Paul M. Jones

In the past few months, Americans have seen their government essentially seize control of one sector of the economy after another. Federal authorities now tell the automobile, banking, credit card, and insurance industries what products and services to offer, all while hiring and firing industry executives in order to implement government orders.

Health care represents the latest frontier in this drive to centrally manage the American economy. Yesterday, the country's major health care producers, including insurance companies, hospital and physician organizations, pharmaceutical companies, and health care labor unions, promised President Barack Obama they would reduce the growth rate of their future incomes by 1.5 percent over the next ten years. If those cuts actually happened, it would mean that in 2019 health care costs (both government and patient) would be $700 billion lower than current projections, reducing health care spending by $2 trillion over the next ten years.

Why would the industry agree to this preemptive surrender? Because it means the end of competition. Under the proposed agreement, the government would guarantee a certain level of profit for each health care producer. From the industry's point of view, the goal is to get a seat at the table as politicians and government technocrats "reform" health care--which means it will decide who the winners and losers will be.

via Health Care Corporatism Arrives : Consumers will pay the price if government partners with the health care industry - Reason Magazine.

Regarding increasing health care costs:

if Medicare were less generous, much less would be spent on health care. Now you might think that would be a bad result and that of course a debate worth having. But the mere fact that you favor some amount of Medicare does not lower the cost burden of the amount you favor. If your preferred policy induces say "40 percent more of health care costs" and you can't put all the blame on the preexisting level or path of health care costs. You also have to accept responsibility for the 40 percent boost or whatever the increment is.

via Marginal Revolution: More health care cost fallacies.

This is late notice, as usual, but I'll be speaking at php|tek next week in Chicago. You can see the schedule here.

In addition to my Organizing Your PHP Project talk (updated from the one I have given in the past to include nods to formal namespaces and framework-based projects), I've got Solar on the Hackathon roster, and I have two proposed unconference talks:

• Your Framework Sucks! (a new talk that I'll probably write the night before, if it gets enough votes), and
• Benchmarking PHP Applications and Frameworks, updated with new numbers, and a Rails and Django comparison that might surprise you.

Vote those up (I guess by commenting) if you want me to present them. Hope to see you there!

I'm sure that most people reading this blog via RSS are here mostly for the PHP content. The recent spate of economics and government-related blogging is probably feeling like a bait-and-switch to many of you. For those of you interested only in the PHP-related content, you can subscribe to the PHP-only feed here: http://paul-m-jones.com/blog/?feed=rss2&cat=2.

Most people underestimate just how economically valuable the rule of law is. A roughly stable investment environment that doesn't maximize social justice is undoubtedly better than an unpredictible one that tries to--just as the billions of poor people who live in states that have tried to exchange the former for the latter. The winners were not the dispossessed.

This can be exaggerated--markets have memories, but they don't last forever, and robust democracies can survive a fair amount of skullduggery at the margins. But on balance, I doubt that deal maximized utility compared to an alternative where the government stayed out of it and Chrysler made whatever deal it could.

via The Better Bankruptcy Bureau - Megan McArdle.

(Emphasis added.)

It’s nothing new for presidents to give us bloated budgets with phony promises of belt-tightening at the end of the day. But never, ever, in the history of the republic has there been so irresponsibly gargantuan a budget defended by rhetoric so duplicitous as we are now seeing from President Barack Obama.

“We cannot settle for a future of rising deficits and debts that our children cannot pay,” he said last month, and he has talked as well about fiscal discipline, eliminating waste, increased efficiency, more focused policies and how dishonest President Bush was in leaving the wars in Iraq and Afghanistan “off the books.”

Well, yes, Bush did that thing and he shouldn’t have, but everyone knew that money was being spent and the dishonesty, such as it was, is nothing – zero, zip, nada – next to Obama dressing up as a miser as he promotes a $3.59 trillion budget with a $1.2 trillion deficit on its back.

via www.washingtonexaminer.com >> Jay Ambrose >> Opinion Articles - Jay Ambrose.

The actual numbers aren’t just worse than the rosy picture Obama painted for a world after his magical stimulus took effect. They’re worse even than the doomsday scenario he outlined if Congress didn’t pass his stimulus plan.

via Unemployment numbers worse than projected | Les Jones.

So let me get this right. We are currently doing worse, having "done something", than the worst predicted outcome if we had "done nothing". Tell me again how "let the markets operate without interference" was a certain path to disaster?

I reject the premise that capitalism is currently failing to "deliver the goods." The whole point of capitalism is to destroy companies like GM and Chrysler. The whole point of capitalism is to destroy unions like the UAW that favor older and retired workers at the expense of younger workers and workers yet to come. The whole point of capitalism is to destroy the "smart guys" who create defective financial products. The whole point of capitalism is to punish us for electing a government that enmeshes itself with the jokers above. The "current unpleasantness" is a feature, not a bug.

via Cafe Hayek: The whole point of capitalism.

As Roberts points out, it's not the *whole* point, but it's a significant one. It's a profit *and loss* system; the failures need to fail, not be propped up artificially. Only then can their destruction create something better.

Spurring new demands to overhaul the nation's healthcare system, Medicare trustees announced Tuesday that the program's biggest fund for serving the elderly would run out of money in just eight years.

But the announcement, the latest in a succession of dire predictions about Medicare's fiscal condition, also pointed up the chasm separating Democrats and Republicans as the Obama administration and its congressional allies prepare for another major attempt to reshape the U.S. healthcare system.

...

"The government-run healthcare programs we already have are unsustainable," said Rep. Tom Price of Georgia, who heads the Republican Study Committee, a conservative House caucus. "It should be obvious that putting more people under the inflexible control of Washington is no way to bring down medical costs, and it's certainly no way to provide healthcare of the highest quality."

via Report: Medicare fund is 8 years from insolvency - Los Angeles Times.

The Federal government can't afford the health-care programs is has *now*, and it wants to create *more* of them? If you want to reduce costs, then reduce regulations and let a free market operate. Hell, I get the idea that even taxpayer-paid vouchers toward high-deductible health savings accounts would be better.

Out in the real world beyond Washington, “structural imbalance” means: Washington politicians are on a spending rampage the likes of which has never before been seen anywhere in human history. The spenders include President Barack Obama, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, plus a supporting cast of bureaucrats like Treasury Secretary Timothy Geithner and his predecessor, Henry Paulson, and the Democratic majorities in the Senate and House (joined by a few Senate Republicans). These officials are terminally afflicted with what Sen. Tom Coburn, R-OK, calls “federal spending disease” (FSD) an incurable addiction in which the sufferer is utterly unable to stop spending other people’s money. An intervention by voters is the only effective treatment.

via www.washingtonexaminer.com >> Feds are broke but keep right on spending.