Sunday, November 29, 2009

What is the Best Paradigm for Guaranteeing Safe Foods?

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Food Safety Widget.
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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.