I don’t know what I find more disturbing;

The tragic terroristic assault in Mumbai or……

the trampling to death of a Walmart employee by customers seeking bargain prices on worthless shit…..

…. the day after Thanksgiving.

The ‘Myth of the Rational Voter’ by Bryan Caplan offers an enlightening explanation of our political reality.

1. Unlike market behavior voting behavior is irrational because the cost of being irrational is low. Unlike your decision on how to spend your money the impact of your decision on how you vote is largely born by someone else. The actual impact of a single vote is small. You in a sense get the pleasure of a short term indulgence and the longer term cost is largely born by others.

2. The average voter underestimates the benefits of free markets and free trade and overestimates the positive impact of government programs. The average voter is ignorant of the current budget, overestimating the portion spent on foreign aid and welfare and underestimating the portion spent on defense and Social Security. The average voter thinks corporate and business profits are much larger than they are.

3. To get elected the politicians must pander to the wishes and perception of an ignorant voter. Yet to stay in office a leader must deliver a sound economy, and to do so requires actions contrary to those promised to get elected. The voters ask for policies they really do not want.

4. The painful but usually effective solutions (in the long run) can be executed by a cabinet or bureaucratic officials, somewhat sparing the elected official from the charge of ignoring the popular (but often wrong) desired policy or will.

5. Lawyers make effective politicians because they are trained to argue a position regardless of its merit. Economic principles that offer real solutions are complicated and the people most knowledgeable on the subject are poor at teaching and convincing the voting public. Policy wonks rarely get elected.

The Republicans have been so dismembered that they will have little influence on Obama’s administration. He will likely find his real opponents within this own party.

When Clinton was first elected the party pushed too far left, primarily with Hillary Health care and other issues such as gays in this military. It quickly cost them control of the Congress. Consolidation of Obama’s power base may require him to use him new power to constrain his own party.

The Republicans are fragmented. There is the religious right/ pro life part of the party; there is the free market solutions segment; there is the fiscally conservative yet still somewhat authoritarian segment; and there is the neoconservative/ world police segment whose mission is to avert the next Hitler.

Many generally conservative voters have a problem with one or more of these segments of the Republican Party. If the Democrats could shed the tax and spend label and become the party of fiscal responsibility they could rule for decades.

The challenge to controlling health care cost is whether you can control cost without reducing choice. That is what sunk Hillary Care.

If government wants to provide a benefit it should actually pay the cost. By forcing health care providers to take low reimbursements the providers must shift cost to the paying customers and it inflates their costs.

If government intends to provide health care to the lower income then it must make a choice how much care to provide- they will have to allocate the cost to the most necessary coverage and perhaps not include dental, psychological, cosmetic, or even life saving treatments with relatively low success rates.

Yes they will have to make life and death decisions.

For some reason in health care we believe that reducing choice lowers costs. This does not hold true in any other sector of the economy and it does not hold true in health care either.

One way to lower health care costs is for government to actually fund the commitments it has already made. A second is to return control of their health care costs to the individuals. Tax deductible Health Savings Accounts is a good start, but this option is very new and is only catching on so far with the upper income. It needs time to grow,

Employers and insurance companies have come between the individual health care consumer and their provider. Replacing this third party with a government bureaucracy will not improve the situation. It will just replace the higher costs with rationing; lowering choice and quality.

In the November 10, 2008 Newsweek, economist Robert Samuelson describes the economic shift with the phrase “affluent deprivation”. Income gains will be modest and largely siphoned by increases in taxes, energy costs, and health care spending.

Growth which was largely taken for granted will be pressured. Thoughts on how to divide the pie may take precedence on how to grow the pie.

Social Security, Medicaid and Medicare are now 2/5 of out bloated budget.

The strain on these commitments with a low birthrate and an aging population is enormous and the solutions are almost inevitable, regardless of party philosophy.

I have contended for years that the social security retirement age will be raised, and that these social benefits will be means tested. If you are fortunate enough to still have a large 401k balance when you retire, your social security will adjust downward.

The affluent elderly will have to pay more for medical procedures that the lower income.

It does not matter if you call this a tax increase on the rich, or a betrayal of the government trust, the fact is that our government has been making a promise that they can not keep. We can not raise taxes enough to cover the bill and we can not likely grow out of the predicament either. These steps will be inevitable.

Both parties have refused to address this for decades