Archive for the ‘economics’ Tag

Trump Isn’t Important   8 comments

I know there are a lot of people who believe that Trump is going to end the world as we know it, while there are also a lot of people who believe he’s going to make everything better.
Image result for image of a crisis tsunamiI don’t. Trump is irrelevant.
I said last year during the run up to the election that I didn’t think it would matter who won the election because we were headed for rough times regardless. Hillary couldn’t fix it. Trump can’t fix it. Gary Johnson couldn’t have fixed it. The United States is headed into a series of problems from which there is no avoidance.
The government is $20 trillion in debt, but the American people are also deeply in debt on a personal and corporate level. The population is aging. There are all sorts of stresses on the social contract. The political elite no longer represent the people.
Those are just a few examples of the stresses that are forming successive tidal waves aimed right at the country. It really doesn’t matter who the president is. We’re going to go through rough times because the structural deficits of our current society are starting to reach a critical point.
The government(s) at all level of American society made promises during economic good times, back when debt was modest, energy was cheap and abundant and the work force greatly outnumbered the dependent classes. Unfortunately, as the work force shrinks and the dependent class grows, those promises cannot no longer be sustained. Ronald Reagan warned us about this the year I turned 21. It’s now 36 years later and we’ve not really addressed that crisis. We’ve just added more to it.
For the last 10 years, the economy has been producing tepid growth, warning us that the underlying structure is become fragile. Timothy Geithner of all people conceded this in a recent Foreign Affairs article. The central banks and governments have employed all their resources toward propping up shaky markets, borrowing extraordinary sums to prop up government spending and have now stretched themselves to the point where they cannot address the next crisis.
You could have an actual miracle worker in the White House and he/she would be unable to forestall the next crisis with the resources left to them. They could try to lower expectations and prepare people for the inevitable crash while also trying to bolster hope that their sacrifices in this generation will be for the good of the future, which is what leaders in the past have done. Historically, great leaders who have dealt with successive crisis trains have not overcome the crises. They managed the edges of them and called upon citizens to make sacrifices for a better future.
Franklin D. Roosevelt did not lead the country out of Depression. Eight years into his presidency (11 years after it started), the country was still deeply mired in the Depression in 1940. It took the wartime rationing and government spending on an unimaginable level combined with a post-war economic boom to return the nation to prosperity.
So focusing on President Trump’s admirable qualities or his major deficits is really a distraction. The economic crises that are coming our way cannot be won like a war might be. All the policy tweaks and grand pronouncements in the world won’t avoid the inevitable. There’s a reckoning coming that no leader can reverse. No one president can extinguish $20 trillion in debt, exacerbated by imperial overreach and political disunity. He or she could make a dent, but the real “solution” is to let it play out and hope there are pieces to be salvaged when the meatgrinder gets done with us.
In the meantime, you can do a lot for yourselves by eliminating personal debt, stocking up on food and learning employment skills that don’t rely so much on a global market and government licensing. Maybe things will be better for our kids, but $20 trillion in debt means it’s more likely things will be better for our grandkids … if we and our children are willing to make the necessary sacrifices over the next several decades.

Gender Pay Gap Facts   Leave a comment

I’m a woman who does not believe the myth of the gender pay gap. Why? Because I work in a female-dominated sector of the economy where every male I know who works in the same profession gets paid less than I do. Furthermore, I work FOR another sector of the economy that is traditionally male-dominated, so I have observed the wage disparity between the men and the women in that profession and can easily see the underlying reasons for it.

Critics of markets claim that American women only make a percentage of what men make and insist that this is evidence that markets discriminate against woman. Back in the 1970s, women (as an aggregate) made about 65% of what men (as an aggregate) made. Now the figure is said to be about 80%, but recent studies show “the gap” is much narrower than that.

How does that work? Well, I alluded to it. The 80% number is comparing aggregate figures — all male workers compared to all female workers. The 80% number does not compare men and women with the exact same skills, experience and employment preferences. Instead, it refers to the ratio of female to male wages among full-time workers, across all kinds of jobs and regardless of skills and preferences of the workers. It’s not an apples-to-apples comparison of men and women doing the same work.

So the claim that women get paid 80% of what men do for the same work is not just a myth … it’s really a lie.

 

The second myth involved here is that the missing 20% represents discrimination by employers. It’s not supported by the facts, which are discoverable through an apples-to-apples comparison of men and women in the workforce.

 

That’s what economic studies of “the gap” attempt to do – hold everything else constant and compare employees who are as similar as possible and who are in very similar jobs, except for gender. If such studies cannot explain a gap by skills and experience, then economists treat that as due to discrimination, pending further studies. The consensus of those studies has been that the clear majority of “the gap” is explained by skills, experience and job preferences.

 

I said “clear majority” of the gender wage gap is explained by factors other than discrimination. That doesn’t mean ALL of it is explained by other factors. There’s still about 3-5% of the 20% gap that cannot presently be accounted for by economic differences, so might possibly be due to discrimination.

Yeah, that was some precise language, because myths live in imprecision.

What this means is that discrimination might exist in labor markets. Economic studies show that most of the 80% figure is mythical and can be explained by factors other than discrimination, but a portion of the gap is not explained by economic factors, so could be attributable to discrimination … at this time, using existing studies.

 

 

But what about other forms of sexism? If employers mostly don’t discriminate based on gender by paying equally qualified men and women differently, isn’t it possible that other forms of discrimination are affecting pay differentials by gender? Maybe the differences in men’s and women’s skills and knowledge are due to sexism before they reach other labor market … sexism in education and socialization. Perhaps girls are told from a very young age that we’re not good at math and science, which discourage girls from majoring in professions that result in earning higher salaries and this contributes to the 80% figure.

Yes, that’s entirely possible, but why do we seek to punish employers for sexism engendered by parents and schools? If sexism pushes women into lower paying fields, that doesn’t mean that they are necessarily being paid less than men for the same work at the same experience level in that field. What’s causing their lower wages is sexism in places other than the markets.

Defenders of markets can legitimately argue that markets usually don’t discriminate by gender, but that sexism exists elsewhere and might indirectly affect economic outcomes by gender.

Feminists will often balk at “gap” explanations that involve the different “preferences” that men and women have. It is true that women are more likely to work part-time than men and that they are less likely to work overtime when they work full-time. While there are some women who do not follow these patterns, women who prefer to spend more time with family or work in less risky occupations, will make lower incomes over the course of their careers.

Feminists argue that such “preferences” really aren’t preferences because they are the result of socialization. Women, they will claim, don’t really “choose” to work less or select less risky jobs, so much as they are forced into gender roles by social patterns. Yeah, okay, but again, why are we punishing employers for patterns that are set in childhood?

 

There’s no reason to deny that socialization might matter. Agreeing with that claim doesn’t imply an obligation by government or employers, because the problem largely isn’t with employers or in labor markets. If we think that socialization is a problem, and that the world would be a better and more free place if women felt more empowered to enter the math and science majors and earn a better living as a result, we can work to change the culture in ways that address these concerns. The same could be said of persuading men to devote more time to child raising and other forms of household production. If we believe that, then working through voluntary processes and institutions of civil society to reduce sexism seems like a better system than trying to force change through government policies designed to punish employers as if they are the cause and not the recipients of the issues we’re trying to address.

 

 

Posted April 20, 2017 by aurorawatcherak in economics, Uncategorized

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Why ACA is Making Us Less Healthy   Leave a comment

I believe sincerely that everyone should have the right to do whatever he wants, provided it doesn’t harm other people or their property. I’m not saying I like it or think it is good for you, but I stand by your right to smoke like a chimney (so long as you don’t do it in my airspace), drink like a fish (but not if I share a household with you), or eat like a hippo (so long as I don’t pay your grocery bill).

Image result for medical careSadly, your lifestyle choices became my problem when the Affordable Care Act was passed. Your poor decisions now cost me money, which is a form of property. Hey, you, with the 50-inch waistline … that’s my kid’s college education in medical expenses that you expect me to pay, so yeah, I have a problem with the Affordable Care Act.

Back in 2009 when the Democratic-dominated government started touting the Affordable Care Act, they assured that the expansion of medical insurance coverage to all Americans would come at no cost to any citizen. A lot of us (about 60% of the electorate) were skeptical and that time and anyone paying even cursory attention to their medical insurance premiums since the go-live date for Obamacare knows our skepticism was well-founded. Medical insurance premiums have dramatically increased for most Americans not in the subsidized classes.

 

It might have seemed like a noble idea – that everyone should be required to have medical insurance just in case, but the Affordable Care Act also required medical insurance providers to cover pre-existing medical conditions.

That means that health-conscious people like me must subsidize medical care costs for people who make poor health choices. These poor health choices lead to diabetes, coronary artery disease, cancer, obesity, COPD, etc., all long-term chronic diseases that require expensive treatment. Coverage of pre-existing medical conditions greatly increased the cost that medical insurance providers were forced to pay out for treatment. This was supposed to be offset by young, healthy adults joining the health insurance pool, but younger, healthier people take one look at the expensive premiums and choose to pay the mandatory fine, because it is less than the premiums. This increases medical insurance premiums even more.

As Rick tried to highlight, individuals are less likely to make wise health choices if it is perceived that they will not have to bear the financial consequences of those choices because insurance paid by others covers the majority of the costs. Medical insurance holders are able to seek out healthcare services without the cost of those services being a major deterrent, which encourages people to go to the hospital and doctor for very minor ailments. After all, you want to get value for what you are paying for. Then doctors are motivated to extract the maximum amount of payment … prescribing expensive and sometimes unnecessary treatments and medications because insurance is covering the cost.

Rick points out that doctors and hospitals are often at the mercy of insurance companies and what gets approved for coverage, so they use a scatter-gun approach toward billing. Patients often demand more expensive treatment because of an impression that it’s better and because cost isn’t an obstacle. This completely undermines doctor-patient relationships where the goal is to choose the best and most sensible treatment options based on a cost-benefit analysis.

All of this has increased the cost of medical insurance. While providing medical coverage to everyone seems very humanitarian, it forces health-conscious people to subsidize the medical care costs of people who make poor choices and is causing employers to drop insurance coverage as it becomes unaffordable. If current trends hold, and there’s no reason to believe they won’t, the Affordable Care Act is going to bankrupt the middle class.

We’re not joking when we call it the UN-Affordable Care Act.

In a perfect world where liberty was still an ideal we upheld, everyone would be able to live their life however they want and be accountable for the personal and financial impact of their choices. The fact that I love bacon even though my family has a history of stomach and bowel cancer would not matter in the least to you because it wouldn’t affect you. Unfortunately, with the ACA, we’re all in this mess together, which means we all affect each other. It becomes absolutely imperative that we all strive to be the healthiest people we can be so as to reduce the economic burden on our neighbors.

Please don’t think I’m down on obese people to the exclusion of smokers or alcoholics or whatever. I’m using obesity as my demonstration condition because of the costs associated with it and it’s lack of social stigmaticism. My Baptist friends who don’t drink or smoke will smugly sit on their ample rears complaining that I’m wrong. “Being overweight is not unhealthy and has no impact on the cost of healthcare,” they will say.

Sorry, folks. You’re wrong. Research demonstrates that obesity and even being moderately overweight are the second leading causes of preventable death, right behind tobacco usage.

Here are some alarming economic implications for obesity:

  • Obese adults spend 42% more on direct medical care costs than adults who are a healthy weight.
  • Per capita medical care costs for severely or morbidly obese adults (BMI >40) are 81% higher than for healthy weight adults. In 2000, around $11 billion was spent on medical expenditures for morbidly obese U.S. adults.
  • Moderately obese (BMI between 30 and 35) individuals are more than twice as likely as healthy weight individuals to be prescribed prescription pharmaceuticals to manage medical conditions.

Did you know that 68.8% of the US citizens are considered overweight and obese? That represents a dramatic impact of overweight and obese individuals upon our medical care system.

Obesity is just one of many other preventable medical conditions that contribute to the cost of medical insurance, but obesity and being overweight are the most widespread.

We would all be personally well-serviced by quitting smoking, drinking less alcohol, exercising more, making better food choices, taking supplements wisely, and getting adequate sleep. There’s the direct positive impact on yourself, but better health habits would have a direct positive impact on the economy, and especially those of us who are forced to bear the cost of our nation’s medical care costs.

Unfortunately, you won’t see a financial benefit to making these changes. Unlike car insurance, where you receive lower premiums if you are a good driver who doesn’t have a lot of accidents, getting healthy doesn’t work the same way. Unlike life insurance, where you receive lower premiums if you’re a healthy individual, the ACA assures you will be paying for others who don’t make the same wise choices.

The result?

A less health population, which is indicated by slipping mortality rates. Although it sounds like such a great idea to provide medical insurance to everyone so they will be “healthier”, the reality is that the United States population has become less healthy as more of us have become covered by medical insurance.

Trump’s Slim Down   6 comments

I am a big believer in cutting government and I would probably be behind President Trump’s budget proposal if it weren’t for the increases in military spending.

Under Hillary Clinton’s reign, the State Department failed so badly at the job of promoting peace that the American personnel ended up in two expanded wars we didn’t need to be in (Afghanistan and Iraq) and four new wars we didn’t need to be in (Libya, Yemen, Syria, and Ukraine). Yeah, we like to think that because we didn’t commit ground troops to these wars, that we weren’t involved. That’s foolish and untrue.

wapoobamabudget1I can’t find when a president has ever offered a budget proposal that was less than the previous budget … maybe it’s never happened. Trump should get some credit for being willing to cut the domestic budget. Unfortunately, he wants to add more money to the largest military in the world. That makes me feel less safe rather than more.

That aside, the rest of the budget makes some good sense. He wants to cut the State Department and USAID by $10 billion (a 28% decrease from 2017). The budget outlines a 31% cut in funding for the EPA, which might mean I can afford to heat my home next winter, since the EPA is trying to take wood burning away from us here in Fairbanks.

Within several Departments, he would eliminate duplicative programs that exist elsewhere. About 62 programs would be affected.

Trump’s blueprint proposes to eliminate funding for 19 independent agencies which exist outside of the federal departments headed by a Cabinet secretary. Understand that these agencies are not accountable to the taxpayers or voters in anyway. They stand outside of the Executive Branch and the only control Congress has over them in to defund them.

Here’s a snapshot of the mission and history of the 19 independent agencies President Donald Trump said he would stop funding entirely under his “budget blueprint.” Trump’s proposal also calls for deep cuts in other agencies and departments, including the Environmental Protection Agency and the State Department, and shifts federal resources to defense.

Trump’s budget cuts would make deep gashes into Alaska’s federal funding. And I’m okay with that. But what are some of the agencies Trump wants to cut entirely? Before we get all lathered, maybe we should look at them.

African Development Foundation

Stated mission: The U.S. African Development Foundation is an independent federal agency established by Congress to support and invest in African-owned and -led enterprises, which improve lives and livelihoods in poor and vulnerable African communities.

Established: 1980 (Jimmy Carter was president)

If we had a surplus instead of a debt, maybe, but we don’t, so …. And if we had a surplus, we should be turning it back to the taxpayers.

Appalachian Regional Commission

Stated mission: The Appalachian Regional Commission’s mission is to innovate, partner and invest to build community capacity and strengthen economic growth in Appalachia.

Established: 1965 (Lyndon Johnson was president).

Chemical Safety Board

Stated mission: The Chemical Safety Board is an independent federal agency charged with investigating industrial chemical accidents. Headquartered in Washington, D.C., the agency’s board members are appointed by the president and confirmed by the Senate.

Established: Under the Clean Air Act of 1990 (Bush 1 was president) (operational in 1998 -when Bill Clinton was president )  I think this is already done by the EPA … or should be.

Corporation for National and Community Service

Stated mission: The Corporation for National and Community Service serves more than 5 million people at a local level through a wide array of services. These include projects in six priority areas: disaster services (isn’t that FEMA’s mission?), economic opportunity (isn’t that the Small Business Adminisration?), education (isn’t that the Dept. of Ed?), environmental stewardship (isn’t that the EPA?), healthy futures (whatever happened to Public Health Centers?), and veterans and military families through CNCS’s core programs: AmeriCorps, Senior Corps and the Social Innovation Fund.

Established: 1993 (under Clinton)

Corporation for Public Broadcasting (Could also be called the Communist Propaganda Bureau)

Stated mission: The Corporation for Public Broadcasting’s mission is to ensure universal access to noncommercial, high-quality content and telecommunications services. It does so by distributing more than 70 percent of its funding to nearly 1,500 locally owned public radio and television stations. CPB is a private, nonprofit corporation. (Brad and I watch PBS every Friday night and some weekday evenings as well. Believe me when I say that it is highly biased and snarky in the same way that the BBC is extremely biased, manipulative and snarky). PBS would continue to exist. It is 90% supported by local stations and listeners having been put on a reducing diet during the Contract with America in the 1990s.

Established: 1967 (under Johnson)

Delta Regional Authority

Stated mission: The Delta Regional Authority works to improve economic opportunity by helping to create jobs, build communities and improve the lives of the 10 million people who reside in the 252 counties and parishes of the eight-state Mississippi River Delta region.

Established: 2000 (under Clinton)

Denali Commission

Stated mission: The Denali Commission is an independent federal agency designed to provide critical utilities, infrastructure and economic support throughout Alaska. With the creation of the Denali Commission, Congress acknowledged the need for increased inter-agency cooperation and focus on Alaska’s remote communities.

Established: 1998 (under Clinton)

Institute of Museum and Library Services

Stated mission: The Institute of Museum and Library Services is the primary source of federal support for the nation’s 123,000 libraries and 35,000 museums. Its mission has been to inspire libraries and museums to advance innovation, lifelong learning, and cultural and civic engagement. (Whatever happened to local libraries supported by their local communities? And, there are all these bookstores and Amazon available too.)

Established: 1996 (under Clinton)

Inter-American Foundation

Stated mission: To channel development assistance directly to the organized poor in Latin America and the Caribbean. The Inter-American Foundation also encourages partnerships among community organizations, business and local government directed at improving the quality of life for poor people and strengthening democratic practices.

Established: 1969 (under Nixon)

U.S. Trade and Development Agency

Stated mission: The U.S. Trade and Development Agency helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. The agency links U.S. businesses to export opportunities by funding project preparation and partnership-building activities that develop sustainable infrastructure and foster economic growth in partner countries.

Established: 1961 (under Kennedy)

Legal Services Corporation

Stated mission: The Legal Services Corporation is an independent nonprofit organization created to provide financial support for civil legal aid to low-income Americans. The LSC promotes equal access to justice by providing funding to 134 independent nonprofit legal aid programs in every state, the District of Columbia and U.S. territories. Grant recipients serve thousands of low-income individuals, children, families, seniors and veterans in 813 offices in every congressional district.

Established: 1974 (Under Gerald Ford)

National Endowment for the Arts

Stated mission: The National Endowment for the Arts is an independent federal agency that funds, promotes and strengthens the creative capacity of our communities by providing all Americans with the opportunity to participate in the arts, exercise their imaginations and develop their creative capacities.

Established: 1965 (under Johnson)

National Endowment for the Humanities

Stated mission: The National Endowment for the Humanities serves and strengthens the republic by promoting excellence in the humanities and conveying the lessons of history to all Americans. It accomplishes this mission by awarding grants for top-rated proposals examined by panels of independent, external reviewers.

Established: 1965 (under Johnson)

Neighborhood Reinvestment Corporation

Stated mission: The Neighborhood Reinvestment Corporation, also known as NeighborWorks America, seeks to promote reinvestment in urban, suburban and rural communities by local financial institutions working cooperatively with residents and local government. It funds 235 organizations, monitors their progress, and provides grants and consulting services.

Established: 1978 (under Carter)

Northern Border Regional Commission

Stated mission: The mission of the Northern Border Regional Commission is to catalyze regional, collaborative and transformative community economic development approaches that alleviate economic distress and position the region along the New England-Canada border for economic growth.

Established: 2008 (under Bush 2)

Overseas Private Investment Corporation

Stated mission: The Overseas Private Investment Corporation is the federal government’s development finance institution. It mobilizes private capital to help address critical development challenges, and in doing so advances U.S. foreign policy and national security priorities.

Established: 1971 (under Richard Nixon)

U.S. Institute of Peace

Stated mission: The U.S. Institute of Peace works to prevent, mitigate, and resolve violent conflict around the world. USIP does this by engaging directly in conflict zones and by providing analysis, education and resources to those working for peace. (I’m pretty sure this is the State Department’s job in combination with the UN.)

Established: 1984 (under Ronald Reagan)

U.S. Interagency Council on Homelessness

Stated mission: The U.S. Interagency Council on Homelessness coordinates and catalyzes the federal response to homelessness, working in close partnership with Cabinet secretaries and other senior leaders across 19 federal member agencies.

Established: 1987 (under Clinton)

Woodrow Wilson International Center for Scholars

Stated mission: The Wilson Center, chartered by Congress as the official memorial to President Woodrow Wilson, is the nation’s key nonpartisan policy forum for tackling global issues through independent research and open dialogue to inform actionable ideas for the policy community. (You know, there are several think tanks that accomplish this goal without federal funds).

Established: 1968 (under Johnson)

These agencies represent a drop in the bucket that is the US federal budget’s corpulence, but it’s a step in the right direction … or would be if President Trump was also not committed to building up our already over-sized military.

Of course, it is only a proposal. Congress makes the actual decisions. Although Trump could follow Barrack Obama’s example and not fund some agencies he didn’t care for.

One thing I’m very interested to see is if the House and Senate actually pass budgets this year. As we should well know, when the House, Senate and White House were all in Democrat control, they were unable to pass a budget. Let’s see if the GOP can do better.

Liberty and Its Shadow – Capitalism   1 comment

I came to Christ as an individual. Mom and Dad weren’t rooting for me. My best friend couldn’t drag me. I stood before Christ alone, having no antecedents and am now acutely aware that God has no grandchildren. I can share my faith with my children, but I can’t make them believe; even though both say they do, they have to decide for themselves what THEIR faith is going to look like.

Image result for image liberty with capitalism as a shadowLiberty and its shadow, capitalism, did not emerge in a vacuum. They developed from the religious revolution of the 16th century which led eventually to the separation of church and state, and freedom of worship. That singular concept that salvation is individual and that individuals can decide their religious affiliation for themselves led to the recognition of other liberties. Free speech and freedom of the press were examples of this liberat­ing movement. Seeing these successes, men like Adam Smith and Edmund Burke began to suggest that economic activity could also be free, guided by the individuals who engaged in it rather than strangled by political regulations and controls as mercantilism had done.

Consumers make a million of daily decisions in the market place, choosing to buy this or not buy something else and this projects a pattern that signals to entrepreneurs how they should direct production within their businesses. In the free economy the consumers is sovereign. An inventor can really be proud of his product, but if consumers aren’t interested, he won’t be able to sell it to us. Businesses have no power over consumer except the ability to persuade and the quality of their products. That’s how the free market economy works and, like it or not, it is an integral part of a free society.

Most Americans believe they embrace freedom. We’ll tell you we want the State and churches to be separate. The press should not be censored. We object when we’re told what we can and cannot say, on the street, in our homes, or on social media. We’re in favor of freedom … except …

Except, business people are evil, so we want the government to control and regulate business, to protect the consumer from the wolves in trade and industry. Sometimes that ire is directed at big corporations and sometimes it is more generally spread to include anyone who thinks making a profit is a good idea.

To quote President Barack Obama, “Sometimes you’ve made enough profit.”

 

There’s a truth hidden here. Human beings are flawed. The sins we accuse business people of are the same sins you find in every walk of life. There are wicked businesspeople, but there are also wicked ministers, professors, publishers, and entertainers. Sometimes that television commentator is lying to you for his or her own benefit, to promote her preferred agenda. Yet, we still object to the censoring of the press, government interference in the churches, things like the Hayes Commission to control the movie industry. Why do we single out business people for special sanction to “protect the consumer”? You might ask – Why not? Because as we saddle them with ever more bureaucratic regulations and controls, this creates adverse economic consequences, adding to the cost of doing business, which makes all of us poorer. Worse, when economic activity is not free, every other freedom is jeopardized.

 

Human liberty is more fragile than we suppose. Economics won’t win or even sustain liberty, but when you control the economic life of a people, you control every other aspect of their lives as well.

Thirty years ago, we knew this because we could peek behind the Iron Curtain and see the condition of people who had no economic freedom, but we’ve lost that cautionary example and so it’s easy for groups like Occupy Wallstreet or both major-party candidates for President to demand income redistribution. The economy isn’t the only sector under stress in our society. Really, all of western civilization has been under attack for several generations. Just because the Iron Curtain fell doesn’t mean the attack against business is over. There’s a reason the American middle-class, the epitome of the bourgeoisie, has been shrinking for 30 years and we can look no further than the economic regulations that strangle our economy.

 

For those who failed to take European history … brief lesson here. The bourgeoisie were and are the middle class—townspeople engaged in indus­try and trade. They arose from the peasant class, but were not the nobility, whose values were quite different. While we don’t often live next door to the “nobility” these days, especially in American, it’s important to understand their values because they still exist today. Those nobody hereabouts holds title these days, the values of the nobility have been glowingly enshrined in romance and myth.

The nobleman has cour­age, spends without counting, de­spises petty detail. There is a great air of freedom and unselfishness about the nobleman. He will throw his life away for a cause, not calcu­late the returns. That is the noble idea. In reality, he lives by the serf­dom of others, and he broadens his acres by killing, and taking other people’s land-’the good old rule, the simple plan. That they should take who have the power, and they should keep who can.    … The bourgeoisie opposed such noble free-handedness and supported a king who would replace ‘the good old rule’ by one less damaging to trade and manufacture—and to the peas­ants’ crops. But the regrettable truth is that there is no glamour about trade. Trade requires regular­ity, security, efficiency, an exact quid pro quo, and an exasperating attention to detail … There is nothing spontaneous, generous or large-minded about it. Man’s native love of drama rebels against a scheme of life so plodding and re­sents the rewards of qualities so niggling. …

What a convenient word is bourgeois! How expressive and well-shaped for the mouth to utter scorn. And how flexi­ble in its application—it is another wonderful French invention!        Jacques Barzun

 

The free enterprise system (capitalism) works for the middle class (bourgeois). The nobility has no use for industry and trade. It’s too much hard work and it tends to dirty the hands without providing any glamour. Most of the world’s work today is done by those who have risen from the ranks, largely by their own efforts, in societies which have no rigid caste barriers to prevent upward mobility.

 

We’re told that freedom is something we should all care about, but when we see any particular freedom threatened, everyone does not take an interest. Christians defend freedom of worship. Journalists band together when the freedom of the press is threatened. Watch what teachers do when academic freedom is challenged. When government controls threaten freedom of economic enterprise, busi­ness people and business organizations mobilize to resist the attack.

Uh, not really.

Perhaps the most striking feature of the picture is the extent to which the bourgeoisie, besides educating its own enemies, allows itself in turn to be educated by them. It absorbs the slogans of current radicalism and seems quite willing to undergo a process of conversion to a creed hos­tile to its very existence … This is verified by the very characteristic manner in which particular capital­ist interests and the bourgeoisie as a whole behave when facing direct at­tack. They talk and plead—or hire people to do it for them; they snatch at every chance of compromise; they are ever ready to give in; they never put up a fight under the flag of their own ideals and interests—in this country there was no real resistance anywhere against the imposition of crushing financial burdens during the last decade or against labor legislation incompatible with the ef­fective management of industry.  Joseph Schumpeter

In a perfect world, we’d all defend liberty even when our own isn’t treatened, but in real life, that’s not how things are done.  It’s partly the fault of myriad business people of the past that freedom of the economy is gravely threatened today. When threatened with government regulation, many larger companies compromised with the regulators to create regulations that would favor them rather than their smaller, more efficient competitors. You can’t really blame them. They worried about the short-term consequences of falling sales and how to meet the next payroll and failed to see the long-term consequences of what they were entangling not just themselves, but everyone else in.

The American econ­omy has never been wholly free, instead operating under various political restraints pretty much since Alexander Hamilton got his greedy, manipulative hands on it. Compared to the politically planned economies of other nations ours was relatively free economy until the 1930s and has maintained quite a lot of freedom until relatively recently.

The prosperity US citizens have gained through producing and exchanging in a largely free country has been the envy of the world. Remember, we started out poor. There was little per capita wealth 240 years ago; but our forebears had an abundant faith in the nation’s future under God, a strong belief in themselves, and they practiced the Puritan work ethic. The United States became the land of opportu­nity. Millions of the poor and oppressed of other nations migrated here to make their own way in this “land of the free.” Mostly, they succeeded. Never have so many ad­vanced so far out of poverty in so short a time, as in the last 240 years in the United States.

The relatively free economy we have enjoyed in America has given us unparalleled prosperity, but an affluent society is not neces­sarily a just society, which brings us to the second test of evaluating a free enterprise system: Does it allocate the rewards fairly and equitably?

In a free society every one of us is rewarded according to the value willing buyers attach to the goods and services he offers in exchange. This market place assessment is made by consumers … uh, people, and people are self-centered, biased and ignorant. So, allowing consumers to set the value of people’s contribution to society might not seem like a good idea.

What’s your alternative? Well, before there was capitalism and the free market economy, there was the nobility who acted as the wise and good, judging and awarding on their estimation of personal merit. They assured us that the wealthy deserved their wealth and that the paupers deserved their starvation. They insisted we should all be contented and happy and pay our taxes to them so they could go on judging and rewarding by their own value system. We rejected that system for a better one.

Is it fair that some people make 25,000, while others make only 15,000 and then you have folks who make millions? Don’t we have a lopsided society in which a handful of people have accumulated the bulk of wealth? Shouldn’t be people be able to vote on politicians, who can appoint bureaucrats, who can redistribute the wealth equitably? What makes you think that someone who used to be your neighbor just became Solomon when elected to public office? You would prefer to elect imperfect people to decide how much you earn rather than let imperfect people earn that position by being successful in business?

We do live in an affluent society, and the fact is that the prosperity generated by our relatively free in­stitutions has been widely shared by the American people. Yes, there are rich people and there are middle class people and there are some who remain poor … although even the poor in our country live far more affluent lives than anything my great-grandfather Elmer (a rich man in 1900) could have imagined. The allocation of rewards represents the choices people make … the education they sought, jobs they took, the money they spent, and the investments they made. It’s said that 1% of the population owns 80% of the wealthy, that 10% owns 90%, etc. We could argue about that statistics. But take a look at reality.

Sixty percent of Americans own their own home and 95 percent own a car. I know a few dozen people who don’t have running water, but I live in Alaska and that’s actually a lifestyle CHOICE. Even people out in the Alaska village have electric refrigerators. Eighty-four percent of American homes have a washer and dryer. Eight-four percent of American homes have a computer, and 73 percent have broadband connection.

Capitalism (the free economy) has produced material abundance, and the benefits of our prosperity are enjoyed by almost every American and we’ve exported a great deal of it to millions of people around the globe.

There is no concentration of ownership of everyday things like houses, automobiles and food. It’s when we look at all the money the “rich” have that we allow ourselves to believe that the industry of this country is owned by a handful of stockholders.

Pick any one of the giant corpora­tions and examine its annual report. You’ll find thousands or even millions of people own stock shares, usually exponentially more than the employees of that corporation. Note the large number of stock­holders who are not individuals but institutions. Those fund churches, banks, pension funds. Nearly every American owns a chunk of the corporate wealth of America!

Yes, there are some phenomenally wealth people in this country. Some of them are foolish with their money, but so are a lot of poor people. Others invest their wealth, which helps to produce the incredible variety of goods America enjoys. Others, and sometimes the same individuals, give generously to charity. Americans lead the world in their charitable giving. No other soci­ety has ever allocated its rewards as generously or as equitably.

Our present economic system of free enterprise has made us an affluent society produc­ing over and above our own needs, which we have gener­ously shared with the world. Every person who has participated in the production of goods and ser­vices shares equitably in the fruits of his production. Even those who do not participate live pretty decent lives … far better than what people a century ago lived.

Ultimately, liberty is based on an aspiration deeply rooted in human nature. We all want the freedom to choose. We want to be free to worship in the church of our choice, to choose our own schools, to read freely and speak our minds. We want to be free to be ourselves, even if others don’t agree, so long as we are not harming others. We want to be free to choose our profession or place of employment. We want solitude when we choose to be alone, and we want the freedom to choose our associates—which includes the right to dissociate. These are some of the demands of human nature itself. God made us this way or it’s in our DNA.

“The God who gave us life gave us liberty at the same time.” Thomas Jefferson

 

The free society is our natural habitat. It aligns with human nature. Freedom also works in our economic sector, which is why the market economy (capitalism) works so well. The economy is free when the productive activities of people re­spond to the needs of consumers, discovered through people’s buying habits. Yes, when people are free to spend their money as they please, they may spend it foolishly. They’ll make mistakes. Most of us learn from those errors and succeed in not repeating them.

The biggest mistake of all is to persuade ourselves that we can avoid the little mistakes people make in a free society by adopting a planned economy. A centrally planned nation is necessarily a command society. Individual per­sons are no longer free to make their own decisions. Our private plans must be cancelled whenever they conflict with the overall political plan.We become nothing more than serfs, doing as the landlord dictates.

Economic freedom does not assure you’ll get the income you think you deserve, or the job you believe you’re entitled to. Economic freedom does not dispense with the necessity for work. It only promises that you may choose from among many employment oppor­tunities, or go into business for yourself. And that it outperforms all other economic systems is a bonus point in its favor.

 

 

Come on, GOP! Go Free Market!   3 comments

Lela’s preferred free-market plan for medical care policy would be no plan whatsoever. I’m offended that anyone thinks they need to tell me how to take care of myself. I’m able to make those decisions for myself. Government, get out of the way and let the market work. Free individuals can negotiate among themselves for lower and better coverage and care.

Rick’s preferred free-market plan for medical care policy would include sliding-fee medical clinics that would operate under charitable auspices. We forget that fraternal organizations used to contract with doctors to provide their members with medical care for a low monthly fee and that churches used to operate hospitals. Contrary to revisionist history, these systems and institutions were well-run and responsible for a rapid increase in the overall health and lift expectancy of Americans. That was all before the American Medical Association got involved in deciding who could become a doctor or open a clinic, using the force of government to create a virtual monopoly.

Image result for image of the american health care billRick was stunned when he wrote that. We believe he just became a libertarian … except he supports government-funding for those sliding-fee clinics, so he’s not quite there yet.

The fact is that it’s really scary that so much of the country believes we must have a federal top-down strategy to manage a huge chunk of the American economy. That’s the main problem. We don’t need a federal plan for health care now any more than we needed in the 1990s or the 1950s. Yet Republicans have allowed liberals to frame the entire debate in anti-market terms.

The Freedom Caucus stood up and said these things and Pesident Trump, who is a progressive who in the past said he favored liberty-and-choice-destroying universal health care, pulled the bill. He hinted that they would keep the Amercian Health Care Act on the shelf until Obamacare implodes (likely toward the end of this year) and then dust it off then. That’s the wrong approach!

The AHCA falls far short of a free-market solution. It’s certainly not a repeal of Obamacare. It’s a half measure that tries to fix the unfixable with tiny doses of deregulation that essentially do very little to impact the core of the ACA. The AHCA’s the “tweak” on the rudder of the Titanic headed toward the iceberg that did nothing to keep the behemoth from hitting it and eventually sinking.

Trump suggested a three-phase rollout, but there were no details for the other two phases, so they might as well not exist because the Republicans will lose the Senate and possibly the House in 2018 if things continue the way that they are headed. Obamacare has too many flaws to ever be fixed and pretending otherwise is not going to get us anywhere.

We’ve seen what the Democratic Party plans for health care (and not insurance, but actual care). They would channel us all into Bureau of Indian Affairs-like services that see our mortality rate drop to British levels (dead people are much lower drain on government than living ones). The Democrats oppose opening up insurance markets across state lines because …. Who knows why because it doesn’t make any sense. Opening up auto insurance across statelines did wonders for improving competition and controlling premiums. Thirty years later, my monthly premiums are just now about what they were before the market was opened up. And Alaska has different coverage than, say, New Hampshire, so no, that’s not a problem either … except maybe in the minds of people who think government-run medical care is the answer to the medical insurance crisis in this country. If that’s the only choice you’re willing to accept, all other alternatives look wrong.

The Democrats don’t want to look at access to actual medical care, insurance costs or the continued growth of the welfare state. They seek to constrain markets to create monopolies that can be controlled by a federal regulatory regime. When that fails, because it ignores economic reality, they will insist upon passing single-payer.

“When I was working in France, I had opportunity to do some visitation in England and Germany and look behind the scenes of their medical care systems. When I developed appendicitis, I dosed myself with pain killers and antibiotics and caught a jet to the United States rather than go under the knife of any of my colleagues in Europe. They’re nice people; some of them were very well trained by European standards and they mean well, but I do not recommend any single-payer or universal medical system in the world. All of the ones I’ve seen are inadequate for anyone I love who has any illness requiring high-skilled treatment.” Rick (speaking as a doctor)

Potential Victories:

  • Halting federal funding of unPlanned Parenthood, the nation’s largest abortion mill
  • Offering states more flexibility in the operation of their Medicaid programs.
  • Expanding health savings accounts
  • Getting rid of the individual mandate
  • Opening insurance across state lines
  • Repealing Obamacare’s taxes

Pressure from conservative groups made the American Health Care Act, as presently conceived, a non-starter. That’s a good thing. The Affordable Care Act would have been a lot worse if it hadn’t been for the moderate Democrats who just couldn’t stomach its more socialist aspects. Democrats did not, despite prevailing mythology, compromise with the GOP in 2009. The GOP managed to pass some amendments, but they were all technical in nature – commas and spelling repair. The Democrats were forced to compromise with their own moderates.It only takes a few senators to hold an entire party’s golden goose hostage.

This time around, the GOP was confronted by the conservative Republicans of the Freedom Caucus, who rightly pointed out that the people did not sweep the GOP into office in order to “tweak” Obamacare. They voted for the GOP because the GOP promised to REPEAL Obamacare.

No federal entitlement has been repealed, replaced or even significantly modified after its passage, but this is the fight that caused Republicans to win majority control in 32 states, hundreds of seats in the House and Senate, and that nicely shaped office in the White House. So Republicans need to take a good hard look at where they stand right now. If they don’t have the strength of character to back of full repeal of Obamacare, then they were elected on a lie. Surely someone among them has a better idea than either the AHCA or the ACA.

Republicans, please recognize that you were put into the position that you’re in right now by people who want to get rid of Obamacare. You shouldn’t allow yourselves to be intimidated by Democratic rhetoric that you’re going to kill Grandma and expose “the children” to the winter winds. We know they’re full of gas. They tried to convince the American people that Obamacare would be a political and economic success story even as the American voters argued that it wouldn’t be. Reality has shown the Democrats were phenomenally wrong and that the American people understand economics better than the elites. The voters who put you in office are not going to fall for a lecture about how unpopular a repeal bill will be. Feel free to pass a bill that incorporates the principles many GOP voters say they believe in.

 

REALLY! They’re behind you and even libertarians like Lela and doctors like Rick will cheer you on.

Removing Barriers to Medical Care   Leave a comment

I believe that we all have a right to medical care, but not in the way the progressives want us to believe. My belief is similar to the belief I have in the right of free speech and the press. You have a right to write and publish and to gain access to the tools to do so, but you don’t have a right to compel others do do it for you. So, if the local newspaper doesn’t want to run your article, it doesn’t have to, but if you pay for a blog or your own printing press, nobody has a right to stop you from publishing.

Image result for image of medical care as open marketI have the same belief in the right to medical care. You have a right to access care that you pay for, but you don’t have a right to compel others to provide it for you.

Sadly, the United States government at both the state and federal level have erected barriers that limit your access to medical care. The steepest of those barriers are the licensing laws. Removing those barriers should lower costs while improving quality.

 

Both of my children and two of Rick’s grandchildren were delivered by direct-entry midwives, but barriers against such practitioners in many states limit access, driving up prices and, if you compare US outcomes to European outcomes, endangering the lives of mothers and their children. 

Regarding the different classifications of midwives, the regulations vary from state to state. Nurse-Midwives are legal nationwide but different states have different regulations that cover what they may do, if they can work independently of a doctor, or if they must be supervised by one.

Certified Professional Midwives (CPMs) have been to a school for training but are not nurses. Twenty-six states allow CPMs to practice with some variations in what they legally can do.

Direct entry midwives typically study as an apprentice under someone else before beginning their individual practice, and their practice varies from state to state. Their legal standing is not clear in some states.

Since Medicaid pays for almost 50% of all births, midwives offer the nation an opportunity to save tax dollars while providing mothers with another choice. Europe uses direct entry midwives for 80% of their deliveries, nurse-midwives for most all of the others and their mortality rate for mother and child are much much lower.

It isn’t just the barriers to midwives that have created problems for patients. Other workers have seen their professions restricted as well, and with that comes physical and financial harm to patients. Nurse practitioners should be at the top of any list of professionals allowed to work without restrictions nationwide.

Nurse practitioners are an often overlooked source of health care and, according to Kaiser Family Foundation, can “manage 80-90% of care provided by primary care physicians.” Research shows that patients are just as satisfied with the quality of care provided by nurse practitioners as by primary care physicians.

An Institute of Medicine Report, from 2011, The Future of Nursing: Leading Change, Advancing Health, states that “what nurse practitioners can do once they graduate varies widely for reasons that are related not to their ability, education or training, or safety concerns, but to the political decisions of the state in which they work.”

Twenty states allow nurse practitioners to work independently of physicians to diagnose and treat patients. Twelve states require physicians to supervise nurse practitioners. Nineteen states allow them to practice as long as they have an agreement to work in collaboration with a physician. Other laws limit their scope of practice by not allowing practitioners to prescribe drugs.

With the aging of society, we will see an increase in the need for medical care, but layer upon layer of regulations makes it hard for practitioners to enter the field and thereby makes care expensive, complex and frequently unavailable.

 

 

Removing these barriers is key to improving access to medical care and lowering costs. Obamacare made those barriers even higher, but now we have an opportunity to remove the barriers entirely and allow the open market to work as it should. Let’s lead the way!

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