Health Care is Ailing, from the Star-Ledger Reader's Forum
Jason Fodeman rhetorically asks: "Is our health system really bad off?" in "Haste makes waste when fixing health care" (April 23). In a word, "yes."
According to a recent Commonwealth Fund Commission report, U.S. health care is the most expensive in the world, but does not meet critical benchmarks for quality, access, and other major performance measures. While America spends twice as much per capita on health care, it ranks lower than most other industrialized nations on numerous indicators of overall care; the U.S. score averaged 65 out of 100 over 37 categories, and fell to last for "preventing deaths through use of timely and effective medical care."
Can we afford covering the 47 million uninsured and the 50 million underinsured nationwide? Yes, we can. Currently, insurance companies have an overhead of approximately 30 percent, which is spent on marketing, administration, shareholders dividends and exorbitant CEO salaries. Medicare's overhead is approximately 3 percent. We could save about $350 billion annually, enough to cover the 47 million uninsured and the 50 million underinsured. Both the Congressional Budget Office and the General Accounting Office say the U.S. could insure everyone for the money we're paying now to insure seniors only.
-- Larry Siegel, Plainsboro
My Commentary:
Posted by Zemack on 04/30/09 at 7:39PM
Larry Siegal underscores the fundamental philosophical/moral conflict at the root of the healthcare debate...collectivism verses individualism. He asks:
Can we afford covering the 47 million uninsured and the 50 million underinsured nationwide?
Implicit in that question is the assumption that the wealth and earnings of a nation do not belong to those who produced it, but to the collective, as represented by the state. That primitive view holds that individual human beings have no value except as sacrificial fodder to the whims of the tribe. The representative of the tribe is whoever claims to speak for it, which in this case is the democratic majority as manifested in the government. Mr. Siegel simply assumes that "we" may dispose of the earnings and wealth (i.e., the lives) of whomever "we" please, for the unearned benefit of the "uninsured" or "underinsured" (whatever that means). This is the altruistic premise that individual self-sacrifice for the sake of others is the ideal, which is the moral root of all forms of tyranny, oppression, and predatory government.
America was founded upon the opposite premise...that every individual is a morally independent entity capable of charting the course of his own life by his own mind and effort, and in voluntary, uncoerced, rights-respecting association with others. This is the egoistic premise that each person is an end in himself, not the means to the ends of "humanitarians" wielding the legalized physical force of government, nor as a slave to the needs of other people. America's founding premises lead to a society based upon the inalienable rights to life, liberty, property, and the pursuit of happiness held equally, at all times, and protected by a government limited to that purpose.
Mr. Siegel's premise leads to socialized medicine. America's premise leads to a free market in healthcare.
Leaving aside the issue of statistics...which can be skewed any which way and which tell you nothing about the actual quality of American healthcare...and Medicare's alleged low administrative expenses...which is a myth ...I do sympathize with Mr. Siegel that our system has serious problems. Unfortunately, Mr. Siegel, like so many other advocates of medical tyranny, fails or refuses to consider how we got here. But cause and effect is where we must begin.
The fact is, the problems in American healthcare have grown in lock step with the growth of government intervention. The solution we are racing towards is to reward the culprit with full totalitarian control. The real solution is one that is not even being discussed in the political arena...a turn towards capitalism and free markets.
The only just and moral course to take on healthcare reform is to rid healthcare of government interference. America currently spends some $7500 per capita per year ($30,000 per family of four and rising) on healthcare. Almost that entire amount represents third parties spending other people's money. This is a fundamental part of the problem. That money comes from all of us in a myriad of ways, yet leaves us with little control over how it is spent. Leave that money in the hands of the people that earned it through some vehicle like HSAs, end government insurance mandates and the third-party-payer system, phase out existing "public" plans like Medicare, Medicaid, and SCHIP, and let people take personal responsibility for their own healthcare.
Advocates of socialized medicine (by whatever name you want to ascribe to it) like to take the moral high road, claiming compassionate concern for some downtrodden group. But they never see actual human beings, whom they are free to help through direct, voluntary charity. They give no consideration whatsoever to their fellow men as what they actually are...individual human beings with their own unique values and circumstances. Anyone who would trample the rights of others to act upon their own judgement with regard to their own healthcare deserves not a moral sanction but moral condemnation. Show me someone who would force others to pay for his "compassion" by depriving them of their earnings and their freedom, and I'll show you a phony.
The choice we face is not between a government-run healthcare dictatorship and the status quo. The choice we face is between being held hostage to government central planners, or liberating each of us...consumers, providers, patients, and insurers alike...to take control of our own healthcare in a truly free market.
Thursday, April 30, 2009
Tuesday, April 28, 2009
The "Public Health Insurance" Option
From the Reader Forum of the New Jersey Star-Ledger.
Oppose insurance lobbyists
During the election, President Obama promised to give everyone the choice of private insurance or a public health insurance plan like Medicare with lower premiums and better benefits.
Obama's public health insurance option could save us up to 30 percent on our insurance premiums by being more efficient and driving down prices across the board, according to the Commonwealth Fund report.
The insurance lobbyists are fighting Obama's public health insurance option. They're fighting against us -- you and me. Insurance companies know that lower costs for us mean lower profits for them.
Resist and overcome the lobbyists. Tell your representative and senators.
-- Millicent Sims, Montclair
My Commentary:
Posted by Zemack on 04/28/09 at 7:26PM
It's a sad, shameful spectacle to witness how eagerly and flippantly so many Americans are willing to give up their freedom.
The "public health insurance plan" advocated by Millicent Sims is just another name for socialized medicine, and denying that is dishonest and evasive. Its sole intention is merely a slow-motion path to totalitarian government control of medicine.
A "public" company (or GSE--government-sponsored enterprise) is backed by the legal force of government, which can subsidize it through taxes, while setting legal restrictions on its private "competitors" through its tax and regulatory authority...etc. A private company has no coercive power, and must rely upon the voluntary private market. To pretend that there can exist "competition" between a government-run "insurer" and a private one is to say there is no difference between an armed mugger and his victims.
Ms. Sims writes:
Obama's public health insurance option could save us up to 30 percent on our insurance premiums by being more efficient and driving down prices across the board...
This is a case of the mugger posing as his victim's savior. Medical costs are exploding because of decades of growing government interference into the healthcare industry, dating back to the 1930s. The natural incentives inherent in a free market...where healthcare providers and insurers compete directly for consumers' business based upon the rights of consumers, providers, patients, and insurers to contract freely and voluntarily with each other to mutual advantage...is what leads to widely available, affordable healthcare. But those incentives are nowhere to be seen. Instead, the Obama plan takes the immoral route.
It is insane to punish the very people you depend upon for your healthcare by empowering bureaucratic government dictators to "drive [i.e., force] down prices". Doctors, hospitals, pharmaceutical makers and other producers of healthcare products and services are not slaves but free individuals who have a right to act upon their own judgement on setting prices for there work. The rest of us are likewise free to pay for those services or not, based upon our own judgement. This is called justice. There is no inherent right to healthcare provided by others at any particular price. There is only the right to trade our earnings for those services, based upon voluntary, mutual contractual agreement. Those who believe government should use force against providers in the name of lower costs are advocating theft and slavery.
The solution is to discover capitalism. The only just and moral course to take on healthcare reform is to rid healthcare of government interference. America currently spends some $7500 per capita per year ($30,000 per family of four and rising) on healthcare. Almost that entire amount represents third parties spending other people's money. This is a fundamental part of the problem. That money comes from all of us in a myriad of ways, yet leaves us with little control over how it is spent. Leave that money in the hands of the people that earned it through some vehicle like HSAs, end government insurance mandates and the third-party-payer system, phase out existing "public" plans like Medicare, Medicaid, and SCHIP, and let people take personal responsibility for their own healthcare.
Today's problems in medicine represent a failure, not of freedom, but of statist government intervention. The choice we face is not between a government-run healthcare dictatorship and the status quo. The choice we face is between being held hostage to government central planners, or taking control of our own healthcare in a truly free market.
Oppose insurance lobbyists
During the election, President Obama promised to give everyone the choice of private insurance or a public health insurance plan like Medicare with lower premiums and better benefits.
Obama's public health insurance option could save us up to 30 percent on our insurance premiums by being more efficient and driving down prices across the board, according to the Commonwealth Fund report.
The insurance lobbyists are fighting Obama's public health insurance option. They're fighting against us -- you and me. Insurance companies know that lower costs for us mean lower profits for them.
Resist and overcome the lobbyists. Tell your representative and senators.
-- Millicent Sims, Montclair
My Commentary:
Posted by Zemack on 04/28/09 at 7:26PM
It's a sad, shameful spectacle to witness how eagerly and flippantly so many Americans are willing to give up their freedom.
The "public health insurance plan" advocated by Millicent Sims is just another name for socialized medicine, and denying that is dishonest and evasive. Its sole intention is merely a slow-motion path to totalitarian government control of medicine.
A "public" company (or GSE--government-sponsored enterprise) is backed by the legal force of government, which can subsidize it through taxes, while setting legal restrictions on its private "competitors" through its tax and regulatory authority...etc. A private company has no coercive power, and must rely upon the voluntary private market. To pretend that there can exist "competition" between a government-run "insurer" and a private one is to say there is no difference between an armed mugger and his victims.
Ms. Sims writes:
Obama's public health insurance option could save us up to 30 percent on our insurance premiums by being more efficient and driving down prices across the board...
This is a case of the mugger posing as his victim's savior. Medical costs are exploding because of decades of growing government interference into the healthcare industry, dating back to the 1930s. The natural incentives inherent in a free market...where healthcare providers and insurers compete directly for consumers' business based upon the rights of consumers, providers, patients, and insurers to contract freely and voluntarily with each other to mutual advantage...is what leads to widely available, affordable healthcare. But those incentives are nowhere to be seen. Instead, the Obama plan takes the immoral route.
It is insane to punish the very people you depend upon for your healthcare by empowering bureaucratic government dictators to "drive [i.e., force] down prices". Doctors, hospitals, pharmaceutical makers and other producers of healthcare products and services are not slaves but free individuals who have a right to act upon their own judgement on setting prices for there work. The rest of us are likewise free to pay for those services or not, based upon our own judgement. This is called justice. There is no inherent right to healthcare provided by others at any particular price. There is only the right to trade our earnings for those services, based upon voluntary, mutual contractual agreement. Those who believe government should use force against providers in the name of lower costs are advocating theft and slavery.
The solution is to discover capitalism. The only just and moral course to take on healthcare reform is to rid healthcare of government interference. America currently spends some $7500 per capita per year ($30,000 per family of four and rising) on healthcare. Almost that entire amount represents third parties spending other people's money. This is a fundamental part of the problem. That money comes from all of us in a myriad of ways, yet leaves us with little control over how it is spent. Leave that money in the hands of the people that earned it through some vehicle like HSAs, end government insurance mandates and the third-party-payer system, phase out existing "public" plans like Medicare, Medicaid, and SCHIP, and let people take personal responsibility for their own healthcare.
Today's problems in medicine represent a failure, not of freedom, but of statist government intervention. The choice we face is not between a government-run healthcare dictatorship and the status quo. The choice we face is between being held hostage to government central planners, or taking control of our own healthcare in a truly free market.
Saturday, April 25, 2009
Insurers Seeking regulation
Insurance regulation needs a new approach
Posted by Frank Keating, Steve Bartlett and Leigh Ann Pusey/ Star-Ledger Guest Columnists April 24, 2009 5:58AM
Categories: Economy, Policy Watch
AP File Photo/ Michael Manning
Former Oklahoma Gov. Frank KeatingShould the federal government be completely walled off from monitoring a $6.4 trillion industry that does business across state and national borders and affects the lives of nearly all Americans?
That is the question that the nation's policymakers must answer as we all grapple with the fallout from the financial crisis and seek ways to assure it does not happen again. The $6.4 trillion industry is insurance; the folks who assure lifetime financial security and protect the value of everything from the family house to the automobile.
Although the insurance industry is as important to the financial services matrix as the banking industry and the securities industry, there is no federal insurance regulatory office comparable to the Office of the Comptroller of the Currency, which regulates national banks, or the Securities and Exchange Commission, which regulates securities.
Since the 1850s, insurance has been regulated at the state level. While that system has performed reasonably well, today's insurance industry is much more complex than it was in the 19th century. To bring the industry into the 21st century, the government must begin regulating insurance at the federal level. In order to do so, Congress must create a national insurance charter overseen by a new Office of National Insurance.
This idea has broad support.
In testimony before the Senate Banking Committee, Treasury Secretary Tim Geithner hinted that he believes a national insurance charter is a good idea and expects it to be a part of meaningful regulatory reform.
Federal Reserve chairman Ben Bernanke told lawmakers that a national regulator for insurers was a "useful idea." He also noted that regulators did not have effective holding company supervision and that implementing such a structure should be given "serious consideration."
And the Group of Thirty -- an influential, non-profit organization of the world's leading financiers and academics -- recently released a report calling for a federal insurance charter. The report was authored by one of President Obama's key economic advisers, former Federal Reserve chairman Paul Volcker.
An insurance regulator at the national level is needed because insurance markets have evolved and now transcend the current state-based system. Today's financial markets are globally interconnected. Problems in one country or one market sector can pose risks to the entire financial system. State regulatory agencies are simply not equipped to address the macroeconomic problems of today, which affect many nations and require the coordinated efforts of several agencies. Such coordination is exactly what would be expected of the new regulatory body, and it would be perfectly positioned to deploy industry-wide solutions to emerging crises.
Establishment of a national insurance regulatory authority should be comprehensive, but not supplant state insurance regulation. Just as with banks, many insurance companies and their customers may choose to remain under state control. But a national insurance regulatory office would allow the government to monitor insurance markets and identify potential risks to the financial system.
This new regulator, both through its direct responsibilities and through its contacts with other financial regulators in the U.S. and abroad, would be able to monitor the insurance marketplace and identify and address problems before they reach the crisis state. This regulator would function with a broad vision not available to a state regulator, whose focus is necessarily limited to local issues.
However, this is not a call for a costly new Washington bureaucracy. A recent report from the Promontory Financial Group, a consulting firm, suggested that a federal insurance regulatory office could rely on fees paid by regulated companies. Taxpayers would bear no additional costs but would enjoy countless new advantages, like truly personalized policies.
As Congress and the Obama administration look for ways to get our economy back on track, it's imperative that they recognize the important role of insurers in the nation's financial system and in the lives of millions of Americans. In the future, the states will continue to play a vital regulatory role, but a new, federal regulatory framework for the insurance industry is vital. Sensible modernization would ensure that consumers and businesses have the insurance options they need to help revitalize the U.S. economy.
Frank Keating, former governor or Oklahoma, is president and CEO of the American Council of Life Insurers. Steve Bartlett is president and CEO of the Financial Services Roundtable. Leigh Ann Pusey is president and CEO of the American Insurance Association.
My Commentary:
Posted by Zemack on 04/24/09 at 10:23PM
This is incredible! To avert a crisis in the insurance industry, we must adopt the same central planning and regulatory framework for insurers that caused the financial crisis! Yet, everywhere one looks, one sees government interference as the culprit in the banking disaster.
There was the Federal Reserve's housing bubble-expanding low interest rate, inflationary credit expansion policies.
We have the FDIC, which encourages risky, imprudent lending...then, when irresponsible banks fail, punishes sound prudent banks by raising their premiums to cover the failed banks' depositors. This, in the name of "protecting" savers.
There are the GSEs--Fannie, Freddie, and Ginnie Mae--which under intense political pressure bought up massive amounts of sub-prime loans, which were then packaged into CDOs for sale around the world. This allowed outfits like Countrywide to originate-and-sell sub-prime mortgages to its heart's content.
There are the three government licensed and protected rating agencies (Moody's, S&P, and Fitch), which were encouraged to grant investment grade ratings to these securities based upon an implicit government guarantee.
There is the CRA, the political wedge through which the sub-prime cancer was introduced into the nation's credit bloodstream.
There was the rigid mark-to-market accounting rule forced on the industry through the government's control of accounting standards, which drove otherwise solvent banks under.
Then there was (and still is) the whole government network of "affordable housing" policies and programs, such as FHA-insured mortgages and "anti-discrimination" rules which enable economically unjustifiable loans.
These and other market-distorting interventions combined to create a mighty conveyor belt of bad lending and inflating home prices that culminated in the housing bust...the fundamental cause of the current recession. The toxic assets likely being carried on the insurers' books can be traced directly to the financial crisis. And this crisis occurred within the context of a heavily regulated, centrally controlled banking and financial industry beset by massive government interference into the mortgage and housing markets.
Yet these insurance industry representatives want the same for their industry, it seems.
To be sure, legal reforms are needed, especially where it relates to health insurance...a market beset by bad tax policy, thousands of government mandates, and trade barriers to interstate competition. But to place the insurance industry into the same federal regulatory straightjacket that brought us the financial crisis is ludicrous. There must be more behind the call by the authors of this article for federal regulation than rationalizing the state-based system.
Perhaps, as suggested by correspondent jbken and John Bury in his related article here, the insurers are willing to sell their souls for a government bailout. Traditionally, businesses seeking government regulation do so in the expectation that they will be pulling the regulatory strings through political connections, or of being shielded from the rigors of market competition.
But whatever the reason, the unholy rush to expand central political regulation and control of business, coupled with industry's willingness to submit to the "protective" embrace of government officials, can only end badly for America. As can be seen with the banking crisis, government regulation and control opens the door to political interference and influence peddling, and is inherently and irredeemably corrupt. We have seen this pattern before. It is the road to fascism.
The right direction to move is toward decontrol and a free market, where government's role is as envisioned by the Founders...a policeman that protects individual rights. This means the vigorous enforcement of laws against fraud and breech of contract. Otherwise, insurers should be fighting for the right to act upon their own judgement in issuing insurance products based upon competition, customer demands, rational risk assessments, and profit expectations. Badly run companies should be allowed to fail, and strong one's to reap their rewards.
The profit motive within the context of a free market rewards personal responsibility and the long-term perspective, and thus is our best protection against future meltdowns. Centralized control and regulation guarantees more calamities.
Other Commentary:
Posted by jbken on 04/24/09 at 10:35PM
dustybuns & Zemack:
You're both missing the point. The insurance industry wants federal regulation now so they can get bailout money too - and they need it.
Did their investment guys see this coming better than the banks? NO! They have the same junk, it's just that they don't have to tell anybody because state regulation is so weak and they can't tell anybody or else the source of their funds (selling insurance) dries up.
These three are just stooges for the industry and it's no coincidence that the Allstate guy, Tom Wilson, had that NY Times editorial last week begging for federal regulation. It's really the only way to save your jobs at this point.
My Response:
Posted by Zemack on 04/25/09 at 10:24AM
jbken
Actually, I think I do get it. I wrote:
The toxic assets likely being carried on the insurers' books can be traced directly to the financial crisis. And this crisis occurred within the context of a heavily regulated, centrally controlled banking and financial industry beset by massive government interference into the mortgage and housing markets.
Yet these insurance industry representatives want the same for their industry, it seems.
Perhaps, as suggested by correspondent jbken and John Bury in his related article here, the insurers are willing to sell their souls for a government bailout.
The authors point to the financial crisis as a justification for more control and regulation, despite the overwhelming evidence that it was just such central planning that caused the crisis to begin with.
Related article:
Why Insurers Want Federal Regulation Now
Posted by John Bury April 24, 2009 9:44AM
Categories: Insurance
Last week Tom Wilson, CEO of Allstate, had an op-ed piece in the New York Times begging for federal regulation of the insurance industry. Today, in the Star-Ledger (and presumably any paper in the country that had exhausted the Obama dog story angles), three insurance insiders made their case for federal regulation.
This is something I have been pushing for decades, from letters to the Times to this blog. Why the push now from inside the industry? It seems obvious to me. Simple survival.
No fiscally responsible person would voluntarily invest in any insurance product these days. (Though that still leaves a substantial pool of suckers, those are not usually the people who have the big money.) Insurance is essentially the process of paying now for the promise of repayment later. If you can't trust that the company will be there later, you won't buy their product. Insurers need that federal charter as a marketing tool since nobody with any sense sleeps easier knowing that state guaranty funds back up those promises.
Insurance companies are basically investment vehicles. That's how they have historically made their profits. They take in $100. They invest it to get an extra $10 and a year later they pay out $100 in claims. The $10 they get to keep. Works like a charm until that investment part either goes away or turns negative. That it did over the last year but since insurance companies are essentially unregulated, it's not widely known.
Surely many Insurers must have the same toxic assets in their portfolios as those banks that are being bailed out but how are you going to find that out? Will you contact the Montana Insurance Department or whatever state your insurer is domiciled in? How about checking with a credit rating agency?
Banks had the FDIC to reassure their customers that, even if the bank itself was shaky, the federal government had the safety net out. Now, put yourself in the shoes of an annuity salesman the day after Harry Reid blurted this out. What are you going to tell your next sit? That the state of New Jersey has a guaranty trust that will protect them in a worst case scenario. Even the most naive insurance consumer knows enough to be wary when the words "New Jersey" and "trust" are linked.
Insurers desperately need a federal cash pipeline to cover losses they will inevitably incur. State funds are inadequate and, in any case, Guaranty associations obtain funds for their operations and payment of claims through assessments against the solvent insurance companies. That means insurers will need to clean up their own mess unless they get access to the federal government printing presses...and soon
Posted by Frank Keating, Steve Bartlett and Leigh Ann Pusey/ Star-Ledger Guest Columnists April 24, 2009 5:58AM
Categories: Economy, Policy Watch
AP File Photo/ Michael Manning
Former Oklahoma Gov. Frank KeatingShould the federal government be completely walled off from monitoring a $6.4 trillion industry that does business across state and national borders and affects the lives of nearly all Americans?
That is the question that the nation's policymakers must answer as we all grapple with the fallout from the financial crisis and seek ways to assure it does not happen again. The $6.4 trillion industry is insurance; the folks who assure lifetime financial security and protect the value of everything from the family house to the automobile.
Although the insurance industry is as important to the financial services matrix as the banking industry and the securities industry, there is no federal insurance regulatory office comparable to the Office of the Comptroller of the Currency, which regulates national banks, or the Securities and Exchange Commission, which regulates securities.
Since the 1850s, insurance has been regulated at the state level. While that system has performed reasonably well, today's insurance industry is much more complex than it was in the 19th century. To bring the industry into the 21st century, the government must begin regulating insurance at the federal level. In order to do so, Congress must create a national insurance charter overseen by a new Office of National Insurance.
This idea has broad support.
In testimony before the Senate Banking Committee, Treasury Secretary Tim Geithner hinted that he believes a national insurance charter is a good idea and expects it to be a part of meaningful regulatory reform.
Federal Reserve chairman Ben Bernanke told lawmakers that a national regulator for insurers was a "useful idea." He also noted that regulators did not have effective holding company supervision and that implementing such a structure should be given "serious consideration."
And the Group of Thirty -- an influential, non-profit organization of the world's leading financiers and academics -- recently released a report calling for a federal insurance charter. The report was authored by one of President Obama's key economic advisers, former Federal Reserve chairman Paul Volcker.
An insurance regulator at the national level is needed because insurance markets have evolved and now transcend the current state-based system. Today's financial markets are globally interconnected. Problems in one country or one market sector can pose risks to the entire financial system. State regulatory agencies are simply not equipped to address the macroeconomic problems of today, which affect many nations and require the coordinated efforts of several agencies. Such coordination is exactly what would be expected of the new regulatory body, and it would be perfectly positioned to deploy industry-wide solutions to emerging crises.
Establishment of a national insurance regulatory authority should be comprehensive, but not supplant state insurance regulation. Just as with banks, many insurance companies and their customers may choose to remain under state control. But a national insurance regulatory office would allow the government to monitor insurance markets and identify potential risks to the financial system.
This new regulator, both through its direct responsibilities and through its contacts with other financial regulators in the U.S. and abroad, would be able to monitor the insurance marketplace and identify and address problems before they reach the crisis state. This regulator would function with a broad vision not available to a state regulator, whose focus is necessarily limited to local issues.
However, this is not a call for a costly new Washington bureaucracy. A recent report from the Promontory Financial Group, a consulting firm, suggested that a federal insurance regulatory office could rely on fees paid by regulated companies. Taxpayers would bear no additional costs but would enjoy countless new advantages, like truly personalized policies.
As Congress and the Obama administration look for ways to get our economy back on track, it's imperative that they recognize the important role of insurers in the nation's financial system and in the lives of millions of Americans. In the future, the states will continue to play a vital regulatory role, but a new, federal regulatory framework for the insurance industry is vital. Sensible modernization would ensure that consumers and businesses have the insurance options they need to help revitalize the U.S. economy.
Frank Keating, former governor or Oklahoma, is president and CEO of the American Council of Life Insurers. Steve Bartlett is president and CEO of the Financial Services Roundtable. Leigh Ann Pusey is president and CEO of the American Insurance Association.
My Commentary:
Posted by Zemack on 04/24/09 at 10:23PM
This is incredible! To avert a crisis in the insurance industry, we must adopt the same central planning and regulatory framework for insurers that caused the financial crisis! Yet, everywhere one looks, one sees government interference as the culprit in the banking disaster.
There was the Federal Reserve's housing bubble-expanding low interest rate, inflationary credit expansion policies.
We have the FDIC, which encourages risky, imprudent lending...then, when irresponsible banks fail, punishes sound prudent banks by raising their premiums to cover the failed banks' depositors. This, in the name of "protecting" savers.
There are the GSEs--Fannie, Freddie, and Ginnie Mae--which under intense political pressure bought up massive amounts of sub-prime loans, which were then packaged into CDOs for sale around the world. This allowed outfits like Countrywide to originate-and-sell sub-prime mortgages to its heart's content.
There are the three government licensed and protected rating agencies (Moody's, S&P, and Fitch), which were encouraged to grant investment grade ratings to these securities based upon an implicit government guarantee.
There is the CRA, the political wedge through which the sub-prime cancer was introduced into the nation's credit bloodstream.
There was the rigid mark-to-market accounting rule forced on the industry through the government's control of accounting standards, which drove otherwise solvent banks under.
Then there was (and still is) the whole government network of "affordable housing" policies and programs, such as FHA-insured mortgages and "anti-discrimination" rules which enable economically unjustifiable loans.
These and other market-distorting interventions combined to create a mighty conveyor belt of bad lending and inflating home prices that culminated in the housing bust...the fundamental cause of the current recession. The toxic assets likely being carried on the insurers' books can be traced directly to the financial crisis. And this crisis occurred within the context of a heavily regulated, centrally controlled banking and financial industry beset by massive government interference into the mortgage and housing markets.
Yet these insurance industry representatives want the same for their industry, it seems.
To be sure, legal reforms are needed, especially where it relates to health insurance...a market beset by bad tax policy, thousands of government mandates, and trade barriers to interstate competition. But to place the insurance industry into the same federal regulatory straightjacket that brought us the financial crisis is ludicrous. There must be more behind the call by the authors of this article for federal regulation than rationalizing the state-based system.
Perhaps, as suggested by correspondent jbken and John Bury in his related article here, the insurers are willing to sell their souls for a government bailout. Traditionally, businesses seeking government regulation do so in the expectation that they will be pulling the regulatory strings through political connections, or of being shielded from the rigors of market competition.
But whatever the reason, the unholy rush to expand central political regulation and control of business, coupled with industry's willingness to submit to the "protective" embrace of government officials, can only end badly for America. As can be seen with the banking crisis, government regulation and control opens the door to political interference and influence peddling, and is inherently and irredeemably corrupt. We have seen this pattern before. It is the road to fascism.
The right direction to move is toward decontrol and a free market, where government's role is as envisioned by the Founders...a policeman that protects individual rights. This means the vigorous enforcement of laws against fraud and breech of contract. Otherwise, insurers should be fighting for the right to act upon their own judgement in issuing insurance products based upon competition, customer demands, rational risk assessments, and profit expectations. Badly run companies should be allowed to fail, and strong one's to reap their rewards.
The profit motive within the context of a free market rewards personal responsibility and the long-term perspective, and thus is our best protection against future meltdowns. Centralized control and regulation guarantees more calamities.
Other Commentary:
Posted by jbken on 04/24/09 at 10:35PM
dustybuns & Zemack:
You're both missing the point. The insurance industry wants federal regulation now so they can get bailout money too - and they need it.
Did their investment guys see this coming better than the banks? NO! They have the same junk, it's just that they don't have to tell anybody because state regulation is so weak and they can't tell anybody or else the source of their funds (selling insurance) dries up.
These three are just stooges for the industry and it's no coincidence that the Allstate guy, Tom Wilson, had that NY Times editorial last week begging for federal regulation. It's really the only way to save your jobs at this point.
My Response:
Posted by Zemack on 04/25/09 at 10:24AM
jbken
Actually, I think I do get it. I wrote:
The toxic assets likely being carried on the insurers' books can be traced directly to the financial crisis. And this crisis occurred within the context of a heavily regulated, centrally controlled banking and financial industry beset by massive government interference into the mortgage and housing markets.
Yet these insurance industry representatives want the same for their industry, it seems.
Perhaps, as suggested by correspondent jbken and John Bury in his related article here, the insurers are willing to sell their souls for a government bailout.
The authors point to the financial crisis as a justification for more control and regulation, despite the overwhelming evidence that it was just such central planning that caused the crisis to begin with.
Related article:
Why Insurers Want Federal Regulation Now
Posted by John Bury April 24, 2009 9:44AM
Categories: Insurance
Last week Tom Wilson, CEO of Allstate, had an op-ed piece in the New York Times begging for federal regulation of the insurance industry. Today, in the Star-Ledger (and presumably any paper in the country that had exhausted the Obama dog story angles), three insurance insiders made their case for federal regulation.
This is something I have been pushing for decades, from letters to the Times to this blog. Why the push now from inside the industry? It seems obvious to me. Simple survival.
No fiscally responsible person would voluntarily invest in any insurance product these days. (Though that still leaves a substantial pool of suckers, those are not usually the people who have the big money.) Insurance is essentially the process of paying now for the promise of repayment later. If you can't trust that the company will be there later, you won't buy their product. Insurers need that federal charter as a marketing tool since nobody with any sense sleeps easier knowing that state guaranty funds back up those promises.
Insurance companies are basically investment vehicles. That's how they have historically made their profits. They take in $100. They invest it to get an extra $10 and a year later they pay out $100 in claims. The $10 they get to keep. Works like a charm until that investment part either goes away or turns negative. That it did over the last year but since insurance companies are essentially unregulated, it's not widely known.
Surely many Insurers must have the same toxic assets in their portfolios as those banks that are being bailed out but how are you going to find that out? Will you contact the Montana Insurance Department or whatever state your insurer is domiciled in? How about checking with a credit rating agency?
Banks had the FDIC to reassure their customers that, even if the bank itself was shaky, the federal government had the safety net out. Now, put yourself in the shoes of an annuity salesman the day after Harry Reid blurted this out. What are you going to tell your next sit? That the state of New Jersey has a guaranty trust that will protect them in a worst case scenario. Even the most naive insurance consumer knows enough to be wary when the words "New Jersey" and "trust" are linked.
Insurers desperately need a federal cash pipeline to cover losses they will inevitably incur. State funds are inadequate and, in any case, Guaranty associations obtain funds for their operations and payment of claims through assessments against the solvent insurance companies. That means insurers will need to clean up their own mess unless they get access to the federal government printing presses...and soon
Thursday, April 23, 2009
ExxonMobil, Property Rights, and the First Amendment
In response to my Earth Day post at Principled Perspectives, The "Anti-Industrial Revolution" Rolls On , Harold left these comments.
My comments followed.
The ExxonMobil case that I wrote about is a symptom of the serious and growing deterioration in the rule of law in America, brought about as a consequence of a mixed economy.
My comments followed.
The ExxonMobil case that I wrote about is a symptom of the serious and growing deterioration in the rule of law in America, brought about as a consequence of a mixed economy.
Wednesday, April 22, 2009
Tea Parties Past and Present
From the Star-Ledger Reader Forum, April 22, 2009
Letter #1
Defends tea partyers
I object vehemently to the charges by reader Lawrence Uniglicht in his letter to the Readers Forum, ("No tea for me, thank you," April 18) that all those protesting increases in taxes and an overspending government are malcontents and clowns. I suggest people look at Govs. Jim McGreevey and Jon Corzine, and Sens. Frank Lautenberg and Robert Menendez if they want to see clowns.
The protesters did not throw tea into Boston Harbor to start a war with England, but peacefully assembled to protest a fearful trend by a Democratic Congress and administration to take away our constitutional right to life, liberty, and the pursuit of happiness that our founders fought so hard to win. Protesters were from all walks of life. They did not break store windows, overturn and set fires to cars, or fight with the police. They personified what Americans are -- hard-working, law-abiding, and moral citizens.
As for constructive ideas from the Republicans, tea party opponents should know there were many proposals that were denied by the Democrats in Congress, mainly because they would be successful in restoring the economy to the way it was before 2006. That was the year the left-wing voted in a Democratic Congress, and we have been sinking toward socialism ever since.
-- Richard A. Ketay, Newark
Letter #2
History doesn't repeat
Once again, the American people are responding like sheep. A case in point is the recent "tea parties" across the country.
Had protesters been paying attention, they would realize the tax rate on the wealthy will only increase from 36-39 percent, far below the 90 percent rate under President Dwight Eisenhower.
The nationwide tea party, which was created to oppose taxation, borrowed its name from the Boston Tea Party. As a history teacher, let me take the opportunity to remind the American public that the Boston Tea Party was not about taxes. It was staged to protest the monopoly being granted to the East India Tea Company by Prime Minster Lord North, who was a primary investor in the company.
-- James O'Brien, Bayonne
My Commentary:
Posted by Zemack on 04/22/09 at 7:23PM
James O'Brien, the history teacher, doesn't understand the significance of today's Tea Parties, or of the philosophical common denominator linking them to the original Boston Tea Party. Richard A. Ketay does. The fundamental principle linking both across a span of centuries is a profoundly moral one...the uniquely American concept that the individual's life is his and does not belong to any "higher power" such as a king, warlord, democratic majority, state, priest, president, or ayatollah. That principle is embodied in the doctrine of unalienable individual rights to life, liberty, property, and the pursuit of happiness.
The concrete issues are different, but the principle is the same. Any government-imposed monopoly such as the East India Tea Company is a violation of individual rights because it forcibly bans individuals from exercising their liberty to promote their lives through the freedom of production and trade in a particular market. Today's protestors are not concerned with some narrow issue such as 3% in the income tax code. Rather, the massive confiscation of wealth through deficit spending and the forced transfer of wealth to politically connected failed corporations and irresponsible mortgage borrowers are what concern the protestors. This will be paid for either through direct, massive tax increases or through the inflationary back door...the confiscation of the purchasing power of our money through the government printing press.
Worse still is the use of the financial crisis as a cover for a breathtaking dictatorial economic power grab by government through its regulatory apparatus. This, despite the fact that it was the massive buildup over the years of government interference in the housing and mortgage markets, as well as the central bank money monopoly called the federal reserve system, that caused the crisis to begin with. The statist policies of Bush and Obama are a direct assault on America's founding principles of individual rights and a government limited to protecting those rights.
I find it fascinating that Mr. O,Brien chooses to call today's protestors "sheep" for rising to defend individual rights, which means the right and responsibility of each of us to take charge of our own lives. In contrast, President Obama constantly demands that we suspend our own judgement and our selfish concern for our rights (the "old, stale" arguments, as he puts it) in order to "come together" to solve our nations problems. This language is a euphemism for relinquishing control of our lives to central planning ideologues who seek to consolidate federal control over private contracts and corporate governance, energy, healthcare, education, food production, finance and investments, etc.
Who are the real sheep? It is certainly not the Tea Party protestors, many if not most of whom are attempting to build an individual rights coalition to push back against the rising tide of statism sweeping Washington, D.C.
Letter #1
Defends tea partyers
I object vehemently to the charges by reader Lawrence Uniglicht in his letter to the Readers Forum, ("No tea for me, thank you," April 18) that all those protesting increases in taxes and an overspending government are malcontents and clowns. I suggest people look at Govs. Jim McGreevey and Jon Corzine, and Sens. Frank Lautenberg and Robert Menendez if they want to see clowns.
The protesters did not throw tea into Boston Harbor to start a war with England, but peacefully assembled to protest a fearful trend by a Democratic Congress and administration to take away our constitutional right to life, liberty, and the pursuit of happiness that our founders fought so hard to win. Protesters were from all walks of life. They did not break store windows, overturn and set fires to cars, or fight with the police. They personified what Americans are -- hard-working, law-abiding, and moral citizens.
As for constructive ideas from the Republicans, tea party opponents should know there were many proposals that were denied by the Democrats in Congress, mainly because they would be successful in restoring the economy to the way it was before 2006. That was the year the left-wing voted in a Democratic Congress, and we have been sinking toward socialism ever since.
-- Richard A. Ketay, Newark
Letter #2
History doesn't repeat
Once again, the American people are responding like sheep. A case in point is the recent "tea parties" across the country.
Had protesters been paying attention, they would realize the tax rate on the wealthy will only increase from 36-39 percent, far below the 90 percent rate under President Dwight Eisenhower.
The nationwide tea party, which was created to oppose taxation, borrowed its name from the Boston Tea Party. As a history teacher, let me take the opportunity to remind the American public that the Boston Tea Party was not about taxes. It was staged to protest the monopoly being granted to the East India Tea Company by Prime Minster Lord North, who was a primary investor in the company.
-- James O'Brien, Bayonne
My Commentary:
Posted by Zemack on 04/22/09 at 7:23PM
James O'Brien, the history teacher, doesn't understand the significance of today's Tea Parties, or of the philosophical common denominator linking them to the original Boston Tea Party. Richard A. Ketay does. The fundamental principle linking both across a span of centuries is a profoundly moral one...the uniquely American concept that the individual's life is his and does not belong to any "higher power" such as a king, warlord, democratic majority, state, priest, president, or ayatollah. That principle is embodied in the doctrine of unalienable individual rights to life, liberty, property, and the pursuit of happiness.
The concrete issues are different, but the principle is the same. Any government-imposed monopoly such as the East India Tea Company is a violation of individual rights because it forcibly bans individuals from exercising their liberty to promote their lives through the freedom of production and trade in a particular market. Today's protestors are not concerned with some narrow issue such as 3% in the income tax code. Rather, the massive confiscation of wealth through deficit spending and the forced transfer of wealth to politically connected failed corporations and irresponsible mortgage borrowers are what concern the protestors. This will be paid for either through direct, massive tax increases or through the inflationary back door...the confiscation of the purchasing power of our money through the government printing press.
Worse still is the use of the financial crisis as a cover for a breathtaking dictatorial economic power grab by government through its regulatory apparatus. This, despite the fact that it was the massive buildup over the years of government interference in the housing and mortgage markets, as well as the central bank money monopoly called the federal reserve system, that caused the crisis to begin with. The statist policies of Bush and Obama are a direct assault on America's founding principles of individual rights and a government limited to protecting those rights.
I find it fascinating that Mr. O,Brien chooses to call today's protestors "sheep" for rising to defend individual rights, which means the right and responsibility of each of us to take charge of our own lives. In contrast, President Obama constantly demands that we suspend our own judgement and our selfish concern for our rights (the "old, stale" arguments, as he puts it) in order to "come together" to solve our nations problems. This language is a euphemism for relinquishing control of our lives to central planning ideologues who seek to consolidate federal control over private contracts and corporate governance, energy, healthcare, education, food production, finance and investments, etc.
Who are the real sheep? It is certainly not the Tea Party protestors, many if not most of whom are attempting to build an individual rights coalition to push back against the rising tide of statism sweeping Washington, D.C.
Sunday, April 5, 2009
Businessweek Debate Room--2
The Economy Needs Ayn Rand
My Commentary:
Mike zemack
April 4, 2009 11:13 PM
It's hard to call this exchange a debate. If I were a serious opponent of Ayn Rand's ideas, I'd be ashamed to call Christina Patterson a representative of my side. Her hissing, uninformed tantrum is more reminiscent of a spoiled child than a worthy participant in Businessweek's "Debate Room."
The fact is, if Ayn Rand's philosophy of Objectivism was dominant in American culture, there would have been no financial crisis.
Objectivism teaches how to live and advance one's life through one's own thinking and efforts, and through voluntary, non-predatory, rights-respecting, mutually advantageous association with one's fellow man. Its cardinal personal virtues include rationality, integrity, and honesty, among others. The consequence would be a benevolent capitalist society.
As a husband, father, and grandfather, I strongly urge anyone seeking a comprehensive guide to a virtuous, self-sustaining, happy life to study the works of philosopher Ayn Rand and Objectivist intellectuals like Onkar Ghate.
http://www.principledperspectives.blogspot.com/
Other's Commentary:
Barney Murrell
April 5, 2009 02:36 AM
All the pro-Rand commentators are ignorant of U.S. History, and/or lacking in morality. Today's economic failures are the result of two things: One, failure to recognize that most humans are greedy SOBs and run amok without oversight (remember prisons?) and two, implementation of deregulation legislation that ended with predictable results.
Same thing happened to S&Ls in the 1980s, thanks to Reagan’s deregulation and tax policies. The following Federal Deposit Insurance Corporation links explain the failures that helped bring about the S&L crisis:
The S&L Crisis: A Chrono-Bibliography
http://www.fdic.gov/bank/historical/s&l/
History of the 80s
http://www.fdic.gov/bank/historical/history/
Also, what follows are links to photographic evidence of what results in an unregulated free market pre-Great Depression economy:
Child Labor (Ann would be proud of their “freedom” to work instead of going to school)
http://www.historyplace.com/unitedstates/childlabor/index.html
Earlier in the 1900s was Upton Sinclair’s “The Jungle” – about labor slavery and the filthy conditions under which American meat was processed.
http://en.wikipedia.org/wiki/The_Jungle
“The Jungle” was the catalyst for Theodore Roosevelt’s implementation of the Pure Food and Drug Act of 1906. http://en.wikipedia.org/wiki/Pure_Food_and_Drug_Act_of_1906
And then there was the Great Depression
Children of the Great Depression
http://www.digitalhistory.uh.edu/learning_history/children_depression/depression_children_menu.cfm
Hoovervilles from American Memory
http://memory.loc.gov/cgi-bin/query/f?fsaall:0:./temp/~ammem_xPlK:
Hooverville: Shantytown of Seattle’s Great Depression
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&File_Id=741
If there are any pro-Rand fans that still believe her ignorance is correct then you are one of those who may be aptly described as "greedy no-good SOBs." Just remember, it was the cannon fodder from the lower economic classes (victims of "free markets") that won America’s wars which made it possible for capitalism to exist and Rand to write.
My Commentary:
Barney Murrell offers not even a hint of a refutation of even a single principle of Objectivism.
Instead, he makes the claim that “most humans are greedy SOBs” incapable of freedom (including Mr. Murrell?). This is belied by the historical fact that rising general prosperity and (even relatively) free markets are inextricably linked corollaries (Ex., the contrast between North and South Korea), while central planning of all kinds inevitably leads to economic decline and poverty (example, the Hoovervilles and today’s unemployment statistics). His support of government regulation implies that a gun can impart wisdom and virtue into otherwise “greedy SOBs”. Give any “greedy SOB”, which he claims most humans are, a position of coercive police power over the lives of other men by making him a regulator automatically allows wisdom and omniscience to flow from the (metaphorical) gun in his hand into his selfless brain.
Humans are not evil by nature, but are rather in need of a rational, scientifically validated code of ethics to guide them in their lives and in their relationships with others. Objectivism provides that moral guidance. See the works of Ayn Rand or of Objectivist intellectuals Tara Smith (Ayn Rand’s Normative Ethics, the Virtuous Egoist) and Craig Biddle (Loving Life, the Morality of Self-Interest and the Facts that Support It. ).
The litany of horrors allegedly perpetrated by capitalism, such as slave labor and child labor, were legacies of pre-capitalist societies that capitalism inherited and eventually wiped out. The extraordinary advance in men’s economic well-being that occurred in the 19th century was unmatched by any century before or since, and enabled the creation of the American middle class. While terrible conditions did coincide with the rise of capitalism, they must be viewed in historical context…something that the enemies of capitalism routinely fail to provide. For a properly contextual viewpoint, see Andrew Bernstein’s The Capitalist Manifesto.
Every one of the 20th century disasters cited by Murrell were the result of government interference into the economy, not free people “running amok”. The S&L crisis and the (Hoover-Roosevelt) Great Depression are two irrefutable examples. The failure to understand the true causes of the S&L crisis helped pave the way for today’s financial calamity. See Richard M. Salsman of the American Institute for Economic Research (The Collapse of Deposit Insurance—and the Case for Abolition)and Amity Shlaes(The Forgotten Man—a New History of the Great Depression).
As for today’s crisis, listen to this lecture given by BB&T Chairman John Allison at:
Or visit The Ayn Rand Center for Individual Rights and visit the special section detailing their response to the financial crisis.
Also read Richard M. Salsman's penetrating essay in the current issue of The Objective Standard.
Government regulation is inherently unjust, because it is based upon the un-American principle of presumption of guilt, whereby coercive control is extended over an entire industry because of the wrong-doing (or alleged wrong-doing) of the few. The establishment of the FDA (and its precursors) is a prime example. That its creation may have been supported by many in the pharmaceutical industry does not justify it. Can it ever be calculated how much suffering and premature death has been caused by the FDA, which routinely delays, prohibits, and discourages investments in medicines from entering the market? Fraudulent behavior of the few is dealt with by criminal law in a free, capitalist society. Prisons are for criminals, and criminals only. Placing controls on people or companies innocent of any wrong-doing is a form of pre-emptive law, which is consistent with dictatorship and is incompatible with a free, lawful society.
It’s not that “greedy SOBs” don’t exist in a free market. It’s that capitalism, which protects individual rights, works to their disadvantage. Honesty wins in a society based upon freedom of association. It is the political corruption of the private economy caused by coercive government interference in the free market that empowers and entrenches the “greedy SOBs” (Ex., Countrywide’s Mozilo and the GSEs).
I take particularly strong exception to Murrell’s degrading of our military personnel as mere “cannon fodder” incapable of appreciating and fighting for their own freedom. We owe an incalculable debt of gratitude to our fighting men and women, who by fighting for their own freedom and our American ideals, they protect the rights of us all…thus enabling Barney Murrell to freely advocate for tyranny and against America’s foremost defender of individual rights.
My Commentary:
Mike zemack
April 4, 2009 11:13 PM
It's hard to call this exchange a debate. If I were a serious opponent of Ayn Rand's ideas, I'd be ashamed to call Christina Patterson a representative of my side. Her hissing, uninformed tantrum is more reminiscent of a spoiled child than a worthy participant in Businessweek's "Debate Room."
The fact is, if Ayn Rand's philosophy of Objectivism was dominant in American culture, there would have been no financial crisis.
Objectivism teaches how to live and advance one's life through one's own thinking and efforts, and through voluntary, non-predatory, rights-respecting, mutually advantageous association with one's fellow man. Its cardinal personal virtues include rationality, integrity, and honesty, among others. The consequence would be a benevolent capitalist society.
As a husband, father, and grandfather, I strongly urge anyone seeking a comprehensive guide to a virtuous, self-sustaining, happy life to study the works of philosopher Ayn Rand and Objectivist intellectuals like Onkar Ghate.
http://www.principledperspectives.blogspot.com/
Other's Commentary:
Barney Murrell
April 5, 2009 02:36 AM
All the pro-Rand commentators are ignorant of U.S. History, and/or lacking in morality. Today's economic failures are the result of two things: One, failure to recognize that most humans are greedy SOBs and run amok without oversight (remember prisons?) and two, implementation of deregulation legislation that ended with predictable results.
Same thing happened to S&Ls in the 1980s, thanks to Reagan’s deregulation and tax policies. The following Federal Deposit Insurance Corporation links explain the failures that helped bring about the S&L crisis:
The S&L Crisis: A Chrono-Bibliography
http://www.fdic.gov/bank/historical/s&l/
History of the 80s
http://www.fdic.gov/bank/historical/history/
Also, what follows are links to photographic evidence of what results in an unregulated free market pre-Great Depression economy:
Child Labor (Ann would be proud of their “freedom” to work instead of going to school)
http://www.historyplace.com/unitedstates/childlabor/index.html
Earlier in the 1900s was Upton Sinclair’s “The Jungle” – about labor slavery and the filthy conditions under which American meat was processed.
http://en.wikipedia.org/wiki/The_Jungle
“The Jungle” was the catalyst for Theodore Roosevelt’s implementation of the Pure Food and Drug Act of 1906. http://en.wikipedia.org/wiki/Pure_Food_and_Drug_Act_of_1906
And then there was the Great Depression
Children of the Great Depression
http://www.digitalhistory.uh.edu/learning_history/children_depression/depression_children_menu.cfm
Hoovervilles from American Memory
http://memory.loc.gov/cgi-bin/query/f?fsaall:0:./temp/~ammem_xPlK:
Hooverville: Shantytown of Seattle’s Great Depression
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&File_Id=741
If there are any pro-Rand fans that still believe her ignorance is correct then you are one of those who may be aptly described as "greedy no-good SOBs." Just remember, it was the cannon fodder from the lower economic classes (victims of "free markets") that won America’s wars which made it possible for capitalism to exist and Rand to write.
My Commentary:
Barney Murrell offers not even a hint of a refutation of even a single principle of Objectivism.
Instead, he makes the claim that “most humans are greedy SOBs” incapable of freedom (including Mr. Murrell?). This is belied by the historical fact that rising general prosperity and (even relatively) free markets are inextricably linked corollaries (Ex., the contrast between North and South Korea), while central planning of all kinds inevitably leads to economic decline and poverty (example, the Hoovervilles and today’s unemployment statistics). His support of government regulation implies that a gun can impart wisdom and virtue into otherwise “greedy SOBs”. Give any “greedy SOB”, which he claims most humans are, a position of coercive police power over the lives of other men by making him a regulator automatically allows wisdom and omniscience to flow from the (metaphorical) gun in his hand into his selfless brain.
Humans are not evil by nature, but are rather in need of a rational, scientifically validated code of ethics to guide them in their lives and in their relationships with others. Objectivism provides that moral guidance. See the works of Ayn Rand or of Objectivist intellectuals Tara Smith (Ayn Rand’s Normative Ethics, the Virtuous Egoist) and Craig Biddle (Loving Life, the Morality of Self-Interest and the Facts that Support It. ).
The litany of horrors allegedly perpetrated by capitalism, such as slave labor and child labor, were legacies of pre-capitalist societies that capitalism inherited and eventually wiped out. The extraordinary advance in men’s economic well-being that occurred in the 19th century was unmatched by any century before or since, and enabled the creation of the American middle class. While terrible conditions did coincide with the rise of capitalism, they must be viewed in historical context…something that the enemies of capitalism routinely fail to provide. For a properly contextual viewpoint, see Andrew Bernstein’s The Capitalist Manifesto.
Every one of the 20th century disasters cited by Murrell were the result of government interference into the economy, not free people “running amok”. The S&L crisis and the (Hoover-Roosevelt) Great Depression are two irrefutable examples. The failure to understand the true causes of the S&L crisis helped pave the way for today’s financial calamity. See Richard M. Salsman of the American Institute for Economic Research (The Collapse of Deposit Insurance—and the Case for Abolition)and Amity Shlaes(The Forgotten Man—a New History of the Great Depression).
As for today’s crisis, listen to this lecture given by BB&T Chairman John Allison at:
Or visit The Ayn Rand Center for Individual Rights and visit the special section detailing their response to the financial crisis.
Also read Richard M. Salsman's penetrating essay in the current issue of The Objective Standard.
Government regulation is inherently unjust, because it is based upon the un-American principle of presumption of guilt, whereby coercive control is extended over an entire industry because of the wrong-doing (or alleged wrong-doing) of the few. The establishment of the FDA (and its precursors) is a prime example. That its creation may have been supported by many in the pharmaceutical industry does not justify it. Can it ever be calculated how much suffering and premature death has been caused by the FDA, which routinely delays, prohibits, and discourages investments in medicines from entering the market? Fraudulent behavior of the few is dealt with by criminal law in a free, capitalist society. Prisons are for criminals, and criminals only. Placing controls on people or companies innocent of any wrong-doing is a form of pre-emptive law, which is consistent with dictatorship and is incompatible with a free, lawful society.
It’s not that “greedy SOBs” don’t exist in a free market. It’s that capitalism, which protects individual rights, works to their disadvantage. Honesty wins in a society based upon freedom of association. It is the political corruption of the private economy caused by coercive government interference in the free market that empowers and entrenches the “greedy SOBs” (Ex., Countrywide’s Mozilo and the GSEs).
I take particularly strong exception to Murrell’s degrading of our military personnel as mere “cannon fodder” incapable of appreciating and fighting for their own freedom. We owe an incalculable debt of gratitude to our fighting men and women, who by fighting for their own freedom and our American ideals, they protect the rights of us all…thus enabling Barney Murrell to freely advocate for tyranny and against America’s foremost defender of individual rights.
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