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Hoisted by Their Own Petard

The Problem with Investigating Trump from Kevin Williamson at National Review:

The Obama administration left us with a poison bouquet, a federal government whose investigatory agencies are thoroughly corrupted, politicized, and untrustworthy. We know for a fact that the Internal Revenue Service, acting after demands from Democratic elected officials, targeted conservative-leaning activist groups for investigation and harassment, and that this harassment was outrageous, including demands that religiously oriented organizations disclose the very contents of their prayers. We know that that Internal Revenue Service illegally and maliciously leaked information about the donors of the National Organization for Marriage, in order to facilitate political and financial retaliation against them. We know that evidence, including e-mails, was destroyed to subvert investigation into this criminal conspiracy, and that congressional Democrats went to extraordinary lengths to protect IRS officials from being punished for their wrongdoing. We know that one of the key figures in that case, Lois Lerner, is enjoying a large federal pension rather than a small federal prison cell.

We know that the Department of Justice was wildly politicized during the Obama years, doing Democrats’ bidding on everything from voter-intimidation cases to the Clinton e-mail case. We know that the National Labor Relations Board was used as a political weapon to try to punish Boeing for setting up new production in Republican-leaning South Carolina rather than Democratic-leaning Washington State. We know that the ATF was used to audit a business whose owners were not involved in A, T, or F, but who were involved in election-reform projects, and that the same firm was targeted by OSHA and the IRS. We know that a politicized EPA was involved in such extraordinary shenanigans that its director felt the need to set up a pseudonymous e-mail account in order to hide her activities from ordinary oversight. Even our Democratic friends have concluded that the FBI under the Obama administration was politicized, though they cannot quite seem to make up their minds about the direction or intent of it.

HKO

I have commented on this blog before about the great damage done to our institutions by their politicization under the last administration. This is far more critical than the issues of fake news. It is real news that was ignored as long as it served the purposes of those in power.  The Democrats weaponized the government institutions and are now apoplectic that this power is now in the hands of the opposition, They violated the cardinal rule of political power: never put power in a position unless you can picture your worst nightmare in that position.

I will predict that just as the recount and the effort to sway the electors backfired on them, this investigation into Trump’s Russian connection will backfire on them as well.

The Unluckiest Political Movement

from Kevin Williams at National Review, Camino de Servidumbre

But men do not like being told that they cannot do that which they wish to do, and this is particularly true of men who have a keen interest in political power. Hayek believed that efforts to impose central planning on economies were doomed to fail, and that this failure would not be met with humility but with outrage. When socialist policies produced their inevitable economic consequences, the first reaction would be to try to pass laws against the realization of those economic consequences. We saw a good deal of that in Venezuela, for instance with the imposition of currency controls when excessive social-welfare spending produced hyperinflation.

But those efforts are of course doomed to failure as well, which leads to outright political repression, scapegoating, and violence. In Venezuela, strongman Hugo Chávez, who was adored by American Democrats ranging from the Reverend Jesse Jackson to former representative Chakka Fattah and any number of Hollywood progressives, undertook to silence opposition media by insisting that they were simply fronts for moneyed elites working to undermine the work of democracy. (It will not escape your notice that our own progressives are making precisely the same argument in the matter of Citizens United, a First Amendment case considering the question of whether the government could prohibit the showing of a film critical of Hillary Rodham Clinton.) His protégé, Nicolás Maduro, has continued in the same vein.

Socialism is either the unluckiest political movement in the history of political movements, one that just happens to keep intersecting with the careers of monsters, or there is something about socialism itself that throws up monsters. There is nothing wrong with Venezuelans, and nothing unusual about them: Here at home, our own progressives dream of imprisoning people for holding unpopular political views, nationalizing key industries, and shutting down opposition media. They have black-shirted terrorists attacking people with explosives on college campuses for the crime of holding non-conforming political views. And they aren’t averse to a little old-fashioned Stalinism, either, provided there’s a degree or two of separation: Bernie Sanders, once an elector for the Socialist Workers party, remains the grumpy Muppet pin-up of the American Left.

“Socialism can be put into practice only by methods of which most socialists disapprove,” Hayek told us.

Hayek Predicts Venezuela

Kevin Williamson makes an interesting distinction between the welfare state and socialism.

from National Review, Camino de Servidumbre

There are two ways of thinking about economics: Many progressives (and many right-wing populists) believe that economics is less of a science and more of an ideology, that all of that talk about scarcity and supply and demand is mostly mumbo-jumbo deployed by people who are getting their way to ensure that they keep getting their way. The alternative view (the view of most economists) is that economics is an effort to describe something real, that while it is important to understand the difference between the map and the territory, all those economic models and demand curves add up to a description of an aspect of reality that is not subject to negotiation and is not a matter of mere opinion.

That was what concerned Hayek and his colleagues in what has become known as the Austrian school of economics, Ludwig von Mises prominent among them. They believed that the central-planning aspirations of the socialists were not simply inefficient or unworkable but impossible to execute, even in principle, owing to the way in which knowledge is dispersed in society. Drawing on more recent work in fields ranging from physics to computer science, modern complexity theorists have expanded enormously on those insights, arguing that markets, like evolution, are complex beyond comprehending even in principle, hence unpredictable and unmanageable. As he famously summarized it: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” From this Hayek, an old-fashioned liberal, concluded that while there might be room in a free and open society for a broad and generous welfare state, the project of providing benefits to poor and vulnerable people must be understood as distinct from the socialist project, which is to put economic production under political discipline. And this has been born out in our own experience: Sweden is simultaneously a free-trading, entrepreneurship-driven capitalist society and a society with a large and expensive (and recently reformed) welfare state. Sweden, sometimes held up as the model of good socialism, has in fact been following a policy of privatization and libertarian-ish reforms for 20 years, with an explicit commitment of moving away from an economy of government planning to an economy of market choice.

A Health Care Reader

The health care debates are particularly contentious because they are a focus of the fundamental philosophical differences in political and economic thinking.  While activists insist they are only trying to be pragmatic in providing care for all, they remain hostage to ideology much more than they realize.

Politicians want to provide benefits without paying for them. They hide costs, even from themselves, in the tax code, regulations, mandates, cross subsidies, and wishful thinking.

Righteous virtue signaling insists there is a moral right to health care.  There is no such right either in the constitution or in a moral code that will inevitably contradict that right with a claim on someone else that they have not agreed to.  Your right to health care does not include the right to get the services of a health care professional for free. This posturing also does nothing towards solving the problem.

Kevin Williams at National Review makes the point clearly in The ‘Right’ to Health Care:

Declaring a right in a scarce good is meaningless. It is a rhetorical gesture without any application to the events and conundrums of the real world. If the Dalai Lama were to lead 10,000 bodhisattvas in meditation, and the subject of that meditation was the human right to health care, it would do less good for the cause of actually providing people with health care than the lowliest temp at Merck does before his second cup of coffee on any given Tuesday morning.

Health care is physical, not metaphysical. It consists of goods, such as penicillin and heart stents, and services, such as oncological attention and radiological expertise. Even if we entirely eliminated money from the equation, conscripting doctors into service and nationalizing the pharmaceutical factories, the basic economic question would remain.

We tend to retreat into cheap moralizing when the economic realities become uncomfortable for us. No matter the health-care model you choose — British-style public monopoly, Swiss-style subsidized insurance, pure market capitalism — you end up with rationing: Markets ration through prices, bureaucracies ration through politics. Price rationing is pretty straightforward: Think of Jesse James and his “Pay Up, Sucker!” tattoo on his palm. Political rationing is a little different: Sometimes it happens through waiting lists and the like, and sometimes it is just a question of money and clout. American progressives love the Western European medical model, but when Italian prime minister Silvio Berlusconi needed a pacemaker, he came to the United States to have it implanted.

Obama invoked courage to save his health care bill. Neil Cavuto properly questioned how much courage it takes to hide economic realities from the voters:

Obama invokes courage because the only struggle he can envision is a moralistic one, between good and evil- between rich and poor.  He does not consider the intellectual dishonesty or consider that ends he pursues do not justify the means. He does not consider that there may be a difference in means to achieve the end he desires, one that is both moral and functional. His approach was neither.  Cavuto quotes John Kennedy, “The great enemy of the truth is very often not the lie-deliberate, contrived and dishonest, but the myth- persistent, persuasive, and unrealistic.”  That is a keeper.

The ACA is based on very bad analysis and ignorant economic thinking. There is a difference between health care and health insurance. Those without health insurance are not often without health care.  Insurance is not an effective means to cover routine known expenses; it should cover the unusual and rare chance of a catastrophic expense

Again from Kevin Williamson at National Review, Back to Reality:

In the same way that Washington has tried to manage housing by regulating and subsidizing mortgages, politicians have long tried to manage health care by regulating and subsidizing health insurance. It does not work. It has not worked, and it is not going to work.

Critics on the left, especially those who support British-style government monopolies on health care, insist that because demand for medical services is relatively inelastic — because you aren’t comparison shopping after a traumatic car accident — ordinary market operations cannot handle health care. But demand for food is inelastic, too, at the hungry margin. It’s just that we rarely get to that margin because food is plentiful, thanks to massive investment in its production, distribution, and improvement. Ultimately, that is what has to happen with health care, too.

But what about pre-existing conditions?

From Michael Tanner at National Review, The Vexing Question of ‘Preexisting Conditions’

A lot of numbers have been thrown around about how many Americans have preexisting conditions. Barack Obama, for example, has suggested that the number is as high as 133 million. But these figures grossly exaggerate the number of Americans who would be affected by changes to the ACA’s preexisting-conditions provisions. They include, for example, Americans on Medicare or employer-provided health insurance, neither of which are subject to medical underwriting. If you get your health insurance at work, the company’s overall costs may increase to reflect its claims experience in the event that Congress’s reform bill gives insurers the right to charge more for those with preexisting conditions, but your individual contribution will not increase because you have such a condition.

And The Pre-existing Lie by Rich Lowry

You’re not affected if you get insurance through your employer (155 million people), or through Medicaid or Medicare. You’re not affected if you live in a state that doesn’t request the waiver, a category that will certainly include every blue state and most red states, too. Even if you buy insurance on the individual market and live in a state that gets a waiver, you’re not affected if you’ve maintained insurance coverage continuously and not had a gap in coverage longer than 63 days.

By this point, we’re talking about a fraction of a fraction of a fraction of the population. If you do have a pre-existing condition in a waiver state and haven’t had continuous coverage, you can be charged more by your insurer only the first year. The state will have access to $8 billion in federal funds explicitly to ease the cost of your insurance, and the state must further have a high-risk pool or similar program to mitigate insurance costs for the sick.

Jeff Jacoby addresses some of the fundamental problems in our health care system,  Ditch Obamacare, and don’t stop there

If Republicans were serious, and willing to endure some political pain to reach a better outcome, they’d eliminate the tax deduction for employers who provide health insurance as part of employee compensation. They’d repeal laws that force insurers to cover a legislated array of medical benefits and treatments. They’d remove the barriers that restrict consumers in one state from purchasing health insurance across state lines.

And they’d break the destructive habit of treating health insurance as the logical and preferable way to pay for routine health care.

 

John Cochrane at The Hill, Here’s what healthcare looks like in a perfect world:

It’s wiser to start with a vision of the destination. In an ideal America, health insurance is individual, portable, and guaranteed renewable. It includes the right to continue coverage, with no increase in cost. It even includes the right to transfer to a comparable plan at any other insurer.

Big cost control comes from the only reliable source — rigorous supply competition. The minute someone tries to charge too much, new doctors, clinics, hospitals, and models of care spring up competing for the customer’s dollar. Access to health care comes like anything else, from your checkbook and intensely competitive businesses jockeying for it.

he original sin of American health insurance is the tax deduction for employer-provided group plans — but not, to this day, for employer contributions to portable individual insurance. Insurance then became a payment plan to maximize the tax deduction. It became horrendously inefficient as people were no longer spending their own money.

Worse, nobody who hopes to get a job with benefits then buys long-term individual insurance. This provision alone pretty much created the preexisting conditions problem.

Cross-subsidies are a second original sin. Our government doesn’t like taxing and spending on budget where we can see it. So it forces others to pay — it makes employers to provide health insurance. It forces hospitals to provide free care. It low-balls Medicare and Medicaid reimbursement.

The big problem is that these patches and cross-subsidies cannot stand competition. Yet, without supply competition, costs increase, the number of people needing subsidized care rises, and around we go.

HKO

The illusion that market forces do not work in health care is nonsense,  We have spent decades subverting market forces and then declare that it does not work. The problem with our health care is that market forces only work too well, and the system has responded to the adverse incentives created by poorly analyzed and poorly executed solutions.  If you pour money into a market, mandate an increase in demand, restrict the supply and reduce competition, then you will get the mess we have.

The debate is subjected to hyperbolic partisan ignorance, useless virtue signalling, intentionally misleading statements,  if not out right lies about both the nature of the problem and the solutions proposed to fix it.

Reality is not optional and it is an act of fraud and cowardice for political leaders to pretend that it is.

Further suggested readings:

Metaphysical Rights

from Kevin Williamson at National Review, The ‘Right’ to Health Care,

Declaring a right in a scarce good is meaningless. It is a rhetorical gesture without any application to the events and conundrums of the real world. If the Dalai Lama were to lead 10,000 bodhisattvas in meditation, and the subject of that meditation was the human right to health care, it would do less good for the cause of actually providing people with health care than the lowliest temp at Merck does before his second cup of coffee on any given Tuesday morning.

Health care is physical, not metaphysical. It consists of goods, such as penicillin and heart stents, and services, such as oncological attention and radiological expertise. Even if we entirely eliminated money from the equation, conscripting doctors into service and nationalizing the pharmaceutical factories, the basic economic question would remain.

We tend to retreat into cheap moralizing when the economic realities become uncomfortable for us. No matter the health-care model you choose — British-style public monopoly, Swiss-style subsidized insurance, pure market capitalism — you end up with rationing: Markets ration through prices, bureaucracies ration through politics. Price rationing is pretty straightforward: Think of Jesse James and his “Pay Up, Sucker!” tattoo on his palm. Political rationing is a little different: Sometimes it happens through waiting lists and the like, and sometimes it is just a question of money and clout. American progressives love the Western European medical model, but when Italian prime minister Silvio Berlusconi needed a pacemaker, he came to the United States to have it implanted.

There is no substitute for abundance. And the great enemy of abundance is the bias against profit. There is something deeply rooted in us that instinctively thinks we are being abused if someone else makes a profit on a deal. That is a dumb and primitive way of thinking — our world is full of wonders because it is profitable to invent them, build them, and sell them — but the angel is forever handcuffed to the ape.