Unlikely Saviors of Capitalism and the Nation

Tonight Washington State Senatorial candidates Pattie Murray (D) and Dino Rossi (R) debated. Mr. Rossi has a record in the Washington State Legislature of cost cutting to balance the budget. Senator Murray has a voting record in the US Senate making her the most liberal member of that body. She is running away from that record to a certain extent while also reminding voters of government money that she brought to the state. Dino reminded us of the practice in congress that our representatives use to get support for spending in their state. They vote for projects in other states in exchange. Dino Rossi is no RINO (Republican in Name only), but neither is he a Tea Partier. He seemed to be lack-luster in his early TV spots denouncing the Obama policies. He seems to be only half-heartedly against Cap-and-Trade, if he is against it at all. Nevertheless, his vote will be 90% conservative as apposed to Murray's 99% in favor of BHO and Majority Leader Harry Reid's agenda. Several other House and Senate races involve similar match ups. The Republicans and the nation need to win a majority of those races.

The conservative view is that economic difficulties stem from government intervention in the economy. Rossi gives this view lip service. Senator Murray does not seem to even understand the concept. Our current national economic problems were caused not only by decades of government actions but specifically by laws requiring banks to loan to bad credit risks. Because Freddy and Fanny were buying most of these loans from the banks, the banks were not too worried. The government was implicitly promising a bail-out if needed, and it was needed. All kinds of other bail-outs and government 'stimulus' spending followed. Those government actions are what is causing the current economic slow-down. It will turn into economic collapse unless we change course immediately.

BHO and his allies in congress have taken over the domestic auto industry, except for Ford Motor Company. They have taken over the biggest insurance company directly, and through the health care law, have taken over all of the health insurance industry. They have directly taken over many banks and investment companies and through the Wall Street 'Reform' bill, have effectively taken over all of the rest of that industry. In the Health Care bill there were provisions to take over more aspects of the economy, student loans, for instance. The laws granting bail-outs to state teachers and other government employees, have taken more control from the states over these employees. Many, many, laws and obscure provisions hidden in the massive Wall Street and Health Care monstrosities, set up new government agencies to control the people even more. Now, with Cap-and-Trade, they plan on controlling energy production, use, and distribution. Those industries are already highly regulated. To help them gain and keep control over the people, they want even more control over the Internet and talk radio. Since they already have control of the mainstream TV and print media, they will gain virtual complete say over what we, the people, are told to believe.

These massive government actions, most of which are for political not economic purposed, will not help the economy. In fact they are causing many problems that continue to get worse. As stated here and elsewhere, prices must lower and bankrupt concerns must be liquidated for markets to return to normal functioning. That is not happening. Government is creating money and debt at breakneck speed to shore-up housing prices, wages, and many industries (such as banking). This is postponing the inevitable and making the inevitable worse. Even if Republicans were to gain control in congress, there would likely be a long uphill climb.

Regarding Senate races, after the debacle of Reid's performance in his debate with Sharon Angle today, his chances of retaining his seat declined dramatically.

Free Maket Healthcare: the Left not Listening Still

Here is a link to an article in Fortune. 45rrrrrrrrrrrr (my cat just typed that)

http://money.cnn.com/2010/02/02/news/economy/health_care_danger.fortune/index.htm


The article gives a few suggestions for healthcare plans that do not require the nearly complete government involvement that the current Obama / Congress / socialist plans do. Basically, it proposes removing state regulations so we can obtain whatever coverage we want. We will not be limited to the policies and companies that our state insurance commissions allow. That means high deductible, lower cost plans. There would be an assigned risk pool for those with serious medical conditions. This is similar to what we have to insure people with very bad driving records. The rates for those plans would be set at about 150% of a well person of the same age. If a person could not afford insurance for whatever reason, there would be government assistance on a sliding scale. Something like that has been advocated for years by Republicans of free market orientation. it has so far fallen of deaf ears, even of those with big enough ears to hear quite well.

Since a plan like this would require little of the government, we would not be dependent on government bureaucrats for our medical care. (That is to say, we would not have to kiss their ass.) That's why the Party Members are not interested.

Next Bubble - Health Care?

It seems that too many resources are going to health care. I have heard numbers of around one-fifth of gross domestic product going to health care. Based upon recent construction projects that I have seen and a cursory review of web searches, there seem to be a lot of new hospitals and expansions of existing hospitals. This could just be the most visible aspect of medical care capacity expansion. Researching financial data to check this would not be difficult but it seems obvious. This could be in response to demand that is artificially enhanced by specific government stimulation along with monetary expansion. (The same as happened with housing.) Certainly the growth in government medical programs, tax incentives, and mandates on private health insurance are indications to business of accelerating market growth. Low interests rates thanks to the Fed have encouraged all kinds of capital projects. (This is the basis of the Austrian School theory of business cycles.)

However, web searches also reveal a lot of stalled projects due to lack of financing. Entrepreneurs are no doubt undercutting higher cost hospital based care. People are looking for alternatives and are foregoing nonurgent medical care. The turn down can be attributed to recession based fears and caution on the part of consumers. When things get tight, apparently medical care is not high on the list of what people see as necessities. The actual priority that people place upon their wants and needs eventually asserts itself. Housing was pumped up by government intervention and of course eventually fell. If not health care what could be next? Maybe education?

Only a free market can allocate resources to where they can best be used to satisfy our wants as we prioritize those wants. Government is not able to do this according to economic theory as born out by attempts at socialization. Time to try less government and more freedom maybe?

Albert Jay Nock Up and Coming?

I predict that Albert Jay Nock will make a come back. That is his ideas and writings will, since he himself died in 1945. Some will say that his ideas never went anywhere; there are clubs and newsletters and probably blogs devoted to him. He was a journalist and author. The main thrust of his beliefs was that the state was the cause of all of our problems. He thought that complete economic freedom would lead to political and social and all other genres of freedom. (As opposed to socialist writers, who believed pretty much the opposite.) He said that the state claimed and practiced a monopoly on crime. Occasionally it would lull us into complacency by granting and guaranteeing a few "rights." Maybe four or five or ten. Actually, what we should have is no state and all rights and freedoms. This is certainly anarchy and he is indeed a hero of the anarchist movement. He would probably say that anarchy is a statist concept. Here is a link to a short article:

http://www.lewrockwell.com/tucker/tucker23.html

This is a Paragraph from the Wikopedia article:

"During the 1930s, Nock was one of the most consistent critics of Franklin Roosevelt's New Deal programs. In Our Enemy, the State, Nock argued that the New Deal was merely a pretext for the federal government to increase its control over society. He was dismayed that the president had gathered unprecedented power in his own hands and called this development an out-and-out coup d'etat. Nock criticized those who believed that the new regimentation of the economy was temporary, arguing that it would prove a permanent shift. He believed that the inflationary monetary policy of the Republican administrations of the 1920s were responsible for the onset of the Great Depression, and that the New Deal was responsible for perpetuating it."

It is his insight regarding the Great Depression that might bring about his revival. It seems obvious that the above paragraph is a pretty good summary of our current economic situation.

Nock's writings about money, business cycles, and government spending almost mirror those of von Mises and other "liberals." I doubt Nock had an academic economic background but he was well schooled in the classics and self-educated in everything else. His writing about social security insurance could be used to help understand the current proposals for government health insurance:
"What such schemes actually come to is that the workman pays his own share outright; he pays the employer's share in the enhanced price of commodities; and he pays the government's share in taxation. He pays the whole bill; and when one counts in the unconscionably swollen costs of bureaucratic brokerage and paperasserie, one sees that what the workman-beneficiary gets out of the arrangement is about the most expensive form of insurance that could be devised consistently with keeping its promoters out of gaol."

He also predicted the rise of Obama-like figures (of which BHO was by no means the first):

"It certainly took no great perspicacity to see that these two measures [income tax and popular election of senators] would straightway ease our political systems into collectivism as soon as some Eubulus, some mass-man overgifted with sagacity, should maneuver himself into popular leadership; and in the nature of things, this would not be long."

Regarding patriotism, he said, "As a general principle, I should put it that a man's country is where the things he loves are most respected." Since he also said, "All I ever asked of life was the freedom to think and say exactly what I pleased, when I pleased, and as I pleased. I have always had that freedom," I would say that America was his country. Let's hope we can keep it a place where freedom is most respected.

Update to Hate List

Nancy Pelosi has taken the lead in targeting the health insurance industry as the next bad guys. (That is a bit of an understatement, she actually seems to be saying that they are the REAL bad guys, super yucky, horrible, despicable guys, the cause of most of our problems and certainly the cause of our health care problems.) http://www.msnbc.msn.com/id/32237227/ns/politics-cq_politics/ Speaker Pelosi is doing this of course to help pass a government health care bill. From listening to some liberal friends, I thought that they would be pushing the "children in danger" talking point. That is, they would be saying things like, "in spite of whatever shortcomings the bill might have, the lack of health care for children has reached the crisis level and children are dying every day. We just need to pass a bill now, no matter what. Even if we have to sacrifice some ourselves, the children should not be made to suffer like this." They have not taken that tack; maybe because the proposed legislation would preempt state programs for child health that probably provide better care that any federal law would. (See "Will Health-Care Reform Hurt Washington Kids," Lynne Varner, Seattle Times Editorial, July 28, 2009; http://seattletimes.nwsource.com/html/opinion/2009554360_lynne29.html )

Instead the democrat leadership is opting for the tried and true hate speech method. In my opinion, this is only a step away from the Jew hating propaganda that was so successful in the Third Reich. (That is, it was successful in keeping the Nazi party in power although it contributed to their downfall because the dumkoff Nazi's believed their own propaganda.) It has often been pointed out, that successfully demagogues have to target a few groups to hate and to blame their shortcomings on. It worked so well in the presidential campaign that without the "hate the mega-rich CEO's" vote, BHO may not have won. (The ever present Hate-Bush voters would never have voted for a Republican anyway, but then the Bush hatred syndrome may have been just strong enough to get them to vote, which they usually wouldn't bother to do.)

The health insurance companies join not only CEO's on the hate list but also the auto companies, oil companies, the "rich" and banks to name just a few. Whatever the truth about the insurance companies is, as Rush L. points out, the Democrats want it both ways. They say the health insurers are unfairly limiting coverage to policy holders and they say that they are not keeping costs down. Government will do a much better job providing more care and doing it for less, they say. (I suppose because they are not motivated by profit -- which is actually close to the reason why Government always dose a worse job.) So anyway, we need to hate the evil profiteers and ask our representative to vote in a government option. With the diminution with time of the Hate Bush vehemence, and with opposition in store for BHO, who will we be told to hate next? Maybe talk radio, then who knows, maybe you.