I'm stepping back to cover some basic principles that guide my thoughts on politics and society.
1. TANSTAAFL- There ain't no such thing as a free lunch. This phrase gets tossed about a bit and it relates to the fact everything in life does have some opportunity costs even things that don't cost you money. For example if I am sitting on the couch watching classic "Doctor Who" while chatting with Truthseaker on Yahoo IM- there are tons of other things I could be doing at that point in time but I am not on the simple grounds I would prefer to watch classic "Doctor Who" and chat with Truthseaker.
2. Voluntary exchange is always better than force- this is one of the many problems with government mandates. If Marry hires Bill and Ted to paint her house for example- you might not like the details of the contract- for example they might agree to do the job for less money than you or a different paint- but you don't right do dictate pay rates- you would have room to complain if they were using a toxic paint that would harm you and your property.
3.) Murphy never sleeps- Murphy's law is what ever can go wrong will go wrong when Murphy is on the job. This is one of the classic problem with all political promises. Every time a politician proposes a new law, program or what not they will always paint a rose picture where the proposal pays for itself and life is some how better. So you need to think about what they expect things to work and as many ways that things can go wrong- and alternatives to accomplish the goal.
4.) Be contestant but feel free to change your mind as you get new information. This might sound contradictory but it is not. The constancy is about ideology, morality and logic not your opinion on individual positions. As one quote from a British politician accused of flip-flopping goes "When my information changes my opinion changes- do you do the same sir."
Monday, June 29, 2015
Wednesday, June 24, 2015
Oklahoma Surgical center- why aren't they the typical clinic ?
Healthcare is an important issue for us- as you as you will know from reading other posts my friend and blogging partner Truth Seeker- was born with 4 forms of Congenital heart defects so the importance of affordable healthcare is not lost on us. On the build up to Obamacare- the supporters were quite fond of stating how much faster medical expenses have grown compared the the ecconomy as a whole- I believe some figures were saying as much as 10 times as much as the general rate of inflation.
This is an issue that must be fixed in order to determine how to do that we must ask the simple question how did we get in this mess?
The first clue might be found with the Oklahoma surgical center this is a clinic that offers up front pricing and claims that other clinics charge several times more than they do- on their webpage they like to point to operations where their total cost was less than the co-pay at other clinics.
Their founder claims in his blog that they are the exception instead of the rule because the current US healthcare system is a scam filled mess that that hurt consumers.
The first being the Certificate of Needs laws which- used to exist at the federal level but now exist at the state level in all but 14 states- which are built around the notion that limiting the number of clinics providing a service would some how limit the prices. Their supporters would claim that this is because the medical industry for some reason is different than the rest of the ecconomy and is exempt from basic laws of economics .
Then we have programs like Medicaid Disproportionate Share Hospital (DSH) Payments which was set up to reimburse healthcare providers that were losing money treating uninsured and patients. The problem according to Dr. Keith Smith- in his videos title the $100 aspirin is that the program has institutionalized abuse as hospital might jack up a bill by by 100000% as they know people would not be able to pay- then claim a loss and collect 5% of the bill which would be 500% more than they should have charged in the first place. The problem is not solved by more insurance due to claims repricing programs where an insurance company will get a bill negotiate it down then charge a claims repricing fee based on the percent they claim to have saved the policy holder. These videos paint an image where hospitals are not struggling due to giving away free care but rolling around in cash because they gouge the public with the DSH program and will fight any plan to either end or reform the program in a cost saving manner tooth an nail.
Any healthcare reform needs to favor a free market approach if you were to reform the DSH program- the easiest part of any reform might be putting a limit on what you will pay for some medicine- for example you can buy a bottle of aspirin 500 tablets for $3.60 at Walmart there is no reason for a hospital to believe they can get buy with charging $5 for a single pill. The harder part would be to determine a DSH reform where you have hospitals competing and driving down prices to a market clearing level which is exactly what I would expect to happen if the program was ended.
While there are some people who are battling horrible conditions and should get help for the medical battles and I will do what I can for them- but these people should be the exception and not the rule- and the Oklahoma surgical clinic does provide some clues on how to improve the medical system.
This is an issue that must be fixed in order to determine how to do that we must ask the simple question how did we get in this mess?
The first clue might be found with the Oklahoma surgical center this is a clinic that offers up front pricing and claims that other clinics charge several times more than they do- on their webpage they like to point to operations where their total cost was less than the co-pay at other clinics.
Their founder claims in his blog that they are the exception instead of the rule because the current US healthcare system is a scam filled mess that that hurt consumers.
The first being the Certificate of Needs laws which- used to exist at the federal level but now exist at the state level in all but 14 states- which are built around the notion that limiting the number of clinics providing a service would some how limit the prices. Their supporters would claim that this is because the medical industry for some reason is different than the rest of the ecconomy and is exempt from basic laws of economics .
Then we have programs like Medicaid Disproportionate Share Hospital (DSH) Payments which was set up to reimburse healthcare providers that were losing money treating uninsured and patients. The problem according to Dr. Keith Smith- in his videos title the $100 aspirin is that the program has institutionalized abuse as hospital might jack up a bill by by 100000% as they know people would not be able to pay- then claim a loss and collect 5% of the bill which would be 500% more than they should have charged in the first place. The problem is not solved by more insurance due to claims repricing programs where an insurance company will get a bill negotiate it down then charge a claims repricing fee based on the percent they claim to have saved the policy holder. These videos paint an image where hospitals are not struggling due to giving away free care but rolling around in cash because they gouge the public with the DSH program and will fight any plan to either end or reform the program in a cost saving manner tooth an nail.
Any healthcare reform needs to favor a free market approach if you were to reform the DSH program- the easiest part of any reform might be putting a limit on what you will pay for some medicine- for example you can buy a bottle of aspirin 500 tablets for $3.60 at Walmart there is no reason for a hospital to believe they can get buy with charging $5 for a single pill. The harder part would be to determine a DSH reform where you have hospitals competing and driving down prices to a market clearing level which is exactly what I would expect to happen if the program was ended.
While there are some people who are battling horrible conditions and should get help for the medical battles and I will do what I can for them- but these people should be the exception and not the rule- and the Oklahoma surgical clinic does provide some clues on how to improve the medical system.
Saturday, June 13, 2015
Living wage conclusions
Tax, Tort, Regulatory and monetary reform as long with ending subsidies needs to be brought up whenever the minimum wage is discussed especially when someone make the claim that it in fact was relatively higher.
When someone makes the claim it was someplace between 30% and 300% higher in 1968- it is vital to ask the simple question why the did the real value drop with out a decrease in unemployment?
I have seen many people state the reason was greed- the problem is this would be like the FAA blaming a plane crash on gravity- which was constant through the entire flight.
Colonel Sanders, Ray Kroc, Dave Thomas and every other business man will naturally look at how to maximize their profits - that is simply the nature of business, so I try to look at what has changed since the late 1960's or if they bring up Australia- what is different between both nations.
Your standard of living is not based on how much money you have in your pocket- rather it is completely based on what you can buy with that money and that in turn is based on society's productivity levels and competition.
A good example of this is to simply think about the quality of life has changed over the course of the past few centuries.
Next it is important to remember there is no such thing as a free lunch - in life there are always trade offs and Failure to understand this fact is magical thinking which is doomed to fail.
This is the reason that I ask everyone who wants to see a $15 minimum wage especially if they site the the US in the past or Australia- why are prices so high in the modern US?
I don't expect CEO's to cut their own pay but instead- reduce hours for those people the increase would effect, decrease quality and increase prices so the value of $1 would drop so that the quality of life you could afford on $15 would be a lot closer to what you can currently afford on $8 today.
I don't pretend that there might not be any negative side effects for ending subsidies and conducting the forms. I just claim they will affect fewer people and be over quicker.
I am not saying we should toss every regulation out- I am though saying we should look at costs and benefits because Australia might just be proof that it will result in drastic price cuts with reasonable environmental and safety standards.
When someone makes the claim it was someplace between 30% and 300% higher in 1968- it is vital to ask the simple question why the did the real value drop with out a decrease in unemployment?
I have seen many people state the reason was greed- the problem is this would be like the FAA blaming a plane crash on gravity- which was constant through the entire flight.
Colonel Sanders, Ray Kroc, Dave Thomas and every other business man will naturally look at how to maximize their profits - that is simply the nature of business, so I try to look at what has changed since the late 1960's or if they bring up Australia- what is different between both nations.
Your standard of living is not based on how much money you have in your pocket- rather it is completely based on what you can buy with that money and that in turn is based on society's productivity levels and competition.
A good example of this is to simply think about the quality of life has changed over the course of the past few centuries.
Next it is important to remember there is no such thing as a free lunch - in life there are always trade offs and Failure to understand this fact is magical thinking which is doomed to fail.
This is the reason that I ask everyone who wants to see a $15 minimum wage especially if they site the the US in the past or Australia- why are prices so high in the modern US?
I don't expect CEO's to cut their own pay but instead- reduce hours for those people the increase would effect, decrease quality and increase prices so the value of $1 would drop so that the quality of life you could afford on $15 would be a lot closer to what you can currently afford on $8 today.
I don't pretend that there might not be any negative side effects for ending subsidies and conducting the forms. I just claim they will affect fewer people and be over quicker.
I am not saying we should toss every regulation out- I am though saying we should look at costs and benefits because Australia might just be proof that it will result in drastic price cuts with reasonable environmental and safety standards.
Monday, June 8, 2015
Living wage part V- monetary reform part II
I mentioned shortly about people screaming for inflation becuse it lowerd real wages. A good example of that can be seen in this article by Kevin Drum of Mother Jones Magazine titled Why High Inflation is Good in a Recession.
The basic claim is that in a recession the biggest obstacle to recovery is the phenomena is sticky wages which is caused by employers who for some reason are not wanting to cut wages.
His entire plan to unstick wages- is to go print out a bunch of money to devalue wages as employers are refusing to do it.
My understanding of economics states that no matter how bad the ecconomy is- that the only reason that an employer would be reluctant to cut your pay is because there is still demand for the goods and services that the company is providing. Now Kevin Drum is arguing for a higher minimum wage.
If Kevin Drum or anyone else advocating inflation to solve the "problem of sticky wages" honestly believes the biggest problem facing the ecconomy is that wages are not adjusting then they should advocate repealing the minimum wage and if he has honest concerns about the standard of living for the poor then he should have advocated letting deflation run it's course.
The primary argument that people will bring up against repealing the minimum wage is the fear it doing so will hurt the poor by lowering real wages across the board. However if someone were to turn around and sight sticky wages as an argument for inflation which is common among Keynesian economists then they can not use this argument as they are expecting that inflation will decrease real wages across the board.
If there was no minimum wage- companies will try to cut pay the concept of sticky wages states that they will be reluctant to cut a good employees wages especially if they are making money. There is a chance that wages might fall with out prices falling- and there are two reasons that this might happen. The first is the ecconomy quickly starts to recover and people prefer to pay a few bucks over standing in line so companies hire more people for example starting pay might fall from $9 to $6 so a company might hire 3 people instead of two so it is now easier to get a job and at some point prices will settle with close to 0% unemployment.
On the other hand if you simply allow inflation to run it's course a Keynesian would argue that the higher real wages would lead to more unemployment as employers are reluctant to hire new people and would automate and off shore jobs that consumers would prefer to have done by a person in the US.
The problem with this argument is that they will make the claim that increasing the minimum wage will lead to higher real wages because employers for some miraculous don't automate or move jobs off shore or raise their prices to accommodate the higher costs.
Letting deflation happen may result in jobs getting moved off shore and automated but as prices are going down consumers will have more purchasing power which means they might have the money to hire people to do other jobs and you might have some jobs come open as people decide to retire.
In either of the two situations the way to reduce the possible bad side effects would be if it was easier to start and grow a business which takes us back to tax tort and regulatory reform. People who object to the idea of having a minimum wage- will inevitably support tax, tort, regulatory and monetary reform and ending subsidies as they expect it to reduce the cost of running a business which in turn will mean higher real wages due to a mixture of lower prices and unemployment depending on consumer preferences.
My next post will be the last on the subject
The basic claim is that in a recession the biggest obstacle to recovery is the phenomena is sticky wages which is caused by employers who for some reason are not wanting to cut wages.
His entire plan to unstick wages- is to go print out a bunch of money to devalue wages as employers are refusing to do it.
My understanding of economics states that no matter how bad the ecconomy is- that the only reason that an employer would be reluctant to cut your pay is because there is still demand for the goods and services that the company is providing. Now Kevin Drum is arguing for a higher minimum wage.
If Kevin Drum or anyone else advocating inflation to solve the "problem of sticky wages" honestly believes the biggest problem facing the ecconomy is that wages are not adjusting then they should advocate repealing the minimum wage and if he has honest concerns about the standard of living for the poor then he should have advocated letting deflation run it's course.
The primary argument that people will bring up against repealing the minimum wage is the fear it doing so will hurt the poor by lowering real wages across the board. However if someone were to turn around and sight sticky wages as an argument for inflation which is common among Keynesian economists then they can not use this argument as they are expecting that inflation will decrease real wages across the board.
If there was no minimum wage- companies will try to cut pay the concept of sticky wages states that they will be reluctant to cut a good employees wages especially if they are making money. There is a chance that wages might fall with out prices falling- and there are two reasons that this might happen. The first is the ecconomy quickly starts to recover and people prefer to pay a few bucks over standing in line so companies hire more people for example starting pay might fall from $9 to $6 so a company might hire 3 people instead of two so it is now easier to get a job and at some point prices will settle with close to 0% unemployment.
On the other hand if you simply allow inflation to run it's course a Keynesian would argue that the higher real wages would lead to more unemployment as employers are reluctant to hire new people and would automate and off shore jobs that consumers would prefer to have done by a person in the US.
The problem with this argument is that they will make the claim that increasing the minimum wage will lead to higher real wages because employers for some miraculous don't automate or move jobs off shore or raise their prices to accommodate the higher costs.
Letting deflation happen may result in jobs getting moved off shore and automated but as prices are going down consumers will have more purchasing power which means they might have the money to hire people to do other jobs and you might have some jobs come open as people decide to retire.
In either of the two situations the way to reduce the possible bad side effects would be if it was easier to start and grow a business which takes us back to tax tort and regulatory reform. People who object to the idea of having a minimum wage- will inevitably support tax, tort, regulatory and monetary reform and ending subsidies as they expect it to reduce the cost of running a business which in turn will mean higher real wages due to a mixture of lower prices and unemployment depending on consumer preferences.
My next post will be the last on the subject
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