Parker Griffith radio interview

U.S. Representative Parker Griffith, whom I've written about before in this space, was recently on WBHP.

I like his positions on the stimulus, bailouts, cap & tax, and healthcare: all no!

I was happy to hear him speak out against the AMA, which many doctors can't do out of fear of losing their licenses. The AMA cartel is a big source of what's wrong with healthcare in America.

He was also correct that the so-called reform proposals are really "overreach" and a "power grab," nothing to do with improving health care. In a 1961 speech, Ronald Reagan warned, "One of the traditional methods of imposing statism or socialism on a people has been by way of medicine."

So far so good. But then he got to his solution.

I understand the poor guy was sleep deprived, but he fell back into the usual feel-good blah-blah-blah about making health insurance companies "play by the same rules." In real life, this will mean more federal oversight, higher prices, less competition, and therefore less consumer satisfaction.

As a physician, he ought to understand the folly of treating the symptom. The real problem is adults still believe in Santa Claus but use the code name "health insurance." Imagine if State Farm were expected to pony up every time you took your car in for an oil change or other routine maintenance. Health insurance is no such thing: it's really a sort of pre-paid entitlement program, but entirely perverse. For example, legislation requires everyone to pay the same premium in employer-sponsored group insurance. This means healthy people are overcharged, and the couch potato gets a free ride. The system subsidizes and therefore encourages poor health!

In the market, sellers compete against sellers, but buyers also compete against buyers. Throwing deep-pocketed "insurers" into the mix inevitably drives prices beyond affordable levels, especially given the way "insurance" destroys patient price-sensitivity.

I like Peter Schiff's proposal much better. Health "insurers" exist only because of aberration in the tax code. This special tax treatment is why open-market consumers can't purchase their products for reasonable prices. Schiff proposes ending this subsidy but simultaneously raising the personal exemption so as to make the change a wash for taxpayers. The true costs of health "insurance" would then be laid bare. The much cheaper option of major-medical policies would become more attractive. Insurers would have to compete with each other on price, terms, service, and so on. We'd no longer be chained to our employer-sponsored plans.

This would create enormous downward pressure on healthcare prices because people would pay for oil changes.. err, routine doctor visits out of pocket from money that they gasp saved in anticipation of such expenses. Of course when the out-of-pocket limit hits, their bona fide insurance would kick in and cover the rest. Economic arbitrage doing its work means that such a system would also benefit those who opt not to purchase insurance policies.

The jingoistic breast-beating about money versus commitment was poor cover for the fact that Uncle Sam is drowning in debt and flat-out broke. The feds can barely afford to pay their bills now. How will they afford a new program that will dwarf Social Security and Medicare?

We have universal legal care

Wow, is it awesome too!

After his appeal had failed and before he was exonerated, Lloyd filed a complaint with the state. He told them Slameka [Lloyd's public defender] never gave him the time of day. Harlin still has a copy of Slameka's rebuttal, which she read out loud:

“This is a sick individual who raped, kidnapped and strangled a young woman on her way to school. His claim of my wrongdoing is frivolous, just as is his existence. Both should be terminated.”

When asked if he really thought his own client should be executed, Slameka said yes, that's what he wrote at the time and that's how he felt.

Read the full story at NPR.

After having 17 years of his life stolen over a horrible crime that DNA evidence showed he didn't commit, Lloyd got out but died two short years later.

His sister, Ruth Harlin, says if someone close to her needed a defense lawyer today, she would do whatever it took to pay for a lawyer.

“I'd mortgage the house,” Harlin says. “I would not let a public defender defend anyone in my family ever again. Ever, ever again.”

Universal legal care's problems—chronic underfunding, unmanageable caseloads, top talent unwilling to participate in the insanity, poor standard of care, and on and on and on—are built in despite its proponents' good intentions.

Economics 101: Incentives Matter!

First thing Monday morning!

Pennsylvania state employees' most recent paychecks were some 30% short, and legislators are waving the threat of goose eggs on the next round. Flat-broke California has already been paying in IOUs, but banks are starting to balk at their worthless paper. Many other states were slow to make good on refunds due taxpayers.

Now turn the tables. We all know people who've been there, and some have been so unfortunate as to experience it personally. The taxman demands payment, and pleas of hardship or budget problems—the same appeals California and Pennsylvania are making now—find no mercy.

“If you don't pay up, we'll garnish your wages.” Revenue agents may even threaten property seizure or jail time.

Government jobs are widely considered to be the among the safest. Civil servants tend to make less money, but the perception of increased security is part of the compensation. GEICO, the Government Employees Insurance Company, was founded with a business model limiting policies to government employees on the bet that they're less likely to be risk takers.

These tough times where even governments can't make payroll help us all appreciate the importance of having an emergency fund as cushion against these sort of blows. How well could you absorb the hits that folks in California and Pennsylvania have taken? Personal-finance advisor Dave Ramsey recommends setting aside 3 to 6 months of expenses at Baby Step 3. But where's the extra money to sock away supposed to come from?

Which brings me to my tip. How big were your income-tax refunds last year, state and federal? Big refunds are not money from heaven: you just paid too much in taxes. Using refunds as a savings program is a rotten plan because the government doesn't pay you interest on your generous loan to them. Now states are earning slow-pay credit ratings, so don't leave your state or the feds owing you money you may need.

First thing Monday morning go to your accounting or human resources department and ask for a new W-4 form to adjust your federal withholding and the appropriate form for your state withholding. The tables on these forms are conservative and will cause you to overpay. TurboTax, for example, has a withholding calculator that gets you close to zero, not much owed either way. Use your most recent paystub and last year's returns to fill in the blanks and get your new withholdings. Easy-peasy.

The point is more money in each paycheck. By increasing the allowances you claim on these forms, less money will be deducted every payday as prepayment on next year's tax bill. So instead of sending that money to the IRS and then waiting—and hoping—for them to send it back next April, keep your hard-earned money. Think of it as getting your refund early. Use it to bulk up your emergency fund, increase 401k or IRA contributions, invest in your professional development, or whatever purpose you see fit.

If you have questions or concerns, be sure to consult with your tax professional.

“The statists are in control.”

I'd like to be as sure as Peter Morici is in this CNBC clip about the fate of cap-and-trade and the Bride of HillaryCare.

In support of his bullish view, he uses an odd metaphor of an aircraft landing on the deck of a carrier and then, “The politics are very important here. I think cap-and-trade's going down. I think healthcare's going down. And when investors see that, and when the public sees that, and when entrepreneurs see that, they'll say, ‘Hey, America's back! The statists are out!’”

Peter Schiff responds: “I hope these things are defeated. If they're not defeated, it's just gonna take a bad situation and make it worse. But the statists aren't out. They're here; they're in control.”

I'm pleased that this pejorative has been making a comeback in recent months, but it's at least eight years too late.

If you're picking up despair, it's an after-effect of Valkyrie's cinematography, which my wife and I watched last night. Portraits everywhere of Der Führer. Endless arrays of Nazi black, white, and red on stark display. The rule of man. The horror of people being tyrannized by this evil criminal gang and, even worse, so many enthusiastically taking part in its atrocities. It's a frightening historical demonstration of the ratchet effect's potential.

Here in America, the cutting-edge, heady mathematical techniques of addition and subtraction show the situation has also gone out of control, albeit along a different axis. The feds will never pay off their debts—not in real terms, that is. They cannot possibly make good on their promises of Medicare and Social Security: certainly not with Bush's addition to the former, and with the latter, everyone up to around my age cohort is being forced to pay fully fifteen percent of annual income into a system from which realistic hope of receiving benefit is zero. The same goes for paper money and the rest of the welfare state. Already, people are arguing over who should be forced to the back of the line, and the state-run rationing system for healthcare hasn't yet been instituted!

In the long run, the bad guys can't win because they're fighting economic law, but between now and then can be dreadful. The decent remnant of Germans, whom it's easy to forget when jingoistically lumping them all together as “dirty Nazi krauts,” ultimately depended on calamity to knock them off the bad course they were on.

Not a great place to invest one's hopes. Ideas have power.

The National Debt Road Trip

A huge step!

As of today, more than a majority of the U.S. House of Representatives have cosponsored the Federal Reserve Transparency Act, but Parker Griffith is still taking a wait-and-see approach. This bill matters to ordinary Americans because all government activities should take place in sunlight. The Fed's easy-money policies are destroying the value of the dollar, which will cause increased prices for everyday goods such as gas and groceries, and destroying families' balance sheets by enticing households to go deeper into debt.

Ron Paul's staff issued a press release heralding the achievement.

Why hasn't the Fed already opened its books for all to see? What do they have to hide?

Dear Congressman Griffith

Before entering office, you gave your solemn word to support the U.S. constitution. Article I, Section 8 of that instrument invests in the Congress oversight of the currency of the United States: “The Congress shall have power to … coin money, regulate the value thereof, and of foreign coin …”

As an aside, the English verb coin has a couple of meanings. One is to stamp metal with guarantees of weight and fineness. The other is to invent out of thin air, as in “coin a phrase.” The delegates in Philadelphia clearly intended the first sense, but others have substituted the latter via stealthy amendments.

I write to urge you to join with 186 (as of this writing) of your colleagues in the people's House and cosponsor HR 1207, the Federal Reserve Transparency Act.

In earlier correspondence, you passed the buck to the Financial Services Committee, writing that you will keep my views in mind "should this legislation reach the House floor for a vote." More than forty percent of your fellows have forsaken the slick politician's fence-sitting, non-committal, wait-and-see opportunism in favor of leadership by taking clear stands.

In the same letter, you assured me that you “support the highest level of accountability.” HR 1207's sunshine on the Federal Reserve, a body that acts in your name thanks to the oath of office you took willingly, would create accountability where secrecy and subterfuge have been the standard, and your active support would demonstrate your commitment to open, honest, accountable government.

Sincerely yours,
Greg Bacon

UPDATE: Mr. Griffith has cosponsored HR 1207!

Scapegoats and the mortgage crisis

When my wife and I were shopping for houses a few years ago, an originator preapproved us for a loan amount so ridiculously high that I knew a mistake must have happened somewhere.

"But you have no debt," the agent insisted.

At this point, I could have patted myself on the back for having arrived, for being a success, for Being Somebody, for having Achieved The American Dream.

I'm sure the agent would have been quite pleased to bank the commission check on such a monster. My family, on the other hand, would have been so house-poor that developing a taste for licking paint off the walls would have become a necessity.

The agent was doing her job. She has zero responsibility for me or my family: that's my job. Had I plunged so deeply into debt, I would have been the fool. I'd have been even more foolish to do so willingly but then turn around and charge "Predatory Lending!"

The same thing happens on car lots. For most people, buying new cars is stupid, and leasing cars even worse. Wise people don't go to car lots seeking financial advice from car salesmen. For good reason: it's not their job! A car salesmen is there to sell you the car you want, regardless of what a lead weight around your neck it'll end up being and the enormous opportunity cost you'll pay.

That cute girl at the office whose marriage is on the rocks and likes to make flirty comments, you could easily throw away your own marriage and your own family over her. Keeping it in your pants is your job, not hers.

Opportunities to screw up royally are everywhere. Children and the incompetent must depend on others to prevent them from making stupid mistakes. It's part of being adults for the rest of us.

Wal-Mart, health care, and irresistable market forces

Bo's post today about Wal-Mart made me think of an excellent definition, thanks to Byrne's Eye View:

capitalism

Economic system under which any legitimate complaint can be rephrased as a decent business plan…

Bo's complaint is about customer service: it can take a long time to get in and out of the place. In a free market, goods are allocated by price and by time. When we think of Tiffany & Co., for example, a price tag with many digits comes to mind, but if a customer walks in weary from hauling around so much cash, they'll graciously relieve him of that burden.

Wal-Mart chooses the opposite corner: low prices but slow service. Target's business model attracts customers with more money to spend, and they do it with features such as cleaner stores and better customer service, which their customers value more highly than the few extra dollars that they trade in return.

Even deeper in the corner of low price and long lines are the popular proposals for "free" health care. (As P.J. O'Rourke quipped, "If you think health care is expensive now, wait till it's free.") The "free" health care in Canada and the UK are characterized by long waiting lists -- which exist for exactly the same reasons as the bread lines in the Soviet Union.

Economist Ludwig von Mises wrote, "Even the most mighty government, operating with the utmost severity, cannot succeed in endeavors that are contrary to what has been called 'economic law.'" The mighty United States government has sort of a pilot program for "free," "single-payer" health care: the VA's frightening maze, and, boy, is it a success!

I'm confident that the calls for "free" health care are well-meaning, but their inevitable result would cruelly force everyone into the same trap -- while politicians insult everyone with unending proclamations of success. (Don't be surprised if members of the congress also give themselves a "special" health care system just as they did with Social Security.)

The lesson is simple: there ain't no such thing as a free lunch.