Paul Krugman has a new blog that is titled "The Conscience of a Liberal".

In his introduction to the new blog, Krugman explains the name of his blog : "... because the politics and economics of inequality will, I expect, be central to many of the blog posts – although I also expect to be posting on a lot of other issues, from health care to high-speed Internet access, from productivity to poll analysis."

Well, it would be downright ungracious to ignore his valuable comments on these subjects - so, readers of this blog can expect to find frequent commentary and analysis of Krugman's articles!

Krugman's introductory post is a lament about the great divergence in America - he says: "a chart that’s central to how I think about the big picture, the underlying story of what’s really going on in this country. The chart shows the share of the richest 10 percent of the American population in total income – an indicator that closely tracks many other measures of economic inequality – over the past 90 years, as estimated by the economists Thomas Piketty and Emmanuel Saez. I’ve added labels indicating four key periods. These are:



Select quotes from Krugman's descriptions of the above periods:

The Long Gilded Age: ".. income remained about as unequally distributed as it had been the late 19th century – or as it is today. Public policy did little to limit extremes of wealth and poverty, mainly because the political dominance of the elite remained intact; the politics of the era, in which working Americans were divided by racial, religious, and cultural issues, have recognizable parallels with modern politics."

The Great Compression: ".. was created, in a remarkably short period of time, by FDR and the New Deal. As the chart shows, income inequality declined drastically from the late 1930s to the mid 1940s, with the rich losing ground while working Americans saw unprecedented gains. Economic historians call what happened the Great Compression, and it’s a seminal episode in American history."

Middle class America: "That’s the country I grew up in. It was a society without extremes of wealth or poverty, a society of broadly shared prosperity, partly because strong unions, a high minimum wage, and a progressive tax system helped limit inequality. It was also a society in which political bipartisanship meant something: in spite of all the turmoil of Vietnam and the civil rights movement, in spite of the sinister machinations of Nixon and his henchmen, it was an era in which Democrats and Republicans agreed on basic values and could cooperate across party lines. "

The great divergence: "Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13 percent, but the income of the richest 0.1% of Americans rose 296 percent. "

The first thing that struck me, as I read Krugman's post, was that it exposes his view that economic equality is (and should be) the yardstick by which the success of a political or economic system should be measured. He doesn't seem to care whether equality is achieved by spreading poverty, or by raising the economic level of those who are poor. The 'great compression' that he speaks of in glowing terms was caused by the Depression; FDR's New Deal helped in prolonging the length and severity of the Depression . In Krugman's world, those were good times, because everyone was relatively poor!

Later in the article Krugman notes that: the great reduction of inequality that created middle-class America between 1935 and 1945 was driven by political change; I believe that politics has also played an important role in rising inequality since the 1970s. It’s important to know that no other advanced economy has seen a comparable surge in inequality .."

It is difficult to understand how a trained economist like Krugman can miss the point about Capitalism being a political and economic force for good. FDR's experimentation with socialism took America away from the path of Capitalism - and our society paid dearly for it. The period of equality that Krugman praises was actually one of unemployment and shortages.

Likewise, the inequality (since the 1970s) that he disparages actually came from increased productivity that was achieved by the existence of free capital markets and relatively low taxes. Although there were more rich people in America (spiking the 'inequality' graph), there was also an expanding and enriched middle class. It could be said that after absorbing the punishment of FDR's policies, the American economy finally began to grow its way out of the decline of those terrible years.
 
Krugman continues: On the political side, you might have expected rising inequality to produce a populist backlash. Instead, however, the era of rising inequality has also been the era of “movement conservatism,” the term both supporters and opponents use for the highly cohesive set of interlocking institutions that brought Ronald Reagan and Newt Gingrich to power, and reached its culmination, taking control of all three branches of the federal government, under George W. Bush. (Yes, Virginia, there is a vast right-wing conspiracy.)

Because of movement conservative political dominance, taxes on the rich have fallen, and the holes in the safety net have gotten bigger, even as inequality has soared. And the rise of movement conservatism is also at the heart of the bitter partisanship that characterizes politics today.

Surely Krugman cannot miss the causal linkage between lowering taxes and increasing wealth. Could he be so ignorant as to reverse cause and effect?

By pretending that wealth is a zero-sum concept, Krugman uses a typical Leftist trick. The reader is led to the assumption that lower taxes (a nasty Republican device) cause inequality, which must be bad (because Krugman said so, and it just seems unfair). Therefore, Republicans are bad.

The reality is that lower taxes release more capital that can be used to produce more wealth. The increase in a nation's wealth is predominantly in the hands of those who take risks, work hard, invest capital etc. While this may be disproportionate, it is by no means unfair! Any effort to curb the success of the productive minority in this country will have disastrous effects on the entire economy. However, those curbs will be successful (in Krugman's view) because they would help to equalize poverty.

Although all citizens benefit from having more capital in their economy (raising more out of poverty, and enriching the middle class), there will always be inequality - as long as people have different abilities - and that is not the evil that Krugman claims it to be.

Krugman's world-view is one of inverted reality. FDR's New Deal is something that he praises, despite the clear evidence of its failure. In fact, the stench of the New Deal lingers to this day in the form of a growing welfare state that harms the welfare of the state(*). A thriving economy, fuelled by tax cuts is disparaged by Krugman - despite the obvious increase in the standards of living of middle-class America.

A clever use of statistics, Mr. Krugman, but your analysis doesn't pass the smell test.
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(*) this phrase was adapted from a similar phrase in one of George Will's recent columns!

Leftists often complain bitterly about the harsh grittiness of Capitalism.

In their view, Capitalism suffers from the following fatal flaws:

* it creates a society that is competitive - some would say that it is brutally competitive
* it rewards risk-taking, but punishes mistakes
* it does not provide a safety net for the less competent

The above flaws, Leftists say, can be removed by means of a layer of control (usually via the Govt), acting as a benevolent force for good. Although well-intentioned, those controls inexorably chip away at the source of Capitalism's power - the freedom of individuals to improve themselves, thereby reaching a higher level of success.

The result is often much harsher, and certainly a lot grittier! Opponents of Capitalism would say that the lack of success of the alternatives just mean that they (e.g. Soviet Russia, Cuba, North Korea) just didn't find the right mix of benevolent Government and freedom. They would like to tweak the recipe and keep trying, in the hope of finding that magic formula.

The reality is that the very concept of a well meaning 'nanny' Government kills the incentives and the accountability implied in Capitalism. The safety net of a mixed economy is not protectively under citizens - it is above them, keeping them down, eliminating that which makes people work harder, take risks and prosper.

By ensuring the best use of resources, Capitalism reduces the overall level of poverty. The fact that this is achieved without it being a stated goal renders moot the effusive smarminess and sloganeering of Leftist propaganda.

Our country was founded on the basis of freedom. A novel idea, this meant that people were free but Govt was bound. Americans were free to do anything except those few actions that were legally proscribed (murder, robbery etc). On the other hand, Govt was bound to do only that which it was permitted, by the voluntary consent of citizens.

In economics, the above priniciples led to Capitalism. After all, unlike other economic systems, Capitalism isn't a rigid set of rules - it is what naturally evolves in the marketplace when there is an absence of Govt control.

With its philosophical underpinnings of freedom, and its economic incentives aligned with human predilictions, the American economy sputtered to life. Within two centuries of its birth - a relatively small time span in terms of societal evolution - it became a roaring engine that sustained the growth of a magnificent nation. Before long, it became the dominant economy in the world. This was because most of the other countries were mired in the muck of monarchy, feudalism or savage cannibalism (aka socialism) in which the economic incentives ran counter to individual desires. The stated intentions of the Governing class in those countries had very little to do with their actual outcomes - they were doomed because of their misaligned incentives.

Somewhere along the line, the "meddlers" awoke in America. Mostly these were 2nd or 3rd generation Americans who inherited (rather than earned) their affluence. A generation or two removed from the mostly virtuous actions that had led to their affluence, they felt culturally deprived, strangely envious of other cultures that had cultural legacy, but weak economies. They donned the mantle of "intellectuals" and embarked on the process of "improving" the barbaric conditions that Capitalism had imposed on America. They found many people in other countries who were envious of America's affluence, but who sneered at its perceived gaucherie and gaudiness. This didn't keep them from shamelessly riding the coat tails of American success (which they disparaged) while seeking economic and/or military support from Americans when their so-called elite & cultured societies faltered.

With altruism as a stage-prop American 'intellectuals' were able to convince many people that Capitalism was savage and unkind. In a way they were correct - Capitalism is all of those things, but it works because it is consistent with proclivities of free human beings.

The intellectuals used religion-inspired altruism to denigrate the very concept that had led to prosperity in America. This allowed the less successful, guided by morally fraudulent intellectuals, to seek the transfer of wealth from their betters. By codifying their concepts into subjective law and taxation, they were able to legalize robbery - and call it justice.

This is the secret weapon of the Leftists - and it is a one-two punch - the concepts of altruism and unearned guilt are the two components. Its a case of Heads - they win, and Tails - you lose! 

Socialism's biggest victory (albeit a Pyrrhic one) has been the voluntary acceptance of the producers that they should live for the sake of their parasites.

In America, many hardworking people who are not of the looter / moocher persuasion routinely vote for entitlements, or for politicians who support ever-expanding programs such as Universal Health Care, Public Education and Welfare.

To be a successful 'producer' in a competitive economy, one has to be reasonably smart. So why do so many get smart people get conned?

In the Leftist credo: Altruism is worshipped as an unlimited virtue & an un-earned Guilt is reserved for those who succeed. Unless the producers in our society reject both those principles, they are easy prey for Leftist moochers.

A recent article in the New York Times caught my attention. It is titled "Jobs Abroad Support ‘Model’ State in India" and may be found at this link.

Although the NYTimes correspondent Jason DeParle attempts to show both sides of this story, a reader can't help being impressed - at least initially - by the achievements of the Socialist state. After all, when one considers that the state (which has been run by the local Communist Party since 1957) is a role model that boasts:

* a life expectancy of 74 years - almost as good as the average of 77 years for Americans,
* a 91% literacy rate - approaching the 99% literacy rate in America,
* a well-established minimum wage, and Government run health clinics and schools,
* hostility to business, with heavy regulation & militant unions,
* Government as the largest employer,

wouldn't everyone want to live, work and prosper there?

But that is exactly the problem! 

Despite the glowing statistics mentioned above, one-sixth of the State's workforce are migrants who live & work abroad while remitting $5B annually to their state's economy. Those remittances account for 25% of the State's economy, which is not bad considering that the unemployment rate in the State is at 20%.

What do the 'experts' think of all this?

* a United Nations report praised the state’s “impressive advances in the spheres of health and education.”
* Amartya Sen, a Nobel laureate in economics, argues (in a book with Jean Dreze) that its “outstanding social achievements” were of “far-reaching significance” in other countries.
* In a book on three places that inspire global hope, Bill McKibben, an American, wrote that the State "demonstrates that a low-level economy can create a decent life” and shows that “sharing works.”

To be fair, the NY TImes article also mentions some critics:

* "far from escaping capitalism, they say, this celebrated corner of the developing world is painfully dependent on it"
* “There would have been starvation deaths in Kerala if there had been no migration. The Kerala model is good to read about but not practically applicable to any part of the world, including Kerala.”
* “So many educated people are here, but we have no jobs,”

While the article strives to be even-handed, the overall tone is positive, ending by quoting an admirer of the State's policies: Professor Franke, the Kerala admirer, said the economic forces that lead people to migrate were beyond the state’s control. “But what’s unique about Kerala is that the benefits are likely to be shared in a more fair and just way,” he said.

“I wouldn’t say it discredits the model,” Mr. Franke said of Kerala’s migration. “It shows that it has weaknesses.”

Clearly, there is nothing wrong with the people of the State of Kerala. They are literate, industrious and capable of putting up with adverse conditions in foreign countries to keep their families afloat. In fact, they are to be commended for their tenacity and hard work. It is the socialist system that has failed them.

Parallels may be found in other Socialist or semi-Socialist countries. Their most notable exports are their hardest-working, educated, entrepreneurial citizens.

But, what about the vaunted halls of academia that one hears about in Socialist countries?

Well, in a sort of back-handed way, the lack of private enterprise actually helped make their Universities better .. and this applies to countries like China, India etc. For more on this read: Successful Soviets - an oxymoron?

PHASE1 (1st five yrs)
* Medicare/Medicaid vouchers for the poor and elderly - yes, this perpetuates the status quo, but fairness dictates a short term 'amnesty'
* cease Medicare 'deduction' and employer match
* return the previously extorted Medicare funds (with interest) into the Health Savings Accounts of individuals
* continue tax deductibility of Health Savings Accounts - employers may choose to contribute into the Health Savings Accounts of their employees
* fee for service begins to eliminate the need for insurance companies EXCEPT for catastrophic coverage
* costs start to come down (supply-and-demand at work)

PHASE2 (next five yrs)
* Healthcare vouchers ONLY for the poor and/or for those who are above a certain 'cut-off' age
* tax relief for everyone else
* end tax deductibility of Health Savings Accounts

PHASE3 (the future)
* no more Medicare, Medicaid etc.
* the poor are helped by voluntary, private charity
* Return to fee-for-service
* Health insurance is relegated to its rightful status - as a hedge against catastrophic illness

Opponents will charge that it is too cold & heartless. Inevitably there will be some who can't afford medical care, requiring private charity to intercede on their behalf. In reality, the lower costs would ensure that there would be a decrease in the number of people who can't afford medical care.

Actually our healthcare system is less screwed up than our education system! At least Govt does not (with some exceptions) own and operate most of the hospitals. So, the above solution is easier than my proposal for fixing K-12 education 

The above solutions do not 'feel good', but they will work. However, it may be difficult to get a Presidential candidate to take this 'tough love' approach - for fear that it may not resonate in present-day Peoria where populism prevails.

Note: TH blogs are rife with verbal jousting between people from all four quadrants of the Secular/Religious, Liberal/Conservative divide. Upon closer inspection, it appears as though some adversaries actually share similar values - although those values may be derived from different sources.

For the sake of clarity, let's start with some definitions:

Values: that which an individual seeks to obtain or retain; e.g. most Americans would agree that Education is a Value.

Virtues: actions taken to obtain or retain values; most Americans would agree that working hard and staying in school are virtuous actions taken to obtain a good Education.

Joy: achieved when one succeeds in obtaining or retaining one's values; what a person feels when they graduate from school or college with a good Education! 

The above definitions apply to atheists and religious people as well. 

It is true that differences can exist in the values that different people hold - but more often, rational people share similar values, although the source of those values may be different.

For example, many secular people and most religious people believe in the value of marriage, particularly when children are involved. In the case of religious people, the source of that value may be a religious covenant. Secular couples on the other hand, may arrive at the same value without the religious significance of marriage.

But when debating which one 'wins' - it really matters what values are being considered on both sides. Also, the actions that different people suggest to attain the same values may differ.

So, it is possible for an atheist and a religious person to have the same values. Of course, there could also be complete disagreement in the value system of two religious people, or two atheists.

Examples of complete disagreement despite seeming similarities:
* an anarchist-type atheist, who thinks that it is OK to rob or kill vs. an atheist who believes in hard work, consistency and disciplined self-interest.

* a religious bomber (whether Mohammed Atta or McVeigh) vs. a religious person who believes in a strong work ethic, family etc.

A few moments of introspection usually help crystallize a person's world-view along the value-axis. Then, without debating the different sources of those values, we can focus on the values themselves. It may surprise us to find that there may be more similarities than differences within the American public despite the labeling that politicians use to divide us!

But, we should also consider that a suicide bomber feels a perverse kind of 'joy' just before he blows himself up. After all, he has just attained his 'value' which just happened to be the destruction of innocent lives. In his loony-tunes world, his action is 'virtuous', truly deserving of multiple virginal defloration rewards in his benighted paradise.

For the record, my sympathies are with the poor virgins!

So, it comes down to this: happiness depends on your value system. So, the 'pursuit of happiness' (per se) cannot be defined as a universal 'virtue', although it has come to be known as the foundation of a free society.

Values, on the other hand, make all the difference.

There hasn't been anything like this since 1925, when Jennings and Darrow clashed in Dayton, TN - in the trial that came to be called the Scopes Monkey Trial.

Now, coming soon to a television screen near you - brought to you by the Fox(N) and CSPAN(Z) faux networks - a debate that will provide definitive answers to a divided nation on crucial economic questions of the century such as "What is the correct role of Government in American Economics".

A clash of Titans - panel leader Krugman (for the Left) and panel leader Sowell (for the Right).

Are you sick of the posturing and pandering that usually accompanies debates on economics when Presidential candidates 'debate' these subjects? Do you sometimes feel that none of the contenders in the debate have the credentials to address the topics at hand, except in the form of sound-bites?
 
The shallowness that we have come to expect (from both sides) during presidential debates is partly the result of the format of the debates. More significant blame rests on the contenders themselves! After all, none of the presidential candidates have much in-depth expertise on the entire range of subjects - so, during the pre-election period, they tell us only what plays well in Peoria - or, in these modern times, what points-of-view have polled well with various demographics and 'focus-groups'.

After an election, the President must rely on policy advisors and experts with (hopefully) a lot more knowledge than the President. As long as the resulting policy directives are not in direct contradiction with the politically inspired, pre-election rhetoric of the candidate, all is well. And, if there are some inconsistencies, it can be palmed off as "facing up to new realities" or some other well-tested cliche conjured up by the President's handlers .

But this time, it is going to be different! 

Introducing, the Touchstone series of debates. Wiki definition: A touchstone is a small tablet of dark stone such as fieldstone, slate or lydite, used for assaying precious metal alloys. The metaphorical use of the word touchstone means any physical or intellectual measure by which the validity of a concept can be tested

Folks, in this series of debates, you will see policy experts frame important issues for the whole country, with facts and unequivocal analysis on subjects such as "Entitlements in general, and Universal Health Care in particular". With this background, none of our presidential candidates can posture and pander their way to electoral success at the expense of the country.

Fox(N) and CSPAN(Z) have teamed up to bring this to you, because it is important to have these "Expert debates" before the funny season begins! Primaries and national elections will continue, but there will be an expert, intellectual basis on which to proceed, instead of the current political calculus that sound more like football game strategies. With the important issues framed by experts, the politicians (and the public) will be less likely to ask for or propose unworkable solutions. There will be a new ‘touchstone’ for public policy, and hopefully, a return to common sense in our politics.

Sponsors include the RNC and the DNC. Look for their exciting local or nationwide political ads during commercial breaks. Other sponsors include your favorite blog-sites, issues groups and and all the other usual suspects. For product placement opportunities (I mean, just think of the vision of Paul Krugman or Thomas Sowell thoughtfully sipping a can of (your product here)). Contact the abovementioned fake networks for more on these exciting sponsorship opportunities..

Stay tuned for more announcements about this exciting (but completely fake) series of debates. The series on Economics will be followed by other Expert Series with different panels weighing-in on topics such as Education, Foreign Policy, the Environment and Law. Finally, there will be a series devoted to Societal & Family Matters, in which a special panel will address complex social issues .

Format (for the economic debate): Sowell, Williams et al on one side, facing Krugman et al. With full access to data, fact checking by experts & peer review. No time limits, no sneaky mediator questions, no in-studio audiences or cheering sections to distract from serious, factual discussion.

The debate on economics will span five days, with one 3hr session every morning devoted to a particular topic. Each side would present a multimedia presentation, to be discussed and dissected in-depth. Each days morning session would be followed with an afternoon Q&A as well as peer review, so that neither side could get away with incomplete, unsubstantiated or incorrect arguments.

DVDs and transcripts will be available through the usual fake commecial channels. Pre-order your copy today!

 

From "Urbanlegends.about.com"
New Dollar Coin Omits 'In God We Trust'

Netlore Archive: Email rumor claims the motto 'In God We Trust' was omitted from the new one-dollar U.S. coin issued in February 2007

Description: Email flier
Circulating since: February 2007
Status: Partly true
Analysis: See below

Email example contributed by George S., 27 February 2007:

This new coin came out this month The U.S. Mint hopes the redesigned $1 coin will win acceptance with consumers. It does not have In God We Trust on it. Another way of leaving God out. Send this on and let consumers decide if it will win acceptance or not.

Comments: (Updated) According to the U.S. Mint, an unknown number of new one-dollar George Washington coins (at least 50,000 of them, by one estimate) were erroneously struck without the motto "In God We Trust" and found their way into the batch of 300 million issued on February 15, 2007. A rumor (see above) began circulating soon afterward to the effect that the religious slogan, which has been a standard inscription on U.S. coins since 1938 and the national motto since 1956, was intentionally omitted from the entire run of one-dollar coins. The rumor is false, though it remains unclear whether it was inspired by the minting error or the fact that the newly designed coin, properly manufactured, bears the inscription "In God We Trust" on its outer edge instead of its face, per the Presidential $1 Coin Act of 2005:

About.com Coins Guide Susan Headley has been following the minting snafu since it was first discovered by collectors in February 2007 and sums it all up in her Washington Dollar Plain Edge Coins FAQ.

BAGHDAD, Iraq (CNN) -- "This is our life now; it's going to start again!"

CNN's Arwa Damon at times found herself forgetting she was on live TV.

Anita, an interpreter with the U.S. military, screamed into the microphone over the celebration racket after Iraq won the Asia Cup this weekend.

I had a ridiculous grin plastered across my face during our coverage. I kept turning toward the screen whenever the room erupted, not wanting to miss a moment, forgetting that I was live on air.

For the Iraqis, faces covered in paint, and the Americans who joined them in jubilation -- some even sporting Iraqi sports uniforms -- the victory was a moment the country never expected to enjoy. 
 
Read the CNN article titled: "Rare jubilation for a war-torn nation"

If you watched the (D) candidates at the YouTube/CNN debate last night, you may have been aware of a sickening sensation that began in the pit of your stomach and then headed north. 

In my case, the above symptoms occurred when the candidates were discussing the merits of various Universal Health Care plans. There was no discussion about whether UHC was moral or fair to the providers of Health Care. In fact, the providers were roundly criticized and subjected to the outraged indignation of the candidates.

Nor was there any mention of the efficacy of UHC in delivering high-quality health care.

Not one (D) candidate expressed the viewpoint that in light of all the failed entitlement programs that currently exist, we may want to rethink the very concept of entitlements before we even consider tacking on this new behemoth.

If you are a Leftist, instead of intestinal discomfort, you may have felt the comfort of knowing that soon, oh so very soon, all your health care problems would be swept away as you were nestled snugly in the bosom of the State, cocooned by the warmth and generosity of Universal Health Care. In that case, you may have cheered on your favorite candidate as s/he scored rhetorical points against the evil providers?

It is beginning to appear that UHC is a foregone conclusion by 2009. Why? Because to anyone that is even slightly left-of-center, it appears as a panacea. The rhetoric that is most often heard is: "If the US is the only Western democracy that doesn't 'protect all its citizens' clearly, there must be something wrong with US."

But how do conservatives view UHC? I refer not to the ivory-tower, intellectuals (and TH bloggers) - but real-world voters ..

I must confess that it has a seductive appeal - even for a conservative business owner like me. When I spend $250/mo/employee on health insurance, it is tempting to think of a nanny state stepping in, wiping my tears away, and writing that check on my behalf. It takes some thought to make a connection between that 'warm, fuzzy feeling' and the fact that with UHC, my six-figured annual business taxes will rise by at least 20%.

It is even more difficult for those Americans who are honest, hardworking, conservative and poor to take an ideological stance against UHC on the grounds that it is unfair.

A post by "True American" on a recent Townhall thread caught my attention:
 
True American: "I have no family and can't afford health insurance. Although I work about 45-50 hours a week as a laborer on a landscaping crew my $10/hr doesn't pay for much more than rent and (some) food. While my wages are low due to the influx of illegal immigrants throughout the southeast the fact is I can't afford to get sick. I'm no socialist but healthcare is a dream in this economy."

And later, in the same thread, he writes (in response to another poster): "your husband sounds like a good employer. with all due respect, how does he compete with employers like mine, who will fire me if I have a sick day and doesn't have to factor in employee health into their costs?"

The angst of this poster comes across in his writing.  He sounds like a fiscal conservative who understands the ideological failure of a welfare-state. But, can anyone expect him to vote against a candidate who provides him 'free' health care? If our country allows illegal immigrants to undercut him in the job market, can you fault him for opting for health care as an entitlement.

Yes, I'm aware that two wrongs don't make a right, but UHC will become reality because of our previous mistakes. Every entitlement is a stepping stone to another. If  "True American" is paying taxes to support the Public Education of his neighbor's kids (remember, he has no family), can anyone blame him for expecting something in return?

Although I fear that the tide has turned on this topic, there are plenty of intellectual, moral and pragmatic arguments against UHC. An article that was posted today at WSJ's Opinionjournal.com explains the true costs involved with free health care - in real-world terms. 

"When Louis Brandeis praised the 50 states as "laboratories of democracy," he didn't claim that every policy experiment would work. So we hope the eyes of America will turn to Wisconsin, and the effort by Madison Democrats to make that "progressive" state a Petri dish for government-run health care.

This exercise is especially instructive, because it reveals where the "single-payer," universal coverage folks end up. Democrats who run the Wisconsin Senate have dropped the Washington pretense of incremental health-care reform and moved directly to passing a plan to insure every resident under the age of 65 in the state. And, wow, is "free" health care expensive. The plan would cost an estimated $15.2 billion, or $3 billion more than the state currently collects in all income, sales and corporate income taxes. It represents an average of $510 a month in higher taxes for every Wisconsin worker.

Employees and businesses would pay for the plan by sharing the cost of a new 14.5% employment tax on wages. Wisconsin businesses would have to compete with out-of-state businesses and foreign rivals while shouldering a 29.8% combined federal-state payroll tax, nearly double the 15.3% payroll tax paid by non-Wisconsin firms for Social Security and Medicare combined. "

Read the article titled "Cheese Headcases" at OpinionJournal.com.

 

Defining sacrifice: it is the exchange of something of value for something of lesser value.

A parent who drives an old, beat-up car so that s/he can send a child to a good private school is not sacrificing.

Why?

Because s/he values the kid's education more than the 'new car smell'.

If s/he valued the new car more than the kid's education then it would be a sacrifice.

Incidentally, this is more than just a linguistic or semantic point. It is the basis of the inverted, Leftist world-view that values sacrifice over self-interest. In fact, the road to socialism begins with the acceptance of sacrifice as an unlimited virtue.

When sacrifice is accepted as an unlimited virtue, one person's need becomes a blank-check that has to be cashed by a person of ability. Whether that need is food, shelter or medical care, productive people are instructed to sacrifice their money or their time to fulfil that need.

Let's apply the terminology of economics to the issue. Borrowing freely from WIki:

The law of supply states that quantity supplied is related to price. It is often depicted as directly proportional to price: the higher the price of the product, the more the producer will supply. The law of demand is normally depicted as an inverse relation of quantity demanded and price: the higher the price of the product, the less the consumer will demand. The price of the product acts as a messenger between consumer and supplier - each plays their role without intervention or external control.

The laws of supply and demand state that the equilibrium market price and quantity of a commodity is at the intersection of consumer demand and producer supply. Here, the quantity supplied equals the quantity demanded (as in the Figure), that is, there is an equilibrium that is created without any external intervention. 

In the topsy-turvy Leftist world, people accept the proposition that  "sacrifice is an unlimited virtue". Suddenly, the "needs" of consumers become an unlimited blank-check drawn on the suppliers. The more something costs, the higher the demand for it. For example, as Health Care costs rise, so does the demand. The demand curve (Price vs. Quantity) shows a direct proportionality instead of the usual inverse relationship!

If an equilibrium exists at all, it must be at a higher price than before due to the change in the demand curve.

What happens to the "suppliers"? To mitigate the price increase caused by a 'need-based' demand curve, Leftists typically require suppliers to continue to deliver their products and services at 'fixed' prices, irrespective of their own self-interest, and much below the equilibrium level. The 'fixed' price will cause some suppliers to stop producing - but others may continue to produce as long as someone (Govt = single payer) can pay the higher prices. It is axiomatic that taxes must go up to pay for the increased prices.

The result of this intervention is that there will be a scarcity of commodities - although no such scarcity existed previously, when suppliers and consumers reached an equilibrium of price and quantity.

I don't knock Mother Theresa and Gandhi for their individual choices and actions. Within the context of their chosen philosophies, they were exemplary and consistent practitioners.

I do, however, question the validity of altruism-based philosophies in general - without distinction as to whether they derive from Catholicism (e.g. Mother Theresa) or Hinduism (e.g. Gandhi) - as being either fair or efficacious.

Incidentally, I have the same problem with non-religious altruism. So, this isn't an anti-religious position, but a consistently anti-altruism position. This is important, because many religious people believe (incorrectly) that altruism lies solely within their province. Political ideologies such as Socialism (and its big brother Communism) are also based on perverse altruistic principles.

FAIRNESS
Why is Altruism unfair?
Because it makes victims and slaves of one segment of the population while making parasites of the rest. We saw this 'divide' in Soviet Russia - until the time when the slaves revolted and the entire system collapsed.

What if people are voluntarily altruistic?
That is not necessarily a problem, but if everyone dropped out of profit-making enterprises and went off to 'help the poor', there would be a lot more poor people!

On our planet, nothing is handed to us for consumption; even low-hanging fruit have to be plucked before they can be eaten. And, humans will only work for themselves - otherwise Socialism would've been a great hit! Altruism can only exist if there are productive, selfish people around somewhere to provide 'funds' behind the blank check of altruistic people.

Personal note: in the 1980s, I had the opportunity to visit Calcutta, India - the city in which Mother Theresa spent most of her life (from the 1940s through the 1990s).

As a visitor, I was struck by the unimaginable level of poverty and disease in Calcutta. It is far more visible in Calcutta than in the rest of India.

Not to take away from Mother Theresa's remarkable achievements (in the toughest of all possible environments), but semi-socialist India's policies outpaced her healing touch. The 'system' ground out millions more poor people every year than even Mother Theresa could heal.

However, Mother Theresa deserves full credit for trying to help the victims of Socialism.

EFFICACY
The salubrious effects of Capitalism on a city/state/country are tangible, particularly in a poor country like India. I haven't had a chance to visit India in recent times, but I've heard from people who have visited industrial areas such as Bangalore, a city in Southern India. I understand that it compares quite favorably with Calcutta (now called Kolkata), which is just a few hundred miles away!

An interesting side-note: Bill Gates (in his selfish, Capitalist, dollar-chasing incarnation, not as a philanthropist) has done a lot more for more people in India than Mother Theresa. Although that wasn't his primary motive, surely he too deserves credit for helping the victims of Socialism?

Despite all the fluff that surrounds the 'ideal' of altruism, it:
(a) doesn't accomplish very much
(b) relies on non-altruists to keep it afloat

So, why do so many people support an ideal that is unfair and inefficient?

I realize that It is almost blasphemous to speak ill of great people such as Gandhi and Mother Theresa - but it is worth noting the following:

* Gandhi (and his ideological followers such as Nehru, the first Prime Minister of free India) were proponents of Socialism.

* Sadly, Gandhi was assassinated in 1948. But India adopted a Socialist model from 1947 to 1991. This was a direct consequence of the ideological beliefs of Gandhi and his well-intentioned followers

* Poverty levels increased during that period, despite ambitious-sounding Five Year Plans (a hallmark of all Socialist countries)

One could make a connection between Gandhi's altruistic principles and the poverty that Mother Theresa fought altruistically with so much personal courage. The sad fact is that Socialism leads to poverty, which increases the need for people like Mother Theresa.

Beginning in 1991 (the post-Soviet era) however, India began to adopt semi-Capitalist policies. A decade later, India appears to be gaining momentum and could become an economic powerhouse in the decades to come..

It is interesting to note however, that the Communist Party is still the dominant political party in Bengal, the state within which Kolkata lies. Any economic improvements in Mother Theresa's adopted city would have to come in spite of their local government!

 .. when he opined "Greed, for lack of a better word, is good." I realize that he is a fictional character in a movie. And although I don't remember all the details of the movie, ol' Gordo came to a sticky end in the movie - I think that he was eaten by either ET or Godzilla!

Gordo's rather reptilian name (and his untimely passing) are Hollywood's way of convincing us that:
* self-interest is a 'base' instinct in humans
* good humans should practice altruism
* selflessness is virtuous and should be revered

It is no surprise that Hollywood would push the above philosopy. After all, that is the essence of the Leftist credo - but, observe that it is also eerily reminiscent of most religious teachings.

The fact that it goes against the reality of incentive-driven human action is somehow ignored. In fact, this credo has been used successfully (with religion-inspired altruism as a sort of catalyst / facilitator) to gain power and control over others. How ironic is it that Leftists can subvert altruism into a weapon of control and power? How stupid are we that so many of us fall for it?

In the jungle, no one would ask a deer to 'walk, don't run' - for a deer to work against its nature would mean certain death for the deer. But humans are constantly asked to work against their nature. Unattainable (and actually immoral) altruistic 'ideals' are raised that are contrary to human nature.

Leftists create grandiose schemes such as Public Education & Universal Health Care which cannot possibly work with 'normal' humans. You may ask, what is a 'normal' human in this context? Answer: One who responds to incentives based on self-interest.

When those selfless (actually sacrificial) schemes fail, it is blamed on the 'selfish-gene' that inhabits only the bodies of the 'greedy conservative sumbiches' among us.

There have been recent examples of anti-gouging prosecution in which high-minded District Attorneys have initiated legal action against individuals who provided gas, food, water, ice and other commodities at 'inflated prices' in the wake of natural disasters.

Those who advocate or prosecute anti-gouging policies are perpetrators of an ugly fraud against individuals and companies that have broken no objective laws (since there is no force employed in the transaction).

Although the ostensible purpose of those District Attorneys is to 'protect' consumers, the end result of anti-gouging policies is to remove or reduce the supply of those high-priced commodities at a time of high demand. Price in a free-market system is a messenger, a conveyor of information, and serves to properly allocate a resource to its best use at the prevailing price.

All the altruism in the world could not get ice or drinking water into a disaster zone quickly - but self-interest in the form of the higher prices earned by risk-takers would make that happen. If self-interest were encouraged in our culture (despite the circumstances), the proper role of Govt would be to ensure an orderly market, free from chaos and violence. In reality, there would quickly be enough private suppliers that would mobilize to bring essentials into disaster areas, with the usual competitive forces bringing prices into line quickly. 

Unfortunately, even those who believe in 'free-market' principles don't often give too much thought to the underlying moral and ethical principles. When they do, they have to resolve the conflict that it creates with their preconceptions regarding charity and sacrifice.

Note: I recommend the article "Taking from those in need" on the blog titled "Fletch for Freedom"

This is about a friend - yes, really, this IS about a friend - who happens to be a very good engineer.

He charges $150/hr for his engineering consulting services, and often has to turn away projects because of the high demand for his skillset.

On weekends, he spends as much as 20hrs, building homes for Habitat for Humanity - because he 'believes in giving back'.

While consuming an excellent 15yr old Laphroaig single-malt scotch at his house the other night, we got into one of our congenial discussions.

[BTW, did anyone notice the clever product placement in the previous sentence? I am hoping to get a lifetime supply of Laphroaig with this innovative scheme. I'm open to offers from Porsche and Ferrari as well.]

Anyway, while luxuriating under the smoky mellowness that comes from (your name here) single-malt scotch, I suggested to my friend that he should consider working on additional engineering projects for 16hrs during the weekend. He could then use the extra $2400 to pay an out-of-work handyman $60/hr to work a 40hr week, building those homes.  That would give an out-of-work handyman steady employment, putting food on his family's table.

The handyman would get a lot more home-building done in one week than my friend could do over a weekend. Also, since the handyman would probably have better skills in home-building than my intellectual friend, the recipients of this generosity would get better quality housing.

His response - it wouldn't be the same, I feel so much better while working on the homes that I know will help the poor. He also enjoys the camaraderie of working with other like-minded people, for a noble cause.

Question: Is he being selfish? 

Certainly, he has a right to do whatever he wants with his time (and I wouldn't dream of abrogating that right). But isn't this a serious misallocation of resources - a common complaint that conservatives make against socialism?

Let me begin by saying that I admire Mother Theresa for her:

* dedication and perseverance
* single-mindedness and focus
* ability to tolerate hardship in pursuit of her cause
* passionate belief in her cause

However, she presents a particularly thorny problem for the anti-altruism viewpoint!

Personal anecdote:  I sometimes get called upon to 'counsel' kids in their late teens and early twenties. In most cases, it is their parents who send them to me with the suggestion "Talk to Unca VoR, he'll set you straight!"

It is amazing how many times Mother Theresa's name is raised by earnest, thoughtful, intelligent youngsters who have decided to quit school and:

* become a missionary in Africa
* volunteer for the Peace Corps
* fight for environmental causes
* chain themselves to the White House fence

Most of these kids are bubbling with altruistic fervor that begins with years of religious values (not all bad) which set them up for a few years of indoctrination by 'selfless' teachers with a Leftist slant (almost all bad).

Therefore, I bait the hook by asking whether 'tis nobler to donate $5000 a month or $50 a month. The answer is usually the former - but, "I don't care about money". Did I mention that these kids are usually from affluent homes?

My next point is whether they could help (insert favorite cause here) more by chaining themselves to a fence, or staying in school, becoming a (engineer, lawyer, doctor ..) and enhancing their value from $7/hr to $250/hr? Wouldn't they prefer to argue their viewpoint in the Supreme Court, instead of carrying a sign along with the rest of the mob? The answer remains (albeit weaker, this time) "But I don't care about money".

Using their definition, I ask "how could you be so 'selfish' as to look for the instant gratification of marching with attractive people in the streets - when you could do so much more after you get an education? If you were educated, you could (a) donate more or (b) work tirelessly and passionately as an educated crusader for justice - instead of being part of the rabble."

OK, so my success rate isn't very high! But they sometimes send me an email when they are (a) getting married or (b) graduating from college.

Back on the topic of Mother Theresa: I have a lot of respect for her, but my problem is with a world-view that reveres her and despises Bill Gates (except for the few millions he gives away).

Quoting (selfishly) from "Somethin' dirty goin' on?"

"This is a philosophical dichotomy that causes us to 'feel' our way towards huge mistakes - with the noblest intentions at heart and the counterfeit currency of altruism. As a result, we 'feel' that Public Education is the only way that we can ensure a quality education. Or, we just hate the idea that doctors, nurses, hospitals and pharmaceutical companies make a profit while providing life-saving services and products. So, we 'feel' our way towards Universal Health Care.

The result: we pretend to be altruistic, and fake our way through life. Since our affluence comes from actions taken in our self-interest, we feel guilty for our success.

We claim altruism as a Value - but secretly value our affluence - setting ourselves up for guilt over our well-deserved high standard of living. So, the Joy of attaining our real value (earned through hard work and careful risk-taking) has to be hidden.

Perversely, we honor philanthropy over well-earned wealth. We seem to forget that the process of earning wealth is actually more difficult than the process of giving some of it away. The process of earning wealth also directly or indirectly contributes much more to 'society' than a wealthy person's philanthropy. So, why is Bill Gates reviled for earning billions (while revolutionizing the business world), but lauded for giving away a few millions?

What is it in human nature that sets us up for these contradictions? Why are we so susceptible to the mostly manufactured aura of selflessness? If we could answer that, we would have a good understanding of the instinctive dislike that many people have of the profit motive. "

On this blog, I have spent quite some time trying to analyze the causes of America's slow, but inexorable slouch towards the Left. 

Please note that I give due credit for America's success to sound Judeo-Christian principles. However, I have suggested that it is the infiltration of religion-inspired altruism (and the concept of unearned guilt)  into our politics that is responsible for the predisposition of a majority of Americans to accept (a) redistributive economic policies and (b) policies that do not put America's self-interest before others.

It is often stated that one of America's sources of strength is Democracy. Yes, I'm aware of the fact that we are a Republic, and that the distinction is significant. However, we are a Republic that tends to act as though it is a Democracy - to our detriment.

Is there something in Democracy itself that makes a Leftward tilt inevitable?

Consider the following:

* American principles of justice and fairness mandate the need for equality of opportunity, but not of outcomes,

* the concept of equity is predominant in Leftist rhetoric, leading to their entrenchment in positions that seek an equality of outcomes.

* in a democracy, leaders have to seek election (and re-election) by winning a majority of votes from the electorate.

* Since every vote counts equally in a democracy, human predilections such as class envy can play a role in voting patterns. Notice how those weaknesses align very nicely with the Leftist concept of equity.

* It may be easy to brand those moral lapses as un-American, but politicians in a democracy learn how exploit them by proposing redistributive economic policies.

The result: Leftist policies gain ascendancy in America, and with each passing generation we undermine our strength by adopting policies such as Welfare, Medicare, Public Education, Universal Health Care etc.

Unlike that of a Republic, the inherent nature of a democracy forces our leaders to pander to human weaknesses, leading to a Leftward tilt. So, if we expect a democracy to lean to the Right, we are banking on a level of intelligence in our electorate that can overcome this inherently leftward bias.
 
I welcome comments and insights from readers on this topic.