Clarity in Need of Courage

Just a quick post about two discrepant narratives in the major media in the last few weeks.

First a prefacing side note: this post is going to be largely about news reporting, so I want to be clear. I don’t go too big with the whole “mainstream media bias” anymore because it relies too heavily on paranoid assumptions of conspiracy. Instead, I try to view things through a clearer, more innocent and objective lens: as a whole, American journalists, news anchors, and editorial boards lean to the left as individual citizens. There are a number of legitimate, organic reasons for this which are not important. What is important is that there are certainly certain assumptions and common narratives that exist in the minds of those writing the major print media, which shade the reporting of news and analysis to a certain level of homogeneity as a whole. The simplest reality is that humans are subjective creatures, and to feign objectivity is dishonest and quite impossible. But enough of this…

The first topic here is the abundance of “anti-taxation” tea parties across the country. I bring them up because I think that newspapers and cable news have been overwhelmingly pushing two ideas: these events are full of deluded, right-wing idiots and fanatics and these events are the result of AstroTurfing (it pains me to even type that term). Both of these stories are largely incorrect and disingenuous in the context of political movements as a whole.

Let me being with the idea of a motley band of right-wing gun nuts and crazies at a political protest. Certainly, there are some weirdos at these events, but does anybody remember Cindy Sheehan? Cindy Sheehan and her band of losers outside the ditch outside of the President’s ranch in Texas? For nearly two years her incoherent, meaningless rants were ignored, but her protests and baseless request to meet with the President was dutifully reported — over and over again.

Another common theme among news stories about tea parties is that they represent many disparate libertarian, anti-establishment, and populist causes, and lack a common thrust or political purpose. Big surprise! As a personal attendant of one of the large “anti-war” rallies in D.C. in 2005, I can assure you that when the left gets together, there is little unity of mind. I say “anti-war” in parentheses because even though it was described as such, you could find a strong representation of pretty much every left-leaning species under the sun wandering in order down the streeds of Washington. Among the groups I remember: a Black separatist group calling for revolution through a megaphone, American socialist parties, several communist groups, dance troupes of 8-10 year old girls preforming anti-Bush skits, anti-Vietnam groups, and anti-nuclear weapon groups. At the time, I don’t think any of the major media described these events as collections of whacko, paranoid leftist groups. No, it was a few thousand people deeply and purposefully opposed to the Bush administration’s rush to war — it was a useful tool to fit the narrative of the missing WMDs, the intelligence lies, etc. (And another side note: After recently finishing the anti-Bush epic Hubris by David Corn and Michael Isikoff, I learned in painstaking detail how the major media as a group was livid about their inability to prevent war in Iraq and were reaching for anything on which to indict the Bush administration)

But now when a few hundred or a couple thousand right-leaning people get together to demonstrate against recent (real or perceived) policies, they are a meaningless bunch of kooks. But it gets better, because not only are they crazy and fanatical, they are signed, sealed, and delivered by the Vast Right Wing Conspiracy! Thank Paul Krugman for breaking this story:

Last but not least: it turns out that the tea parties don’t represent a spontaneous outpouring of public sentiment. They’re AstroTurf (fake grass roots) events, manufactured by the usual suspects. In particular, a key role is being played by FreedomWorks, an organization run by Richard Armey, the former House majority leader, and supported by the usual group of right-wing billionaires. And the parties are, of course, being promoted heavily by Fox News.

Oh no, Fox News is heavily promoting them, sounds illegal! That whole piece is flat out embarassing for somebody who takes himself as seriously as Paul Krugman. After all, this is a Nobel Prize winner here…

Enough about the media. I think the real story that is being glossed over about the tea parties is that there is a legitimate displeasure with the recent actions and stated plans of the Obama administration. I sum this feeling up as the following. Not only are current economic policies (the “stimulus plan”) a weak attempt to immediately help the ailing economy, they are also a disingenuous and cynical (Obama favorite term alert) pursuit of left-wing aspirations for America — all the pork, the fact that little of the money will be spent before 2011, the sheer volume of the thing. And the results are far from satisfactory, even by the Democrat-majority Congress’ self-congratulatory standards. And now we hear about the trifecta of reform — health care, energy, and education — all of which promise to be significantly expensive and transform the role of the federal government in both commerce and private family life.

Clearly I am not the only one who was thinking this, as the editorial board of the Washington Post articulated the discrepancy between Obama and reality last week:

It is all the more disappointing, then, when Mr. Obama overstates his case in one crucial area and loses all candor and courage in another. The overstating comes in linking his policy agenda to the economic recovery. The agenda focuses on education, renewable energy and health care. These are all worthy pursuits, areas where we support many of his proposals. But as his admirable summation of recent history made clear, these pursuits have little to do with the economic crisis, and they are not the key to economic recovery. The recovery will result from successfully transitioning away from an economy overly dependent on debt and the American consumer, unclogging the banking system, stabilizing housing — and dealing with the fiscal imbalances facing the country that were bad before, are worse now and, if left unattended, could well cause the next crisis.

This is the sentiment that mobilizes the tea parties. This is the legitimate political backlash to a President who seems to be, at this early stage, oversold as a leader and to be trying to oversell an unrealistic and radical agenda. It doesn’t matter how many attend the tea parties, or how many radical nuts are among them. Obama and the Democrats would be wise to recognize them as a legitimate insight the political mood in America, even if a bit disjointed and colorful.

Dis-Mass-ter

The New York Times published a very revealing article on Saturday about the present and future of health care in Massachusetts. The overhaul in 2006 was designed to achieve the nearly meaningless benchmark of universal coverage, while paying no mind to efficiency, cost transparency, or overall costs. And now, three years later — gasp! — the program has vastly overrun its projected costs, and is “not sustainable”:

The day of reckoning has arrived. Threatened first by rapid early enrollment in its new subsidized insurance program and now by a withering economy, the state’s pioneering overhaul has entered a second, more challenging phase.

Thanks to new taxes and fees imposed last year, the health plan’s jittery finances have stabilized for the moment. But government and industry officials agree that the plan will not be sustainable over the next 5 to 10 years if they do not take significant steps to arrest the growth of health spending.

How exactly does it work when the guiding hand of life and death — in this case the state government — is not sustainable? Well, there are three options: a.) pay for this “free” care out of pocket or in new taxes and fees, b.) ration care, or c.) both. More on that to follow, but here is the type of language that you can expect to hear, because this article is just so rich with insight into the reality of this brand of health care reform.

First, the program hasn’t lowered costs, as its proponents promised, for anybody. It has expanded coverage by shifting costs around, and ended up charging businesses and individuals here and there:

… health spending per person in Massachusetts increased faster than the national average in seven of the last eight years…In its first full year of operation, Commonwealth Care drew higher enrollment than anticipated, and the state found itself facing an inaugural budget gap. Mr. Patrick and the legislature filled it by assessing insurers and hospitals, raising the penalty on noncompliant businesses, increasing premiums and co-payments for consumers, and raising the state tobacco tax.

And the proponents of this reform ignored the legitimate critics plan, who feared that it would be too expensive and were fearful of being squeezed by the government plans in the long run. They were right. The first reform kicked the can down the road a few years, and now comes the “new incentives,” the price controls, and care rationing:

Those who led the 2006 effort said it would not have been feasible to enact universal coverage if the legislation had required heavy cost controls. The very stakeholders who were coaxed into the tent — doctors, hospitals, insurers and consumer groups — would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said…

More efforts were made last year in legislation that provided incentives for doctors to practice primary care, required uniform billing procedures among providers, toughened the state’s regulation of new hospital construction, and established the payment reform commission… all [considered options] would do away with the fee-for-service system, which provides perverse incentives by paying physicians and hospitals for each patient visit. The changes under consideration include reimbursing for episodes of care rather than individual visits and bundling payments to groups of providers who would together take responsibility for a patient’s health…

Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care. “Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.

So now you have this big, expanding beast of a program that covers a lot of people, but it is already (less than 3 full operating years!) fiscally unsustainable. What can you do to fix the new health care crisis resulting from the fix for the old health care crisis? Not much! Find a way to pay for it…

Because Massachusetts now requires its residents to be insured, it cannot fall back on the strategy used by other states in hard times — to simply remove people from the public insurance rolls by restricting eligibility.

“It forces us to look in the mirror and say, ‘What do we do about health care spending?’ ” said Jon M. Kingsdale, executive director of the agency that administers Commonwealth Care. “And the reason that’s so challenging is that it means limiting resources for people doing really good stuff…It’s not like the fat sits out here easily identified and you just slice it off. It’s marbled throughout the meat.”

That last quote is chilling, and it is the absolute truth. Does this article paint a picture of a Massachusetts populace that is better off than they were with 10% uninsured in 2005? Maybe this year, but not in two years, and certainly not into the forseeable future. At some point, those perverse effects described so vividly in this article will appear and the costs will be more convoluted and more services will be denied, and residents will be paying for the “free” and “affordable” public plans through taxes, fees, and co-payments.

This is the model for national health care reform favored by the Obama administration — a new public program to close the gap of the uninsured and purportedly lower costs. In fact, ObamaCare would be even worse because he is against the level of insurance mandates used in Massachusetts, so we would have all of the problems with a much higher than 2% uninsured rate. The Krummey Truth is that Massachusetts-style health care is a failed attempt to improve health care as measured by increased coverage and decreased costs, and that any similar attempt on the federal level would fare no better.

The Real Axis of Evil

Remember the Bush-era neoconservatives rabidly “drumming up” support for war in Iraq, even “lying” about WMDs? Remember the relentless Obama campaign on post-partisan pragmatism, and the rejection of ideology or dogma? And we cannot forget the change that Americans were so hungry for! The dreams have clearly come true.

I lack the energy to fully comment on the absurdity and pompousness of the White House repeatedly attacking Rush Limbaugh, Rick Santelli, and Jim Cramer in a single month, but I can say this: the Obama vision for America is quite conventionally liberal and decidedly partisan.

My favorite genre of opinion article of late are those defending Obama against charges of being a socialist — by actual socialists! Of course the title is hyperbolic. But calling the budget, the rhetoric, and the ideology of the Obama administration moderate is at best unsubstantiated, and at worst dishonest. Just listen to the rejoice of Social Democrats E.J. Dionne and Eugene Robinson. Dionne is ready to finally create an America in which no one is denied anything that a greedy rich person might have stolen through reduced wages and tax loopholes:

Politicians will say lots of things in the coming weeks, but they should be pushed relentlessly to address the bottom-line question: Do they believe that a fairer distribution of capitalism’s bounty is essential to repairing a sick economy? Everything else is a subsidiary issue. . . .Do we want to be a moderately more equal country or not? This is the question Obama has put before the nation. Let’s debate it without the distracting rhetorical sideshows designed to obscure the stakes in the coming battle.

Gene Robinson, a favorite guest on Keith Olberman’s nightly rant, gushed that Obama has the gall to lurch to the left further than any one thought possible:

Obama is determined to shift our whole political spectrum to the left, redraw the boundaries of our politics and expand the realm of the possible. He senses that the nation is already moving in his direction, well ahead of its political leadership. The sums of money involved [in Obama’s $3.6 trillion budget] are so huge that commentators used up a year’s worth of adjectives: unprecedented, staggering, breathtaking. Ultimately, though, the numbers will mean less to history than the way Obama’s budget reorders the nation’s priorities and changes the relationship between Americans and their government.

The dishonesty here comes from using the recession as political cover to radically reform federal priorities to new investments in health care, energy independence, and education, while lightly addressing structural reforms that would best improve the banking system, housing market, and overall economy. Charles Krauthammer points out that the causes of the financial system collapse “do not include the absence of universal health care, let alone computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates.”

The conventionally liberal ideology here is the demonization of the private sector and capitalism, as Obama plans to create a more “responsible” world by raising taxes on the “oil and gas industry, hedge fund managers, multinational corporations and nearly 3 million of the nation’s top earners.

We don’t have a War on Terror anymore, but we have found the real Axis of Evil!

What about these entities is so “profoundly irresponsible” to Obama? All three have managed to accumulated capital, which makes them ripe for the plucking to create a more “just” wealth distribution profile, which will be designed and implemented by the even and all-knowing invisible hand of Congress and the White House. This is the liberal wing of the Democrat Party’s social agenda for the last century, there is nothing innovative or post-partisan about it! It’s the New Deal meets the Great Society meets the Green Revolution: the federal government improving people’s lives with the money of those who were too successful – er, greedy! Time rebuild the middle class with an eco-friendly touch! This is pure class envy, political retribution for eight years of centrist Democratic rule followed by eight years of Republican rule in Washington, and experimental social engineering.

Ah, and now we arrive at health care reform, (which I think has become the litmus test for how successful the Obama revolution):

Obama proposes the kind of budgetary support that Kathleen Sebelius, nominated yesterday as health and human services secretary, must surely love: a $634 billion “down payment” over the next 10 years on health-care reform, with the aim of moving toward universal coverage. The important thing here isn’t the big number but the fact that he is expanding the government’s responsibility for citizens’ health beyond the old, the young and the poor. Conservative commentators, of course, are outraged that Obama would go so far as to offer a government-supported plan that Americans are likely to prefer to the hodgepodge of private insurance coverage they now have to navigate. Has the president no shame?

Robinson’s flippant commentary deserves a seriuos rebuke — all Krummey Truths. First, any reform that expands the federal government’s responsibility to provide health insurance or care is dishonest, because it will further hide the cost and payment of health services. Second, a $634 Billion “down payment” is a meaningless platitude that obscures the serious question of the true cost of any reform plan over the next decades. Third, liberal reform that promises universal health insurance coverage — even through a coverage mandate — will not achieve it, plain and simple. Fourth, an Obama-style connector insurance program in Massachusetts has not only exceeded its initial projected outlays, and legislation is planned to “contain costs.” Finally, the only reason that a government-supported plan would be preferred to private plans is if they appear cheaper. Such appearances, however, would only come from government price-fixing, not actual lowering of costs. The difference will be made up first by taxes and fees, and eventually by limited services.

Food for thought…

This is dangerous…

And this is being ignored in the major media.

Pluripotent, Totipotent, or Multipotent?

As reported in all major media outlets today, the FDA approved the first stem cell-based therapy for victims of severe spinal cord injuries. The idea is that you inject said cells near the spinal cord a few times, give some  immunosuppressant drugs, and monitor patients for increased sensation. If that sounds a little far-fetched, it is!

Stem cell therapy has tremendous potential to make cell-based and gene-based therapies a reality, and to personalize medicine in wondrous ways. Stem cell therapy, however, is nowhere near making either of these strides. As with this study, a lot is known about the properties of the stem cells themselves, but therapeutically they are a big black box.

Consider: the premise of stem cell therapy is that undifferentiated cells (or partially differentiated cells, like the oligodendrocytes) injected near a wound site will both (a.) be physically incorporated in the correct sites of damaged tissue, and (b.) receive the correct signals to differentiate into the appropriate cells, and (c.) not be cleared as foreign cells by the immune system. This is a lot to ask of a relatively few cells, and there is good reason to believe it might not work — how will a few cells in proximity to damage make it to an exact niche within the tissue? Why would an appropriate millieu of extracellular differentiation signals be present if the body is no longer developing these cells?

Despite these problems, stem cell therapy can only move forward through clinical trials and research, such as this study. The major reason this is news today is because “stem cells” has been turned into a hot button issue along the abortion-religion-culture wars axis. Several studies in the last year have made efforts to skirt this dilemma — and Bush administration embryonic stem cell research ban — by de-differentiating mouse or human fibroblasts into pluripotent cells, called induced pluripotent stem cells (iPSCs).

This is a huge accomplishment, but it has been overblown by those wishing to do away with the embryonic stem cells once and for all. These iPS cells are clinically problematic because of the use of retroviruses to deliver the necessary genes and the induction of the gene myc, both processes are potentially cancer-causing. The reality is that stem cell therapy itself is still many years in the future, and iPSC therapy is further — not closer to — this future.

New York Times Page A21

This great analysis appeared in the New York Times few weeks ago – on Page A21, some wonder. It raises many of the fundamental problems of Obama’s “big idea” of expanding federally provided health insurance. First, as has been well articulated on this site and by many others, no public program can “compete” with private insurers.

Forcing private plans to compete with a public program like Medicare, with its price controls and ability to shift costs to private payers, will inevitably doom true competition and could ultimately lead to a single-payer, government-run health care program,” said Senator Michael B. Enzi of Wyoming, the senior Republican on the Health, Education, Labor and Pensions Committee, before which Mr. Daschle will testify on Thursday.

Senator Olympia J. Snowe of Maine, a moderate Republican, shares some of that concern. “Creation of a government plan is no panacea,” she said, and “could disproportionately shift costs from private plans to the public.” Mr. Gelfand, of the Chamber of Commerce, said: “People would gravitate to the public plan because it would look cheap. Instead of paying the full cost of care, it would shift costs onto private insurance plans. It’s our employees, American workers, who would pay the price.”

Another key point is that a large reason for the disproportionate convoluted and opaque payments for health care coverage, service, and reimbursement is caused by the Medicare reimbursement schedule.

In a report to Congress last year, the Medicare Payment Advisory Commission, an independent federal panel, said Medicare paid doctors 19 percent less than what private insurers paid, on average. For hospitals, the gap was similar…Medicare rates, the prices paid for everything from wheelchairs to brain surgery, are set not by negotiation or competition, but by a web of federal laws and regulations. Scott P. Serota, president of the Blue Cross and Blue Shield Association, whose member companies insure one-third of all Americans, said: “I’m not worried about our ability to compete on a level playing field. I am worried that a public program would have marketplace advantages that make private plans noncompetitive.”

Precisely! Congress clumsily sets reimbursement rates via the Medicare Payment Schedule, which is used by private insurers to determine their reimbursement rates. A major problem in recent years has been a bias towards operative care (which has contributed heavily to the lack of a new generation of primary care physicians) and otherwise underpayment for services. This causes providers to jack up prices in hopes of actually covering their costs. Ever wonder why an aspirin infamously costs $80 in the hospital? The bottom line is that the track record for federally funded health care coverage is one of ineptitude, and is a major ill to the whole system. The Obama Solution: more public programs.

Another real gem:

Mr. Stark [Rep., D-CA] said he did not accept the argument that Medicare was grossly underpaying doctors and hospitals. “Many of the private plans are poorly managed,” he said. “They are the General Motors of medical care delivery. Medicare is paying the right amounts. To suggest that a heart surgeon has to make $600,000 or $700,000 a year, as opposed to only $400,000 under Medicare fees, does not get much sympathy from me.”

Here is the dangerous liberal philosophy underlying it all: the greedy, evil doctors are making too much money anyway; if reform legislation screws the physicians, oh well. How dare a politician, who receives lifetime benefits and pension after serving a single term in Congress, decide how much a private citizen should make? Heart surgeons are highly, highly trained specialists, who pay (often in the form of debt) $150,000+ for four years of medical school, plus seven or more years of residency and fellowship training. When they finally do finish and are able to make real money, they are faced with paying back their educational debt plus interest, in addition to six figures per year of malpractice insurance (so sycophants like John Edwards can take them to court multiple times during their careers). On top of that, they have professional obligations with no “off hours,” which consists of being the last life-saving hope for thousands of people. Quite frankly, the opportunity to make $500,000+ per year is just about right for a select group of the most highly trained specialists on the planet. The worst heart surgeon is easily more talented and intelligent than Pete Stark, or any blathering wind bag politician. If a heart surgeon, or any other professional has personal wealth, it is because they worked for it, because they sacrificed and took risks for it, and because they deserve it. This is the American Dream, which is increasingly in conflict with the liberal-Democrat paradigm of social engineering and economic justice.

Despite all the talk of “pragmatism,” “consensus” and measured, rational problem-solving we are guaranteed by the Democrats and the “We Are One” Obama administration, when push comes to shove this is the philosophical framework they will use to guide legislative decisions. And it is precisely why individual choice, competition, and market forces are the only way to protect us from meddling politicians who want to decide what is “fair” and “worthwhile” in everyday life.

Cato Sense

There are but a few flickers of light in the expansive blackness that is the US Heath Care Reform. This site is one of them, and Michael D. Tanner of the Cato Institute is a much brighter one. Mr. Tanner recently analyzed the current prospects for health care reform legislation on the Cato Daily Podcast (“Three Bad Health Care Plans,” December 23). The man speaks the sweet, sweet truth, so I want to paraphrase some key points.

- There is no rational reason for employer-controlled health insurance. Employers don’t provide car, life, home owner’s or any other type of insurance for employees. Employer-provided health care is a circumstantial accident of World War II, during which wage and price controls, coupled with a labor shortage, inspired corporations to include health insurance as a fringe benefit to lure workers. Years later, the IRS solidified this system by making this benefit tax-free. Most center- and right-leaning economists recognize that this is an absurd and inflexible system of providing health insurance.
- There are three health care reform plans pending in Congress. The Obama plan opposes an individual insurance mandate, and creates a government-run health insurance program to compete with private insurance plans. The Baucus plan creates an individual insurance mandate and also expands government insurance programs, but also places a cap on the tax break for employer-provided health. The Kennedy plan is presumed to create an individual mandate and significantly expand government insurance programs.
- It is “disingenuous” for all of these plans to claim that public insurance plans can lower costs and create “freedom of choice.” Quite simply, this because government plans are subsidized by taxpayers, and can therefore offer lower premiums and better benefits than private plans, which will squeeze many consumers from private plans, and in turn make private plans more expensive.
- There is great momentum for legislation to pass in 2009. This is because there is a consensus within the plans for an employer mandate, insurance regulation, some expansion of government-provided care, and Democrats are bent on passing this. Furthermore, the old opponents of HillaryCare (insurers, doctors) are agreed that something bad is going to happen, they just want to get in the lifeboat.

Ah, he brings tears to my eyes! A common thread in these reform plans is the creation of a public program to compete with private insurance, which is billed as a reasonable, post-partisan, market-based reform policy. I think not. The government is not capable of becoming a competitor in the private sector, for the reasons Mr. Tanner cites. Furthermore, a real-life results of this type of policy is found in MassCare.

Keep this really simple. Liberal reformers claim that unequal access — the uninsured — is the most urgent priority in health care reform. However, rapidly rising costs are the reason that the numbers of uninsured are on growing, and thus represents the single largest threat to both quality and access. They maintain that expanding federal programs, with or without an individual mandate, will eliminate this injustice and simultaneously control costs. The Krummey Truth is that several lines of evidence — fundamental economic principles of supply and demand, the history of ballooning Medicare and Medicaid costs, and the outcomes of similar reform in places like Massachusetts — indicates that this type of reform would not only fail to achieve universal coverage and raise the costs of care, it would create an even greater opacity in health care economics, and massively expand the class of citizens dependent on federal benefits.

Propaganda We Can Believe In

Does any one else see the absurdity in the assertion that an $800 billion-plus “stimulus plan” will end the recession? This recession has united disparate strains of politicians under the mantle of the government as savior of the crude, unjust, greedy, unregulated private sector. The narrative here is that this is an unprecedented “crisis,” in the face of which “doing too little” is unfathomable. Unsurprisingly, Professor Obama is certain that “only government can break the cycles that are crippling our economy.” Seriously?

In my mind, the nonsense began on December 28, when Obama economic sage Larry Summers wrote an opinion piece in the Washington Post arguing that the federal government “doing too little poses a greater threat than doing too much.” This is purely an appeal to economic fear and anxiety, based solely on predictions of doom and gloom that seemed to appear when economic difficulty began in the fall. That same day, I heard self-described liberal super-economist Paul Krugman on a Sunday talk show asserting that the stimulus should be between $750-850 billion (not between $772-814 billion, mind you), and that by his Nobel-prize winning estimation, we needed to spend $250 billion in stimulus to reduce unemployment by 1 per cent – per year.

Flash forward to the Sunday Post, which reports that Obama’s $775 billion economic stimulus plan will “save or create” 4 million jobs. The amazing detail is that this charade rests on the Obama economic team’s prediction of a future rise of unemployment. And what is their best guess, even in their fictional future economic world? It is that the stimulus plan will transform the current 7.2% unemployment rate in the beginning of 2009 and by the end of 2010 it will be…7.2%. Talk about lowering expectations!

Am I missing something? The grand bargain is that we can distribute a trillion dollars in federal benefits and tax breaks so that economic conditions won’t improve in two years! But if we don’t spend this money, warns the team of sages, unemployment “could reach 9 percent” (or 10 percent as predicted by many others).

Some important questions in my mind: Is the federal government that was largely responsible for nurturing the subprime real estate and financial crises capable of reversing a recession now? Is any one questioning how legislators and academic economists will be able to nimbly and efficiently administer the delivery of this money? What about the TARP, which has not been used for its legislated purpose, nor has it come close to achieving its stated goals? Jonah Goldberg is wondering some of the same things.

The prescription for what ails us is not an influx of public jobs and federal infrastructure spending, it is a strong dose of liberty in the form of lowered corporate tax rates, tax breaks accompanying cuts in federal spending, and seriously reduced entitlement spending for the next generation. The Krummey Truth is that the stimulus will do nothing to end this recession, both because any money or benefits will go into effect too late, and because it will be watered down with meaningless jobs retrofitting buildings to be “green.”

If you think health care is expensive now…

Just wait until it’s free.

A great piece by George Will about the runaway costs of government-run health benefits, Medicare and Medicaid. Will highlights the central problem with state-funded care: both the price-fixing and complexity of Medicare/Medicaid uncouple responsibility and accountability from care, and the gaps between price and cost (created by well-meaning legislation, of course) are passed on to the consumer.

The highlight of this article is outgoing HHS Secretary Michael Leavitt’s blunt assessment of the future of health care in America: until individuals can easily know and assess the cost of their care up front, there will be no accountability or real change in the system (a paraphrase). It is a fair extension to say that without this accountability, no significant control of price inflation or improvements in quality will come.

This is the reality ignored by current calls for reform along the lines of the Democrats. With all these acknowledged problems with health benefits programs, and the runaway costs, why do we think that more of the same will mean better care for any one?

Friday Night Radio

I am listening to an interview on C-Span Radio (yes, nerd alert) with Marxist author Thomas Frank about his new book, The Wrecking Crew: How Conservatives Rule. I cannot sit quietly and listen to this.

Mr. Frank is contends that modern conservatism is designed with the deliberate goal of “wrecking” government by making it inefficient and ineffective, thereby diminishing its value and increasing the power of evil private industry. He classifies conservatives as radically greedy, money-grubbing “true-believers” or “free marketers” who “worship the market” as God. The epitome of this backwards way of thinking is, of course, the Bush administration. Conversely, if government would just be allowed to perform all of the glorious miracles that it is capable of, we can eliminate those nasty inequalities in society.

While this drives at the heart of political philosophy that will someday be the subject of my autobiography/manifesto, I will try to limit my comments to two or three points, and tie this to the current debate over health care reform.

Mr. Frank’s central intellectual misfire is a failure to consider that capital is not evil, capital is the best means of producing equal opportunity and eliminating poverty. It is essential to realize here that the government produces no capital, it only spends capital that others produce. Think about that one for a minute. The government only redistributes wealth generated by private enterprise, wealth that is generated in the free markets. Now, this is a bit simplistic, but I think the premise is a strong one: government is often cast as this all-knowing tool for managing society and the private sector is routinely demonized as an unfair oppressive force. In reality the opposite is operationally true.

Yes, some will always have more than others, and the world can be a cruel unfriendly place, but the only way one can gain and keep wealth is by producing a good or service that is in demand. I recently heard that something like seventy per cent of the economy is driven by small business. Large and small corporations pay for government in total, plain and simople. One of the most despicable myths is that there is a wealthy corporate class and an underserved working class in America. Executives of corporations are not divinely appointed, they rise and fall on their own accord. Sure, there is some luck involved, and most will never make as much wealth as the top business people; but they are at risk of failure, and routinely fail and succeed multiple times. When they succeed, everybody in the enterprise gains, and everybody in the market gains as well. This is the justice in capitalism, which is manifested in the dominance of America in a short span of history.

I see an analogy here to a central point that Steven Pinker made in The Blank Slate about the 1960s “radical scientists” denial of sociobiology and a fundamental human nature. Bear with me here. Pinker argues that for political reasons, this generation of scientists want to deny that humans have any biologically-wired behaviors, because they wish to see society as a “blank slate” that can ultimately be manipulated in a just and equal way. They cannot accept that there is a bell curve of intellectual traits or evolutionarily conserved social behaviors, and in this denial elevate “culture” as the supreme non-biological driving force behind society. The connection is that the Frank-esque liberals want to deny that the free market rules the economic and social landscape because the market is ugly and unjust. There are winners and losers, and the results are unpredictable and reversible. They were brought up intellectually being promised that a method of social organization existed where everybody should have more, but nobody should have more than them. They would much rather believe that “free marketers” are only the winners, that the others are left to permanently suffer, and that government (like culture) is the ultra force that can level the playing field permanently. The reality is that the market forces of supply and demand are the economic law of humanity. Although these forces create a spectrum of results, those results are based on free will and individual liberty, and hold the best hope for advancing the plight of society as a whole.

The final piece here, which holds the connection to the health care reform debate, is that the market-haters cannot deny the presence of market forces, they are reduced to arguing that they are simply unfair. Like the radical scientists who are surrounded with evidence of innate human abilities, they construct an alternate reality that sounds better than it is. This logical murkiness is commonly invoked in the health care reform debate by advocates of universal coverage. As the argument goes, the evil private insurance companies and the vastly unequal access to care are supreme proof that the “market has failed,” so the only rational solution is to fairly provide health care by the federal government. As I have observed in Paul Krugman’s writing, they purposely juxtapose price and cost: the feds can lower prices so that “working class families” can afford them. Wrong.

Universal coverage will do nothing to reduce the cost of health care. Subsidies only further hide the true costs of care, which is a fundamental problem with the system now. To a certain extent, this is an attempt to take the easy way out. It is much more complicated to explain that through several separate de-reguatory steps, the free markets will lower health care costs and more people will be able to afford more services. It is academic to explain that the markets have not failed, but rather the incursions of command-and-control federal regulations on the markets have failed. Why is health care coverage linked to employers over individuals? The tax code bias. Why is there a gap between what doctors get paid for services and what those services cost? Medicare price schedule. Why are there increasing coverage stipulations that drive up the cost of health insurance plans? Federal and state regulations.

Mr. Frank stops short of saying so, but he is actually a full-blooded Marxist. He openly invokes class struggle and advocates essentially for a command-and-control economy. He discounts the values and principles that drove America’s rise in the world, and tries to mischaracterize conservatism as a demonic, malicious ideology. Classical liberals believe that there is a real and limited role for government, that it is a necessary evil of sorts. The Krummey Truth is that Mr. Frank is an entrenched denier of human nature, and that market forces hold the best hope for health care reform in the long run. Any move towards greater government involvement in distributing medical care is certain to make our problems worse.