I started writing this entry because of a post I read about Canadian health care....
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Let's strip away all
the political rhetoric and look at the facts. For goods and services
whose demand can be affected by external factors such as cost (i.e. elastic demand), markets are the best way to
allocate resources. Health care (a product with inelastic demands) does not behave this way, as no one
bleeding to death will ask how much does it cost for a doctor to fix me?
For goods and services like health care, other, more efficient methods
have to be devised to best allocate resources.
Let's take away from our argument the idea of
charity hospitals and doctors practicing without regard to money. The
number of these people and organizations is shrinking, as states have
allowed medical organizations to be profit making organizations. This has led to markets being used to allocate resources where markets are
not the best way to allocate resources.
In a
society that values human life more than ours, people's lives are
maintained without regard to market forces. The individual receiving
health care is not part of the market. So, how is care allocated? In
the US, we used to have organizations called HMO's. But even they were
affected by markets, and limited care when care was needed.
Many developed nations, such as Canada provide health care services with a
fixed amount of money allocated for care in each province's budget. People get to see their doctors by appointment
(usually more often than in America). Care provided has been vetted
against "best practices" and drugs/procedures which provide the most
bang per buck are usually chosen to reduce costs. In areas where there
might be inflexible demands, such as needing heart transplants, they
prioritize recipients of care to those who would get the greatest
statistical benefit from that care. This means that a 40 y/o man might
be selected for a transplant over a 90 y/o man. This takes market
forces out of the decision, and allows care to be provided without
regard to a person's wealth or lack of it.
America
has distorted the use of markets so much, that many of us fear what
might happen if we move some goods and services out of market place
allocation of these goods and services. The experiences we've seen in
foreign lands shows us that costs can be reduced by taking things out of
markets. In fact, we're now seeing medical "tourism" where many
Americans are flying to Europe and Asia for non-emergency procedures.
There are many procedures that cost half as much when done in Europe
than when done in the States. In Asia, the costs are even lower. And,
quality is similar (or better) than what one finds in the States.
The
drawback - no one likes being a gate keeper. No one likes having gate
keepers. And non-market systems require gate keepers. Who wants to
hear that a $500,000 procedure won't be performed that could add another year to your 90 year old grandma's life, because society has chosen to fund a
rural clinic that provides 10,000 people with essential health care?
Being a decent human being means making choices. Canada and most of the developed world have made good choices. America doesn't yet make that many good ones....
The internet "Wayback Machine". It is an invaluable resource housed in a server farm in California, and is used by news outlets from both sides of the aisle to extract an objective truth of what was publicly available on the internet at any given time. I have used it myself for more mundane issues, such as retrieving web pages for a defunct "Church of Elvis" site which has been down for about 15 years. And with the election of President to be Trump, they consider the prospect of government interference enough to announce that they will clone their entire server farm in Canada to preserve their essential data.
I am not a fan of Trump, and I think worse things could happen than if a GOP congress were to impeach him, and let VP Pence take the reins of the executive branch of government. But this is far from ideal. As I write this, the Electoral College hasn't voted, and enough "faithless electors" could potentially change their allegiances to affect this election. But I strongly doubt this will happen. For the first time in my memory, we will see a president elected who openly claimed that the election was rigged - even after he won the election!
What does this mean to America?
Sometime in January, President Obama will hand over the reins of government to the new President Trump. We will have a man in power who has no respect for legal precedent, no respect for the rights of citizens to protest the government, and has no respect for previously negotiated contracts. His administration will be known for promises not kept, and conflicts of interest that will only serve to make this man and his family richer than they are now. It will also be known for the political extremists who joined his cabinet, as political payback to extremist groups who supported him during his campaign.
Over time, I expect to see attacks on hard won labor rights and hard won civil rights. Look at Trump's position on labor issues - he recently said that wages as a whole are too high. Yes, he has flip flopped on this issue several times in regard to the minimum wage. But can we trust labor rights to a man who discriminates against American labor? In addition, with a vice president who ignored the AIDS crisis and supported Gay Conversion Therapy, can we expect someone like that to protect the rights of this community?
Trump has said that he'd nominate a man like Antonin Scalia for the vacant Supreme Court seat. And recently, he has said that he would take away American Citizenship AND put a person in jail for at least a year, if convicted of burning an American flag. Can we say that he will respect any constitutional right when Scalia himself said that flag burning is a constitutionally protected right?
How do we deal with the potential threats of a Trump presidency?
In an op-ed piece in the New York Times, Luigi Zingales says that the Democratic party should work with Trump when he wants to do something that helps the party achieve some of its goals, and strongly oppose him when he goes the other way. The Democrats should resist having another Clinton dynasty come in the persona of Chelsea, but should grow new leaders from their ranks. Opposition to Trump should be modeled on Italy's opposition to Silvio Berlusconi, as they were able to remove him from office using issues instead of personality hatred as their means of motivating the electorate.
The above only covers resistance at a macro level. What about the little people who could get in Trump's way? For me, I believe that if one could get a second passport, that one should do so now. Money can slowly moved outside the country and invested elsewhere. This could be done legally, without records, if the amounts are small and the resulting foreign investments were not interest bearing. (I'll let my readers figure this out for themselves. There are legal issues involved in the movement of money across our border that I don't want to discuss here, lest I am charged with giving information on how to commit a financial crime.) Ideally, one would have a skill that is in hot demand AND would make it possible for a quick exit to Canada. Americans with skills on this list will likely be welcomed North of our border. But what about the rest of us? The New York Review of Books published Rules for Survival in an Autocracy. And they are:
- Rule #1: Believe the autocrat. He means what he says.
- Rule #2: Do not be taken in by small signs of normality. Consider the financial markets this week, which, having tanked overnight, rebounded following the Clinton and Obama speeches.
- Rule #3: Institutions will not save you. It took Putin a year to take over the Russian media and four years to dismantle its electoral system; the judiciary collapsed unnoticed.
- Rule #4: Be outraged. If you follow Rule #1 and believe what the autocrat-elect is saying, you will not be surprised.
- Rule #5: Don’t make compromises. Like Ted Cruz, who made the journey from calling Trump “utterly amoral” and a “pathological liar” to endorsing him in late September to praising his win as an “amazing victory for the American worker,” Republican politicians have fallen into line. Conservative pundits who broke ranks during the campaign will return to the fold.
- Rule #6: Remember the future. Nothing lasts forever. Donald Trump certainly will not, and Trumpism, to the extent that it is centered on Trump’s persona, will not either.
I don't know exactly what will happen over the next few years. But I do think these will be trying times, and it will be our duty to protect America from its own delusions of greatness.
It is a little ironic that the title of one Beatles' tune is "Happiness is a warm gun" when one of the Beatles died because of a crazy man with a gun. Obviously, we need to make sure that crazy people do not get or have guns. But how do we do that when one of our fundamental rights would be impinged?
Unlike many pro gun people, I am willing to listen to arguments that might affect my right to keep and bear arms. I am not afraid of my neighbors, nor do I think that I need a gun for self defense. I do not have any intention of walking into stores with my guns on display, as this would be a shout for attention and not have anything about my right to keep and bear arms. But I do worry now and then that there is a slow erosion of our right to keep and bear arms as a check and balance against the power of an over reaching government.
Using guns as a tool of revolution is an important right. Yet, it's not a right that our founding fathers felt would be exercised often. They felt that the inefficient structure of our government, with multiple sovereigns would provide a check and balance against tyranny.
Sadly, there was one big problem. America chose "Life, Liberty, and the Pursuit of Happiness" above "Peace, Order, and Good Government".
The American myth would have us believe in the rugged individual, someone who needs no help from his friends. The myth is embodied in the idea of the American Cowboy, someone who rides alone on the range, and only comes into town when delivering cattle to the railroad's stockyards. If you look at the same Cowboy from Japanese eyes, they see a group forming to take care of a task, and focus on the function of the group and not the individual. The truth lies somewhere in the middle of these positions.
I used the phrase "Peace, Order, and Good Government" in an earlier paragraph. And this is what a lot of people think when they think of Canada. They are just as prosperous as America, and yet, few people fear extreme poverty. They have avoided warehousing their poor, and they treat their poor more humanely than we do. No Canadian fears going broke because of medical bills, nor do Canadians worry about a Military Industrial complex starving the civilian economy of the funds needed for government to serve the people.
Canadians do not have a bill of rights that has the same force as those in the United States' Constitution. They have gradually traded freedom for security - but have done so, knowing what they have traded for. Two hundred and forty years ago, Americans would call them kin. But that was before the war of 1812. Now, we call them kindred folk - a very big difference, one that acknowledges the different evolution paths of our nations.
Am I advocating that we sacrifice our right to own guns for safety? Definitely not! But I feel that we should look at our neighbor to the North and learn from the things they are doing right - and then try to do them better. One thing I can say, we'd never see bombastic windbags like Trump, Cruz, Santorum and others running the country. Instead, we'd see a more middle of the road (albeit a little too far to the left for most Americans' tastes) leadership that focuses on the needs of the 95% instead of the 5%.
It's hard to believe that the New York Stock Exchange once looked like this. The stock market was less regulated then, but never a place for a timid person to risk his/her money.
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One of the things I've said for years is that I believe in open, fair, and transparent markets. In an ideal world, these markets would be self regulating. However, powerful players love to distort markets via the use of rules, and via a lack of transparency. In the case of the stock market, most disputes are settled via arbitration - which is often rigged in favor of the large firm by the nature of familiarity. Precedents from one settlement are not applicable in the next case, so the large firms have an edge which is almost impossible overcome.
However, the lack of transparency affects more markets, and has an even greater effect. For example, the current practice of "Non-Standard" sizing makes it much harder for a person to "compare apples to apples" when determining the price of goods. In the case of a carton of Orange Juice, the standard 64 oz. size was shrunk by all players to 59.5 oz. - making it much harder for people to determine what the real price was. Also, the shrunken size went less far, so the customer had to buy more containers to sate their needs for Orange Juice. Something similar happened in the size of Tuna cans - a few years ago, the standard size was 6 oz. - now it's 5 oz.! No one asked the consumer (in these terms) whether we wanted to pay the same money for smaller size packages, or more money for the same size packages. If they did, the marketplace would have chastised the sellers of these goods - something they avoided by obfuscating their price hikes with package size changes.
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Right now, people are starting to see a crisis with student loans. This is another example of marketplace interference creating disastrous effects. A little over 150 years ago, it was "easy" for a person to attend some of the nation's most prestigious universities. All they had to do was learn the "basics" - which included Latin, and other skills no longer needed in the real world - and then pay the bills for school - which weren't that expensive. However, after World War 2, the GI Bill made it easier for students to afford college - and a college education was seen as the ticket to middle class success. Years later, our nation's policies changed to provide poor people with grants to go to college, trying to create a more diverse student base in these schools. And then came the age of college loans - which I see as a total disaster. Instead of increasing the supply of college seats (which would have reduced prices and increased availability), policy simply increased demand for college seats by making student loans cheap, easy to get, and with no demand that a student comes out with a salable skill. The only effect here was to raise the price for seats in a good school.
What happened to the students? Many got saddled by debt, studying in majors that would not prepare them for jobs in the outside world. When a student owes money on a student loan, it is almost impossible for it to be discharged in bankruptcy. As a result, the interest on the debt makes the student loan virtually impossible to pay off.
But what would happen if we eliminated the Federal guarantee of payment? What if these loans could be discharged in bankruptcy? Well, many of the private lenders would cease lending money, marginal students would stop going to college, and colleges might be forced to lower their prices for study. The powers that be don't want that. The banks making a lot of these student loans would cease making loans - and making guaranteed profits.
I posed a question to a couple of people and got the same negative response - therefore I know I'm on to something.... What if (1) there were no guarantees of student loan repayment by any level of government, and (2) a student loan lender could insist that a student loan borrower major in a field likely to result in a job? Both people said that this would be wrong - the student has a right to study what he/she wants to study. But at whose expense? The student is usually way too immature to make many decisions which will impact the rest of his/her life. Part of college's function in society should be more than that of a trade school - it should teach a person how to think, and how to look at life with a long term perspective. One of these people said that if he were to take out a bank loan for a car, that the bank has no right to tell him what car to buy. Yet, one could counter - that if a car manufacturer's finance arm offers you the loan on the car, it should have the right to tie you into buying one of their cars.
In short, the lack of a efficient market (with rules for proper debt discharging) for funding higher education has caused a crisis in higher education that also affects non-students. If a former student is saddled with too much student debt, that same person may not be able to afford getting married and having children. And if this person has children, he/she may not be able to pay enough in school taxes to educate the children - a long term risk for society.
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Not all problems in society can be resolved by market forces. Other methods must be used to limit consumption of resources. Great Britain spends about 35% of what America does on health care, and has a roughly equivalent standard of national health. Canada spends about 50% of what America spends. And other developed nations are in the same league. What is different? They all recognize that health care doesn't work with a marketplace model. So, instead, they ration care in ways that Americans would consider unacceptable. Britain uses results based medicine, and when in doubt, chooses the cheapest alternative. There is a waiting line for almost everything except acute emergency care - and even then, there are rules and regulations that apply - as if one were part of a giant HMO.
I do not advocate the British or Canadian models, because they err in ways Americans would not accept. But the German and French models have a lot to offer - if only we would examine them more closely.
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Americans like the idea of free express roads that take them from town to town, and city to city. There is one big problem - the price - FREE. This has encouraged the growth of the trucking industry over that of the railroads who pay for the upkeep of their track. One might say that truckers pay gas taxes that should maintain the roads. But in many states, especially in the South, these gas taxes have not been raised in years, nor have they been indexed to inflation. As a result, we're seeing part of our transportation infrastructure neglected by lack of proper funding, and now at great risk - as many structures are at the end of their life spans.
What happens when people have to pay to use a road? People actually think - do they need to make this trip? And this is an important question, as it reflects a market helping to shape a behavior. There is a discipline that takes place in a well functioning market. The trick is to design a market well, regulate that market well (but minimally), and make sure that only the right things are governed by that market.... This, as I see it, is the big challenge of the 21st century.
Has anyone noticed that the cultural divide in America in the 21st century isn't that much different from a map of the United States drawn at the time of the Civil War? Most of the states drawn in blue are "liberal" states, while most of the states drawn in gray and territories drawn in brown are "conservative" states. In a previous entry, I noted that the lunatics are now in charge of the asylum. What I didn't note was how geography plays a big part in a region's cultural values.
Areas of high population density are often hotbeds of cultural diversity. One can not but have his or her values tested by being in contact with people who think differently. A typical New Yorker will have coffee at a pushcart staffed by an Iranian, eat lunch at a Kosher deli staffed with Mexican labor, and have dinner at an Italian restaurant staffed by Albanians. On another day, that same person may eat breakfast at a Greek diner staffed by Columbians, have lunch in a cafeteria staffed by native born Americans, then have dinner at a Soul Food joint before rushing off to an Irish bar....
Contrast the above to life in smaller towns in the old Confederacy. In many of these small hamlets, one might not even find one decent restaurant - and have to grab a burger at the local pub. (Charlie Daniels' "Uneasy Rider" comes to mind here.) Due to the remoteness of many of these places (think of small towns in the Rockies and in Appalachia), many people socialize with people who often are related to each other by inter-generational intermarriage. Their views often aren't challenged, as they only meet people like themselves on a regular basis. When one lives in these smaller communities, the locus of social activity is often the local church. This doesn't sound like much, but think of it as the one institution in the South that wasn't crushed after the civil war, and you'll see how dysfunctional values of 150 years ago could be preserved to the present day.
Religion, as an institution, changes much slower than society in general. This is good, when people need a connection to the eternal. It is bad when dysfunctional values are passed on from one generation to another. Years ago, my mother made a big deal about our church changing the hymnal being used every Sunday. Imagine what it was like dealing with the issue of slavery - something which the bible permits and has rules for. If a person comes from a society that accepted slavery, and was forced to end it - it is likely that the religious institutions would be slow to follow the political mandate. It is also likely that these same institutions would help people find ways around the political mandates (legal and illegal) - which we saw in the era from Reconstruction to the Civil Rights battles of the mid 1900's.
People in conservative areas are slow to change with the times, and there are still traces of institutional racism found across the USA - including the "Northern" states. In Nixon's "Southern Strategy", he knew what language the GOP could use to flip it from Democratic Blue to Republican Blue. And he was successful. Unfortunately, he also eliminated the mixing of conservative and liberal values in BOTH parties which helped stabilize American government. Now, we have a very conservative GOP which uses both a religious and plutocratic litmus test for its candidates - and its influence is growing in the short term, while demographics condemn it to likely failure in the long term.
Would we have been better off if the South had left the Union? I'm not sure - it'd have been one hell of a hard border for both sides to police. Socially, I think the North would have been better off, and would have looked more like today's Canada with its higher priority on social welfare and fairness. The South, however, would have had a history similar to today's South Africa - with a period of Apartheid and ostracism from world politics, followed by a more democratic, but polarized country.
Instead of what could have been, we have what we have now - a country fragmented along a rural/urban divide, where the more conservative elements are holding off on the needed investments in our common future. Sadly, I don't see anything changing soon....
