Saturday, December 19, 2009

Of all of the promises forwarded in support health care reform, the most risible is that it will reduce fraud and abuse. Think for a moment how much legislative energy is devoted to "closing loopholes" in one set of statutes or another. Look at how many bills seek to amend current laws because of unanticipated exploitation that degrades the law's effectiveness. the simple fact is that in most cases, people who make their living exploiting laws are much, much...much smarter than the politicians who make those laws.

When a ship is commissioned, it is customary to subject it to a "shakedown cruise" to work out glitches in the ship's systems, uncover defects in design or construction and generally verify that the vessel is suitable to the purposes for which it is intended. Obviously, every eventuality cannot be foreseen, and problems only become apparent when subjected to real-world use. Now consider that our Congress seeks to impose a novel scheme, creating over a hundred new entities that are to interact somehow, onto an industry that involves sixteen percent of the American economy. Does anyone seriously think that the system will not contain a miasma of faults, opportunities for fraud, insufficient oversight and inefficiencies born of too much wishful thinking and not enough experience?

Some people will become fabulously wealthy exploiting the half-baked policies, venal pandering and sheer stupidity that Congress will apply to healthcare. Anyone who can't see this coming miles away simply isn't paying attention.

Sunday, December 13, 2009


I believe that Obama doesn't want to be president as much be an ex-president. I think he is much more enthralled with the following he would attract speechifying with the gravitas of having been the president than he is with the burdens of having to make decisions. He is much more comfortable in the rhetorical world of strawmen and sonorous platitudes than in the real-world where facts often vitiate the pleasant-sounding theories and aspirations of his speeches.

I suspect that Obama will come to the same conclusion that Palin did: that responsibility is limiting, and that political genius and divine insight can be frustrated by the tether of executive responsibilities. Deep down, I doubt that Obama has much ambition to be remembered for the nuts and bolts of his managerial responsibilities, but instead yearns to be a transcendent figure, lecturing across time and continents. In short, I suspect that Obama knows knows that his influence is limited by the day-to-day responsibilities, because the hard decisions he has to make will give lie to the vaporous but seductive ideals that he would rather talk about.

Sunday, November 29, 2009


One of the biggest concerns about the present government's ambitious prgrams is the near-certainty of the corruption they will create.

The essence of power is the ability to decide the winners and losers in some area of endeavor. This is a basic, fundamental fact, unmodified by circumstances. Our current political class realizes this and has endeavored to use political programs to acquire and maintain power. The clearest expample of this is in the healthcare debate. The advocates of healthcare reform do not want rigorous competition; to the contrary they want an oligopoly of a few entities, who are dependent on the favor of the government for success. This ensures that one or two large insurers buys political favor with campaign contributions and support of pet programs. It creates the scenario where government malice inhibits upstart competition at the behest of those interests buying support from the political class.

This scenario favors the politicians who assume to themselves the ability to decide who will prosper and, independent of merit, who will struggle in the bureaucratic wateland of governemtn provided healthcare. To see this principle in effect, consider that the House version of healthcare reform provides for penalties to states that limit litigation awards in medical malpractice cases, or which undertake to limit attorney's fees. This is how the special interest group of trial lawyers will be able to access th etrillions of dollars of publc money that will be confiscated in the name of reform. This is a bald and cynical example of the malignancies that the system seeks to instill. It seeks to create a large, publicly-supplied fund of trillions of dollars, to which special interests seek access by legislative favors. This results in corruption in its purest form.

Wednesday, November 11, 2009


Overpopulation alarmists often wring their hands and fret over some ill-defined number known as the planet's "carrying capacity." This is maximum number of human beings that the resources of Earth are theoretically capable of sustaining at one time, and represents the practical upper limit of population. No one knows for sure what this number is, but we can be fairly certain that human beings have been able to revise it upward.

If human beings were solely limited to hunting and gathering for subsistence, the planet likely could not support more than a few hundred million people at a time, and familne would probalby be a yearly occurrence somewhere or other. Because humans developed agriculture, irrigation systems, chemistry, etc., it is safe to say that right now there are many more humans alive than the planet could provide for were we limited only to harvesting the wild. A more immediate example is also suggested by the ability of human beings to live for periods underwater and in outerspace, environments that are fatal to mankind in the absence of technology.

It is reasonable then to wonder if the principle involved, i.e. that technological progress has expanded the native ability of the planet to support humanity, is applicable generally. Has the progress that civilization has enabled led mankind to be so dependent on this progress that disaster will result in its absence? We can see many areas where civilization had led to possibilities that were unavailable to our more feral ancestors. We have made progress, not only in the areas of technology, but in our attitudes toward others. We have become more refined in our views on exploitation of others, crime and punishment, charity, and human rights. Surely the progress made by civilization (including western civilization with the Renaissance, Enlightenment, and notions of individual liberty) have resulted in improvements in the human condition, which would suffer greatly were that progress to be abandoned. Just as the development of agriculture allowed the human race to expand beyond the limits imposed by nature, political philosophy that recognized and respected the value of individual liberty allowed mankind to live leves beyond struggles for survival.

The reason this is an issue is because there are those who openly disdain western civilization, and who would reject the centuries of human progress achieved through experience, struggle and a significant amount of bloodshed. They prefer that the mass of men live lives under the restraint of dubious theories.

Not everyone is pleased with the technological accomplishments of mankind. There are some environmental purists who pine for a planet unmarred by man's hand, famine and misery be damned. Likewise there are those zealots that are hostile to individual liberty, because it conflicts with idealilzed notions of humanity as a uniform, conforming hive.

If mankind were to turn away from agriculture, the planet would revert to it natural carrying capacity, necessitationg a compensatory die-off of billions. If mankind were to turn away from the advances that arise from individual rights and individual liberty, the results would be no less disastrous.

Monday, November 09, 2009


One of the criticisms of federal bailouts of this bank, or that company is that they prop up failure.

Subsdizing a failed industry or business model interferes with the quite natural and beneficial process of eliminating outdated and inefficient institutions and allowing more healthy and vigorous entities to replace them. The prospect of bailouts makes the need for development and improvement less urgent, and risks sustaining failing entities to the overall detriment of everyone else. They are analogous to putting a terminal patient on life support so that she may live long enough to die of something more painful.

Our society does not limit itself to bailing out companies and industries. Its wrong-headedness has led it to blunder into supporting cultural conflicts in the same way that it throws good money after bad on Wall Street. Whereas the financial bailouts of TARP and the stimulus have given us deficits and flabby competetiveness, government patronage of disparate customs has given us the disaster of multiculturalism.

The fallacy of multiculturalism is that disparate customs and traditions are simply aesthetic choices that different people make; different strokes as it were. In fact traditions and customs evolve because the are useful to the cultures and environments in which they develop. This usefulness often disappears when transplanted to different locales, where the populations flourish with traditions and customs of their own. It should not be expected that the Bedouin customs of the Arabian peninsula would be particularly useful among the agrarian economy of Ireland, or in the significantly different environment of the Northwest Territories. Societies that subsist in regions with a single dietary staple will develop different customs and traditions than those from more fertile regions. One would expect nomads to have different values than a people that has for centuries taken their living from the same village. Customs and traditions flourish because they are useful, not because they are fashionable.

When customs and traditions lose their usefulness, it is quite appropriate to let them fade away. Thus, the Indian custom of sati, i.e. immolating widows, and the despicable customs of female circucision and "honor killing" should not be accommodated in the name of diversity; if anything they should be actively eliminated. But it is not merely those cultural facets that have lost their original purposes that should wane. Some transplanted traditions and customs are detrimental to their new environment and should not be accommodated, as a matter of common sense.

Cultures, like institutions, should be left to survive or perish according to their merits, and should not be perpetuated solely to satisfy misguided notions of political correctness. Customs and traditions must be relevant and useful to their times, their environments and their purposes. They should not be used as excuses to perpetuate the separation of people who have more legitimate intereststhan, and who interact for reasons other than "diversity." A community that does not assimilate in order to satisfy some artificial notion of multiculturalism is no different than one that remains segregated to sustain racial purity. In each case, the commonality of shared humanness is degraded in pursuit of some theoretical idiocy.

Multiculturalism can be corrosive, not because it recognizes different cultures as valuable, but because it refuses to recognize that some customs, such as stoning aldulterers, or forbidding the education of girls, are detrimental to civilized society and not simply part of some grand tapestry. Some cultural artifacts are simply out of place in certain societies, and certain centuries, and should be allowed to succumb to their own obsolescence. Left to its own course, multiculturalism eventually degenerates to segregation by another name.

Saturday, November 07, 2009


The ability of progressives to advocate seemingly detrimental policies need not be thought of as evidence of some exotic psychological quirk. A moment's reflection reveals that progressives are paradoxically opposed to progress, and simply misappropriate the title for another philosophy. What the modern progressive believes in more than anything is exceptionism. This is to be distinguished from the more familiar exceptionalism in that the latter at least contains a hint of merit and achievement.
What the modern progressive believes is that rules are for other people. It is only the ideologically pure that may obtain exemption from the misery that they prescribe for others under the guise of "fairness." Thus, Al Gore can deplete an entire oil field to lecture us on the evils of fossil fuels; President Obama can crank the heat in the oval office while he practices his sonorous admonition to the hoi polloi that they must "sacrifice." Timothy Geithner can claim carelessness and self-interest as exemptions on his own tax returns while venerating the letter of the law for others. Chris Dodd, Barney Frank, and Nancy Pelosi can be very solemn-faced about the rules when prescribing them for others, but view their own conduct contrary to those rules as the tribute that audacity pays to ideology.
Progressives seem oblivious to hypocrisy because they think themselves incapable of it. Their view of fairness means that exceptions will always be made for hard cases, and any divergence between their words and conduct is merely an exception that they are entitled to by virtue of their own wonderfulness. This explains why the left are so enthralled with anecdotes and victimhood. Of course they are not worried that the government will deny their cancer therapy or their hip replacement when the time comes. They assume that an exception will be made in their case, because the denials are for others, the people clinging to their guns and bibles and so forth.
Progressives know that the cute immigrant child that brings Oprah's audience to tears will get her bone marrow transplant, because an exception will be made in her case. They see all difficult policy issues as simply vignettes of special pleading. They don't worry that costs will rise, that access will shrink, that quality will suffer, because the way they look at the world, it doesn't matter. An exception will be made in their case.

Friday, November 06, 2009

Worst Media Developments

The worst cultural developments over the last 20 years:

1.) 24 hour news. There is not enough interesting news to hold a normal persons attention during all waking hours, so the 24 hour news networks have to compensate by embellishing, speculating, and having people tell us what the news "means." There was a time when we could figure that out for ourselves. What is really corrosive about the twenty four hour news mentality however is the notion that a car chase in Biloxi, or a city councilman's use of a racial epithet in some rural backwater is something we absolutely must know, when in fact it is the immediate, mundane a crucial events in our own families and communities that should command our atention.

2.) Playing 911 calls after some tragedy. Emergency calls are not replayed because of the sharp detail they contain; on the contrary, they are played to exploit the alarm, emotion and fear of the caller. The hysteria and fear of stressed-out citizens is meant to provide "atmosphere," apparently on the theory that we could not figure out that fatal fires or horrific accidents are bad, without cues.

3.) Finding someone to blame for every misfortune. The theory behind this all too common media passtime is that life is all peace and bliss unless someone, usually for malign motives, screws it up for someone. This foolishness has progressed to the point where seemingly educated and reasonably intelligent people prove otherwise by hinting that someone is responsible for disease epidemics, natural disasters and the criminal behavior of others. You see, we all would live in an earthly paradise were we not constantly being screwed by the man...

4.) Having some commentator tell us that we will be "outraged by," "surprised by," or "will not believe" what we are about to hear or see. The media have largely abandoned relaying information that has intellectual merit and replaced it with that appealing to some base emotion. The underlying narrative is that all properly thinking persons will respond to the same emotional chords that move the media. Thus we must certainly be outraged that driver's manuals are not printed in braille, surprised that religious conservatives do not eat their young, and will not believe people sometimes make mistakes.

5.) The disregard of principle. There is a fashioable notion in teh media, as well as academia, and even our governing institutions that some things are too important to let principles stand in teh way. It is permissible, we are left to conclude, to allow a lapse in some scruple as ling as it serves some larger purpose. Thus we see the perversion of science in pursuit of ideological goals, mangling of legal process and order for political advantage, and jettisoning of journalistic ethics in favor of partisan interest. We need to recognize these affronts for what they are: corruption. We have no difficulty in recognizing corrution in some official who misuses his authority in exchange for money, and we should be no more accommodating of those who betray the principles of their profession in pursuit of ideological vanity.

Monday, November 02, 2009


Political "progressives" have several traits that do not translate well into the practice of governing a free society:

1.) They tend to think that what is importat to them should be important to everyone, and worse, seem to think that their priorities should be everyone else's priorities.

2.) They fall for the "novelist's fallacy." Progressives understand that a novelist has complete control over the fictional events of his works. He can make things up, defy logic and reality, create the impossible. What the progressive exptrapolates from this is human laws are made more or less the same way; one can draft a law to say pretty much anything. Thus, just as the navelist can make whatever he wishes happen in his novel, the progressive thinks he can make whatever he wishes happen in society by passing laws, but the consequences of laws often elude the intent of the legislator. There are forces in the world much more powerful than legislative enactments that affect the destinies of societies.

3.) When confronted with the unintended consequences of overly ambitious laws, the progressive's instinct is not to recognize those greater forces that drive such consequences, it is to tweak those laws, advancing them farther down the the path of futility. The practical progressive begins tweaking by declaring exceptions in the law's application, which exceptions apply first and foremost to the progressives who created the law. Laws are for other people; the progressive is guided by his own unshakeable sense that he is special.

Thursday, August 20, 2009

Single Payer

In August, 1972 the artist Christo made a second attempt to hang a 400 meter curtain across Rifle gap in Colorado. The display lasted 28 hours. There was no real purpose to this project other than to do it for its own sake; the artists prerogative or something. The transience and frivolity of the enterprise were not considered grounds to dissuade the artist from proceeding, no matter how objectively pointless.

The left pursues single payers for the same reason that Christo hung his curtain. It is simply a socialst ideal that should be pursued for its own sake, not because it delivers any tangible benefits, (and in fact is likely to be detrimental) to the healthcare of 300 million people. The goal is not to improve people lives by implementing enlightened policy, the goal is to satisfy an emotional yearning, to achieve a socialist ambition that origniates not in rational thought, but in a dreamy romantic fantasy unvexed by fact.

The left want single payer, not because it makes any sense, but because it is part of an orthodoxy that too few of them question. Just as Christo was forced to dismantle his creation after a few hours because of the elements, the left really don’t care what becomes of healthcare if they achieve single payer. The goal is not to improve or stabilize or even establish an enduring model. It is simply to promote the illusion of the committed activist, marching endlessly, and petulantly toward imagined paradise.

Sunday, August 16, 2009

The questions "Why is healthcare so expensive?" and "Why does healthcare need reformed?" are related, but not as closely as Obama would have us believe. Heathcare reform is essential to government obligations, not to the health of Americans.

To illustrate the principles, consider two businesses, say landscaping companies, operating in a community. Let us call the first NSLS for "Non subsidizied Landscaping." This is a very well managed business that uses the the latest technology, hires the best landscape architects and technicians, manages its finances, is responsive to customers and achieves good results. NSLS's customers are very happy with the service and are willing to pay for it, even though the costs go up as the company tries to stay on the cutting edge.

Let's call the other company SLS, for "Subsidized Landscaping." This company was started by a billionaire for his son to run. Father has deep pockets, and son is not the most astute businessman, but the company has access to father's support. The business plan for SLS was to sell pre-paid landscaping service, providing future service in exchange for small upfront payments in an attempt to secure market share. To keep customers happy, SLS has to buy services from NSLS, and because the latter's fees are increasing in response to customer demands, SLS has no choice but to pay more to provide service to customers than it collected from them in upfront fees. SLS operates at a widening loss. Son keeps hitting up moneybags father for more support until father realizes that SLS is a losing proposition. Bankruptcy is out of the question; family pride and all that.

Father decides that what he must do to control SLS's costs, and keep it from bleeding him pale, is to control the costs that SLS pays to NSLS for the services that people actually want. He cannot compete directly with NSLS on quality or efficiency, so he does the logical thing: tries to take over NSLS, so that he can control landscaping costs for the entire community by limiting the expensive services that NSLS's willing customers pay for. Finally, in order to boost the balance sheet while costs are being brought under control, Father decides to have all of SLS's and NSLS customers pay a surcharge to subsidize services for new customers, in hopes that they will provide revenue for SLS's current obligations and eventually provide revenue for future operations.

There is no time to worry about what people's yards will look like.

Not a perfect analogy of course, but it illustrates the principle: the government has to reform private healthcare because 1.) It buys services from the private system, 2.) the fees for those services are set by what people are willing to pay for service that they are satisfied with, and 3.) the government assumed obligations that it is incapable of servicing because frankly, it is not very good at delivering healthcare.


Liberals seem to be genuinely baffled by opposition to healthcare reform proposals. Their natural response is to hypothesize some malign motives for such opposition, and to, of course, demonize the "villains," in the manner of Speaker Pelosi. It does not seem to occur to the liberal reformer that there are in fact valid grounds for opposition that have nothing to do with privilege or profit or greed. It does not seem to occur to them that their "vision" assumes a set of values that are dissonant to our culture and adverse to our traditions. The left is shocked that ideas that are predators in the academy are prey in the real world.

The starkest examples, of course, are the end-of life philosophies clumsily articulated by Obama and Ezekiel Emanuel. Obama's extemporaneous musing "maybe she'd be better off taking the pain the pain medicine" assumes a societal fatigue and moral penury which we would lead us to collectively declare that some life is not worth living in a finacial sense. This is contrary to America's history as the most generous nation in history; it is antithetical to our tradition of philanthropy and charity and our moral senses.

When George H.W. Bush was shot down in World War II following a bombing raid on Chichi JIma, Japanese soldiers on the island were amazed that the U.S. Navy would dispatch a submarine to rescue a single pilot. It seemed a foolish risk and waste of resources. Similarly, the U.S. Army's liberation of the POW camp on Cabanatuan seemed extravagant by liberating soldiers who likely would never fight again. When the people of Midland Texas mobilized magnificently to rescue Jessica McClure from a well, one can only imagine the moral costs of doing nothing compared to the finacial costs of doing the right thing. We Americans pay freely to rescue half-wit hikers who get themselves lost in the wilderness, miners trapped by earthquakes, unlucky mariners caught in storms and out of bounds skiers trapped in avalanches. It seems quite natural to us to support the premature infant who is struggling for life, or the burn victim facing multiple surgeries and prolonged rehabilitation. President Obama should expect annoyance when he taps his pencil on the balance sheet and tut-tuts the fact the most Americans still believe that human life is never an ordinary thing.

I will conjecture that most Americans have an intuitive sense for what is meaningful in their lives, much more than what their life should be worth monetarily. Obama just plain sounds stupid when he presumes to lecture centenarians on what is "better" for them. President Obama has no clue whether the last three weeks of a particular person's life might be the most meaningful three weeks. It is simply a matter of individual liberty and good conscience to allow a patient to decide whether pain control or being able to participate in treasured activities is more important. The healer's role after all is not to serve the state by performing repair and routine maintenance on the vassals of Utopia, it is to minimize the effect that disease and trauma have on the ability of individuals to pursue that which is most meaningful to them. If one person opts for hospice and another in the same condition rages against the dying of the light, free from the coersion of the state, that is a positive reflection on a free society, because it respects the humanity of the individual. People who are elderly or terminally ill are just as free and just as capable of meaningful life as are the academic snobs who fret about the cost of their therapy.

The fact that Chris Matthews and Obama and Pelosi can't see that they are openly challenging the values of a significant portion of Americans, and instead attribute opposition to healthcare reform to "greed" or special interests, or racism or ignorance or whatever really just suggests that they are not nearly as smart as they think they are.

Thursday, July 09, 2009


1.) Q: Why does healthcare need reform?
A: Because a disproportionate amount of healthcare services are consumed by people who do not contribute goods and services to the economy.

2.) Q: Why does it matter if a healthcare consumer contributes to the economy?
A: Because the use of healthcare resources becomes decoupled from the revenues that pay for them. The healthcare system consists not of different tiers, but of two different patient populations. The first population consists of the employed who pay for their healthcare services as they go along, typically through the payment of health insurance premiums.Call this population the "self-sufficient population." The second group consists of everyone else: the retired, unemployed and those who cannot devote a sufficient amount of their own resources to their healthcare needs. Call this group the "non-self sufficient population."In a system where healthcare consumers pay as they go, these consumers can direct their money toward the system attributes that are most important to them, in effect allowing true market mechanisms to shape the healthcare system according to the preferences expressed in the market. As healthcare costs increase, the employed and insured have some elasticity in their allocation of income to healthcare needs. Those not paying for healthcare from current income do not have this flexibility. They either have to pay for their care from accumulated resources, have someone else, typically the governement, pay for them, or a combination of the two.

3.) Q: What are the practical differences between the self sufficient and non-self sufficient populations?
A: The non-self sufficient population by definition must have its healthcare subsidized, and the government has assumed the obligation of doing so. Members of this population have their healthcare directly limited by political concerns and the inherent constraints of public financing. "Health insurance" does not insure health; it insures the assets of the person responsible for paying for healthcare services against significant health-related expenses. It is a way of protecting against having to go into debt or bankruptcy on account of illness.It makes little sense to go into significant debt to pay for health insurance, because avoiding ruinous debt is one of the rationales of health insurance to begin with. Health insurance companies are regulated to ensure that they do not assume too much debt, and therefore do not go into debt paying for healthcare costs. This system works well as a pay-as-you go model. Health insurance premiums are paid from current income and insurance benefits are paid from current premiums. The one population that this model does not apply to is the non-self sufficient population described above. Their healthcare is largely, and necessarily financed by public debt, and the debt will increase as long as their healthcare expenses exceed the actuarial value of resources that they contributed (e.g. "paid into" medicare) while working. This is the reason why the government needs to reform healthcare: The government has obligated itself to pay the healthcare costs of the non-self sufficient population, and can only do it by taking money from those that are self-sufficient. One way or the other, the employed and those otherwise producing wealth will pay the healthcare costs of everyone. The question is whether the healthcare system will lose valuable characteristics as a result.

4.) Q: What sort of cost pressures do the insured population exert on the healthcare system?
A: The healthcare system consists of more than just raw payments for clinical services and medicines. There are several other attributes of the system that affect its expense such as innovation, access, choice, ease of use, familiarity, quality and respect for individual patient values. These are the attributes most likely to be affected by healthcare reform, because each of these involves costs beyond a basic, "good enough" package of healthcare services. Insured patients have at least some measure of influence over their care by seeking out providers and insurance carriers that emphasize those attributes most important to them. As insurance mandates become more comprehensive and insurance policies more expensive, thus pricing some patients out of a competetive market, the inusred population has less influence over its care. This is another reason why healthcare reform is necessary.

5.) Q: Why is healthcare so expensive?
A: American healthcare is very expensive, to a significant degree because it accommodates a number of American values. The most influential factor however is that Americans have expressed a preference for state of the art healthcare over good-enough healthcare.There is a reason why a fighter jet costs hundreds of times more than a Cessna 172, or why a Lamborghini costs 20 times that of a Dodge Omni. The relationship between cost and performance is not linear, and high performance systems are associated with costs out of proportion to the incremental benefit. A Lamborghini does not go twenty times faster than a Dodge. To see how this principle applies to healthcare, consider a common condition like pneumonia. Most pneumonias can be treated simply for a few dollars worth of oral antibiotics. We could cut heathcare expenditures immediately by decreeing that oral antibiotics are "good enough" care, and drastically slash the associated costs, in exchange for a few more deaths among the sickest patients. As patients get sicker and sicker however, state of the art care becomes exponentially more expensive, paradoxically in the patient population where the outcomes will be poorer despite the interventions. Ventilators, dialysis machines, intensive care units and cutting-edge drugs deliver the same marginal performance benefits that the additional cost of a Ferrari Testarossa delivers over a Honda Civic. We in the United States tolerate these expenses and inefficiencies as a matter of societal values. Healthcare is not expensive in the United States because "they" are greedy. Healthcare is expensive because "we" value care beyond what is "good enough."

6.) Q: Is healthcare a right?
A: It is not a right in the sense that anyone is entitled to have if provided for them. Part of the rationale for healthcare reform is that the amount of healthcare is limited. As a practical matter, everyone cannot claim as a right something that not everyone can have. Furthermore healthcare is a service that must be provided by skilled practitioners, and no one has a claim of right to compel the performance of services against the consent of the service provider. The United States Supreme Court has already observed that states are not obligated to pay for the healthcare expenses of indigent patients.If the phrase "healthcare is a right" is taken to mean anything, it is that the government cannot prohibit a patient from accessing those diagnostic and therapeutic interventions that are potentially beneficial to him.

7.) Q: If healthcare is not a right, then what is it?
A: Healthcare is a limited resource that must be allocated prudently, developed carefully and delivered effectively. This understates the complexity in dealing with healthcare decisions because it assumes that there are definite answers to such basic questions as "what is healthcare?" Most people think they know what healthcare is, but there is a significant lack of consensus regarding the point. Some people think that chiropractic care is healthcare, while others do not. Some people think that chiropractic is legitimate for some things, such a musculoskeletal pain, but not for others, such as cancer therapy or treatment for infertility. The list of potential healthcare modalities engendering some controversy is long: therapeutic touch, aroma therapy, naturopathy, chelation therapy, faith healing, sham surgery, magnet therapy, antidepressant therapy for adolescent behavior issues, etc. Even if there is no controversy as to whether a particular type of therapy constitutes healthcare, there are disputes as to whether they should be included in healthcare reform discussions. Examples include lasik eye surgery and cosmetic surgery.Viewing healthcare as a limited resource, and of limited scope, is a step toward ensuring that healthcare reform does not degenerate into a formless miasma of special pleading, political opportunism and fraudulent waste.

8.) Q: Why don't doctors do more to control healthcare costs?
A: In theory doctors are the ideal stewards for limited healthcare resources. They have an understanding of the potential and limitations of various diagnostic and therapeutic interventions. They consider the unique clinical characteristics and subjective values of the individual patient, and have the authority to affect the amount of resources expended to treat a given complaint. In practice however, the American healthcare system has gradually imposed a tangle of competing and conflicting interests on the management of individual patients. The ideal of the physician-patient realtionship has drifted farther from reality as more interests compete for a say in healthcare decisions.

9.) Q: Is government involvement in healthcare necessary?
A: Yes. Even if healthcare services were to be confined to transactions in a fair market, there must be some regulation to ensure that the market in fact operated fairly. Government is the appropriate institution to monitor and ensure quality and protect the population from the harmful activities of the incompetent, malicious and unscrupulous. Furthermore, the non-self sufficient population must have its healthcare subsidized, and government is seen as the most reliable entity for attending to the needs of this population.

10.) Q: Why do current healthcare reform proposals rely so heavily on government involvement?
A: The government has several attributes that private enterprise does not. The government may use force and coersion to accomplish its objectives, within prescribed Constitutional limits.It can force unpopular policies on unwilling populations. In addition the government is viewed as the ultimate deep pocket, the financier of last resort. It can compel support for programs from persons who would otherwise have no interest in them. In addition, because government has assumed the obligation to provide healthcare to a significant portion of the population, it has a stake in ensuring that reform is advantageous to government interests. Because the private payer population increases the cost of healthcare by supporting innovation, access, patient choice, etc., and because the government has undertaken to pay these costs for the non-self sufficient population, the only way the government can effectively control costs in the public systems is to constrain the costs in the private system. Ironically, government mandates on private insurers to pay for services that would not otherwise be supported in a fair market increases costs for both systems.

11.) Q: Why do government systems seem to work out okay in Canada and Great Britain?
A: The healthcare systems of Great Britain and Canada are designed to achieve different objectives than that of the United States. This is a reflection of differing values, societal expectations, and the relationship between government and citizens. Canada and Great Britain undertook to provide universal coverage by recognizing that "good enough" healthcare was significantly cheaper and adequate to meet the vast majority of healthcare needs. There is currently vigorous debate as to whether the government systems in Great Britain and Canada are working out well.

12.) Q: Why didn't a Canadian-style single payer system develop here?
A: The United States accepted the increased costs associated with limiting waiting times for various therapies, underwriting medical innovations that benefit other countries as well as our own, and allow for individual patient values to influence that patient's care. In Canada, a woman with breast cancer will get treatment. It might not be state of the art treatment, but for a majority of women, it will be good enough. Some Canadian provinces balked at providing the stunningly effective drug herceptin for economic reasons. Canadian hospitals did not provide state of the art nipple-sparing surgery for breast cancer patients, deciding that the nipple-sacrificing version was good enough for their population. This is why Belinda Stronach, a member of the Canadian Parliament and staunch defender of the Canadian single-payer model, came to the United States for nipple sparing surgery at UCLA. "Good enough" wasn't apparently good enough for her, and because the U.S. aspires to better care, Ms. Stronach had an option. There would be trade-offs involved with adopting a Canadian -style system in terms of access, rationing, waiting times and innovation. These are things that Americans have so far preferred to the benefits of a Canadian-style single payer system.

13.) Q: Do other countries have better healthcare systems than the United States?
A: It depends on whether the attributes that make the American healthcare system so expensive are included in the definition of "better." Systems that provide "good enough" healthcare will always compare favorably with the United States on the issue of cost, because the vast majority of patients could derive some benefit from much less expensive rudimentary or dated services. Most of the objective measures of a healthcare system's function are affected by factors other than health insurance, and the care that passes between a particular patient and his physician. It makes little difference in the long run if the majority of patients are treated with expensive brand name cholesterol medicines or their generic equivalents, but it may make significant difference to an individual patient. Outcomes such as life expectancy are influences more by public health measures, lifestyle factors and demographics than the financing model of the healthcare system. There are many things that the American healthcare system does better than any other in the world; those things are also very expensive. The underlying question involved in healthcare reform is whether or not those things are worth the expense.

14.) Q: Wouldn't it be more efficient to just have the government administer the healthcare system?
A: No. It is a well accepted economic principle that specialization increases efficiency. The most efficient systems are those in which the various components of the system focus on those activities that they perform best. A consequence of this is that the more competing constraints that a system has to accommodate, the less efficient that it is. We would expect that if the fire department were also made responsible for road repair, there would be a deterioration in both firefighting performance and road maintenance. Inefficiency results when a system has to accommodate multiple criteria and address multiple goals. A single payer system would theoretically have a more streamlined, and thus efficient administration, but in reality, it would have to accommodate competing interests, i.e. political interests, economic interests, legal interests, research interests, educational interests, commercial interests, charitable interests, etc., and be much less efficient at actually delivering healthcare than a decentralized, more specialized network.

15.) Q: What benefits do free market principles contribute to our healthcare system?
A: Markets allow consumers to directly influence the type and quality of goods and services being provided. Since consumers, being left to their own choices, will favor those services and products most reflective of those consumer's values and preferences, the market is an effective mechanism for expressing the social values inherent in providing healthcare throughout the society. In addition, markets are inherently competetive, and the natural consequence of competition is efficiency. It is an observable fact of biology, economics and history, that those entities that are more efficient with regard to some necessary function have a competetive advantage and will prosper at the expense of the less efficient. Markets have an inherent optimizing mechanism, in that those items that provide the best value will eventually be preferred over those that do not. The government alternative to optimization by market competition is attempted optimization by planning. One shortcoming of the latter approach is that even the most careful plans include unintended consequences (which free markets would eventually reject), and rather than reflecting the diverse values and interests of consumers, are subject to political influence by narrow interests. It takes a symphony of poor judgment by a diverse population of consumers to wreck a fair market, but only a few misjudgments by influential officials to destroy a centrally planned system.

16.) Q: Why don't market principles hold down the cost of healthcare in the private-payer system?
A: There is no true fair market for healthcare in the United States because of government mandates, the association of health insurance with employment and the nature of healthcare services. A properly functioning market is information dependent; the market participants must have enough information about the transactions in which they participate to judge whether they are advantageous or not. Healthcare on the other hand is fraught with uncertainty, and uncertainty can be very expensive. Consumers may not have the sophistication necessary to evaluate complex medical products and services; insurance companies may be prohibited from considering relevant information about individual patients when deciding whether to offer particular insurance products. Hospitals face uncertainty regarding the payer mix of patients that come through their emergency rooms; pharmaceutical companies may face uncertainty regarding potential side effects, regulatory approval of and liability for a given drug. Diagnoses are uncertain, prognoses are uncertain and complications are unpredictable. There is uncertainty as to whether a given strain of influenza will be especially virulent, or spark a pandemic. It is often mere speculation whether science discovers treatment for diseases like AIDS, which were once considered universally fatal, but could possibly be managed at a cost of tens of thousands of dollars per life-year saved. The uncertainty associated with healthcare is a challenge for market principles, but is even more of an impediment to centrally planned or government administered systems. Rationing, constraints on provider reimbursement, and limiting access to advanced therapies may make for poor healthcare policy, but they reflect the government impulse to address the cost pressures of healthcare, including uncertainty, by brute force.

17.) Q: Why doesn't the government just pay for treatments that are cost effective?
A: Because the determination of whether a particular treatment is cost effective ultimately depends on the value of the treatment to the particular patient. There is no objective measure by which to decide whether the final three weeks of a cancer patient's life are more or less valuable than the three weeks that a surgery patients spends in a rehabilitation facility. It is up to the individual patient to decide if the side effects of a particular therapy are tolerable. To similarly situated patiens may have vastly different opinions as to whether limb amputation is an acceptable therapeutic option. "Cost effectiveness" implies that there is sufficient benefit per amount of resources expended, and there is no true objective measure of this because "benefit" is unalterably subjective.

18.) Q: Would a single payer system provide universal access?
A: No, not even close. Any system that actively tries to control costs must do so by limiting services. The fact that those services are limited means that not everyone has access to them, and therefore such access is not universal. If a system, for denied dialysis treatment to severely demented patients, that particular cost savings measure, regardless of how rational, means that part of the population has no access to services that are available to others. Many services, to one degree or another would be unavailable to certain patients meaning that access would be selective, rather than universal.

Sunday, June 28, 2009


Eskimos supposedly have multiple words for snow, reflecting the need to be able to distinguish subtle but mportant differences in something so central to one's life. In a similar manner, people in the oil industry have different terms for various grades and products of petroleum, even if it is all just goop to the rest of us. Grandma may have a "lump," but the professional who makes a living evaluating such things must converse with colleagues using a vocabulary that parses lumps, masses, tumors, adenomas, carcinomas, hematomas, adenofibromas, etc. The simple principle seems to be that the more important a concept is to a group of people, the more that language must be able to convey the subleties and practical differences in that concept as it discussed in different contexts.

It is somewhat puzzling therefore, for a society that declared at its founding that we are possessed of certain unalienable rights, to be so limited in our discourse regarding the concept of rights. We seem to have gotten the principle exactly backward. Instead of being able to distinguish the variations and subtleties of individual rights so as to understand how they fit in our system of ordered liberty, we make the term less exact and less meaningful by attaching it to things that have little in common with those endowents recognized bythe founders, and as a result degrade the entire concept.

It is possible to argue strenuously that healhcare is a right, and to assert just as convincingly that it is not, by substituting the word for less politically advantageous, but more exact terms. The reform disciples who advocate for more government involvement in healthcare by invoking the term "rights" do not mean what they say, despite their inexact use of the term. They are not even referring to entitlements, rather they seek to create a social obligation based on political advantage and academic theory. Observing this obligation will ensure that healthcare will lose many of the attributes of a right.

It should instruct us that Thomas Jefferson limited the enumeration of unalienable rights in the Declaration to three, the last being the pursuit of happiness. This insight recognizes that the meaning of each person's life is an individual and unique attribute. Every person's life involves finding that subjective equilibrium between realtionships, risk, health, honor, work, family, curiosity, ambition, temptation, adventure, fear, etc. that makes life meaningful for that individual. So long as the individual's priorities do not harm his fellow citizens or impair those few purposes for which people form societies, a person should be allowed prioritize his interests in the way most meaningful for him. The malignant progressive on the other hand insists on prioritizing these interests for us. It is the conceit of the political busybody that insists that bodily risks must be minimized even if it means sacrificing those meaningful experiences that give rise to the risks. The blinkered planner presumes to decide what should be meaningful at the end of life, prioritizing hive-like efficiency above the interests of the individual patient. It is just as easy to see how this government meddling is a deprivation of rights as it is "protection" of something that the ideologue confuses with rights. If you want to smoke and drink and have promiscuous sex, because that is what turns your crank, that is your right. If you want your neighbors to pay the health-related costs of the consequences of your activities, you are not invoking rights, you are seeking an accommodation that relies on the interests and altruism of others. If you want to pay for your hip replacement because it is important to the way you want to live your life, that is responsibility, and you should have the right to do so. But if the government tells you that you cannot receive this treatment or that, or that you must be treated in a manner satisfactory to some distant functionary as a matter of "efficiency" or "fairness," healthcare is no longer a right, it is simply a vital resource that has been degraded by tyranny.

Monday, June 22, 2009


Some orphan issues in the health care debate:

1. Expertise. Ask any number of established physicians if they order more or fewer tests now than they did right after residency. Nearly all will answer "fewer." Ask the same regarding specialist consultations, and referrals to the emergency department and you likely will get the same answer. The underlying principle is that expertise is essential to cost-effective medicine, and cannot be replaced by giving glorified cook books to mid-level practitioners, imposing practice guidelines, or trying to shoehorn an experienced physician's decision-making into some mold fashioned by remote academics.

2. Providing more money for physicians to be primary care providers is not the same as paying them to take care of primary care problems. Just improving reimbursement for office visits and level of service provides no incentive to keep the primary care provider from referring the management of a COPD patient to a pulmonologist, fob off adjusting a heartfailure patient's diuretics on a cardiologist, or sending a diabetic with proteinuria off to the nephrologist.

3. "You will get to choose your doctor" masks a simple truth in the setting of universal care. You will only be able to choose those doctors that are willing to have you. Physicians, like any rational participant in an economic environment will do whatever is allowable to maximize their income as a function of effort. Some patients frankly are a pain in the neck and consume resources out of proportion to the acuity of their medical complaints. These patients will be competing for the physician's schedule with patients who have problems that are relatively straightforward, can be addressed in a limited amount of time, and provide satisfactory reimbursement. Expect your doctor to keep his schedule open for the dog bite or uncomplicated cellulitis, in preference to the person trying to make the eighth or ninth appointment for back pain in which "nothing works," or the fibromyalgia patient who is intolerant of all prescribed therapies.

4. The claim that health care consumes 17% of gross domestic product is a glaringly one-sided assertion. It only makes sense if you view the economy as something of a gigantic Easter-egg hunt, with a pre-determined GDP distributed around the yard, harvested by the people and then spent on items reflecting varying degrees of necessity and discretion. What percentage of GDP does manufacturing or legal services "consume?" An equally valid formulation would be that health care produces 17% of GDP. So then we have to ask, how much is too much? If less is spent on health care, will something else produce a compensatory amount of wealth? True, health care expenditures go up, but the expenditures go somewhere. How much will we spend on education, or transportation infrastructure or scientific research before we start complaining that it "consumes" too much of our economy?

Sunday, June 21, 2009


Part of the healthcare reform debate concerns the notion of value, getting something worthwhile for the amount of resources expended. It seems obvious that a desirable healthcare system would provide more value per amount of money expended. Some people even think that poor value is the key to the issue. In an article in the May 25, 2009 issue of National Review, Regina Herzlinger wrote: "In my view, the core problem is that U.S. health care is a bad value for the money spent." In the very next sentence she identifies the difficulty in relying on value as a basis for change: "Unfortunately, I cannot prove my view of the problem because, unlike virtually every other sector of our economy, health care has no real measure of productivity." This defines the difficulty in a nutshell. We really have no way of knowing just how good or bad things are, and no good way of knowing if we are making them better or worse.

Ms. Herzlinger is not alone in lamenting a straightforward measure of value. The lack of such has led the health care system to embrace poor subsitutes, such as adherence to treatment guidelines, comparison to arbitrary benchmarks and consensus guesses as to what constitutes quality. The real issue however is that Ms. Herlinger has slightly mis-stated the problem. It is not that there is no "real measure of productivity," it is that there is no generalizable measure of value from which to derive measures of quality. This conundrum is an inherent byproduct of the notion of quality.

People who attempt to derive consitent measures of quality are trying to square the value circle. There is no objective measure of value for the simple reason that value is not objective, it is inescapably subjective. A particular health care outcome, such as a cosmetic result or shortened recovery time may seem trivial to one patient but highly important to another. Some patients may not tolerate one form of therapy, or care about a particular side effect, while other's experience is the opposite. Some patients may be resigned to age related functional decline while their neighbor intends to go out kicking and screaming.

It is both a great strength and obvious point of criticism that our health care system accommodates the subjective appraisals of value and quality between individuals. The bureaucrat and social engineer is appalled by this situation of inaccessible metrics and seeks to remedy it by prescribing what constitutes value and quality. This makes the job of administration easier but, like many bureaucratic interventions, it defeats the purpose of reform by destroying one of the most desirable ends of healthcare in favor of one of the more insignificant means.

Sunday, June 14, 2009


A large impediment to the advocacy of free market principles in healthcare is the intuitive notion that such principles are incompatible with the idea that healthcare is a right. Healthcare is not a right, at least in the commonly used sense that it is a constitutional obligation of the government. No less an authority than the U.S. Supreme Court has already recognized this:

The Constitution imposes no obligation on the States to pay the pregnancy-related medical expenses of indigent women, or indeed to pay any of the medical expenses of indigents.
Maher v. Roe, 432 U.S. 464 (1977)

The postition that healthcare is a right is asserted dogmatically, but the assertion cannot withstand scrutiny. Until this misperception is dispelled, advocates of government financed healthcare will have a formidable, if disingenuous talking point, one that will be used to defend potentially disastrous alterations to our healthcare system.

But if healthcare is not a right, what is it? If I may wax Obamaesque for a moment: There are those that assert that healthcare is a right, and not a privilege. But I reject the false choice between those two extremes." In fact healthcare is neither a right (in the sense that someone is obligated to provide it for everyone), nor a privilege. It is instead a limited resource that must be provided and used judiciously. This is the key to understanding the healthcare "crisis." View healthcare as a limited service, and you can clearly see the differences in philosophies underlying the various healthcare proposals.

Wise use of resources requires stewards, and the debate at the moment reduces to who is the most appropriate steward for utilizing the impressive healthcare resources of the United States. There are four obvious candidates:

1.) The patient. This is the model that pure free marketers advocate, and in theory, the main stakeholder.
PROS: This is the human life that is actually affected by healthcare decisions. The patient has the most incentive to retain the quality of the healthcare system, and since he ultimately ends up paying for a portion of it in one way or another, he should be able to exert consumer pressure to keep prices down and service up.
CONS: Most patients do not have the sophistication, nor the objectivity to evaluate healthcare decisions. They are dependent on providers who guide them through the decisions between angioplasty and by-pass surgery, revascularization vs. amputation, expensive diagnostic studies vs. watchful waiting. Likewise they may be confused by the intricacies of determining actuarial risk among various pools, and not fully understand the subtleties of different insurance plans.

2.) Insurance companies. These are ideally thought of as the agents of the patients, serving to diffuse risk among appropriately described pools. The employer-provided model significantly limits the utility of insurance companies, by constraining the choice of individual patients, and injecting job-related uncertainties into the private insurance market.
PROS: Insurers can be objective. In a competetive market, they have an incentive to select out the most efficient aned efficacious therapies. Through their premium structure they can promote preventive and public health practices that lead to more efficient uses of limited healthcare resources. They can use their actuarial skills to adjust risks for arbitrarily sophisticated treatments.
CONS: The more regulated insurers become, the more their interests conflict with their policy holders. Publicly traded companies also must balance the interests of insureds and shareholders.

3.) Physicians. They are the most knowledgeable regarding the use of resources and the expected benefits to the patients. In theory, they are patient advocates.
PROS: Physicians have the best knowledge regarding the use of resources in a particular case. They are responsible for expending resources in a manner that benefits the patient's health. They interact with the patient and are exposed to the patient's concerns and anxieties. A large part of medical expenditures is the direct result of uncertainty reagarding the patient's care. The physician alone is charged with accommodating this uncertainty.
CONS: The present system imposes a multiplicity of conflicts of interests. The physicians financial interests sometimes enters into medical decision-making; the spectre of medical liability results in the waste of resources under the guise of "defensive medicine." Regulatory requirements, hospital medical staff rules, insurance panels, unreasonable family members of patients, and dwindling reimbursements all compete for the physician's decision-making attention.

4.) The government. The government brings two things to the financing of healthcare: coersion and other people's money.
PROS: They government can limit costs by diktat. It can force physicians, with criminal penalties if necessary, to conform to the ideologies and pet theories of the bureaucrats in charge of the system. It can confiscate property and money to pay for services.
CONS: Efficiency suffers whenever any system must simultaneously accommodate multiple competing interests. The government is far and away the institution most subject to this effect, and consequently will be the least efficient steward of healthcare services. This is a main reason why the government will have to ration, why waiting times will soar, why care will suffer, and why choices will diminish. The government will only be able to accommodate "good enough" care. Furthermore, the government may coerce people, but it cannot coerce the outcomes of the immutable forces that affect the production of goods and services. A fair market contains an intrinsic optimizing feature: competition. A prescriptive government defauting to command economy methods will eventually respond only to political concerns rather than individual patient care concerns. And obviously, the smartest people will not be running healthcare with the government in charge.

Taken together, the reforms most useful to the American healthcare system will: exclude the government from running anything; limit the conflicts of interests imposed on physicians, especially the tort liability system and mindless "guidelines" drafted by remote functionaries; allow the insurance industry to compete on the basis of efficiency and the values and preferences of their insureds, rather than the ideologies and parochial vanities of policy-makers; and allow patients to find those insurers that will help them get the services that they need and value in the most efficient ways possible.

Monday, June 01, 2009


8. There is no way to change the way that heathcare is financed without changing the way that medicine is practiced.

9. In order to slow the rate of increase of healthcare expenditures, it is necessary to increase efficiency. Efficiency is promoted by focus and degraded by attempts to accommodate multiple competing interests. For example, efficicency and cost effectiveness is impeded by HIPPA compliance. This is not to say that there may not be some independent argument validating HIPPA regulations, but it must be recognized that these regulations breed inefficiency and its associated costs. The more interests that are accommodated in the healthcare system, e.g. cost-effectiveness, access, liability for adverse outcomes, shorter waiting times, availability of imaging studies, the more that efficiency will decline.

Wednesday, May 20, 2009


It is not original to note that there is a difference between power and influence. This distinction is helpful in understanding the dynamics and course of political maneuvering, as well as give some indication as to what may become of the current political fashions.

Power and influence are closely intertwined, but there are crucial distinctions that determine the fate of political movements. The most obvious distinction is that dead people can be influential, but are not powerful. This distinction is fundamental, because it is the clearest illustration that influence is durable, but power is much more finite. Power is essentially endothermic, requiring a constant input of energy to maintain itself, whereas influence is exothermic, animating others and providing energy beyond the temporal reach of its source.

The essence of power is to determine who wins and who loses in same area of human endeavor. Influence is the capacity to focus the thoughts and principles that animate the activities and enterprises of others. Because of the contemporaneous realtionship between power and its subject, power is much more prone to corruption. Power is result of coersion where influence is more concerned with persuasion.

Obviously, power and influence often, in fact usually, reside in the same person or group. Power can sometimes be converted into influence and vice versa. Because power is more immediately apparent, it is more susceptible to corruption. Excessive uses of power may lead to diminishing influence, especially where power is exercised through the use of force.


The impending resignation of Justice Soutrer from the Supreme Court, and the anticipation regarding appointment of his successor overshadows a more fundamental issue in American law. This issue is the erosion of legal and constitutional presumptions.

Although statutes are presumed to be valid, there is now in fact a presumption that all state legislation regarding social issues is unconstitutional. This is because such legislation results in groups that may feel excluded. Courts have replaced the "benevolent detachment" standard of establishment clause cases with a virtually conclusive presumption that religion is improper in the public arena. Even though Roe v. Wade specifically held that states could outlaw abortion in the third trimester, partial birth abortion survives because no statute outlawing it has overcome the presumption that such statutes are, and shall always be, unconstitutional.

This intellectually sloppy and illegitimate climate is an unchecked metastasis of the valid doctrine of strict scrutiny. Ideologically predisposed judges and justices have spread this concept to all corners of their ideological fancy and have left us with such abominations as Justice Breyer stating that he will look to foreign jurisdictions for reasoning that supports a conclusion that he wants to reach but which is unsupported by stare decisis.

That this slow erosion has occurred can be objectively verified by considering the treatment of privacy over the last forty years. Of course, when Griswold v Connecticut and Roe v. Wade extended protection to contraception and abortion, the legal concept involved was one of liberty and not privacy. However, there was no constitutional language, nor precedent, nor for that matter public support for the notion that sexual matters could not be regulated by legislation. After forty years of this, however Justice Kennedy in Planned Parenthood v. Casey, dropped the charade and spoke of abortion in terms of liberty, not privacy. ("These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life.") The presumption thus evolved from a nebulous non sequitur dredged up from the penumbra of search and seizure, to a full blown liberty interest against which the forces of government should not prevail.

One does not need to be a lawyer to identify the unspoken legal presumptions of twenty first century America: Gay marriage is an existing, yet unrecognized right that merely needs judicial protection; Physician-assisted suicide is an issue awaiting hard facts to make bad law; rights should be unencumbered by responsibilities whenever practical; subjective sensitivities are entitled to the most vigorous legal protections; group rights should be fostered and expanded even beyond the point that the groups are no longer recognizable.

The biggest presumption that has changed, however, is that courts should confine themselves to the role conceived for them by the founders.

Tuesday, May 12, 2009


Here, in my opinion are the immutable facts that must be addressed in any healthcare reform discussion. These are not the breezy idealistic musings, populist rhetoric, or doctrinal appeals that make for good politics but bad policy. These are the realities.

1.) Healthcare is not a right. Those that assert that it is are indulging in an unhelpful abstraction, because there is no practical way to provide healthcare services in a manner that is consistent with the notion of rights. Asserting that healthcare is a right is nothing more than a political gambit that is divorced from reality.

2.) The huge marginal costs of healthcare expenditures goes to providing a relatively small amount of high-performance services. The Pareto principle suggests that 80% of healthcare services result from 20% of the expenditures, and consequently, 20% of the high-end services consume 80% of the costs. The ratios are obviously somewhat arbitrary, but do serve to illustrate the fact that a disproprtionate amount of healthcare resources are consumed in intensive care units, tertiary care facilities in the last weeks of life, and in interventions with low likelihoods of clinical success. "Basic" halthcare is realtively cheap, but Americans have come to expect (and apparently are willing to pay for) much more than the basics.

3.) Healthcare is a limited resource. Resources require stewards. Stewards should know more than book-learning about what it is they are responsible for. The most appropriate stewards of healthcare resources are physicians, but physicians have a multitude of conflicts and perverse incentives imposed upon them that impair their ability to realize the most efficient use of healthcare resources. Government bureaucrats are not good stewards. Just as there is no bureaucreat who knows better than a parent what is best for an individual child, there is no bureaucrat who knows what the best healthcare recommendations are for a particular patient.

4.) There is no consensus as to what the definition of healthcare is. This creates the conditions that will allow healthcare expenditures to grow exponentially as politically connected causes are able to claim more and more services by arguing that they are part of healthcare. These typically begin with appeals to hard cases, with the underlying assumption that, despite attempts to ration or craft clinical practice guidelines, exceptions will be made for photgenic and sympathetic people disadvantaged by bureaucratic medicine, thus opening the floodgates to healthcare policy being made not only by unqualified bureaucrats and politicians, but by Oprah and Geraldo as well.

5.) The assumption underlying most of the good-sounding calls for healthcare reform, particularly the single-payer utopians, is that healthcae is really relatively straightforward: a patient has a complaint, a doctor orders a test to figure out what is wrong and orders a cure. This is not even remotely similar to the reality. Physicians do not have the same luxury that a car mechanic or washing machine repairman have. A physician can not take a patient apart, swap out parts and see if that fixes the problem. Not every disease has a consistent presentation or definitive test. Not every symptom complex is indicative of disease. A good many patients have good clinical outcomes solely because of the gifts and expertise of experienced practitioners, and these cannot be replaced or even approximated by clinical practice guidelines, critical pathways, or other cookbook approaches to healthcare. Making practice standards more uniform benefits public health statisticians and self-perpetuating bureaucracies. They do little to replace the insight, experience and intuition of skilled practitioners.

6.) Claims about healthcare reform being an element of social justice really suggest the foundation of market-based reform. It is simply common sense to recognize that if a person chooses to forego an intervention and opt not to pay for it as part of his personal healthcare, he should not be compelled to pay for it for someone else. And likewise, if if he opts not to pay for such intervention for his own health, he should not expect others to provide it for him at someone else's expense.

7.) Healthcare coverage, in the sense of insurance, does not provide access to healthcare services. The insurance aspect of health insurance insures the assets of the person against financial ruin precipitated by medical expenses. Access does not result from insurance, or compassion or government mandates. Access results mostly from industriousness of people who benefit from providing such access, and from policies that recognize the mutually beneficial relationship between motivated providers and the society that is beneficiary of their efforts.

Monday, May 04, 2009


The fundamental flaw in the principle of "spreading the wealth" arises from the following:

The rate at which a society produces wealth is dependent on directing those benefits to those who are most adept at producing wealth. Arbitrarily confiscating wealth from the one who produced it and giving it to someone who has contributed little or nothing simply decreases the rate at which wealth will be produced in the future.


We hear quite frequently how smart President Obama and Rahm Emanuel and Barney Frank and Hilary Clinton are. Even political opponents remark on this as a prelude to policy disagreements. "Smart" now seems to be its own political entity as President Obama endorses "smart diplomacy," "smart meters," "smart cars," etc. etc. It is presumably impolite to notice how this seems a reprise of the "best and the brightest" from the 1960s.

There is something curious however about how these really smart people think. People that don't have nearly the reputation for smarts as Mr. Obama or Noam Chomsky can predict with impressive accuracy what those smart people think about particular topics. People of unremarkable intelligence know what the really smart people are going to say before the smarties say it. Susan Sontag was supposed to be one of these supersmart people but her comments after the terrorist attacks of 9/11/2001 were as predictable as the coming dawn. Her thoughts were less suggestive of deep intellectual inquiry than they were the products of an articulate machine, more deterministic than inspired.

The reality is less that our leaders devise policies based on their unique intellectual nimbleness and more that such intellectual gifts are merely used to advance policies that are products primarily of personality, emotions, and subjective taste. "Smart" isn't enough, nor should it be particularly comforting.

Monday, April 20, 2009


The theory of socialism does have some intellectual appeal, just not as a universal concept. It is quite easy to imagine a setting in which socialist principles might work better in practice than a capitalist approach, specifically one in which a society has only a few discrete types up resources with which to produce wealth. Socialism might be just the ticket for an oil rich state with nothing else but sand with which to provide necessities for its people. In general, if the sparse resources are fully exploited with only a fraction of the workforce, then "spreading the wealth" makes sense.

On the other hand, in a country such as the United States, or South Africa or Russia, with a vast array of resources with which to drive an economy, the efficiencies afforded by capitalism are much more likely to produce higher standards of living, and allow people to pursue those activities most meaningful to themselves. Free markets presuppose a degree of liberty that the socialist simply cannot afford.

Sunday, April 19, 2009


People that prefer their moral thinking to be straightforward might be somewhat vexed in applying principles to the treatment of detainees in the war on terror. Laying aside whether one form of interrogation or another consitutes torture, or what exactly the definition of torture is, anomalies abound when trying trying to apply moral reasoning to the treatment of human beings in the setting of war. An obvious illustration of this point arises from the use of unmanned aerial vehicles to conduct targeted airstrikes in Pakistan and Afghanistan. The human targets of these strikes are killed and maimed without warning. There has been no judicial process by which their status has been determined or their conduct condemned. Furthermore, the manner in which the strikes are conducted raises the risk of collateral damage, potentially killing and maiming innocent bystanders. Similarly, when Navy SEALS assassinated three pirates holding an American sea captain, the event caused little moral consternation, in stark contrast to interrogating terror suspects by use of sleep deprivation techniques or pouring water over a cloth covering their faces to simulate drowning.

For some reason, killing adversaries in the field is more readily accommodated than causing physical and psychological stress to a captive, and soul-searching ensues in the latter case when our collective conscience seems unvexed by the former. There is an obvious disconnect in the ways in which we view the treatment of different adversaries whose past histories and enmity of the Unites States are indistinguishable. In the one case, we have the power to kill them and in the other to cause them discomfort or indignity, but in each case the decision is ours. There may be an arguable distinction arising from the threat posed by terrorist still in the field and one in our custody, but this distinction fades when viewed in light of the purposes of a Hellfire missile strike or enhanced interrogation.

It might be that the paradox of legitimate assassination and illegitimate interrogation arises from some infirmity in the arguments used to justify the two cases, but a more fundamental question arises regarding the concept of justifying one or the other in the first place.

The term "justify" means to make just that which ordinarily is not. We do not justify educating our children or providing emergency medical services. We need not justify paying our debts or contributing to charity because these things need no justification; they are already just. We speak of justifiable homicide or justifiable use of force because these are not inherently just, but may be considered so in the appropriate circumstances. Aquinas spoke of just war because it is quite natural to conceive of war as an enterprise unconcerned with the common attributes of justice.

The conception of all activities as just, justifiable or unjust would seem to be theoretically elegant; classifying as it does all human conduct according to some notion of reason and moral values. But in the context of warfare, it would seem that such an assumption is not valid. During the Second Word War, Churchill ordered the Royal Navy to attack the French fleet anchored at Oran. Was this justified? Churchill also sacrificed the Highland Division to achieve more political than tactical ends. During the Doolitle raid on Tokyo, U.S. Navy destroyers fired on unarmed picket ships to prevent them from alerting the Japanese military of the raiders' presence. Each of these could arguably be justified by the circumstances, even though they may make us uncomfortable when viewed retrospectively, but even then the concept of justification seems somewhat superfluous. There is a quiet suspicion that the exigencies of war are so extraordinary that they do not conform easily to our customary moral reasoning.

Back in the 1980s certain Jewish leaders opposed the idea of studying the Holocaust to identify its causes. Their position was that such evil was best considered as evil, rather than as some understandable quirk of human behavior. They believed that the crimes of the Third Reich should not be candidates for rationalization. It seems obvious that one cannot "justify" the Holocaust, not because such a catastrophe does not meet rational and considered grounds for justification, but because it is practically impossible to find a context in which our moral reasoning and judgment can even comprehend the historical fact. It is quite literally absurd to ask if the Holocaust could be justified.

There are several references to an occurrence, subsequently adapted as part of the plot for the last episode of M*A*S*H, in which a Jewish mother suffocates her infant child to avoid detection by the Nazis. Is it even reasonable to ask if this woman's action was justified? Can anyone find a context in which such a decision is even remotely amenable to the moral judgments that we make based on our experience and abstract notions of just and unjust? Can anyone even imagine, much less understand how remote such a decision is from our experience and judgment? Who is competent to make such a judgment?

It is perhaps a conceit of civilization that we should judge our conduct against standards that we ourselves adopt, but it is likely the case that there are some activities so foreign to our abstract notions of morality and justice, and so peculiar to our own experiences that we can neither justify them nor condemn them. Some things cannot be understood, much less justified. They arise in that chasm in man's nature, on one side of which are the base fears and instinctive drives of survival, and on the other, the aspirations and virtues that he seeks through reason. War is terrible in part because it gives rise to acts that we cannot honestly judge as just or unjust; the acts themselves are terrible, the natural acts of ordinary people confronted with mortal threats not of their own choosing. Sometimes life presents dilemmas where each of the alternatives is appalling, and only the deluded and morally frivolous will presume to judge those who are forced to choose.

Sunday, April 12, 2009


Societies protect rights because they benefit from doing so. Religions are tolerated because most religions advocate altruistic principles that are socially beneficial, not to mention that the oldest constitutional government is less that two hundred and fifty years old, but several religions have survived for millennia. When governments try to force citizens to choose between political interests and religious beliefs, it can't be sure that the masses won't opt for the latter.

The right to privacy arises from the fact that when people must interact in a society, reputations and public impressions are necessary to the relationships that allow that society to function. Recognizing a right to privacy allows a person some measure of control over his public image, and consequently allows him to function as a productive member of society. Libel and slander laws, it should be remembered, protect not privacy in itself, but reputation.

Freedom of speech recognizes that most worthwhile adeas originate with individuals, collective creativity being so fanciful as to be almost an oxymoron. Freedom of expression is necessary to access individual inspiration, and recognizes that the great ideas of history were largely solo accomplishments.

The right to own property assumes that individuals will have an incentive to put property to its most efficient uses, and as a consequence maximize the benefits of enterprise.

Rights are not altruistic accommodations by tolerant government; they are the essential components of the success and ultimate survival of societies.

Saturday, April 04, 2009


Socialism is a doctrine of the average, the middling, and the mediocre. There are at least three inherent characteristics that limit achievement under socialist doctrines.

The first is that it does not have the optimizing advantage that competition provides to capitalism. Competition, and thus capitalism inherently rewards efficiency; socialism inherently rewards uniformity, a condition that is unavoidably opposed to exceptionalism.

The second characteristic that handicaps socialism arises from the concept that the value of money, like all values, is largely a matter of opinion. This principle is largely self-evident, and examples of it abound. When the stock market tumbles and investors lose billions, what has happened is that the opinion of the worth of the implicated investments has changed. The natural consequence of this is that economic growth results from providing captial to the production of goods and services that people generally find valuable. The disadvantage of socialism in this regard is that some central authority tries to prescribe what people should value, and if that authority is wrong, stagnation follows.

It is quite natural for a government to decide that everyone would be better off if they preferred fuel efficient vehicles at the expense of safety, or certain food choices at the expense of individual preference, or economic security at the expense of opportunity, but if these do not refect what the majority of peoplel value, no amount of regulation or stimulus will remedy the defect. Governments cannot force the people to want something, even if it is for their own good.

The third shortcoming of socialism is that human beings are inherently progressive creatures, and by that is meant that they will always strive to find more efficent means of pursuing individual interests. Efficiency is simply the amont of something desirable per amount of something necessary or expendable, and if the socialist limits the amount of the desirable thing, the natural human response is to increase efficiency by limiting the expenditure of something else. If the governemtn caps salaries, workers will respond by limiting the amount of effort they expend.

Socialism is a doctrine of caution, not of vitality or inspiration. It is suffused with the catchphrases of social justice and equality, but produces only artificial facsimiles of these. Socialism seeks its ends by minimizing risk, but in so doing minimizes the rewards to be gained from accepting those risks. Socialism requires that people in significant measure give up some of the aspirations, ambition and daring that is a natural part of human nature, all in the interest of achieving something that works much better in theory than it does in practice.

Saturday, March 28, 2009


In Washington right now there is a great deal of squabbling and pontificating regarding the role of regulation is our finacial system. It is accepted as given that regulation is fundamental, that it is necessary to the functioning of the economy. Now it may in fact be the case that government regulation in some manner is a better way, and some might argue, the best way of ensuring market integrity, but this does not establish that it is the only way.

Economic activity is much older than the government regulatory schemes about which we fret right now. Trade occurred between tribes and loosely organized city-states and between farmers and tradesmen without a noticeable bureaucracy. The function which is now served by regulation was once served by skepticism, explicitly recognized as the principle of caveat emptor. One has to think that if banks and other financial institutions had to rely only on their own evaluation of financial risks, and had to bear the consequences of evaluating poorly, then there would have been no credit default swaps, derivative financial instruments and "opaque transactions."

It may certainly be argued that the novel financial instruments, which emerged under the noses of regulators, did have beneficial attributes, such as increasing liquidity, etc., but the more skeptical banker would be expected to rely on more conventional means of ensuring the same, i.e. having people that take out loans pay them back.

The net benefit of regulation is undoubably positive but that does not mean that there is not a down side. If people generally retained the skepticism of our more saavy ancestors, the consequences of regulatory failures would be much less severe. When regulators do their jobs poorly, such as when the investigator who examined Bernie Madoff's books could not figure out where the investment returns came from but let Mr. Madoff continue to pretend to make them, that is arguably worse than having no regulation at all. Like domesticated animals that have lost their survival instincts, and thus are incapable of providing for themselves, so too are Americans who have been gulled by the existence of regulatory schemes into thinking nothing bad can happen to them.

When people remain responsible for the results of their own voluntary transactions, there is an inherent limit to the amount of damage done by nefarious or poorly designed schemes. It takes thousands of people to make a disaster. But when assurance against calamity is relinquished to regulators, it takes only the ineptness or corruption of a few individuals to cause a fiasco.

Sunday, March 22, 2009


I have yet to see any widely distributed pundit make what I believe to be an obvious point regarding Congress's attempt to confiscate AIG executive bonuses:

The single most important determinant of economic recovery is confidence in the financial system. Predicatability is essential to confidence. One would be reluctant to drive an automobile if sometimes the steering wheel affected the direction of travel and at other times it did not. We would not use microwave ovens if sometimes they warmed our frozen burritos at at other times responded with a mechanical boxing glove sock-in-the-face.

Predictability is essential not only to confidence but to progress of any sort. That is the reason, and in fact the only reason why we have written laws and why we enforce contracts. What Congress is doing with this retroactive abrogation of contacted terms is destroying the predictability necessary to economic activity. It is undermining confidence that companies and individuals can plan and function without being frustrated by the unpredictable emotional tantrums of our elected officials.

I doubt that our elected officials have any idea at all how much real damage will result from their opportunistic grandstanding.

Sunday, March 15, 2009


Here is an illustrative pastime for when the new government starts cranking out new laws, policies and regulations: Whenever you read about such actions, count the number of times the word "requires" appears in the descriptions. You know, a law requires employers to do this, or insurers to do that, a new regulation requires drivers to do such and such and utilities to do so and so. Get a feel for how much the activities of government are dependent on compliance with "requirements" and imagine what happens when such compliance is not forthcoming. You may notice something odd about liberals and government.

A fundamental paradox of liberalism is this:

Liberals look to government to be the primary problem solver and organizing institution of life, not only for themselves, but for everyone. They instinctively look to government to ensure fairness, to insulate everyone from risk, to coddle subjective grievances and validate emotional needs. They look to government to do this because 1.) Government has a seemingly endless supply of money, and 2.) What the government cannot procure by persuasion it can compel by force. One quickly realizes that these two attributes are not separate. The government also aquires control of money under the threat of force. Thus, liberals flock to government to solve their problems, validate their worths and calm their fears, primarily because the government can, if necessary, resort to force. The liberal view of the world contains no small elements of compulsion, from compulsory taxes, to compulsory use of particular light bulbs, to compulsory diversity, to compulsory insurance, to compulsory community service etc. They like government because it "requires" things under the threat of force.

But the United States and Israel have lost moral standing in the world because they, when deemed necessary, well...use threats of force. Thus, the threat of force, and the consequent metastasis of government into the lives of its citizens, is the prime attraction of the liberal to the concept of big government, but the threat of force as a necessary element of survival? Well, that's bad. Threatening force to subsidize an indulgent ideology is satisfyingly chic; threatening force to make someone stop killing the citizens of your country is barbaric. It's the type of paradox that resists self-reflection, and not coincidentally, the type of paradox that allows a particularly shallow and clueless sort to wear a Che T-Shirt without the slightest hint of irony.

Wednesday, March 04, 2009


Here's my hypotheses regarding the financial crisis:

1. The fallacy. The fallacy underlying the current financial mess is that the amount of realestate in the United States is relatively fixed, but the population continues to grow; thus real estate is always going to appreciate over time. Thought eh general principle is true, the fallacy is that it will continue to appreciate over ANY period of time.

2. The anomaly. The anomaly in the situation occurred because of efforts to intervene in the market mechanics of real estate pricing, to the effect that the appreciation in realestate outpaced income growth. This inflated the housing bubble and would inevitably lead to a bust.

3. The confounder. The usual balancing mechanisms that operate in fair markets were skewed by artificial devices that obscured where value was being created and disappeared. These were the "derivatives" which supposedly added liquidity to real estate investments. What actually happened however was that the derivatives became divorced from the intrinsic value of the underlying mortgages and asumed the nature of wagers. Thus, money invested in these derivatives did not go to increasing value, but merely shifted it between the people who bet correctly and those who did so poorly.

4. The vortex. Because of the proliferation of derivatives, and because of the synergistic effect of ineffective government oversight on one hand and inappropriate meddling on the other, money that should have gone to maintaining equilibrium in the credit market, and maintaining liquidity of the system the old fashioned way, i.e. by having debtors pay off their obligations, the underlying assets became "toxic" and the artificial value of realestate collapsed.

5. The upshot. Foolishness in the housing market shook the credit and investment sectors of the economy, but the underlying premise is still sound. Even though real estate and housing are subject to bubbles, i.e can have artificially high valuations, over the long term, real estate values will appreciate. My bet is that the safest investments right now for liquidity appreciation and safety is real estate investment trusts.

Monday, March 02, 2009


Among all of the current political discourse and debate; whether this program or that expenditure is appropriate, or whether this new regulation, mandate or prescription is necessary, there exists a more fundamental set of questions. Specifically, given that the one attribute that the state has over private enterprise is that it may resort to force, what do we consider appropriate uses of force by the state? Obviously, most of us agree that the state may use force in our behalf to prevent bodily harm or breach of the peace. We agree generally that the state may protect property rights, such as when a sheriff evicts delinquent tenants from a home. But now it seems we are being presented with a menu of potential proscriptions and mandates that, if the average citizen does not comply, such compliance will be enforced by the authority of the state. So to get an idea of just where the acceptable boundaries of such enforcement lie, it may be useful to consider whether we think that laws should be passed and enforced that affect matters such as the following:

1.) Determining whether you have the right to educate your children according to your values, or must relinquish them to the priorities of the public education system;

2.) Determining how and when to discipline your children;

3.) Whether you may express an opinion that someone's religious beliefs seem nutty to you;

4.) Whether you may decide for yourself what life's activities justify risks to your health;

5.) Whether you should be legally liable in any way for expressions that hurt the subjective feelings of others;

6.) Determine what kind of car you drive, if you are allowed to drive it at all;

7.) Whether you can pay from your own resources for medical services that you want and can afford, but that are not favored in a managed system;

8.) Whether you can decide for yourself who you will and will not do business with, on whatever criteria you choose;

9.) Whether you can express opinions that make other people "uncomfortable;"

10.) Whether you may refuse to participate in or fund the voluntary activities of others that you find morally objectionable;

11.) Whether you can defend your life and family from mortal threats with appropriate levels of force, including lethal force;

12.) Whether you can tell a joke that some official somewhere thinks creates an undesirable "atmosphere;"

13.) Whether you can decide for yourself what altruistic causes are most deserving of your financial support;

14.) Whether you may charge whatever a willing buyer is willing to pay for your products or sevices;

15.) Whether you may decide for yourself what activities are meaningful and beneficial to you, regardless of what someone else thinks those activities should be.