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Obamacare a Pallbearer for American Freedom?

healthcare-cartoon“The essence of government is control, or the attempt to control.” Benjamin Tucker

There is no better way to describe the so-called  health care plan than Tucker’s quote. It is not about improving health care; it never was. Oh there may be some dim bulbs in Congress that truly believe they have improved the country and the health system with their latest efforts. But sincerity is not an excuse for stupidity. Reality does not give a damn about good intentions.

The majority in Congress knows exactly what this bill means for them and medical care in this country. For them, it opens up the potential for total control of the citizenry. For health care it means continued deterioration in our health care system, but in a way that is “fairer” than before. It provides for broader insurance coverage at the expense of the quality of medical care. But for idealogues who worship at the altar of equality, that is a reasonable trade-off. Winston Churchill described socialism’s value thusly: “its inherent virtue is the equal sharing of misery.”Healthcare-Patient

For the rest of us, it means the continuing deterioration of health care that commenced with government’s involvement in Medicare. For a full discussion of this point, see Scott Gottlieb‘s article in the New York Post on Obamacare.

Perhaps more important than the effects on the quality of health care will be the effects on every aspect of our lives. Ayn Rand’s warning long ago has finally come true under the Trojan Horse known as health care reform: “We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.”

The reach provided by health care “reform” is virtually unbounded. Congress or its bureaucratic arms will begin invading not only every aspect of traditional doctor-patient relationships, but every aspect of individual freedom. Food content, diet requirements, exercise, living style and much more will soon come under attack. There is no aspect of human behavior that a motivated and imaginative mind cannot link to health. The public nuisances and busybodies in government have more than the requisite motivation to “improve” your life. Now they have a set of tools that enables them to do so. They literally will be able to invade every aspect of human behavior under the guise of improving your health.

The concept of American individualism, freedom and greatness has Obamacare as its pallbearer.

This post originally appeared on American Thinker.

Tennessee Williams Was Smarter than US

The United States is now dependent on the rest of the world to finance its government deficits. As the sovereign version of Tennessee Williams’ Blanche du Bois in Streetcar Named Desire, we are truly “dependent on the kindness of strangers.” The government has no way to finance itself other than to borrow from strangers (or to print money and risk hyperinflation).

Unlike Blanche, who never harmed her benefactors, the US financial industry played our now-needed creditors as marks in their gigantic Ponzi scheme. All of this occurred with the implied if not explicit seal of approval of the US government. As a result, much of the world was victimized in the same manner as US investors and taxpayers. As a result, their economies are in the same financial and economic hole as the US. As expressed in Insecure Securities:

For years, hundreds of billions of new mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) generated from them were sold to the world to compensate for the lack of savings in the United States and to finance American housing investment. Now virtually the entire market for new issues of such securities – all but 3% of the original market volume – has vanished.

While the polite and quaint customs of international diplomacy has muted the criticism deserved by the US, it is clear there is a great deal of animosity. Slowly and deservedly some of this is starting to surface. China, India, Russia and other countries have admonished the US for its profligate ways.

The US, in spite of warnings and growing complaints, has increased its deficit spending and effectively nationalized the mortgage and other parts of its lending industry:

To compensate for the disappearance of that market, and for the simultaneous disappearance of non-securitized bank lending to American homeowners, 95% of US mortgages today are channeled through the state institutions Fannie Mae, Freddie Mac, and Ginnie Mae. Just as there was a time when collateralized securities were safe, there was also a time when economies with so much state intervention were called socialist.

US dependence on the kindness of strangers has only increased at a time when the strangers are overtly criticizing our policies and adjusting their actions as well:

Two years ago, Ben Bernanke, chairman of the US Federal Reserve, argued that foreigners were buying US securities because they trusted America’s financial supervisory system and wanted to participate in the dynamism of its economy. Now we know that this was propaganda intended to keep the foreign money flowing, so that US households could continue to finance their lifestyles. The propaganda was successful. Even in 2008, the US was able to attract net capital inflows of $808 billion. Preliminary statistics suggest that this figure has now fallen by half.

At this point, the US has greater needs than ever before. Benefactors have been scammed. Their advice and warnings have been consistently ignored.

Foreigners have cut their funding support in half. Even if the strangers continue to tolerate our behavior at their current reduced levels of support, we cannot fund government deficits. Nor can we obtain the capital necessary for the private sector to expand.

Had Tennessee Williams developed his Blanche du Bois in the fashion of the US, there would have been no play. The character would not have been credible. My bet is that the sovereign version of Blanche is no longer credible and will be booted out into the cold before long.

All quotes were from Insecure Securities.

The Myth of Government

This postcard book, Rube Goldberg's Inventions...
Image via Wikipedia
Frédéric Bastiat.
Image via Wikipedia

For the past seven decades, Government formula has been the same. Start a program whenever something seems wrong. Intervene if the economy does not produce the desired results. Repeat again and again, all the while convincing citizens that government is the only one that can solve the problem. This ad hoc interventionism enabled Governments around the world to expand at rapid rates, growing haphazardly into behemoths.

We are now at a turning point in history regarding Government.  They have become Rube Goldberg contraptions, grown beyond effectiveness or control. Their failures are readily apparent. Their perception as “problem-solver” is morphing into “problem-causer.” They are inefficient in their responsibilities while draining the vitality out of the economies they rule. Rick Newman in a recent article on Seeking Alpha discusses Gary Schilling’s findings about the US:

“Economist Gary Shilling has calculated that 58 percent of the population is dependent on the government for “major parts of their income” including teachers, soldiers, bureaucrats, and other government employees; welfare and Social Security recipients; government pensioners; public housing beneficiaries; and people who work for government contractors. By 2018, Shilling estimates, an astounding 67 percent of Americans could be dependent on the government for their livelihood.”

The size of the US government debt and obligations causes concern around the world that will likely make Shilling’s trend impossible. We have already passed the point where these obligations can ever be serviced in an honest, contractual fashion. No plan is mathematically feasible. That is why no one in authority addresses this problem. It is a kick-the-can-down-the-road strategy that works until the can goes over the cliff. Resistance to additional debt/dollar holdings by other countries and our zombie economy, propped up only by unsustainable government spending, suggest that we are very near that cliff.

The history books a century or so from now are likely to marvel at the naivete of our era. People reading them will wonder how their ancestors could have engaged in a sort of religious worship of government, believing that any and all problems could be solved by this God. But the bigger story is apt to be the civil and social unrest. Devout believers do not react well when their God is shown to have been little more than a giant Elmer Gantry scam.

Our current economic crisis will be the first few pages in the chapter of this period. Like a good mystery, the ending is not yet knowable. My suggestion for a title for this period is “The Myth of Government.” If we don’t destroy ourselves in the process, our descendants will wonder why we arrogantly chose to ignore the prudent advice available to us. As an example,  Frederic Bastiat told us more than 150 years ago:

“The State is the great fiction by which everyone seeks to live at the expense of everyone else.”

 

Perhaps that is a better title of the era we are living through.

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Not an Economic Problem, A Constitutional One

cover-FoundingFathersMost of us who are troubled about what is happening in this country have no or loose ties to politics. Our concerns arise because of concern for future generations — children, grandchildren and founding_fatherstheir grandchildren. Opposition to various policies and trends is motivated by what we believe works and what doesn’t. Perhaps, I should say that more strongly, by what we know works.

When this country was founded, there was little reason to believe that it would become the envy of the world. Other countries had existed much longer, had infrastructure in terms of schools, industry and culture that did not exist here. All the science and intellectual achievements known to the world had originated outside of this country. Furthermore, our population was motley, initially representing the refuse of advanced societies. Arguably they had little talent and some were criminals who had been exiled to our shores. The intitial population was supplemented by early immigrants best described as “your tired, your poor and your downtrodden.” Yet, in the space of about a century and a half, this country grew to become one of the most prosperous countries on earth. No one, except perhaps our wise Founders, could have envisioned the miracle that occurred.

So how did this happen? Well, it wasn’t government; it was the lack of government. Our Constitution was established to limit government, to protect the citizens from government. It allowed all to pursue their own personal interests. As expressed by Hal Gershowitz and Stephen Porter:

The magic of America, since the nation’s inception, has been the internal gyroscopes of the people, free to gravitate toward each individual’s true north. That, to a great extent, is what American Exceptionalism is and has always been. And it is the Administration’s failure to understand this aspect of the American psyche that is perilous to all of us. In its quest to control healthcare, anything that can remotely be packaged as “protecting the environment” (or, with even more grandiosity, “saving the planet”), executive compensation and nearly every other aspect of our national life, we now have all-powerful bureaucracies answerable to no one but the President and his acolytes in the White House.

The Constitution was successful in its goal of protecting the citizenry, at least for more than a century, despite being under assault from the beginning. Significan deterioration in the effectiveness of the document did not occur until the Twentieth Century. Now, it has been reduced to little more than an artifact of history, an interesting piece of parchment that no longer carries much legal weight.

Our current economic crisis reflects what has been done regarding the emasculation of our liberty and freedom. Economics cannot be understood without understanding the institutional framework within which it operates. The current crisis arguably started to show up in economic data in the late 1970s. Real weekly wage growth showed problems even earlier than that. Today, real weekly wage rates are lower than they were in 1964, having first dropped below that level in the late 1970s and never returning to the earlier level. Our economic problems did not start in 2007.

To understand better how important our Constitution was, one should read the excellent article by Gershowitz and Porter entitled Crossing the Rubicon. It is a remarkable piece that traces the advance of statism, how it has never worked anywhere in the world and what it has done and is doing to our country. Excellent read for those interested.

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