Beyond Economics

The End of Growth and Time for a New Era

Category Archives: Health Care

How Goldman Sachs and Wall Street Pull the Strings

These are two lengthy but very readable articles from Matt Taibbi in Rolling Stone that I posted on in August but want to highlight again now.

The Big Takeover The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution (3/19/2009)

It’s over — we’re officially, royally fucked. No empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country’s heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The Great American Bubble Machine From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression – and they’re about to do it again (7/13/2009)

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

Here is an extended excerpt on Bubble #6: Cap and Trade

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Health Care, Markets, and Government

Bob Searles’s post got me thinking about health care and the underlying issues. This post is partly a response, but it turned into more of a rant against those who worship at the alter of the free market. In the process, I admit to using some hyperbole to illustrate my points. I do not mean to lump Bob in with these faux free marketeers entirely as his perspective is much more thoughtful and authentic. What I am reacting to is a free market ideology that seems to assume that more government necessarily means less individual liberty and that “government run” by definition is inefficient and inferior to the market.

The motivation to define things as goods vs. rights
Obviously, many things like hamburgers and haircuts are clearly goods (or services). More generally, if something is a right, then government may be needed to protect it (e.g. free speech) or provide it (e.g. national defense). If something can be defined as a good, then perhaps the market can take care of it. Therefore, the more things we can define as goods the less government we will have. If you believe that government is inherently bad, then you would like to define health care as a good, lest we turn it over to government (making it bigger) and lose fundamental political and economic liberties.

Rights are those things which are fundamental, but what’s fundamental?
Which is more important to most people (and to society), the right to carry a gun and spout off their opinions or having health care for their families? I guess you could argue that the right to bare arms and the right to free speech are fundamental to protecting us from the tyranny of government. Tyranny can be evil. I guess you could argue that you would rather be dead (from lack of health care) than imprisoned in a concentration camp. But let’s step back. You don’t have to give up these rights to have universal health care, even single payer. My point is that individual freedoms may not be the be all and end all. Even if we moved to a system of complete socialized medicine and government gets bigger, why does that threaten individual political liberty? That’s just an assumption.

The real motivation of the faux capitalists
Oh, but there’s economic liberty…the right to get paid hundred’s of millions of dollars  to run Home Depot’s stock price into the ground over 10 years (while Lowe’s skyrocketed) and then get paid hundreds of millions more to go away. Just knowing that’s a possibility is so motivating, it’s my reason for living and the idea that, if I were to make that kind of money, the government might take away an extra 10-20% is just more than I can bare. Why that would just kill the economy and anyone’s incentive to work or invest and create jobs. And nobody would want to invent anything any more.

Choosing to make health care a fundamental right
So is health care an inalienable human right? One could argue more so than anything else. But even if it is not, societies can choose to make it make it a fundamental right. I want to live in a society that does. Rights, whether to health care, free speech, or to carry a hand gun are what we, collectively, decide them to be. If you don’t want to be affected by anyone else, go find yourself an island.

Then move to Canada
Oh, but I might have to wait for certain medical procedures that I don’t have to now. Full disclosure: I  have great health insurance provided by my employer and my job is secure. Actually, I am tired of that straw man. Limitations in some areas of the Canadian and British health care systems are cherry picked and constantly cited as examples of why “government run” health care would be so terrible. Even then, those are only two out of many, most of which work quite well. And their citizens are often quite happy with the size of their government and have plenty of personal freedom. Oh, but I forgot, they will never have the ability to throw a $70,000,000 wedding anniversary party.

But how much health care would be a right?
So if health care is a right, the question becomes: How much? What is basic health care? Does it include drugs for chronic diseases? What if it was my fault that I got the disease? Do I have the right to cancer treatments if I am 20 years old? How about if I am 90 years old? Do I have the right to a liver transplant? What if I wasn’t an alcoholic? What if I am willing to pay for it? Do I have the right to plastic surgery if I think I’m not good looking and it’s causing me mental distress? Where do we draw the line? Oh, it’s so complicated, I guess only the market can sort this out. Or perhaps the churches. But what if I am an atheist?

We can figure this out, but not in less time than it takes to choose a puppy
There will need to be lines drawn. We can’t prolong everyone’s life indefinitely with artificial or transplanted organs even if we redistributed all the wealth in the world. We do need a national/societal debate about this. There has to be rationing and lines drawn at various points. While we don’t need to stall, it certainly is going to take a lot longer than selecting a White House dog.

Arguably, there’s a pragmatic reason for universal health care
One could argue that even if health care is not a right, we should, as a society, provide it anyway because it would cost us less to do so when externalities are considered. If the child of an unwed mother does not get proper prenatal and child health care, how much do you suppose that child might cost society if it becomes delinquent or violent. How much will it cost to incarcerate that child as an adult for 5, 10, or 25 years, let alone the damage that child might have caused along the way?

Time to redefine economic scarcity
But even if it did cost us more to have universal health care, in the 21st century, what we think of as scarcity is a myth. There are plenty of resources in the world for everyone to live well with a lot left over for some to benefit from incentive systems that reward them for hard work and responsible behavior. Yes, we do have to be careful about handouts creating dependency. We can figure this out. But I don’t lose sleep about some people intentionally or unintentionally mooching off the rest of us. I am far more outraged by how much the best and brightest were paid billions in bonuses to trash our economy while so many go without anything.

Utopian myth of the free market
The utopia of a free market is a myth. As soon as anyone gets ahead,  they will begin to work with others to protect and expand their position.  A ruling elite will develop and take over the government (as they have in the U.S.). The ruling elite will convince the ignorant masses that the government is their enemy. Because they control the government, but really despise it, they will only use it to their advantage and run the rest of it poorly, proving their point. There will be the illusion that there are two opposing political parties, one promising to protect you from the government, the other promising to protect you from big business. But government and big business are in bed together.

Beware the one-size-fits-all ideologies
Both governments and markets are needed to manage human affairs and resources. There will always be a natural tension between individualism and collectivism, between government and free markets. We have seen what happens when the government completely runs the show (Soviet Union, etc.). Now we have seen what happens when individual economic actors and markets are essentially unregulated. Oh, but that doesn’t really count because we didn’t really have free markets. Well, that’s about as close as you are ever going to get. The problem is that any system is subject to corruption and subversion. If too much power is given to either governments or markets, one will capture the other. A healthy balance is needed. If both political  and economic power are not limited, you will get a ruling elite. It’s complicated and messy and requires periodic corrections when the pendulum swings too far in one direction or the other.