security, food assistance, unemployment and other programs and benefits that fall into the category of taking from some and giving to others. To condemn legalized theft is not an argument against taxes to finance the constitutionally mandated functions of the federal government; we are all obligated to pay or share of those.

RIGHTS DEFINED

Excerpt from the article: “Many say that government spending guarantees one right or another. That’s nonsense. True rights exist simultaneously among people. That means that exercise of a right by one person does not impose an obligation on another. In other words, my rights to speech and travel impose no obligations on another except those of noninterference. For Congress to guarantee a right to healthcare, food assistance or any other good or service whether a person can afford it or not does diminish someone else’s rights – namely, their right to their earnings. Congress has no resources of its own. If Congress gives one person something that he did not earn, it necessarily requires Congress drive somebody else of something that he did earn.

FREEDOM OF ASSOCIATION

Excerpt fro the article: “A very difficult liberty pill for many Americans to swallow is freedom of association. As with free speech, the true test for one’s commitment to freedom of association does not come when one permits people of voluntarily associate in ways that he deems acceptable.”

“The true test is when he permits people to associate in ways he deems offensive. If a golf club, fraternity of restaurant were not to admit me because I’m a black person, I would find it offensive, but it’s every organization’s right to associate freely.”

“On the other hand, a public library, public utility or public university does not have a right to refuse me service, because I am a taxpayer.”

CONCLUSION

Excerpt from the article: “The bottom line is that it takes a bold person to be for personal liberty, because you have to be able to cope with people saying things and engaging in voluntary acts that you deem offensive. LIBERTY IS NOT FOR WIMPS.

It is our job to make the case for individual liberty. As I said earlier, people are not being taught about individual liberty in our schools and universities. If people are not curious enough to educate themselves, it is up to us to educate them.

Walter E. Williams has been ringing the bell for individual liberty his whole life. You don’t have to try to save the whole world. You just have to influence the people in your little part of the world. People are starting to be curious about what is going on. The election of Trump proves that people know there is something wrong with the status quo. These people represent fertile ground on which to plant the seeds of liberty.

 

Related Article: Walter E. Williams: The State Against Liberty, at austrianaddict.com.

Related Article: Walter E. Williams: Voluntary vs. Involuntary Exchange, or Seduction vs. Rape, at austrianaddict.com.

Related Article: Walter E. Williams Speaks About The Economics Of Liberty, at austrianaddict.com.

Related Article: Walter E. Williams: Are We Moving Toward More Personal Liberty of More Government Control Over Our Lives, at austrianaddict.com.

Related Article: Walter E. Williams Talks About Individual Liberty, at austrianaddict.com.

Economic Ignorance Has Caused Our Political Chaos.

March 8, 2017

Microeconomics or Micro Economics as a Concept

What do Jeffery Sachs (economics professor at Columbia), Bill Gates, the Pope, Donald Trump and Republicans in Congress have in common?….. Economic ignorance!

Why are  pronouncements by people with authority rarely challenged?….. Economic ignorance!

I found some recent articles on economicpolicyjournl.com which have a similar theme: People with authority demonstrating their ignorance about basic economic principles.

Here are the articles.

Harvard Educated Economist Clueless About The Fundamentals Of Economics.

I Never Realized The Economic Ignoramus Bill Gates Is….Until Now.

The Pope’s Problem With Basic Economics.

Trump In Melbourne Spilling His Economic Plans And How Non-Free Market Are They.

House Republican Border Adjustment Tax Plan Gains Support In White House: Prepare For Higher Prices And Less Product.

Jeffery Sachs, Bill Gates and the Pope don’t have the power of Government behind anything they say. Their authority exists in the minds of the people who believe they have authority. They can’t force their economic ignorance on us

The President and Congress have the power of Government behind their policies. Politicians and bureaucrats can force their economic ignorance on us.

OUR ECONOMIC IGNORANCE

The increasing political chaos existing in the U.S is rooted in the economic ignorance of a vast majority of people. Both the masses, and people with “authority”, bear responsibility for our present political and economic situation.

People with “authority” being economically ignorant creates a problem because we the masses accept what they say as truth. This leads to the passage of Governmental policies which can’t produce the outcomes predicted by the people with authority.

We have the power to be a check on these people with authority. But we reinforce their authority on the one hand, and increase the economic ignorance of the masses on the other, when we don’t challenge the economic validity of what they say.

People with authority always want more power. Their power can’t be increased unless we allow it. Authority not backed by the force of Government isn’t real authority. We voluntarily give people their position of authority.

With politicians and bureaucrats it’s different. Their authority is backed by the force of Government. Our first non-violent voluntary recourse to their power is to vote the economically ignorant out of office, or not to vote them into office in the first place. Our second is putting political pressure on politicians. But this only works if a overwhelming majority of people put political pressure on them.

The ability of politicians and bureaucrats to grow their power, rests on the economic ignorance of the electorate. If the economic consequences of the policies passed by these politicians were known by the voters, they wouldn’t have been passed. Understanding basic economic principles allows us to look over the horizon and see the consequences of these policies.

EXAMPLES OF FAILED POLICIES

The Affordable Care Act aka Obamacare sounds great. But the laws of economics will not allow the ACA to lower the cost of healthcare. The costs can be shifted, but not lowered by government decree. The result of passing the ACA is chaos in the healthcare market, or what is left of a healthcare market.

Increasing the minimum wage for low skilled workers sounds great. But the laws of economics won’t allow increasing the minimum wage, above what that labor produces. The result of passing this law is fewer low skilled workers will be employed.

FORSEEABLE CONSEQUENCES

If, we the people, understood some basic principles of economics we wouldn’t allow these interventionist ideas to be planted, let alone take root.

Some of these basic principles are: 1) Scarcity, 2) Subjective Value, 3) Supply and Demand 4) Production Precedes Consumption.

Lets look at the Affordable Care Act and mandated minimum wage increases through the binoculars of scarcity, and supply and demand.

Scarcity is the first rule of economics. Scarcity simply means, “what everybody wants adds up to more than there is”. Put differently. Their are limited means available to satisfy the unlimited ends we seek. These limited means have to be allocated toward producing the ends we seek. There are two ways to allocate these means. One way is voluntary cooperation, through prices in a free market. The other way is force, through the edicts of politicians and bureaucrats using government power.

Supply and Demand is easy to understand. Put simply; More is demanded and less is supplied at a low price, and more is supplied and less is demanded at a high price. Prices reflect and drive supply and demand. If their is a sudden drop in the supply of a product, the price rises. This increase in price rations the existing supply, and sends a signal that more needs to be produced. On the flip side of the coin, if their is a sudden increase in the supply of a product, the price will go down. This decrease in price sells off the existing glut, and sends a signal less needs to be produced.

AFFORDABLE CARE ACT AND MINIMUM WAGE LAWS

The Affordable Care Act forced “30 million” uninsured people to enter the healthcare market. This meant the demand for healthcare was going to increased. Even though the supply of healthcare couldn’t be increased as quickly. (Example) It takes years for people to become doctors and nurses. Increasing the supply takes more time than the almost instant increase in demand brought about by the stroke of pen. If we apply the economic principles of scarcity, and supply and demand to the Affordable Care Act, what was going to happen to the price of healthcare? And this is not even calculating the cost of the regulations and new bureaucracy created by the 2500 page bill.

Raising the minimum wage increases the price of labor. According to the law of supply and demand, less is demanded at the high price. Voting for laws which increase the wages of people who we think are not being paid enough doesn’t help these people. Fewer people will be employed at the higher price. Many times these low skilled workers jobs will disappear all together because they can be replaced by automation. The price of labor was artificially increased to the point where it was economical to automate (read here). If we apply the law of supply and demand to the rhetoric of increasing the minimum wage, people wouldn’t have been fooled into thinking they were helping the people the law was actually hurting..

OUR CHOICES

Economic principles are always in play. Government edicts can’t negate economic reality. The political chaos we have today is the result of ignoring the reality of basic economics. We can’t wish these realities away because we don’t like the fact they limit what we demand.

I’m going to quote a person with authority at this point. So don’t take this quote as authoritative. Figure it out yourself.

F. A. Hayek a Nobel Prize winning economist, (how is that for status), said: “Planning, or central direction of economic activity, presupposes the existence of common ideals and common values; and the degree to which planning can be carried is limited to the extent to which agreement on such a common scale of values can be obtained or enforced.

Let’s get educated in basic economics. Life is easier to understand when you understand how the world works. Here is another quote.

F. A. Hayek: “The curious task of economics is to demonstrate to men how little the really know, about what he imagines he can design.”

We have two choices. Scarce resources can be rationed through prices voluntarily in the free market. Or Scarce resources can be rationed forcibly by politicians and bureaucrats through the power of Government. Which direction are we moving?

CONCLUSION

Political insiders of both parties have shaped the battle field into a choice between the R’s and the D’s. In reality the real battle is between the insiders in both parties who want to grow the power of Government, and people who stand for free markets and want to cut the power of government. Neither group is a majority. The majority of people are the economically ignorant. These people have been fooled into fighting the battle through the R and D paradigm.

Our job is to educate the economically ignorant. When this majority understands basic economic principles, they will they stop fighting on the fake R and D battlefield and start fighting on the real battlefield: central planning vs. voluntary cooperation.

 

Related ArticleMinimum Wage Laws Create Unemployment, at austrianaddict.com

Related ArticleIncome Inequality Part II: Increase The Minimum Wage, at austrianaddict.com.

Related ArticleThe Reality Of Obamacare, at austrianaddict.com.

Related ArticleThe Economics of Healthcare vs. The Right To Healthcare, at austrianaddict.com.

 

You Decide: Did Jeff Sessions Commit Perjury?

March 3, 2017

Video of Al Franken’s Question To Jeff Sessions In Context.

DEFINITION OF PERJURY: The willful giving of false testimony under oath of affirmation, before a competent tribunal, upon a point material to a legal inquiry.

Here is the transcript of the whole segment (Click Here)

FRANKEN: CNN has just published a story and I’m telling you this about a news story that’s just been published. I’m not expecting you to know whether or not it’s true or not. But CNN just published a story alleging that the intelligence community provided documents to the president-elect last week that included information that quote, “Russian operatives claimed to have compromising personal and financial information about Mr. Trump.” These documents also allegedly say quote, “There was a continuing exchange of information during the campaign between Trump’s surrogates and intermediaries for the Russian government.

Now, again, I’m telling you this as it’s coming out, so you know. But if it’s true, it’s obviously extremely serious and if there is any evidence that anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign, what will you do?

SESSIONS: Senator Franken, I’m not aware of any of those activities. I have been called a surrogate at a time or two in that campaign and I didn’t have — did not have communications with the Russians, and I’m unable to comment on it.

FRANKEN: Very well. Without divulging sensitive information, do you know about this or know what compromising personal and financial information the Russians claim to have?

SESSIONS : Senator Franken, allegations get made about candidates all the time and they’ve been made about president-elect Trump a lot sometimes. Most of them, virtually all of them have been proven to be exaggerated and untrue. I would just say to you that I have no information about this matter. I have not been in on the classified briefings and I’m not a member of the intelligence committee, and I’m just not able to give you any comment on it at this time.

FRANKEN: OK. Totally fair.

 

WAS SESSIONS RESPONDING TO THE HIGHLIGHTED AREAS IN THE ABOVE TEXT?

DID HE COMMIT PERJURY? YOU CAN MAKE UP YOUR OWN MIND.

 

Related ArticleI Hate Politics! at aistrianaddict.com.