Thursday, December 31, 2009

On Regulating Insurance Profits

A few years back, Patrick Byrne earned the wrath of the progressive community with the suggestion that public schools should spend 65% of their budget on education.

The public school system, as everyone knows, is a primary trough for progressive political activism. Many of the most progressive school districts prefer to use the funds allocated for education to achieve the progressive goal of redistributive justice to the lesser goal of educating children.

Mr. Byrne was openly vilified by the left for the 65% suggestion.

With this in mind, I find myself startled to see progressive lauding the 2009 health care bill for setting a percent limit on the cut insurance companies can take. In a show of duplicity, self-righteous pat themselves on the back with the demand that a set percent of premiums be spent on "medical care."

(I put "medical care" in quotes because the progressives running the health care system will get to define what is and is not "medical care" as political expediency demands. For example, I would expect the $300,000 a year that Michelle Obama earned as a political appointee at the University of Chicago Medical Center to be considered a medical expense. One might also consider the hefty lawyer fees collected in malpractice suits to be medical expenses.

Let's face it. In a world where there is a great deal of collusion between insurance companies and health care providers, there is often ways for big insurance companies to shift profits from the insurance side of the books to the health care side of the books)

The duplicity of the left aside, the reason for this post is a direct observation that setting the profits of insurance companies at a fixed percent does not help reduce medical care costs.

When a company works on a percentage basis, their efforts focus on increasing total sales.

The reason that we do not see the productivity gains in health care reflected as price drops is that the insurance companies that control health care spending do not want to see the prices drop. Their profits would plunge if prices dropped.

If we wanted to see a price drop in insurance, we might try a system where the insurance companies worked on a fixed amount or hourly wage. This is what I was hoping to try with the Health Care Advocates in the Medical Savings and Loan.

Better yet, one might try a system where the agents get a bonus for cutting expenses.

Imagine the plight of a company working under the regulatory regime of Pelosi-Reid that gave bonuses for cutting medical costs. Lets imagine that young entrepreneurs came up with an ingenious way to dramatically reduce health care expenses for the company.

What would happen in our progressive regime is the company offering the bonus would become Federal criminals as the combined reduction in medical expenses and bonus crossed the performance threshold set by Congress.

While setting insurance company's income as a percent of medical expenses polls well with those driven by wealth envy, the program does not actually reduce health care expenses, nor does it actually affect the gap between rich and poor in any meaningful way.

Having Federal regulators setting wages and prices in the insurance industry does little more than give an inside advantage to those companies with political connections as they can get the wages and prices set in ways that are favorable to their business model.

Health Care and Redistributive Justice

Barack Obama is not the first politician to use the health care system for the goal of redistributive justice.

There's been a long history of people wishing to use the medical system to right the wrongs of the world. It is not uncommon for doctors, insurance companies and others to pad bills here and there with the intent of helping others.

For that matter, people in the medical community have been extremely good about extending care to those without the funds to pay for care.

Of course, in some cases, people who started out with the intent of engagingin redistributive justice ended up redistributing the funds to themselves.

The political class is especially bad about redistributing the funds raised in the name of redistributed justice back to members of the political class.

I've mentioned multiple times that insurance itself is a device to achieve the goal of redistributive justice. Insurance takes money from a group of people and redistributes it to group members with a medical need.

This idea of padding bills with the intent of redistributing care is so entrenched in the current medical system that "redistributive-justice" has become the primary reason that our medical bills are so out of whack with reality.

The reason that we do not get straightforward pricing for health care in America is not because there are evil people seeking profit. The reason we don't get straightforward pricing is because there's a large number of people good people with the good intent of engaging in redistributive justice.

Traditionally Americans put up with those seeking to use medicine for redistributive justice is that many of our best and brightest work in health care and we have great faith in their integrity an sense of justice.

Owners of the local hamburger joint or used car dealership would love to engage in the same "redistributive justice" as hospitals. But we do not put up with it and are more vocal in our demand for fair pricing.

There is some value to redistributive-justice.

The problem with redistributive-justice is that when there is too much of it the redistributive-justice itself becomes a source of oppression.

In the United States we find that there is so much padding of bills that we have driven the cost of health care from the means of many middle class Americans.

It is likely that the new layers of redistibutive-justice being added to the system is simply going to drive prices up higher and will result in more people driven into insolvency.

In my opinion, the best form of redistributive justice does not involve robbing Peter to pay Paul. The best form of redistributive justice involves helping people up to make them self-sufficient.

Thursday, December 24, 2009

Special Deals With the Regulators

Many people are upset about the special deals worked stuffed into the Senate Health Care bill to buy votes in the last minute legislative push.

Sadly, these special deals seem to exist in most modern level at both the state and federal level. In most cases the deals pass trhough the system with little scrutiny.

State governments and other local authorities have been regulating insurance since the inception of insurance. These regulatory bodies invariably have special deals which favor companies with inside connections. Insurance is very complex and a favor might appear to be something benign, or even progressive, but the advantages are there. The advantages usually create the dyanamic where the group receiving the favor ends up dominating the local market.

The ugly sausage making process that we saw taking place in Congress this holiday season took place in all of the local regulatory efforts.

Insurance is currently regulated. The regulations came through processes like the one that we just saw on national TV. The regulatory process invariably creates an uneven playing field which favors some constituents over others. It is the regulation process that leads to the monopolies and to the inequitable distribution of care.

Unfortunately, the federal regulation of health care is unlikely to make any improvements. What's likely to happen with the new Federal regulation is that there will now be two layers of regulation competing for influence in matters of local health care. There will be state and local regulators in conflict with federal regulators and power players diverting health care funds back and forth as they compete for influence.

If we want to break the inequities of our health care system, we need to move away from the insurance paradigm to a self-funded paradigm ... like the Medical Savings and Loan.

Monday, December 21, 2009

Stimulus is Progressively Corrupt

This is really non-news. A study confirms that most of the stimulus money went to award party faithful.

If the Republicans had done something like this; the study would be headline news. Reports on Democratic corruption is just restatement of the obvious.

Strategizing a Way Out

The health care power grab was the result of a multigenerational disinformation campaign of the left. The process worked by first promoting insurance as if insurance were health care. The left gave deep tax breaks to insurance companies while structuring the tax code to make alternatives untenable.

Insurance is an inherently flawed business model. Insurance combines everyone's health care resources into a pool, then lavishes the politically connected members of the pool with great care and leaves those outside the group structure hanging.

The solution to a flawed business model is to create a better business.

The Medical Savings and Loan is a better business model. The MS&L depends primarily on savings. Rather than developing a group risk pool, the system using a combination of savings accounts and interest free loans to help the individual self-finance care.

A medical savings and loan looks surprisingly like an insurance policy. Employers would pay funds into the account. Employees would draw funds as needed. Unlike pure health savings accounts, policy holders will always have funds to cover needed and preventative care.

The MS&L is even progressive in that there is a transfer of wealth from the healthy to those with expensive medical needs who are unable to pay back loans.

While the Medical Savings and Loan looks a lot like insurance to an outsider, the system avoids many of the flaws of insurance. The system is individually based and is not subject to the moral hazards of pool based insurance. Policy holders are spending their money on care. Except for extreme cases, people taking out loans are expected to pay back the loans.

The bills before Congress makes all alternatives to insurance illegal.

If those who are upset about the health care power grab agitate loud enough and get the MS&L treated as insurance, then those opposed big government and big insurance could vote with their feet and pull their money out of big insurance and into the self financed medical savings and loan.

The whole health care mess is the result of the fact that insurance is an inherently flawed business model. The solution to a flawed business model is not more regulation but a better business model.

The Medical Savings and Loan is a better business model. If the right uses the travesty of the 2009 health care power grab to make the MS&L a legal alternative to insurance, then people can vote with their feet by opting out of the corrupt political structure created by the power grab.

Sunday, December 20, 2009

Wrap Rage

In recent years, manufacturers have started making their packaging extraordinarily difficult to remove. Many electronics come in clamshells that one must violently destroy to get at the contents.

Personally, I've taken to using extremely sharp and dangerous objects like box cutters to open plastic clamshells. I really dislike clamshell packaging as I like to keep packages around for storage.

My guess is that manufacturers are seeking to reduce returns. It is less tempting to return items to a store after destroying the package.

The result of the hard to remove packaging is that there will be a large number of emergency room visits this Christmas as people trying to open clamshells fall into a fit of wrap rage.

Christmas Morning is a time filled with elevated emotions and hyper activity. The parents might be filming while the kids stumble over each other to find if Santa was kind.

Heightened emotions can take unpredictible directions.

When a present proves unopenable, kids will run and grab whatever sharp object they can find to break the wrapping. I've seen small children weilding eight inch chef knives trying to find a way to the toy held in place by industrial strength plastic holders.

Invariably, a large number of people will stab themselves on Christmas morning and destroy their Happy New Years with an expensive trip to the Emergency Room.

The way to prevent wrap rage in your family is to completely open then rewrap all presents before xmas day.

It is better to deny the gift recipient the experience of removing the manufacturers packaging than it is to subject them to a stay in a hospital.

Parents should put the camera down and stand at the ready with the box cutters. It is better to have sharp objects at the ready for opening packaging than it is to have people run around on Christmas day trying to find knives and scissors.

The reason for this post is that it wrap rage brings up an interesting question of liability. Apparently there is some sort of financial gain for manufacturers in using clamshell packaging. I assume that it reduces returns. Manufacturers receive a small financial gain by creating a large number of injuries.

This is the type of situation where liability laws play a positive role.

Decisions made by manufacturers to encase their products in difficult to open packaging will result in a large number of injuries that would not otherwise occur. The treatment of such injuries should be paid for by the manufacturers that benefitted from the decision to use impossible to open packaging.

IMHO, what we want in the personal injury arena is a system that can fund all of the small claims from product liability. For that matter, I think our product liability laws and practices do a good job of helping people identify and account for risks.

With a system that has manufacturers facing the real costs of their decisions, the manufacturers could then look at the data and weigh the fact that clamshell packaging reduces returns against the injuries caused by the packaing and hopefully come up with packaging designs which can be opened without the aid of a sharp object.

Tuesday, December 15, 2009

Constitutional Fog

The US Constitution is one of the most accessible legal documents ever written. In 17 pages, the document outlines the scope of a limited national government that proved much more effective than the convoluted governments of the fuedal and empiral ages.

The secret to the Founders's success was that they limited the government and empowered the people.

To punctuate the fact that the Constitution created a limited government, the founders of the country added 10 Amendments (the bill of rights) at the end of the document. The last amendment reserved to the States those rights not given to the Federal government.

The document is an easier read than my auto insurance policy.

An interesting development in our progressive age is that our Representative treat this document as if it were written in some type of obscure Egyptian hieroglyphics requiring a the interpretive skills of an advanced Constitutional scholar to decipher.

It is true that a scholar could spend a life time researching precedents and interpretations of the document and barely scratch the surface of all possible implications of the document. This does not mean the document is inaccessible.

Scholars could spend a life times on almost any subject. A scholar could spend a hundred life times studying Rock and Roll. For that matter, there's a large number number of decidated rock scholars in our schools. The fact that there's a large body of knowledge surrounding Rock and Roll does not make the music inaccessible.

The fact that someone could spend a great deal of time studying a subject is not the determining factor in accessibility. Accessibility references the ease with which one can get started or to understand the basic concepts behind an idea.

Disneyland is immensely complex, but little kids go there everyday.

Of course the fog built around the Constitution isn't the result of the Constitution itself. The fog is the result of the great pains progressives have taken to skirt the Constitution in their quest for unbridled centralized power.

Through our nation's history, our ruling class has gone through bone bending contortions to turn the Constitution to their ends. This effort has created a situation where they, like the chronic liar, must employ a legion scribes to keep their stories straight.

2009 has been one of the worst years in American legislation history. Our progressive Congress wasted over half a year writing health care legislation that they know is in violation of the spirit of the Constitution. When confronted with the unconstitutionality of their dense and bewildering constructions (the bills number in the thousands of pages), they point to one of the most accessible pieces of law ever written and project their convolutions onto the Constitution itself.

Hopefully enough people will seriously look at the convolutions coming from Congress and rejects these games being played by our ruling class.

Monday, December 14, 2009

Judge Napalitano

Below is the YouTube video of Judge Napolitano discussing states holding a Constitutional Convention to reject the health care power grab.

Sunday, December 13, 2009

Democracy in Health Care

Apparently some people think that the Federal power grab of health care will somehow make our health care system more "democratic."

The opposite is actually true. This federalization of health care regulation places health under the yoke of an overtaxed Congress which is distant from the people. US Senators represent, on average, about 3 million people. Members of the House represent abouy three quarters of a million people.

This small number of elected officials is not only distant from the people. They have a massive workload which includes national defense, interstate commerce, overseeing international treatises as well as writing the laws of the land, etc..

The bills presented in the 2009 Healthcare debate all created regulatory bodies that individuals are unable to affect through elected officials.

If Health Care 09 passes, then people will have to hire politically connected lobbyists and lawyers to have any influence in how their health care is administered.

The Health Care 09 proposals are inherently undemocratic.

If our goal was to create a democratically based government structure for care, then we should do something like create an elected position of Health Care Commissioner in each state. One might even split states into districts and have elected health care administrators for the districts.

Of course, people would have an even more "democratic" structure if they had their insurance through locally owned mutual funds ... people have the absolute most control over their care when they self-finance the bulk of their care and only use insurance for extraordinary circumstances ... as in the Medical Savings and Loan.

Regardless, the distance between representatives in the Federal Government and the people means that the Health Care reform reduces the influence that an individual has on his own health, and is remarkably undemocratic.

Saturday, December 12, 2009

A People's History of People's Movements

Michelle Malkin reports that Hollywood and Marxist thinkers have team up to produce star-studded propaganda for our nation's schools. The project is called "The People Speak."

I agree that there's a large number of skeletons in our's nation's closet. What "The People Speak" is likely to miss is that pretty much all of the great atrocities (from the slavery, the slaughtering of buffalo to to the killing of Indians and abortion) were all the results of progressive people's movements.

There are progressives in both parties. George Bush (who attended two of the most liberal schools in America) had an extremely progressive agenda with the federal government taking the leading role in curriculum design with the No Child Left Behind policy.

Conversely, the rare occasions where Americans stuck to the classical liberal roots of the founders, led to prosperity.

The damage of propaganda efforts like "The People Speak" is not that they criticize the United States, but that it frames the criticism in ways that fail to teach students the source of our nation's problems.

I've said in past posts that critical thinking only works when applied to one's own belief system. Critical thinking aimed at one's partisan opponents is thinly veiled criticism.

The problem with Howard Zinn's rethinking education project is not that the project holds up "peace and social justice" as ideals, but that the intellectually dishonest techniques favored by the left undermine society and have a long history resulting in war and widescale injustice.

Health Care Rally

On December 15th, Americans for Prosperity is holding a rally against the health care power grab. I would attend this rally, except for the fact that is just too far away. I could not afford the drive to DC, nor the hotel stays for the multiple day trip.

One of the primary reasons that I oppose the health care power grab is that I believe health care should be administered by the states, where there is a better chance that individuals (like me) could affect any legislation.

Somehow, the left has convinced millions of people that we don't have health care unless health care is delivered by the Federal Government.

Real live medical care is delivered at the individual level. To have quality health care, the decision making process regarding health care must be made near the individual.

This game of giving total control of health care to the Federal government is the most undemocratic action that I have seen in my life time. The Democrats know that they have to pass their bill now, because, if health care was the primary issue in the election, people would vote out those members of Congress advocating the power grab.

Americans giving control of their health to a distant body that they are unable to affect numbers among the most absurd things that has happened in our Republic.

Tuesday, December 08, 2009

Lending For Capital Investments

I saw a short blurb today last week in which the president said the markets would recover once banks started "lending for capital investments."

I understand the speech was an attempt to drum up interest in small business loans; however, the wording gave me a double take.

In the free market of Adam Smith, the primary source of funds for capital investment came from re-investment of profit. A person makes a profit on their product. They know the market and judge whether or not it is a good time to put more money into the market or to diversify.

Such a system has the capital investment within an industry coming from within the industry. This is down to earth mechanism with a great deal of feedback.

The Federal Reserve effectively destroyed the Smith style free market. The Central banks created a system where a political machine controlled by political interests floods the market with cheap money.

This act of "lending for capital investment" is best seen as a leveraged speculative play. It is within this speculative framework that bubbles are born.

I believe that there is a place for interest bearing loans in an economy. However, to retain our prosperity, the main thrust of investment should be aimed at the process of developing and maintaining equity. Watching the recovery effort trying to fix the blown out economy with cheap money makes me worry that we are simply re-inflating the balloon.

Sunday, December 06, 2009

The Bottleneck of Congress

The best way to make a business fail is to push all decision making for the business through an over taxed bottleneck.

Nevada Senator Harry Reid just issued a charged partisan attack against the hated Republicans and secondary media for the claim that there is not enough transparency in the Health Care process.

Mr. Reid then enumerated all of the time that Congress diverted from its Consititutional duties to the Unconstitutional power grab of health care.

The Founders realized that one of the great problems of the monarchy was that monarchy pushed all decision making through a single point of failure that tended to be both overtaxed and corruptible.

The founders sought a balanced decision making system that distributed those decisions that had the most impact on individual lives to authorities close to the individual people.

They stated this idea in the tenth Amendment in an effort to punctuate their belief that the Constitution enumerated limited powers to the Federal government and reserved the other powers to the local authorities when individuals had a better shot at influencing the process.

So, in response to Harry Reid:

Yes, you and Nancy Pelosi diverted a great deal of legislation time from the jobs you were supposed to be doing. During this period you dropped the ball on a war which put our troops in danger. By dropping the ball, you created a situation where the Taliban had a resurgence in Afghanistan and came close to toppling the fragile new democracy in Pakistan.

The delay in sending additional troops meant that we had insufficient forces to protect the Afghan forces during their important election. Because our Congress took the eye off the ball, there was insufficient resources in Afghanistan to help assure the election was fair. As such, it appears that the election that so many of our troops died for was in fact manipulated and stolen from the people.

In Iran, we find that, while Senator Reid focused the attention of Congress on the power grab, Iran threw hundreds of political dissidents into prison and entered the final stage of its nuclear program.

On the environmental side of the fence we find that the Senate has an important Constitutional duty to provide advice and consent in international treatises.

Because of the Congressional power grab of health care, the President of the United States will attend one of the most important International Treatises negotiation in Copenhagen this month without adequate advice from our Senate leaders.

Dear Mr. Reid, while you dropped the ball on this extremely important Constitutional duty, there erupted claims that some of the data being used to justify the Copenhagen treaty was falsified.

Regardless of one's beliefs about global warming, the ClimateGate scandal is bad news. ClimateGate brings up the spectre that this treaty might be a flawed theory, in which case we will do irreparable harm to our economy for no positive return. The theory might be true, and the charges of fudged data might keep countries from ratifying a treastises that is necessary for preserving life on the planet earth.

All of the time that the Senate took from its Constitutional duties to perform an Unconstitutional power grab is time that should have been spent on the most important international treatises passed since the creation of the UN and NATO.

The really ironic thing is that, despite all of the time that Congress diverted from its Constitutional duties to grab regulation of insurance from the States, the time they gave to the important issue of health care still is not enough.

Don't you see?

Health care is the single most time consuming activity that we humans do. Health care is about the appliction of time, resources and decision making power to the needs of individuals. It is tough, time consuming work.

The founders of the US realized that such time consuming processes should be done through a distributed decision making process in the states or by the people themselves.

Health is an attribute of the individual. Both the financing and administration of health care needs to take place at a level close to the individual.

The desire for remform is not completely unfounded. The method for reform is.

Yes, it is true that big insurance has been failing the American people.

The reason that big insurance fails is that big insurance is too remote from the individual. (Self-financed care as in Medical Savings and Loan puts health care resources in the hands of the patient and the decision making process in the hands of the patient and doctor.)

The great Federal power grab of regulatory authority of health care makes the decision making process even more remote.

It places the decision making process in the hands of a group that is already over taxed with its Constitutional duties, and does not have the time to explore all of the nitty details necessary to deliver quality care to people thousands of miles away from Congress.

Even worse, this power grab is a one shot process. Congress is so overtaxed that people are not going to be able to use the Democratic process to rectify any mistakes made in the initial writing of the bill.

Mr. Reid, the fact that you personally failed in your Constitutional duty as a Senator in your power grab of health care shows the world that the power grab is wrong headed and will lead the American people to great harm.

Tuesday, December 01, 2009

Black Friday IS RACIST

The term "Black Friday" was the creation of evil profit minded businesses and has gained a place in our lexicon by being repeated by evil doers like George W. Bush (all progressive articles need at least one jab at the former president to re-inforce political themes).

Anyway, "Black Friday" is a racist term and, like the term "Christmas," it should be struck from the progressive vocabulary.

Evil profit-minded businesses hire a class of ne'er-do-wells called accountants. These petty minded people toil away in dark places keeping the books for businesses (drooling in the process).

These evil people use red pens to signify losses, and black pens to signify profit (profits gained on the backs of persecuted workers, I might add).

The term Black Friday came into existence because many retailers would struggle through the year in the red and not see any black ledgers until the day after Thanksgiving.

Were sales to be bad, they would see only red for the year.

Don't you see the innate racism in all of this????????????

These horrible profit-minded businesses switch from using red pens to black pens in a symbolic hatred of Native Americans!!!!!!!!!

The regressive education system of old used similar racist tactics to oppress children. If Johnny wrote on his 'rithmatic lesson "2 + 2 = 5," the reactionary teacher would mark the paper with red pencil to punish the student for deviating from social norms. Associating bad math with the white hatred of Native Americans would stigmatize the child and create an anal rententive society where clerks at the Tasty Freeze could make correct change.

Progressive schools realized the self-esteem destroying tactics of the oppressive past. The modern-enlightend educator now simply awards Johnny for creative thinking.

The progressive accountant of the future will no longer celebrate a company's transition from red into black by changing pens, but will openly stand forth and question the fairness of a system where sometimes employers have years with profit.

With a glorious new leader in place and a Congress committed to progressive change, we can take great pride that fewer and fewer American companies are taking part racist tradition of switching red pens for black pens.

We, as a nation, should applaud our glorious leader who loves small business, and who has implement policies to help small businesses become even smaller!!!!

So class, we can conclude today's lesson by stating that evil profit-minded businesses are racist for using different colors of ink in their ledgers and that progressive wonderfulness will ensue when our glorious leaders raise taxes and health care expenses to the point that no businesses engage in the inherently racist act making a profit.

Praise be the one.

PS: If you are wondering, my web empire pulled in fifty cents on Black Friday. It was not enough to join my fellow profit-mongers in the ritual of changing the color of the pen, but it was sufficient for me to rub my hands together and think greedy thoughts. On Cyber Monday, I pulled in an astounding $30 ... not enough to go black, but we can't all be evil.

The Party is The People

The Constitution and Bill of Rights were submitted simultaneously to the people in 1787 to change the structure of the government from a dysfunctional confederacy to a union of states.

In a bit of poetic license, the document begins with the words "We the people," and The Bill of rights ends with the words "the people."

This short document brackets the definition of the United States between the words "the people."

In a comment that left me dumbfounded a progressive writing under the nom-de-plume Anonymous Coward wrote the following:

The 10th Amendment reads "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

That last bit about "reserved to the states...OR to the people" (emphasis mine)means the people can exercise their power through their representatives and grant the government power to act on their behalf on issues provided it is not explicitly prohibited from acting by another section of the Constitution. What other section prohibits regulation of health care?

In twist that would make the Dark Lord Chomsky proud, Mr. Coward claims that, if you defined "the people" as "the government" then the 10th Amendment annuls itself. For that matter, one could say that the 10th Amendment annuls the entire Constitution as the Legislative Body could claim unto itself that it is the will of the people and is therefore omnipotent.

But, why should we limited this to the legislative branch. In keeping with the tradition of Caesar, one could say that the president is the manifestation of the spirit of the people. As the mind of this transcendent president is the people; therefore totalitarian powers lay within the hands of the one.

These were the ideas of Hegel (Hegel--as you know--laid the foundation of Maxism, Stalinism, Nazism, Fascism, Moaism and the American public education system).

Of course, the Marxist ideology transformed progressivism and brought forth the idea that the president is merely a figurehead and that. Since we are all Marxists now, I guess one would probably say that the party is people. The transcendent president and legislator are manifestations of the god like party.

Golly, when we progressively give ourselves the totalitarian power to change the definition of words, then we can do all sorts of things.

Anyway, showing a complete lack of understanding in the way that logical systems work, Anonymous challenged me to list all of the times that Federal Control of Health Care is prohibited by the Constitution.

I mean, for someone to really means something they have to say it at least three times. Preferably, one needs to say it 10 times.

Things said just once don't matter.

For example, the 10 Commandments only say "Thou shall not kill" once. So, they clearly don't mean it. In the Laws of Thermodynamics, Newton only lists entropy once; So, clearly Newton didn't think entropy was all that important.

If entropy was important, Newton would have given us like 30 laws of thermo-dynamics and entropy would be listed like a dozen times.

It is not as if the point of an axiomatic system is to figure out a set of logically independent axioms, and to state the axiom only once.

I realize that progressives are as dumb as stumps, and are incapable of reason, but I will recount the form of the Constitution for show:

Anyway, the Constitution is a very short document that opens with the line: "We the people [...] do ordain and establish this Constitution"

Using flowery language like: "All legislative Powers herein granted ..." the Constitution enumerates the powers granted to the three branches of government.

The Constitution ends with the punctuation mark in the tenth amendment that all powers not granted by the Constitution are reserved to the states or to the people. The Constitution was then sent "to the people" for ratification.

The very form of the document indicates that the Constitution was creating a limited government.

Of course, in a world where progressive educators intentionally ripped the study of logic from the curriculum it is impossible to say anything as progressive reserve the right to redefine all terms as political expediency requires.

PS: The Ten Commandments only prohibited coveting thy neighbor's wife once; So, I take that to mean that thy neighbor's wife if fair game. The part of holding other God's before God didn't include golden calves.

Sunday, November 29, 2009

What is the Best Paradigm for Guaranteeing Safe Foods?

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An effective talking point of the last election was that the evil Bush Administration had turned the American food supply into poison, and that a new administration would save us with bigger government and tighter regulation.

I admit, I was so focused on the slow food revolution that took place during the Bush years to notice how bad our food supply had become. Slow Foods is the idea that food should be grown locally. It includes Community Supported Argriculture (CSAs) and Farmers Markets.

For those unaccustomed to thinking, Slow Foods is the antithesis of food regulation. Slow foods is about taking what comes naturally. Regulation is about making things regular.

It is not a conincidence that there was a surge in small organic farms during an administration that was loosening some of the regulations that made such farms untenable in previous decades.

Anyway, since the new President's Food Safety Workgroup was such an important thing in our exciting changed world, I thought should check out their newly revamped to see how things were going.

The site provides a slick presentation of the same basic food preparation and safety info found on most food safety sites ... with a big emphasis on the role that your government plays in food safety.

The site had the script for the food recall alert that I added to this post.

I scanned through the list to find out what's cooking in food safety localley. I found a food recall with a really bizarre twist. Here is the gist of the recall:

Thrive Foods, a Lindon, Utah, establishment, is recalling approximately 3,790 pounds of assorted [Freeze Dried] meat and poultry products because they were produced without the benefit of federal inspection.

The first thing that struck me about this article was that they were recalling Freeze-Dried food. This made me wonder how often freeze-dried food is the vector for food poisoning.

The other thing that struck me about the food recall was that this food appears to have been meant for the food-preparedness community. This community has been hopping of late as people who fear hyper inflation stock up on survival supplies. (The market for this food is people who are not pleased with the administration.)

The recall emphasized that the USDA had not determined that the food was bad. The reason for the recall is that the food did not "benefit from government inspection."

I doubt the survivalists who bought this food think that any food benefits from government inspection. People who see the government as the enemy are unlike to see benefits in government control of the inspection process.

Now, I actually am a big believer in inspection and quality control processes. I would even buy the idea that a company should recall a product simply for lack of quality control. The question in my mind is if the inspection should be done by the government or third party.

In my readings, I've come across quite a few horror stories of corrupt government inspectors in 3rd world countries. Government controlled food inspection often takes on political tones as inspectors have the ability to reward friends with lenient inspections and enemies with hypercritical inspections.

In many cases, it is the food inspector that destroys the livelihood of small independent farms in favor of the corporate behemoths that can adapt the inspection process into their business cycle.

Homogenized control of the inspection process invariably favors large conglomerates like Walmart with the power to control and influence the inspection process. Federally run inspection system tends to create a homogenous food supply.

In The Forgotten Man, Amity Shales recounts the case Schechter Poultry Corp. v. United States. In this case, inspectors of the NRA objected to the bizarre kosher processing of chickens done by a the small Jewish owned firm. Surprisingly, the Supreme Court of the FDR era ruled in favor of the small kosher poultry shop.

The case shows how the intolerance of government inspectors to different food processing traditions.

So, I think that the better form of food inspection is one where there are many different inspectors, and the inspectors (along with the food producers) are liable for their food.

The quality control in freeze-dried market is different from fresh fruits, which is different from peanut butter, which is different from raw meat. The Walmart way is different from the Slow Foods way.

There needs to be quality control. I've thought the best way to go about the process is for the government to set minimum standards. Private companies could encapsulate and extend those standards.

This new hyper-partisan food safety system, where the regulators award political friends and attack political enemies, is, in my humble opinion, the worst possible direction for food safety.

Friday, November 27, 2009

Going Coupon Happy

I spent the last two days listing coupons and sales on my little ecommerce site.

This year, I've been thinking of hitting the thrift stores for Christmas. The cool thing about thrift stores is that pretty much all of the money spent on an item in a local thrift store stays in the local community. In bad economic times, I think it is wise to bulster to local economcy.

The other cool thing is that gifts purchased used tend to hold more of their value than new gifts. Most new things lose 70% to 90% of their value with the first purchase.

I had been thinking of doing some shopping on ebay. Ebay is great because it gives a good feel of the resale value of a product. The problem with eBay shopping is the hefty shipping expense.

On the selling used things puzzle. I decided to trying selling a few used books on Last time I played this game, I was able to sell books for about a quarter to half the list price of the book. The books I wanted to sell had several people listing the same title for a penny. charges $3.99 for shipping. I am taking the large number of penny books as a sign that the bottom fell out of the used book market.

Sunday, November 22, 2009

The Reason for States' Rights

I fear that many people today have never been exposed to the reasoning behind state's rights. Our public education system encourages folks to follow the following line of reasoning: The Federal Government is the biggest government. As it is the biggest government, important things like health care and education should be regulated by the Feds.

The thinking for states' rights follows a different path. This thinking holds that those things most important to an individual should be administered in a realm that can be affected by the individual.

Since it is extremely difficult to influence the decision making process 3000 miles away in Washington DC, health care and education are better left to the states.

Even the states are too large these days, which is why people are usually better off with insurance companies. The best insurance companies are small local mutual funds.

Practical experience shows that education at private schools is more cost-effective and usually does a better job than state funded education. This is because the service takes place in a realm directly under control of the customers.

The founders were happy with the protection and kinship with England, but had horrible experiences when the King of England meddled in private affairs. They understood implicitly that things that are important to a person should be administered in a realm that could be influenced by that person.

Our education system pretends to have a universal perspective of things. When we come out of school, we think of the universal perspective as a higher perspective. However, as people experience life, they find the greatest frustrations are with the big monolithic structures of big business and big government that dominates the economic landscape.

The universal perspective claimed by Hegel and Marx is at best an abstraction, at worst it is an illusion (the big lie). Society simply functions better when we realize that each person has a unique perspective and the ideal society minimizes dependencies. Where dependencies occur, the governance of the dependency should take place in a realm where the dependents have some influence on decisions.

The founders realized this nature of man and structured a government with multiple branches and layers and reserved to the states those powers which most directly affected the people.

Wednesday, November 18, 2009

The Senate Should Not Proceed with an Unconstitutional Effort

Every Senator took an oath to defend the Constitution. The current health care proposal to transfer the regulation of health care from the states to the Federal government is in direct opposition to the Tenth Amendment of the Constitution.

The Founders of the United States believed strongly that those programs that most directly affected people should be handled by administrative authority close to the people.

This law establishing the Federal government as the primary authority over all health care creates the dynamic where only political organizations with enough clout to influence the power brokers in Washington DC will have their health concerns address.

This legislation is antithetical to the very foundations of the American Experiment.

In upcoming weeks, the Senate will have a procedural vote on the Health Care proposal.

Many argue that Senators should wait until after the reconciliation of the House and Senate bills to voice their opposition.

I contend, however, that the bill is such an egregious violation of both the Constitution and common sense that Senators should stop the bill in procedure, for there is no way for the legislation to continue without violating the virtue of distributed rule given to us in the US Constitution.

Proceeding is a direct violation of the oath of office swore by the leaders of this nation.

Tuesday, November 17, 2009

Competing for Government Largess

In past posts I've argued that the role of competition in the free market has been way over played. "Freedom" is the operative word of the free market. Free people choose will compete and cooperate on multiple levels through their lives.

For example, health care is an act in which a doctor and patient engage in a cooperative effort to improve the patient's health. Different doctors might compete for the patient's business. The patient will often choose a doctor based on which doctor is the most cooperative.

A multidimensional free market system has greater substance than simple competition. The free market excels because it tends to create a mix where the competition exists at levels that tend to improve service.

Government regulation and financed industries add a political dimension to markets. This political dimension tends to throw the system off kilter.

When government is involved, the players in the market compete on who is best at getting the government cash, or they compete on who is best able to game the regulatory regime.

Government tends to have a diversionary effect which transforms a market from a system optimized to the needs of the individuals to one optimized to the state's political concerns.

The proponents of government controlled health care often use the term "competition" in their rhetoric; however, improvement does not come from the mere existence of competion, but from the form of the competition.

As health is an attribute of the individual, the private market for insurance has a strong track record for improving care because the system hones competition to the needs of the patient.

NOTE: The introduction of third party insurance appears to have had a negative effect similar to government control as doctors are forced to compete on their ability to please the insurance company and not on the needs of the patient.

Using the fact that insurance is a bad model for health care does not really justify creating an even worse system.

The form of the competition matters more than the existence of competition. We would see the greatest improvement in health care if created a structure where people self-financed their care.

Making the government the primary player in health care will lead to stagnation even if there are token competitions that make health care providers compete for government largess.

Monday, November 16, 2009

Public Assistance is Better Than the Public Option

There will always be people who have needs that exceed their resources. I contend that, for these cases, openly acknowledged public assistance is preferable to the public option.

The public option, like all pooling mechanisms, tries to address health care needs by placing those with extraordinary needs in a pool with healthy people. The hope being that there's enough healthy people to cover the cost of the sick.

This system is intellectually dishonest. The system intentionally is selling people a product that they do not want.

Even worse, by taking people's health care resources, the public option reduces people who were self-sufficient into a state of dependency.

The intellectual dishonesty behind the current health care debate reduces million of once free Americans into a state of subservience.

The intellectual honesty of open public assistance is a welcome alternative to the reforms ideas that involve coercing people into systems that do not hold their best interest at heart.

The one challenge of public assistance is that it is difficult to distinguish those who legitimately need additional assistance with care from those who do not. The Medical Savings and Loan provides a structure that provides medical care as needed with loans. It can then identify those whose resources fall short of being able to provide for care.

On Intellectual Honesty in Health Care

Pooled insurance is, by its very nature, an act of intellectual dishonesty. The basic idea behind the scheme is an attempt to ignore the unfortunate reality that some medical expenses are unpredictable by jumbling up everyone's health care savings into a common pool.

Nor surprisingly, this little active of intellectual dishonesty leads to monumental corruption, waste and a great deal of angst. Even worse, it totally destroys the pricing mechanism which makes it difficult for health care providers to provide care where it is most needed.

This may seem counterintuitive to members of the political class, but the cure for intellectual dishonesty is not new layers of regulation, but a little bit of honesty.

The Medical Savings and Loan replaces pooled insurance with a system of structured savings coupled with interest free loans. The interest free loans anticipate a high default rate.

This elastic structure allows for self-funded health care but can cover unanticipated costs and does not overburden a family in case of catastrophe.

The main thing the structure accomplishes is a person by person accounting of health care costs.

By restoring honest accounting into the system, people will be in a better position to see their health care expenses in the proper context of their entire life. This necessarily will improve preventive care and might encourage people to make diet and lifestyle choices that reduce long term costs of care.

Restoring the self-financing mechanism also will restore price negotiations between doctor and patient. This will restore the pricing mechanism and bring costs down.

Finally, by honestly accounting for people's health care expenses, our society will be better positioned to identify those needing additional help with care.

The Medical Savings and Loan is not antithetical to the concept of redistributive care.

The system actually aids in the redistribution process by providing the information that separates those needing additional resources from those simply skilled at gaming the system.

The dishonest political process that we see going on in Washington is unlikely to improve the integrity of the health care system. A new business model for funding health care based on providing quality information about individual health care needs would restore the integrity of the system.

Sunday, November 15, 2009

Popper on Hegel

I must confess that I've never managed to read all the way through any of Hegel's books. Yes, I know that professoriat is enchanted with the Hegellian spell and that Hegel laid the foundation of modern progressivism. I just find his find his writings to be completely vacuous.

I supsect that the real reason for Hegel's popularity is that his style allows intellectuals to read between the lines. When one gets to read between the lines, one can inject one's own random musings into the mix at will.

I've read several books by academicians about Hegel. Most of the interpretations I've read gave radically different views of what the highly influential philosopher was saying. As life is short, I gave up on Hegel, hoping that the rest of the world would have given up on the Hegelian/Marxist direction as a dead end.

I should preface that. I gave up on Hegel before American overwhelmingly elected a Hegelian style change agent into the Whitehouse.

As the Obama Administration has revived in full the Hegelian/Marxist approach to politics, I fear we might have to go back to reading Hegel and Marx to figure out how to get out the mess that the Democrats are making of our country.

Rather than reading source texts. I decided to take a short cut and start by rereading Karl Popper's The Open Society and Its Enemies, Vol. 2: Hegel and Marx. As the title suggest, Popper dislikes Hegel ... even more than me.

The reason for this post is the following quote:

[...] it seems improbably that Hegel would ever have become the most influential figure in German philosophy without the authority of the Prussian state behind him. As it happened, he became the first official philosopher of Prussianism [...] Later the state also backed his pupils (Germany had [...] only state-controlled Universities)

The Prussian state was a reactionary state that was looking for a way to restore the monarchy and to stop all of the talk of Constitutions and liberty that came from the American and French revolutions.

In order to counter the new philosophies, Prussia elevated Hegel to the position of official state philosopher. Hegel then stitched together pieces from the Western philosophic tradition to create a new dialectical philosophy in which the state was the highest entity.

Since the schools of the restored Prussia were under state control, Hegel created a political structure of community activists that infiltrated and controlled the education system.

In other words, it is likely that, from the start, Hegel's philosophy was nothing more than sound that came from his mouth while politicos did the important work of capturing and controlling the schools.

The political structure is likely the real source of Hegel's influence and not his works. The structure had the state supporting of an official philosophy and a political structure in the schools that advanced the philosophy. The primary aim of the philosophy was the preservation and stregthening of the state.

The Hegelian ideas came to the United States and became the bedrock of the American public school system through John Dewey.

While Hegel's philosophy is mushy sentimentalism, the marketing of the philosophy has, from its inception, been a cold hard targetted system of organizing activists and infiltrating schools with the goal of strengthening the state.

Paulo Freire, Bill Ayres, Ailinsky and others have added very little to the debate, they are simply executing a political formula that was in the works centuries ago.

The sad story is that the foolish conservatives have been so enthralled with the idea of centralizing power that Hegelianism has gone unchecked and is simply back to do more harm. I wish there were a way to challenge the ideas of Hegel and Marx. How to you challenge dialectical mush other than pointing out that it's pretentious mush and that it is in the classical liberal tradition (not the Hegelian inspired modern-liberalism) that people can find both the love of ideas and freedom.

Wednesday, November 11, 2009

The Usurped Against the Usurper

I saw a news clip in which Judge Napalitano proposed that state legislatures push forward an amendment to the Constitution to block the Federal power grab of healthcare.

Such an amendment would be the best possible outcome of the 2009 health care idiocacy.

Speaking as a fool who actually read two of the horrible bills, I would think that any rational being familiar with the damage that out-of-control unchecked legislation can do would be looking for anyway to stop this process dead in its tracks.

A Constitutional Amendment passed by the state legislatures would not only be the best possible way to stop this legislation, it could set up a precedent for states seeking to defend state's rights.

A Constitutional Amendment would also highlight a fact glossed over by the media that insurance is already a highly regulated industry. Each of the 50 states have a large insurance regulatory process in place.

I suspect that both Democratic and Republican state legislators would be supportive of an amendment preserving state control of health care as a large number of the legislators have a great deal of skin in the game with local health care efforts.

The one big obstacle to state's writing an amendment is that the state process for amending the Constitution involves a Constitutional Convention ... and their is fear that such a thing could get out of hand.

However, I think there is such focused angst about the current health care fiasco that it is highly likely that the states could establish a focused effort that addresses a single issue.

I would like to see the wording say something pithy like:

Amendment 28: "Regulation of Health care is one of powers not delegated to the United States by the Constitution and reserved to the States and the people by the 10th admendment."

The pithy statement re-inforces that the health care power grab was Unconstitutional from the start.

Tuesday, November 10, 2009

On the Redistribution of Income

Conservatives make a big mistake when they get all lathered about the redistribution of income.

In the left/right culture war that has dominated civilization for these last centuries, the "redistribution-of-wealth" is nothing more than a slogan. It is an empty promise made by politicians in the quest for power.

To move beyond the culture war, people need to look past the slogan to strategy. The strategy behind the slogan of redistributed wealth is the ancient technique of pitting the ends against the middle. The technique of pitting the ends against the middle was precisely the technique used by Caesar in the destruction of the Republic of ancient Rome and has been used numerous times by groups seeking to rise to political power.

Emperor Napoleon pitted the ends against the middle in his moments of fame.

Using the dialectical methods of Hegel, Karl Marx penned a compelling philosophy around the strategy that has hypnotized more than one academician.

The Marxist tradition formed an alliance of the intelligentsia and the proletariat in a class struggle against the bourgeoisie. The term "intelligentsia" refers to the political and academic world. "Proletariat" refers to workers and the lower class, and "bourgeoisie" refers to the middle class.

Marxism is a class struggle that pits the ends (the ruling class and under classes) against the middle class.

The ruling class uses the promise of redistributed wealth in the class struggle. However, the redistribution of income rarely happens.

The promised redistributed income is actually paradoxical. Were the process to redistribute income as promised, it would simply create a new middle that one would feel compelled to struggle against again.

The form of the revolution in both ancient and modern times is that the ruling class will promise a redistribution of income to unite the ends against the middle. The ruling class says that if you give us unbridled power, we will use that power toward the end of social justice.

Inevitably, the consolidation of power becomes the means unto itself and the promise of redistributed justice devolves into an overall impoverishment of both the middle and lower classes.

We see that the modern revolutions that pit the ends against the middle have resulted in a series of epic atrocities with hundreds of millions perishing in famine and war.

The process of uniting the ends against the middle is paradoxical and flawed.

Unfortunately, the public debate gets dominated by people like Sean Hannity and Glenn Beck who get caught up in arguing against the slogan and fail to understand that it is the strategy behind the slogan (not the slogan itself) that leads a society to ruin.

Attempts to argue against the slogan of redistributed wealth allow agitators of the left the opportunity to employ the most effective tool in their arsenal: Wealth Envy.

To win the debate, defenders of freedom must talk about substance and not slogans. After all, there really is nothing wrong with a redistribution of wealth.

For that matter, the great irony of the modern debate is that the free market, when properly implemented, has proven to be one of the most effective mechanisms for equitably redistributing wealth, while the consolidation of political power (favored by the left) tends to lead to a concentration of wealth.

When one understands the strategy behind the leftist slogan of "redistributed wealth," one realizes that the problems we face lie not with the worthy end of an equitable society, but with the fact that the strategy of pitting the ends against the middle will not result in an equitable society.

People often call the more equitable distribution of wealth in the American system social mobility. It is common for Americans who apply themselves to experience different levels of income in their lives.

Sadly, the cries for redistributed wealth usually end with the consolidation of power in an entrenched ruling class and overall impoverishment of society.

The better approach would be for people to realize that growing disparity in wealth that we see in America today is not the result of the free market, but the result of the ongoing consolidation of political and economic power. The growing disparity in income seems to coincide with the growth of government.

In conclusion, the solution for our economic frustrations is not a bigger government with the power to forcibly redistribute income. The solution is to find ways to restore the free market system that was first envisioned by the founders of the United States.

Sunday, November 08, 2009

Saving for Health Care

The free photo of the week is an absolutely adorable shot of a baby boy.

Considering that the defenders of the American free market tradition suffered a major loss today, I decided to use the picture to remind people that it the children of tommorrow who will suffer from Congress's actions.

I made the page to emphasize that the savings is the best way to fund health care.

Insurance tries to fund health care on a pay-as-you go basis. People buy a policy that pays for the expected experience of a group during the year.

One does not build equity in a pay as you go plan.

Since people do not build up equity in their insurance account, they suddenly find themselves unable to pay the premiums when the pay off.

Pelosi's plan has the nation borrowing and spending to build a massive bureaucracy with some one hundred new regulatory agencies. This plan is even worse than pay as you go. It is borrow and go.

Insurance, at its best, is a stable ponzi scheme. Yes, people get hurt on an ongoing basis as they find the hundreds of thousands thrown into the policies build no equity. When done right, the scheme does not collapse.

The health care power grab undertaken by Pelosi is an unstable ponzi scheme destines to blow up in the face of our children. This weekend's health care vote is self-destructive partisan politics at its worse.

Anyway, here's my snipy page about this weekend's vote. I hope that someone wakes up and realizes someday the best way to fund health care is to save for it. Ponzi schemes (like insurance) lead to systemic faults. Borrowing for health care leads to complete societal collapse. Saving for health care leads to a bright future.

Repealing the Anti Trust Provision

A few posts back, I mentioned that I was happy with talk of removing the Anti Trust Exemption (The McCarran-Ferguson Act of 1945).

As I said that something really started nagging at me.

While readint the Wall Street Journal's take on the issue, the nagging little issue jumped out into the open.

The anti-trust laws of the trust busting era were about interstate commerce. Insurance, as we keep hearing in the debate, is regulated by the states. It is the federalization of the regulation that keeps people from being able to buy insurance across state lines.

Insurance is intrastate commerce, while the anti-trust laws were aimed at interstate commerce. The current system had the fifty states regulating insurance; So the McCarran-Ferguson Act was largely a re-affirmation of the 10th ammendment.

The WSJ piece mentions that the anti-trust exemption only applied to states that had anti-trust laws similar to the federal government. Which means that the exemption was simply pulling out a redundancy.

The WSJ piece further argued that the anti-trust exmemption is not quite what people think it is. The exemption was designed to allow insurance companies to exchange actuarial information. As such, the repeal of the exemption may not induce more competition as one would hope.

I guess I should conclude with comments on the Medical Savings and Loan. The MS&L simply is a structure to help individuals save for their medical expenses. The actual negotiating of bills and payment of expenses takes place between the patient and doctor.

Since the accounting is done on an individual basis (opposed to a group basis), I really don't see any forces toward monopoly. Individuals are likely to seek radically different approaches to their care. The companies offering the MS&L will be more like the myriad of credit unions that exist today.

Thursday, November 05, 2009

Avoiding Worms and Mulching Leaves

On the subject of rotting things ...

... It is far better for your lawn (and all concerned) to simply mulch the leaves into the grass than to bag them and haul 'em to the land fill.

I've found that mulching leaves into the grass helps accelerate the decay of the thatch that builds up in the lawn. The areas of the lawn that get covered with leaves seems require less water during the year than those that are clear of leaves.

If you don't like the look of leaves on the grass, then I such piling the leaves in a mulch pile ... that way you will get great free mulch each year.

On the subject of mulch, I've come across a number of sites selling organic earth worms for mulch piles.

This is very important. DO NOT BUY EARTH WORMS! Gardeners do a great deal of damage to the local ecosystem when they import composters. The native composters of the Western US do every bit as good a job composting as earth worms imported from Europe.

Composters play a key element in the ecosystem. Importing a composter (ie, buying earthworms on line) does as much damage to the local ecosystem as any invasive speces.

If you wish to find a starter for your mulch pile, I suggest going to a local abandonned field or taking a walk in the mountains and picking up a back full of partially rotted leaves. The chances are better than things found in local nature will have local composters.

You may not have noticed, but the Wasatch has some areas with extremely fertile foot thick loam. The fertile soil of the Wasatch gets destroyed by imported composters. In making my mulch pile, I actually went into the mountains and grabbed bag full of half rotten leaves from an area with rich soil hoping that I was picking up native composters. I would avoid ordering worms or composters over the Internet as such things are likely to make their way into the native ecosystem.

In conclusion, mulching is better than hauling quality organic biomass to the land fill. A yard covered with leaves is the new eco-chic.

Health Tip - Athletes Foot

There actually is a less pleasant topic than politics: that topic is foot fungus.

As an experiment, I started cleaning my feet with cheap hand sanitizer. I bought the bottle on sale for $1.25 in the local store. Anyway, the hand sanitizer cleared up all of my feet problems that I could never get rid of with expensive creams like Lamisil, Tinactin, Desenex or other medications.

I also bought a pair of Crocs as Crocs are easier to clean than regular shoes.

So my money saving tip of the month is to clean your feet with hand sanitizer. Crocs are also good shoes that are easy to clean.

In conconclusion, maybe foot fungus is a more pleasant topic of conversation than the shenanigans of the 111th Congress.

What Data Mining Detects

Cato-At-Liberty correctly notes that Data Mining is not effective at catching terrorism. What it is able to catch are organized attacks aimed directly at disrupting the communication infrastructure.

It is also able to catch organized criminal activity including organized identity theft.

To have a working data infrastructure, the infrastructure has to have ways to protect itself from threats relevant to its nature. Crashing a data infrastruture, after all, is matters of percents. If one creates an attack that gains a given percent of computer at any given time, then the people attacking the system can bring the system down.

Unfortunately, I think there has to be data mining efforts in the communication system aimed at protecting the communication system. The problem is that FISA model for regulation this activity forces this activity into the criminal investigation model. The better model is to have the datamining efforts separated from the criminal investigation process entirely. The aim of the data mining should not be about seeking criminal prosecution of anyone, but should be about assuring the integrity of the communication system. The court oversight shouldn't be driven by the search warrant model used in criminal investigation, but should be something new aimed at analysis, understanding and prevention of cyber attacks.

For example, one of the biggest threats we face is with spyware. Spyware is a program installed on a computer than reports on the computer activity of the user to the person who installed the program. Spyware programs use the data communication infracture to communicate back to the host. The programs have discernable patterns. It would be possible for a dataminer to identify these patterns and create counter measures to help identify people engaged in spyware, and help protect people's privacy.

IMHO, the FISA court model is not working because it was a court created through political motivations in the Nixon years. As such it tries to stuff the paradigm used in criminal investigations on a field that needs to be investigating a different kind of threat.

I agree that there should be court oversight of the intelligence community. The court oversight needs to be designed to address the specific security needs of the intelligence community and must be designed so that it evolves and changes as communication technology evolves.

The warrant process used in criminal investigations is not the right model for overseeing the security aparatus for a robust and changing communication system. International security is about identifying threats and figuring out how to protect things. When the oversight is geared toward criminal prosecution, it forces the community in the wrong direction.

Negative Campaigns

Someone named Dee left the comment on the last post.

"'People vote for the bad, fearing the worse.'

Where do you come up with this crap?"

That progressives write condescending messages is not surprising. This one struck me as odd. As you see, the notion of people voting for the bad to avoid something worse is the driving premise behind the negative campaign. The negative campaign tells people, you must vote for me because my opponent is worse.

Both parties go negative on a routine basis. There is a lot more press about Republicans going negative. An effective propaganda technique is to use one's partisan opponents as the negative example.

Regardless of which party chooses to go negative, the premise behind the negative campaign is the same.

I prefer to state the premise behind negative campaigns than simply evoking the image of negative campaigns as I think stating the premise highlights why this type of politics keeps leading our nation in the wrong directing. Yes, the negative campaign might help us avoiding making a worst decision, but we still end up making a bad decision.

In the case of health care, the Republican plan has the effect of establishing the Federal Government as the primary regulator of health care...this is counter to the 10th Amendment. Going against the Constitution like that is bad for those of us who like the system of distributed government outlined in the Constitution.

This plan that attempts to hold off the worse by promoting a bad idea fails to get us on a better path.

The reason I wanted to promote my reply to a full post is that I have been thinking a lot about the role of logic in society. Progressives yanked the study of logic from the curriculum generations ago. The primary goal of affirmative rationality is simply to state the reasons behind our actions. Being able to state the reasons behind our actions can help us determine if our actions will lead to a positive outcome. Without familiarity with logic, people simply engage in whatever activities seem effective at the time. Politicians go negative thinking as going negative is an effective tool against a political opponenets. Yet, when we think of the premise behind going negative, we see that the process systematically leads us down a bad road.

In the Bush years, many Republicans won simply because independents feared the Democrats, the Republicans--following their negative strategy--became a mirror image of the Democrats. The Republicans gave up fiscal conservatism and managed to grow the Federal government at the same rate as LBJ.

To get us off the road to socialism, the Republicans have to come up with a better strategy to simply popping up with bad ideas to desparately stave off worse ideas.

Wednesday, November 04, 2009

GOP Health Care

The Republican Party put forward an alternative health care plan. The 219 page bill is a bit easier to read than the 1990 page Pelosi bill. Their site has a nice set of bullet points pdf.

However, I feel the program is still headed in the wrong direction. Too much effort is aimed at trying to save insurance when, IMHO, the insurance industry itself lays at the heart of our health care woes.

The only way to restore the pricing mechanism is to create a system where there is more direct negotiation between doctor and patient.

The bill includes some minor changes in the accounting of Health Savings Accounts, but does not seem to do enough to position health savings as a viable alternative to insurance. (NOTE, as pointed out in past posts, various parts of the Democratic proposals seemed directly aimed at eliminating Health Savings Accounts and penalizing people for self-financing their health care. Minor improvements here is better than the total elimination of health savings accounts.)

The Republican plan comes off as a bad bill in contrast with the worse bills before

The engine for the unfettered growth of big government is that Democrats would come up with awful bills (like these health care proposals). The Republicans would come up with an alternative scaled down bill with a slightly better chance of success. Unfortuately, this process still has a single direction of greater government control an less individual liberty.

People vote for the bad, fearing the worse. As we saw in the 2008 election, when the cumulative effect of the bad finally tears down the economy, the worst is there to take total control.

I wish we could find a way around this idiocy where politics is the choice between bad and worse.

Tuesday, November 03, 2009

Captured from Inception

George Sorros is correct in his observation that many things in the current economic paradigm are broken. What he fails to appreciate is that the things that are broken were the things designed by left leaning intellectual snits such as himself.

The prime example of a broken system is the NASDAQ as designed by the progressive thinking Bernard Madoff. The system was designed with short selling and options in mind and configured such that hedgefunds working in concert with brokers could undertake massive stock manipulations that allow the designers of the system to take over firms, or to simply profit from the destruction of firms foolish enough to list on the NASDAQ.

The credit default swaps that came into existence in the last days of the Clinton administration was similarly designed by people convinced they found a short cut to progress. Fannie Mae, Freddie Mac, the FLSIC system, etc, were all designed by progressives.

The center piece of the both the current health care and cap and trade legislation are highly partisan markets created and run by progressive drones implementing the philosophy of Sorros and his predecessors.

I was just watching a YouTube video by a Garrett Gundersun (that I placed on Salt Lake Sites). He was talking about the foolishness of our technocratic dream where we place our faith with investing technocrats, when our financial decisions should be driven by a pursuit of "personal abundance."

I don't know if Mr. Gunderson is someone worth following. Few gurus are. I've watched so many people wipe out incredible amounts of wealth based on really bizarre understandings of the market, that I've been at a loss.

Only a few people really stand out today. Pat Byrne of Overstock is on a roll with Deep Capture. However, "capture" may not be the right term. "Capture" implies that something was good at inception, but was later corrupted by evil doers.

So many of the markets that exploded in our face (the Federal Reserve, government backed re-insurance, the insurance industry itself) were captured at inception. The markets were designed as short cuts to progress, and the short cuts to progress have systematically undermined people in the real world ever since.

Ridding ourselves of the systemic faults that caused the 2008 economic dip will require more than wrapping our markets with highly partisan regulators. It will involve actual thinking about the very foundation of economics and the nature of wealth. An activity which has not been well addressed since Adam Smith's work on the Wealth of Nations.

The worst approach we can take is to continue along the lines of taking counsel from Sorros and the market manipulators whose efforts magnified the depth of the economic downturn.

Monday, November 02, 2009

Is Health Care a Natural Monopoly?

Charm Coach asked me to expand on the question of whether or not insurance is a natural monopoly.

I admit, when I hear the term "Natural Monopoly," I think of instances where there is a physical reason for a company to have a monopoly. For example delivering electricity to houses requires telephone poles. The company that puts up the telephone poles is able to leverage that to gain control over everything that goes to a house that involve wires.

Railroads require a right of ways ... this is a physical barrier that can be leveraged to create a monopoly.

The medical industry does not have any natural barriers that would prevent doctors from popping in and out of the market. There are no barriers that prevent people from choosing which clinics to use.

Unregulated insurance does not have any natural barriers that prevent investors from creating new pools. The new pools may not be financially stable, but there are no natural barriers to prevent a group from declaring the existence of a new pool.

The barriers come from the way things are regulated. Politically connected insurance companies work with regulators to create a market that favors their products.

The real evil comes when insurance companies negotiate pricing deals with health care providers ... or take the step of using their insurance reserves to buy providers. They are then able to leverage both sides of the health equation to give themselves an unnatural advantage in the market.

It are these unnatural relations that give insurance companies their monopoly poweer. These unnatural powers are also the things that give insurance companies the ability to lock people outside their covered base from health care.

So, it is the political structure that creates monopolies in health care.

The current structure of our financial system also leads to the creation of monopolies. The free market described by Adam Smith had individuals reinvesting their resources as they see fit. Our current capital markets are designed more for the business war model of thought. The fractional reserve system of the fed and the capital market on Wall Street create a structure where market insiders are able to raise huge sums of capital in efforts to corner a market.

Of late, there's been a number of businesses with the model of dominate the market or fail. These efforts tend to undermine the entire market.

The structure of financial markets can create a drive for monopoly status.

IMHO, many of the forces that lead to consolidation in the market are unnatural creations of the political and financial market.

Of course, when we look at the areas where we see natural monopolies, one realizes that it is often possible to create a political structure to break down the monopoly power in an industry.

For example, we could create competition in data communications if we restructured the industry so that home owners owned the wire that ran from their house to a local communication center. If a buyer's coop in your neighborhood owned the wire to a communication center, a large number of internet companies and cable companies would offer service from that box ... giving people in your hood access to competition which is currently lacking.

The truth of the matter is that, if we worked at each of these issues, we could find ways to induce competition. For example, we could break the cable and internet monopolies simply by letting home owners own the data cable running from their house to a communication center. Internet service providers would then compete on providing services to communication center ... giving everyone in the neighborhood more communication choices.

Intellectual Dishonesty

In my opinion, since the nature of the assistance is openly acknowledged, public assistance in health care is superior to the public option.

The goal of the current health care reform is intellectually dishonest. The current political effort is about finding ways to shove those with known expensive medical conditions into pools to cover their costs. To make up for the deficit, politicians wish to force others to buy insurance that is multiples of their expected expenses.

A far better approach is to create a structure where individuals have a mechanism to properly account for the care they receive, and to handle the exceptions with openly acknowledged assistance.

The intellectual dishonesty of pooled insurance diminishes our health care system. It leads to corruption and erodes the foundations of our health care.

The problem is that we are trying to design our entire health care system around exceptions rather than designing the system around the known and real needs of all people. All people have expected health expenses of several hundred thousand dollars in a full life time. Our system should be designed to help people save these resources.

As the distribution of income follows the distribution of wealth, if we had a system where people owned their health care resources, we would immediately eliminate the growing disparity in income caused by the foolish system of employer based health care.

A system based on intellectual honesty will always lead to better results than one based on intellectual dishonest.

The Medical Savings and Loan is an intellectually honest alternative to pooled insurance. The system creates a savings and lending account for all policy holders. People place money in their savings in times of health, and withdraw funds in times of need. When need exceeds savings, people can take out loans. If they need more money than they are capable of repaying, the system has them turn to public assistance.

People are actually wonderful creatures who take great pains to help each other. With the medical savings and loan helping identify those with extraordinary needs, people will be happy to find to find ways to extend such assistance.

The problem with an intellectually dishonest system (like the bills before congress) is that hard working people become victims of those gaming the system ... by following the inherently dishonest route, people will degenerate into petty jealousies, into conspiracies, and conclude that to survive they must become manipulators themselves.

Please contact your congressman and tell them that this path of dishonesty will lead us to ruin. The honest path would lead to a bright future.

Lawyers and Drug Testing

I owe Evil Esquire a big apology. They had a poll question about drug testing and lawyers. Apparently, they wanted to know if lawyers should be subjected to random drug tests like so many other workers in our society.

I misread the question and answered:

"Yes, I think lawyers should be used for drug testing.

The genetic make up of lawyers is remarkably similar to that of humans.

By testing potentially dangerous drugs on lawyers, pharmaceutical companies can avoid the ethical questions involved in testing drugs on people, while avoiding the bad publicity involved with testing drugs on adorable furry animals.

An added benenfit of testing deadly drugs on lawyers is that the process thins their ranks to the benefit of society.

On rereading the question, I realized that my answer was inapropriate, despite the fact that testing potentially harmful drugs on lawyers is a pretty good idea.

Saturday, October 31, 2009

Five hundred million per page

Representative Price points out that the health care night mare that Pelosi spat out will cost Five Hundred Million Dollars per page.

Trick or Treat

Happy Halloween.

For a super spooky treat this Halloween, the Leader of the House of Witches brewed up a special concoction called the "Affordable Health Care for America Act". The PDF is large. 1990 pages. The act contains a number of tricks played on the people and plenty of treats for lobbyists and the ruling class.

In a press release about bill, the Leader of the Witches cackled on air about how progressives have been skillfully manipulating the country for over a century with the goal of transition America from a free society with an open health care to a closed society with government care.

All the while, the half wits on the left lap up the notion that the over-priced, hyper-regulated health care system was somehow a manifestation of the free market.

Reading HR3200 made me sick. This new bill looks like it is twice as large and twice as bad.

On the bright side, one should realize that all government programs get worse with age. If we compare this bill with the health care our children will receive from the government, then we should feel lucky.

We would be luckier still if a miracle happens and the bills fail.

Staring at this bill. I feel worse that I would had I just eated a whole bag of Halloween candy.

Thursday, October 29, 2009

Reforming in the Wrong Direction

In speaking small businesses today, Barack Obama issued forth a technocratic vision of business. Small business is a petty small-minded affair in which people take out loans for predictable static returns. Small businesses hire people at fixed salaries, pay fixed insurance rates, etc., etc.. The small business owner is nothing but a soulless cog in a computer simulation run by an omnipotent 2nd year econ major.

Barrack Obama further claims that he is wonderful beyond any leader in the history of civilization as he and the Democratic Congress wish to relieve the petty-minded small business owner of healthcare though one of the greatest extra-Constitutional power grabs in the history of the nation. (NOTE: Amendment 10 of the Constitution reserves health care and most other matters to the states or to the people).

Sadly, a large number of Republican politicians seem to share this same technocratic vision of the economy in which the economy is top down equation that can be controlled with the right inputs from an unbridled Federal government.

The top down vision of the economy created by Marx is not new. It was, in fact, the rule of the feudal society and a long period called The Dark Ages.

From the Renaissance through the penning of the Wealth of Nations by Adam Smith, people began developing a different idea of the economy. Both the feudal and Marxian system see the wealth of the nation flowing from the glorious leader, through the political structure to the petty-minded people.

The free market brand of thought saw wealth as a creation of the human mind. Wealth was created by the investments of the people. The wealth of the nation did not flow from the king through the people, but was the accumulation of the wealth created by the people in their various undertakings.

If Adam Smith is correct, the Obama's stimulus and health care reform are not the cure of our economic woes, but the cause of it.

The technocratic view is not unique to Democrats. An increasing number of Republican politicians (Alan Greenspan, Poulson, etc.) appear to have adopted this view. Greenspan was enchanted with the notion that an all seeing and all knowing economist at the Federal Reserve can regulate the economy through a fractional reserve lending system. The Feds lend out a dollar at a given rate. That dollar is then lent by banks a dozen or so times

The fractional lending regime created an economy where people took wild margin plays against equities. The system of margin plays has proven to do little more than to create series of wild bubbles and chaotic market moves.

If the technocratic view is the problem, the cure is for people to deleverage and to return to the free market economy described by Smith … which was controlled by people building equity and saving … opposed to people taking out loans and running margin plays against the economy.

Health care reform should move away from the technocratic vision of insurance (with fixed monthly payments) to one in which people are building equity in anticipation of future medical expenses … such as the Medical Savings and Loan.

If the technocratic vision of a static economy that runs like a computer program is wrong (and Adam Smith was right); then the health care reform before Congress is reforming our health care system in the wrong direction.