HSA and Marketers

Have you ever seen those slick ads telling folks they can get a free scooter from the government?

Slick marketers have learned that when a third party is picking up the tab, people are likely to spend foolishly.

While discussing the differences between the Health Savings Accounts and the Medical Savings and Loan, I should mention that the HSA coupled with high deductible insurance preserves the perverse incentives of third party payments.

Marketers are attentive to who is paying the bill. As such, they market unnecessary medical expenses to people who are getting their care funded by the high deductible insurance.

Patients, of course, are attentive to their deductibles and plan their doctor visits to get as much free care as possible.

The medical savings and loan has all expenses being self funded by the patient ... eliminentating the perverse incentives.

Supplements to the MS&L come in the form of grants. The grant givers are likely to be highly atuned to nature of the spending. They are less likely to give grants to people who spend frivolously.

Marketers would take a different approach to people in the Medical Savings and Loan. The sick will do a better job guarding their money, while the healthy would end up with massive amounts of cash in their Health Savings Account. Businesses would compete developing products that help the sick get the most out of their money and concentrate frivolous marketing on the healthy ... probably in the form of preventative care and savings related products.

A study on how the Medical Savings and Loan differs from Health Savings Account would be a wonderful addition to research related to liberty and health care.

I would be happy to help anyone with such an academic study.

A conference on the Medical Savings and Loan could result in numerous academic papers, publications and even new businesses.

It would cost very little to host and would produce a world of good. All the conference needs is a group of people willing to spend a day or two talking about free market alternatives to group funded health care.

HSA v. Medical Savings and Loan

Currently, a Health Savings Account with high deductible insurance (or government funded catastrophic insurance) is the only alternative to insurance.

Reports indicate the Indiana Insurance plan has an $8K yearly deductible.

Unfortunately, an HSA + high deductible insurance creates some ugly gaps.

Let's compare a person with a one time catastrophic incident costing $20K to a person with a chronic condition that costs $5K a year.

The person who has the one time catastrophe pays a one time $8K deductible and gets a $12K supplement.

The person with the chronic condition is under the deductible each year and will have to bear the full cost of the illness.

Since chronic conditions tend to reduce earning power, the person with the chronic condition is in a double crunch.

The Medical Savings and Loan is based on a full life cycle analysis. In the MS&L the person with the one time $20K event would end up paying what was in his savings account and get a loan to cover the rest of the $20K.

The Medical Savings and Loan supplements people with grants (not re-insurance).

Let's say a grant agency has $12 to dole out. The grant agency would notice that the person with the one time catastrophe had $22K in expenses (The one time event and some other doctor visits). The person with the chronic condition shelled out $5K a year for 8 years ... this person had $40K in expenses and diminished earning capacity and high future expenses.

So, in the Medical Savings and Loan, the guy with the chronic condition would get the grant.

BTW, I should also note that an HSA with high deductible insurance has one additional flaw: A person with high deductible insurance still must borrow to pay the gap between savings and the insurance. This borrowing is usually done with high interest loans.

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New Years Resolution

Health Care Financing is a business problem, not a political problem. We've been trying to finance health care through pay-as-you-go pooled insurance. This model has failed in so many ways.

The idea behind ObamaCare, the Utah PAC, etc., is that we can fix a failed system by making it absolute. The key feature of ObamaCare is to make buying insurance mandatory.

The better solution is to design a better business model. In the 1980s, I spent a great deal of time creating an alternative to Insurance. Despite the fact that it would provide substantially better care for less money, I found no local interest in the program.

So, my resolution for 2011 is to find a freemarket-oriented group seeking to repeal ObamaCare, and to present the Medical Savings and Loan.

Such groups do not exist in Utah. Utah is filled with Glenn Beck style creatures who spout plumes of free market rhetoric, but systematically reject any real free market oriented solutions.

To fulfill my resolution, I need to travel.
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To travel, I need cash. I thought about self-publishing a book. Selling 20 copies of a self published book is enough to buy a room at the Motel 6. But, I find self-publishing an unedited book distasteful.

I have a whole book written. Quality writing demands peer review and editing.

I am now thinking the best way to get traveling cash would be to add social media functions to the Community Color Web Sites. If I could increase the traffic through these sites tenfold, I'd make enough for a motel every other night.

The nasty catch here is that increasing traffic tenfold would mean I'd have to move to a new server.

Hmmm, I've been dearly tempted by the VPS.net cloud. The Western U.S. Servers are hosted in Utah Valley. Upgrading to a newer version of MySQL would mean I could use Stored Procedures which is more conducive to the distributed type of computing used in social media.

I seem to be good at stymying myself with chicken-before-the egg-type conumdrums.

First Day Sales

My first two days of sales are in. With a little bit of forum spamming and blog posts, I was able to scare up 50 clicks to the the Kindle Version of Brainwashing. From those 50 clicks, I managed to sell one copy of the work.

Okay. I was the person who bought the copy. I thought it would be worth $.99 to see how the work rendered in the Kindle Software. Buying a copy means I have statistics for the book.

The Amazon upload did not paginate or do the table of contents in the same way as the copy I compiled with the software from MobiPocket.com.

The one sale put my book at position #134,524 in the Kindle Store. A weeks ago, my sister published a short story for young adults called Bouncing Brad. She is in position #116,613. My guess is that she sold two copies (me being one of the two copies).

Both works suffer from the lack of an editor.

I suspect that, in the long haul, the large quantity of unedited works on Kindle will destroy it as a potential revenue source for unpublished writers. (Unless, of course, people develop an appetite for raw writing ... which is possible).

Were I to design a Digital Text Platform, I would include editing functionality. A writer could upload their writing as raw. People who enjoy improving writing could make modifications to works they like. Editors would end up getting a cut of the sale price of books.

As for Brain Washing. I wrote the book in the 1980s. I did a major edit in 2000. IMHO, There was sufficient time from the writing to the publishing for a self editing session. I added the section headers and made very minor corrections for the Kindle edition.

Anyway, my Kindle book was a test of Amazon's DTP.

I think will do a little more spamming. I gave up on the goal of recouping the $10.99 I invested in the project (I bought a $10 stock photo for the cover). My new goal is to get 50 more clicks on the title.

Kindle Stuffer

One Day Late for Christmas, I am pleased to announce the Kindle edition of Brain Washing.

This is a $.99 short story sold through the Amazon Digital Publishing Program. It is the tale of a philosophically inclined apprentice janitor.

The plot line was that a person works his way through college working as a janitor. He graduates in a recession and continues on as a janitor feeling bad about his social status.

He hooks up with a master janitor. After a series of triumphs and defeats, the master janitor goes through a self cleansing which is so thorough that the master janitor achieves nirvana (the highest state of being) and transcends.

You can read the story online.

The primary reason that I republished the story on Kindle was to test the Amazon kindle publishing format.

I uploaded the story a week ago. I originally clicked the 70% royality button. The lowest price I for an eBook on the 70% option is $2.99 (which is too much for a short story). So, I changed to the 35% option and republished. It took Amazon several days to encode the change ... so, I missed the Chirstmas market.

There might be people who just bought a kindle (or who got an Amazon.com gift certificate). So, I might get a few sales.

Moneywise, I spent $10 to buy a stock photo titled Commercial Cleaning by Pedro Castellano. I also bought a copy of the book to see what it looks like. I should be making about thirty cents per each book sold.

If I can sell 40 copies, I will break even. I doubt I will sell that many. But there might end up being a small market for dollar books as people with Kindles might buy such books to use up the loose ends of gift cards.

It's Illegal to Check the Expiration Date

This ruling by the Department of Justice makes no sense.

Hoover Manufacturing was sued because it required permanent residents working at their firm to provide new green cards when their old green cards expired.

The Justice Department says Hoovers is discriminating because Hoovers doesn't ask US citizens to produce new worker permits when their old worker permits expires.

Personally, I see this lawsuit as yet another example of how horrible our Federal Government has become.

The whole point of an expiration date is that people are supposed to check the expiration date.

If there is not an expiration date on a permanent resident's ability to work in the US, then there should not be an expiration date on their work permit.

I realize that half-witted progressive disparage me as a racist for criticizing their precious big government; however, a company checking on expired documents is not a social justice issue.

Accepting that it is a big hassle for permanent residents to update their worker's permit, one finds that failure of a company to require updated documentation can be as oppressive and requiring that they keep documentation current.

A worker without an updated worker's permit cannot change jobs without getting a new permit. The ability to change jobs is an important part of a free society.

An evil company that knows its workers have expired permits can be abusive because their employees would have to go through the burdensome task of renewing a green card to get a new job.

The Federal Government is the group to blame for our immigration problmes, not employers.

BTW: Problems like inconsistencies between work permits and residency status could easily be fixed through incremental reform.

Comprehensive reform simply creates a massive change with a new set of problems and corruptions that our ineffective Federal Government is unable to resolve.

Tying Our Hands

The world has changed dramatically since the original START treatise.

A generation was dominated by the prospect of nuclear war between the United States and the Soviet Union. After the collapse of the Soviet Union, the new fear was of soviet nuclear material flowing into the hands of terrorists.

The possibility of a US/Soviet war stopped being the primary nuclear threat to the world when the Soviet Union stopped existing.

At this moment in time the Middle East, China and rogue nations are more likely to prove major nuclear threats than the former Soviet Union.

I am thrilled that President Obama is seeking ways to reduce the nuclear arsenals of the world. Yet I wonder why we rushed to sign a bi-lateral treatise based on a resolved conflict when the world is experiencing nuclear proliferation among rogue nations.

The smarter approach to nuclear disarmament would have the United States and Russia working together to stop worldwide nuclear disarmament.

A bilateral treaty that ties the hands of the United States effectively lessens the ability of the United States to engage rogue nations in disarmament talks.

I am left wondering why we just witnessed an unprecedented effort to rush a major treatise through a lame duck Congress.

The START Treatise of 2010 looks more like a desperate drive by a narcissist to earn peacenik stripes than a serious contemplative step to make the world a safer place.

The Parasites Gather

On January 18th, a group called Utah Health Policy will hold a meeting on implementing Obamacare on January 10, 2011 at the University of Utah (and satellite locations across the state.

When I first read the announcement, I thought the public meeting would solicit ideas from the public on health policy.

Being an optimist a complete idiot, I actually started gathering information on the Medical Savings and Loan to bring to the meeting to see if I could find any interest in the concept.

On reading deeper into the site, my heart sank. I actually felt physically ill when I read the Myth v. Fact page of the project.

This group simply dismissed the Tea Party and the 2010 elections as myth.

I went to the tea parties, I spent a year closely following the anti-Obamacare movement. The Myth-v-Fact page completely mischaracterizes the tea party and utterly misinterprets the election. Using a myth-v-facts pages to spread myths is a classic Marxian style paradox, I imagine the web site creators are quite proud of themselves.

This biggest myth spread by the myth-v-fact page is the notion that insurance is the only way to fund health care. It is the way we fund health care today because government tax policy gives employer based insurance unfair advantage.

The current health care mess was created by the very progressives who are now stuffing Obamacare down our throat.

There is some truth to the myth page. For example Obamacare is not pure socialism, while participants in the tea party tend to call it socialism. Obamacare is not pure socialism. In pure socialism, the means of production are owned by the state.

A system national policy implemented through large politically connected firms might better be called "Fascism."

Obamacare is one of the many offshoots of the Marxian tradition and is counter to the free society created by the US founders.

The one part of the myth v. facts page that every patriot should read is the section on the role of states in Obamacare. This section points out that Obamacare is dependent on the states. It reads:

Health reform is designed to be a partnership between the state and federal governments, as it should be."

First off, this idea of states implementing the policies dictated by the Federal Government is not "the way it should be." The Utah Policy Project is essentially avocating the revival of the relation between the colonies and the king where the king dictates policy and the local governors implement the dictates.

This is precisely the structure that the US Founders rebelled against.

The US founders clearly created a federal government with limited powers. The federal and state governments operated in distinct realms.

Isn't it bizarre that a president who was supposed to be against colonialism is reorganizing the US government along the colonial structure?

Hope and Change appears to be a revival of the monarchy and the kings's court.

Instead of courtesans we now have a bizarre creature called a "stakeholder."

The system of stakeholders pulls together a group of likeminded courtesans into the king's court to influence and implement policy.

The stakeholder system is very simple: The intelligentsia would decide policy, then choose a selection of politically connected stakeholders who are sympathetic to the policy, then use the influence of the group to dictate policy.

I read through the list of participants involved in this Utah Policy Project. The primary stakeholders in the policy are the same big insurance firms, big hospitals, big HMOs, big government and big education that created the health care mess.

The King's Court stakeholder system cuts the people out of the equation.

So What Should We Do?

The groups pushing Obamacare in Utah are very powerful and very well organized.

Unless people who wish to preserve their health care freedom do something, Obamacare is as good as implemented in the Beehive State.

I suspect that similar efforts to the Utah Health Policy Project are taking on in every state of the nation.

If there is any interest in preserving health care freedom, patriots must act and must act now!

The best way of acting would be to create Health Care Freedom Conferences where people brainstormed on alternatives to Obamacare.

I would be happy to contribute my research on The Medical Savings and Loan to any such efforts.

The Medical Savings and Loan is a structured savings program that would allow people to self fund their health care, and would provide an alternative to insurance.

I do not have the resources or connections to organize a conference, but I can contribute ideas and help publicize an event. I would be happy to travel to a conference.

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Tyranny of the Center

I read the tweetstream of a guy claiming to be a centrist (RiseOfTheCenter). The stream is page after page of labeling the groups the author dislikes as extremists.

The tweetstream is little more than a long string of posts that projects hatred on groups that hold a position ... each having the hastag #NOLABELS.

The tweetstream feeds a web site where the author claims his dictates are magically the center.

This tweetstream is the perfect example of Hegelian dialectics in action.

In dialectics, the intelligentsia creates dichotomies then plays the dictomoies to centralize power.

Centrism and centralized power go hand-in-hand.

The author of this tweetstream is dedicating himself to a NOLABELS movement.

The NOLABELS movement is something that magically appears whenever the left is descending. I fell for it when Reagan was president. I aspired to be a balanced, rational centrist standing against those horrible conservatives and naive liberals.

The NOLABELS movement labels the Tea Party as far right ... despite the fact that the movement was primarily attended by independents.

The reason for the appearance of a coordinated centrist campaign after a progressive leap toward socialism is to hinder any steps back to a free society.

Progressivism is, of course, is a dialectical movement closely linked to centrism. The goal of the progressive is to systematically redefine the center.

The game is working.

Remember how Reagan said he never left the Democratic Party. The Democratic Party left him. Today, we see a president who was essentially a fifties style Democrat defined as the far right.

Reagan was on the left in the 50s. He was a centrist in the 60s and far right in the 80s ... without any fundamental changes in his views.

This trick was accomplished by people redefining the center.

Many people try the centrist game. For example, Bill O'Reilly presents people he calls left, then people he calls the right then claims to be the fair and balanced centrist.

Anyway, I wasted several hours reading posts from this hypocritical NOLABELS movement to simply discover that the NOLABLES movement (with its partisan version of centrism) is more dependent on labels than the groups it dismisses as ideologies.

Ideologies, after all, are attempts to find a working set of ideas on which to base society. The US Founders did a great job finding ideas on which to base society. True ideologies are interested in ideas, not labels.

The term "ideology" came from the French Revolution. Hatred of ideology was core to Napolean's drive to re-establish the empire. Napolean's game was to play left off right to cease totalitarian power. Napolean created a centrist empire! Whoopie!

Hatred of ideology was also core to Hegel. I contend it was also central to Marx. Note, Marx never defined Communism beyond vague terms. He defined a conflict between bourgeoisie and proletariat with the aim of inciting revolution. The revolution would resolve in a new center.

Progressivism seeks to redefine society by being to the left of a constantly changing center.

There is no center to the political universe and the self proclaimed centrists are usually among the biggest rogues on the politcal stage.

Dependency on Moral Character

For millennia, people thought the monarchy was the way to be. A top down government with one central ruler (be it a king or emperor) would provide for the people and issue justice. The system would be perfect were it not for a few bad kings that gave the system a bad rap.

In hindsight, one finds that the top-down centralized monarchy was a bad system. The rare good king gave a bad system a good rap.

One of the interesting aspects of the human condition is that people with strong moral character can make bad ideas work.

I am a fan of the strong moral character, and believe that that a society is wise to invest to promote moral character in education.

However, when discussing the organization of society, one should avoid building systems dependent on moral character.

For example, the mortgage system uses margin plays against the value of property to finance home purchases. This system depended on the integrity of both banks and borrowers. The system grew corrupt, which resulted in a bubble which made homes unaffordable and a bust that left a crippled economy.

Our progressive financial system was designed to the desires of central banks and corporate moguls. Center pieces of this system include fractional reserve lending and short selling. These financial tools allow corporate moguls to take hugely leveraged positions to dominate the market and drive out small business.

This ability to take out hugely leveraged positions allows business leaders of strong character to do amazing things. Glenn Beck fawns over Jon Huntsman. Many more idolize Warren Buffet. For that matter, there are folks in the elite media in bed with George Soros.

It is exciting to talk about the exploits of the warlords of finance, yet for each successful business warlord, there's a hundred others that simply wrought financial destruction with their leveraged margin plays. (Ken Lay, Bernie Madoff, Bernie Ebbers, etc.).

Although we all have business heroes that we admire, I wonder if this progressive system of finance designed to the desires of business warlords seeking market domination is better than one built to the needs of individuals seeking to build and preserve equity?

A progressive financial system built to the desires of financial warlords is called "Capitalism." This system was described by a man named Karl Marx and first outlined in a book called "Das Kapital." It stands in contrast to the free market envisioned by Adam Smith and supported by the US Founders.

Just as the monarchy was dependent on the character of the king, this system of market domination by business warlords is dependent on the character of the business war lords.

The free market of Smith, filled with billions of individuals optimizing their personal resources through the preservation and creation of capital, benefits from strong moral character, but is not dependent on it.

The Good Progressive from the North

I watched part of the Glenn Beck Show where Mr. Beck gushed over Jon Huntsman.

Apparently, Huntsman is a good progressive compared to bad progressives like George Soros (boo, hiss, boo, hiss).

But, wait a second?! The drones in the Open Society all see Soros as the good progressive. They have their list of bad progressives who must be censured. A great deal of the research of Soros's "Open Society Institute" is exactly the same type of conspiracy research done by Beck. The conclusion of Popper, Soros and followers is that they have to form powerful groups to overthrow the bad progressives like GW Bush.

I do not hate Huntsman, but recognize the guy as a progressive who used a combination of high power contacts in the Nixon administration, Utah's state church, and big business to become a billionaire.

During his career, Huntsman leveraged our progressive financial system to create products to help big firms (like McDonalds) drive smaller concerns out of business.

Some of the products like styrofoam BigMac containers created long lasting environmental damage for marginal gains.

Huntsman was a big supporter of Mitt Romney (who brought the world RomneyCare). That his family members jump from big business to big government on a regular basis indicates that the family is not above mixing business and politics in the grub for more wealth and power.

In Beck's world, Huntsman is the Good Progressive from the North, while Soros is the Wicked Progressive of the East and Pelosi the Wicked Progressive of the West.

Hmmm, is George W. Bush the good progressive from the South?

Apparently, Huntsman is a good progressive because he has "character."

Glenn Beck tells us that if we just had good progressives in charge of the centralized state-business complex, then things will be wonderful.

He is wrong.

It is the centralized monstrosity that the progressives on the left and progressives on the right are creating in concert that is destroying our freedoms.

The problem of progressivism is not a simple matter of character.

It is the highly centralized structure of the system which drives billions of people into poverty and artificially concentrates wealth.

Anyway, Glenn Beck provides a good example of the way modern dialectics is slowly strangling our freedom. He spends his day waving a flag yelling about how bad the leftist progressives are bad. His answer is that we need rightwing progressives in control.

Beck is playing the same game being played by Soros, Chomsky and clones ... but on a different side.

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Tell. Don't Do

I never liked the "Don't Ask, Don't Tell" policy conceived by the Clinton administration.

The Clinton policy essentially tells people to lie. Nothing good comes from institutionalized lies.

Personally, I would prefer a policy of "Tell. Don't Do."

IMHO, the problem is not with individual gays serving in the military. The problem we need to avoid is widespread sexual misconduct in the army.

I say this because I've come across people who advocate using sex to manipulate society.

In my progressive days, I came across a number of people who wanted to define a new "gay lifestyle" that involved sexual relations with hundreds of different people. Some claimed to have had thousands of partners.

My progressive professors advocated the creation of a gay military. These progressives thought that, if there was a large number of promiscuous people actively living an active gay life style within the army, this group would form a progressive army within the US army.

It would be like the progressive party within the Democratic Party. You only need a small number of people dedicated to the cause to rule.

A group of people forming a sexual nexus within the army could jerk around those who weren't in the nexus. Imagine millions of people engaged in the fantasy that they were Hawkeye Pierces set in on a campaign of destroying the people they labeled and derided as Frank Burns!

Think about it. Sex could be used by Alinsky style community organizers to organize a progressive party within the US Army!

My progressive professors held the fantasy that a gay army within the army would be a force for progress.

However, when I have thoughts of an army within an army having sexual adventures with thousands of partners at home and abroad, I don't have visions of progress. I have the nightmare of Abu Greib on an epic scale.

Please note, I don't see homosexual misconduct as the only type of misconduct. I see the thousands of babies our hetrosexual troops abandonned in Vietnam as a national disgrace.

Here in Utah, Mormon pioneers experimented with polygamy as a way of progressing a society through sex. This historical record indicates that this was a terrible thing for a large number of people. I've met several people who've escaped from modern polygamist cults. Their stories of abuse are horrific.

The problem isn't a person with same sex attraction serving in the military, but the combination of sex and power politics.

My observation is that, when people develop systems of power politics centered on sex with multiple partners, things get ugly. What starts as a progressive fantasy turns into institutionalized abuse.

Rather than a system that excluded people for who they are, I would prefer a system that accepted all people, but that disciplined or expelled people for sexual misconduct.

I would prefer a system of "Tell. Don't Do," to the corrupt policy of "Don't Ask. Don't Tell."

There's really no problem with a person who feels same sex attraction serving in the military. Problems pop up when there's a group of people who have sex with eachother while engaging in power politics. Such people end up undermining the people around them.

Such behavior can happen regardless of sexual orientation.

Unfortunately, we live in a society where it is no longer possible to talk about problems.

Every time I hear people talk about the issue, I remember a progressive professor who was titillated by the idea of using Alinsky to organize an army within an army dedicated to the cause of progressive dominion.

The Challenge of Progressive Taxation

We've heard the sound bites. We all know by now that George Bush caused the recession (though we don't know how or why).

We also know that the Bush Tax Cuts are evil.

Oddly, despite the fact that we have the most progressive president in US history, legislatures are waffling on letting the tax cuts expire.

The BLS reported unemployment at 9.8% today. It would be higher if the BLS was honest in its definition of the unemployment and included those who gave up hunting for a job.

The fear is that higher taxes would cause a further jump in unemployment.

So, despite the fact that vilification of the Bush Tax Cuts is a primary stance of the Obama administration, the government is worried that letting the tax cuts expire would hurt a large number of people.

I am clearly an evil person because I don't blame Bush for the recession. Even worse, I favor the Bush Tax Cuts.

The problem faced by policymakers supporting a progressive tax system is that businesses make their investment decisions based on the highest tax rate.

Even though most small businesses fail to achieve a coveted position of being in the top income bracket, small businesses actually end up making many investment decisions at the top tax rate.

The top tax rate has an adverse affect on small business. There are many small business owners who live a modest life but throw everything into the business. Since their personal finances are tied in with the business, they end up paying the top rate despite a modest lifestyle.

My solution to the progressive tax challenge is to create a new tax system which I called the Object Oriented Tax. This system taxes an abstract object between income and consumption.

Basically, people would have an investment account and a spending account. There would be no taxes on investment related transactions in the transaction account. Taxation would happen when people transferred funds from their investment account into the spending account.

One could set a progressive tax rate based on the size of the investment account.

Warren Buffet would pay a higher tax rate than his secretary because he has a massive amount of investments.

The challenge of progressive taxation is that business decisions are made at the top rate. Taxes have an adverse affect on the very business decisions that generate wealth. Creating a new tax system that taxed an abstract object between income and consumption would simplify investment decisions while preserving a progressive tax.

As it stands, since businesses make investment decisions based on the highest tax rate, I believe the wise course of action is for Obama to ignore the wealth-envy rhetoric of his campaign and extend the Bush Tax Cuts. If we want to continue a progressive tax system, we might consider something like the Object Oriented Tax that cleanly separates investment decisions from taxes and taxes only consumption:

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Black Thoughts on Friday

I spent the morning working on Black Friday Ads. This month I've had sales from Vann's Electronic in Missoula, and Love Lettering in Logan.

If sales go well, I might hit the road after the holidays in search of a free market group interested in health care reform.

My poll on the Medical Savings and Loan ended. I had two votes expressing interest in the idea.

I had been thinking about self-publishing the work. Publishing a printed work would cost $400 to $1000. If I had a product to sell, I might have more success getting heard.

My real hang up in publishing a book is that I strongly believe in the process of peer review. Writing a book before I have sufficient input is wrong.

Unfortunately, it is nigh impossible to get pier review when one has been driven from the local community as a pariah. Of course, this is what the progressive professors at the University of Utah intended when they falsified my test scores to keep me from obtaining the degrees of my choice.

I flunked three class one quarter for including the line "Workers of the world untie" in a criticism of Marx.

Anyway, Although I derived the Medical Savings and Loan by studying actuarial data, I don't have that information on hand anymore. I feel the work is too theoretic. I want more hard data. For example, I would like data showing the exact figures people pay out in health care to compare to premiums. This would prove that people can pay for the same care if they were allowed to keep their health care dollars.

The book includes too many unverified suppositions.

For example, I state that, for an insurance company to remain solvent, premiums must be greater than claims. But even an intuitive statement such as P > C must be backed up by data.

I need data to show that insurance companies that spent more than they took in went bankrupt!

IMHO, there is value in stating a theory, then testing it. This how the scientific method works. A person develops a theory, then tests it.

(I should say, this is how it used to work. Progressives control the University, and are busily working to change scientific theory more to their liking.)

This type of experiment is what I want to do. I want to prove that if a person put the $500,000 that they will spend on insurance over their life time into a savings account, that the person could buy a half million dollars in medical care.

I want to prove that if one put money in a grant program (as opposed to reinsurance) that the money could be spent on medical care in a more cost effective manner.

I don't like writing without data to back up wild claims like P > C, but an imperfect self published work stating the theory could be followed up by peer reviewed works with substance.

Anyway, I've been working on ads today. Even a tiny bit of cash would open up opportunities.

The Medium is the Message

The other day, I came across an ad for a company that claimed to have the answered for the uninsured. The answer was a program that promised to deliver health care over the interet (for a modest subscription fee).

Subscription fees don't work for medical care. The reason is that people have different needs and will consume different resources.
A subscription service will need a large number of underserved chumps for each properly served patient.

The idea is absurd.

Medical care must take place in direct person to person contact.

For that matter, the idea that health care is about people directly helping other people was the founding principle of the Medical Savings and Loan.

I have no intension of creating a computer program that will deliver health care. I am seeking a way that empowers people to maximize their personal resources so that they get the most of their care.

Reading the web site intro for this internet scam drove the point of why I am failing to get out the message about the medical savings and loan.

People see web posts and articles, but they end up confusing the medium with the message.

The reality is that the Medical Savings and Loan is an organic method to help people self-fund health care.

As it is an organic approach to funding health care, the interface is not a computer. The interface of the system is human beings.

Yes, the program deconstructs an insurance company. However, the program did not start with the math. The program started by an examination of the claims adjusters.

For the most part, claims adjusters are wonderful people who really want to help people get the best care. The structure of insurance puts claims adjusters in an adversarial role to both the patient and doctor.

This adversarial role exists because the adjuster's job is to defend the insurance pool. If one changed the orientation of the system so that the people owned their own resources, then the adjuster's job is to defend the assets of the patient. The adjuster becomes an advocate for the patient.

Simply changing the orientation of health care funding solved a large number of problems.

Pretty much all of the major complaints about insurance and socialized medicine fall away when we change the orientation of the system from group funding to self funding.

Anyway, it was with the health care advocate in mind that I developed the medical savings and loan.

It was with this health care advocate in mind that I developed the rest of the medical savings and loan.

The math is compelling. If one deconstructs health care pools into individual accounts, one creates a structure that better serves the people needing care.

Any attempts to implement a program depends entirely on the people. The interface of the system is face to face contact.

Unlike insurance, the Medical Savings and Loan doesn't hold the money. People will have their own savings account in the financial institution of their choice. So, it is not an accounting program. It is the concept of structured savings to self-finance care.

The medical savings and loan is not a computer program. It is not a book, nor is it an accounting system. The medical savings and loan is about people working together face to face in a concerted effort to optimize their health care resources.

Anyway, I am stuck in a rut. As people tend to confuse the medium with the message, I fear that the only way to convey the program is within the same medium as the message ... face to face contact.

Face to face contact is very hard to pull off in a community where one is driven off as a pariah. Every day I eye the road and think about a direction to drive.

It is warm in Arizona, but I don't know anyone in Arizona.

Regardless, I am thinking of hitting the road after the holidays.

As for right now, I am adding internet coupons on an ecommerce site. Maybe, I could get some road money.

Self Excluded by the System

David Horowitz likes to write on ways in which conservatives are systematically excluded from the teaching profession.

A response to Mr. Horowitz provided a very interesting insight into the fascist mindset of progressives. In support of ideological litmus tests in schools hippiepooter said: "it is you who excludes yourself from the employment."

Progressives are such ugly people. They will design a system in ways to exclude people, then cast dispersions at the people they exclude. "It's your fault that I am doing this horrible thing to you."

Sadly, progressives are so full of their own self-righteousness that they can pull these things off without rebuke.

Summary of Reforms

Our financial institutions were designed to the desires of the central bankers--Not for the needs of the investing public.

Because of this our financial institutions artificially concentrate power in the hands of bankers while undermining the wealth creation process within the community.

The solution to this problem is to redesign financial products around the needs of the investing public.

We need actions. Not just complaints.

In this blog, I've made four very concrete proposals for financial reform. The common thread in these four reforms is that they replace financial tools geared to the needs of banks with tools geared toward the need of the investing public.

The reforms are:

• The Medical Savings and Loan: This reform replaces insurance with a system of structured savings and supplemental grants to secure medical coverage.
• Shared Equity Financing: This reform replaces mortgages with direct investment in housing.
• The Real Time Open Source Exchange is a product that replaces black box stock exchanges with an open source program that executes trades in real time. Executing the trades in real time eliminates naked short selling.
• The Object Oriented Tax. The object oriented tax is an interesting program that taxes an object between income and spending.

The first two proposals are concrete ideas that could be implemented by small companies.

The OSRTX is more theoretical. It could be implemented by a collection of companies or investors seeking to share ownership in equities. The primary goal of this project is to demonstrate the short selling is the creation of anti-market regulations.

The Object Oriented Tax is a political solution. This program taxes an object between income and consumption. It combines the best of a progressive income tax with a consumption tax. Essentially, everyone will have two accounts: An Investment and Spending Account. The system charges a progressive tax when people transfer money from the investment to the spending account.

With the OOT, people can make their investment decisions without having to calculate the effect of taxes. People would have to pay a progressive tax on what they spend. The system empowers individuals in saving and investing. The system eliminates the capital gains tax, but taxes capital gains spend on consumption at a progressive income tax rate.

Empowering the Investor

Each of these reforms arises from the same thought process which seeks ways to empower the individual in our economic system.

Even if I find no backers for thes programs, I believe a vigorous discussion of the reforms directly address the underlying problems with our current financial structure.

For example, the programs fit well in discussions about the difference between the free market and capitalism.

In the free market, the free mind of the individual is supreme. The theory of capitalism overemphasizes the role of paper money.

Implementing the Reforms

It would be easy for small organizations to implement the first two reforms. I designed the Medical Savings and Loan as a method for reverse engineering an insurance company. A company seeking to reduce the cost of health care benefits could implement the Medical Savings and Loan.

An investment firm could offer SEF-Liens as an alternative to mortgages. (A SEF-Lien is pegged to the local realty market. One would never see a house financially "underwater" because the lien would automatically drop in value if housing prices dropped.

Yes, it is true that businesses implementing either the Medical Savings and Loan or Share Equity Financing will make less profit per client than insurance or mortgages; however, people in need of financial services are likely to choose the products that offer best security.

I believe that, if the programs were implemented, they would be a hit in the market as they provide a better service to the public.

Conclusion

To restore the American experiment, tea party patriots simply must start engaging in a positive discussion of the ways that the free market and limited government can solve the problems created by our over centralized banks.

The structures discussed in this blog could be part of such an effort.

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Shorting our Way Into Debt

We all know that America has a debt crisis. This crisis is not simply the result of borrowers. The debt crisis is the result of a financial system that floods capital markets with easy money.

Notably, the fractional reserve lending system of the Federal Reserve multiplies the amount of debt. Banks lend out multiple dollars for each dollar saved. The Fed works like a lens systematically magnifying debt.

Perhaps the most pernicious effect of short selling is that it contributes to this debt crisis.

A short sell is a similar source of easy money. Short selling is not an investment in production, but a financial tool derivative of other's productivity. It is a paradox-ridden kin to a margin play.

When a person shorts a stock, they borrow a stock then sell it at market prices. The person who lent the stock for the short sale no longer has an investment a company. The investor has a loan that tracks the price of the stock.

These loans often take place without the knowledge of the investor. So, you might think you have 100 shares of GM, when really you have a loan to a third party that tracks GM's price.

When a short seller sells a stock, the short seller gets money. This easy money floods into other investments. Short sellers often hold the money in tools like government bonds or mortgage backed securities ... creating an artificial demand for these financial products.

(Short selling feeds the beast that crashed our economy)

The amount of easy money created by short selling is phenomenal. It is second only to the amount of easy money created by the Fed.

Hedge Funds use a formula for shorting. For example, some hedge funds with have $30 in shorts for ever $70 in investments. The amount of money being shorted is massive.

Following the short interest on stocks, I find it common for the short interest to be 20%, 30% or even 40% of the float for long durations.

For a trillion dollars in investments, one might see short sellers generate $200 billion in easy money through shorting.

Free-marketeers should be irrate about short selling. This is not wealth created by the re-investment of surplus production (as was described by Adam Smith). It is vast quantities of easy money created by the financial regulations that allow short selling.

Short selling (selling stock that does not belong to you) is a direct violation of the principles of property rights. The system has numerous perverse effects that muck up the process of generating real wealth.

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Short Selling and Liquidity

Proponents of short selling repeat the theme that short selling improves liquidity.

All of my experience shows that the exact opposite happens. Short selling decreases liquidity.

Wikipedia (drawn 11/20/2010) defines "Market Liquidity" as "an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value."

My experience is that when a short seller has a large block on the ask line, it is difficult to sell the stock without accepting a steep loss. I've often seen the case where a piece of bad news hits a stock. The short interest in the stock will explode and the price will tank. This reduces the ability of the common share owners to liquidate their stock.

I have noticed that short interest tends to jump just before planned sales of stocks. For example, when employee stock options vest, there is generally a jump in short interest prior to the vesting date dramatically dropping the price during the window when employees are allowed to exercise their options with planned sales.

Short interest increases whenever a company plans a secondary offering. The short sales are decreasing the liquidity of the stock.

Short sellers are like other investors. They want to sell high and buy low. As such short selling generally increase during market dips.

There was a massive increase in short selling during the liquity crisis of 2008. The prime time to short stock is when people are panicking or otherwise being forced to sell.

Yes, back in the 1800s when it took several days to execute a transaction, short selling helped improve the liquidity of stocks.

But when one has a system where transactions can take place in real time, there are few cases when short selling actually improves liquidity.

The most active short selling occurs when there is a distressed seller. In these cases short selling dramatically decreases the ability of the distressed seller from selling their stock.

Mortgage Backed Insecurity

Patrick Byrne of Deep Capture repeats an interesting rumor. The rumor is that a sizeable portion of the loans in the toxic mortgage-backed-securities bundles that crashed in 2008 were actually fraudulent loans. The "paperwork errors" holding up foreclosures are tiny things like houses that don't exist or mortgages that don't have liens on titles.

Possibly some of the bad loans aren't just loans made to people who can't repay, but were fraudulent loans from the start.

The convolutions of mortgage backed securities, CDOs and credit default swaps make my eyes curl up in their sockets.

However, this much I know.

These bizarre derivatives all came from the insurance industry.

The idea behind a mortgage backed security is that centralized banks can manage risk by bundling large number of mortgages into packages that are then traded on the market.

Freddie Mac and Fannie Mae are GSEs (Government Sponsored Enterprises) that bundled, insured and served as an exchange.

The exchanges created a convoluted complex of derivatives such as CDOs and credit default swaps to facilitate the trade of the securities and promised the ability manage risk.

The exchange system for mortgages failed miserably.

I repeat that. The exchange system for mortgages failed.

The exchange system for mortgages failed.

The exchange system for mortgages failed.

The exchange system for mortgages failed.

The heart of ObamaCare, and other current approaches to health care reform replicate the failed centralized exchange system of the mortgage industry.

The system where traders sit in towers and speculate on the risks of others will simply replicate the failed mortgage system. It will be rife with fraud while those needing care will be spun off onto the public coffers.

The better approach to health care reform is to march in the opposite direction. Rather than created convoluted group pools in which the elite control health care, we should develop a system where people self-funded their care (with supplemental grants and loans).

Hmmm, I wonder if anyone has come up with such a thing.

I've watched the news, read the papers, hit the tea party web sites.

I haven't found any.

Hmmm. If only some would work on such a system, it would be great.

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No One Can Listen

Harry Markopolis is an option trader who figured out that Bernie Madoff's hedge fund was a fraud decades before Madoff's ponzi scheme crashed in multibillion dollar financial scandal. This last year Markopolis penned a financial thriller titled: "No One Would Listen" (buy at Overstock.com) which details his frustrations as he tried to convey his discovery to the financial community.

He talks about how he brought his information to the SEC, the press and others, but no-one would listen.

I've had similar problems throughout my career where I have very clear ideas to communicate, and I am simply unable to communicate the idea.

I've come to the conclusion that it's not a simple case that no-one will listen, but that our leaders have dinked around with the language to such an extent that no-one can listen.

The modern era has been full of intellectuals who sought to manipulate discourse at a foundational level. For example, Hegel, Marx and modern progressives love the term "sublate." This is a process in which a term gets turned into its opposite.

The process is ever so clever; however, as progressives grub power through a systematic undermining of our language, we lose the ability to communicate with each other.

So, the power of the Aristotelian tradition was not so much that Aristotle created a superior method of reasoning, but that he created a relatively clean method for people to communicate their reasons.

Whenever there is a society where the Aristotelian method clicks, people are able to communicate with each other and accomplish great things. When intellectuals resort to manipulating the language to gain power, the ability to communicate dissipates and the society diminishes.

What is Capital?

This post is a reply to a tweet.

Before engaging in high level debates, it is useful to think about the terms used in the debate.

For example, we often use the term "capital." But what exactly does one mean by "capital"?

Wikipedia we find the term capital referring to different things. In classical economics it referred to a real physical thing ... a factor of production.

In Marxian economics capital refers to an abstract entity called "money."

It is possible to create or destroy money without actually producing any physical benefits. This is what the Federal Reserve does.

In common discourse, people tend to use a muddled definition where it refers to both the physical factor of production and the money used in investment, but in actually trying figure out how things work, one finds that different definitions of capital work differently.

Things become even more convoluted with the absurd convention of using the term "capitalism" to refer to the free market economic system favored in the United States.

Definition of Middle Class

I believe that the distribution of wealth is far more important than the distribution of income.

Income refers to the amount of money that a person receives in a year. Individual wealth refers to the resources that one owns over a life time.

In the scheme of things, one's income is derivative of ones wealth. Income is simply a slice of one's life long wealth.

I contend that if a society has a healthy distribution of wealth, it will naturally have a health distribution of income.

Conversely, a society with a healthy distribution of wealth might have an uneven distribution of income as people make different amount during different years of their life.

My last post spoke about the changing definition of the Middle Class.

The original definition of middle class was based on the distribution of wealth.

One could split the ancient regime into three primary classes. There was a small ruling class, a very large working class of peasants and workers and a middle class between the two.

The ruling class derived its wealth and power from the state. The working class sold its labor for subsistance.

The middle class learned to re-invest the proceeds of the labor to improve their productivity. This middle class of merchants and manufacturers re-invested the profit from their endeavors to build capital.

Note, both the ruling class and working class were largely dependent on the state. As the middle class built capital, it gained a certain amount of independence from the state.

Intellectuals despised this middle class with its independence.

Because this despised middle class was very good at creating wealth, it systematically pulled millions of people out of poverty and the ranks of the capital owning middle class swelled.

In this traditional paradigm, the term middle class (bourgeoisie) was based on the distribution of wealth. The distinguishing feature of the middle class was that it owned and controlled capital.

Progressives hate this property owning middle class with a deep abiding passion.

Progressives took a tool developed by Hegel and perfected by Marx called sublation. Sublate is a process which one can use to turn a term into its opposite.

The defining characteristic of the middle class was the ownership of capital (its wealth). Progressives simply made income, not wealth, the defining characteristic of wealth.

Income, like most statistical phenomena, falls into a simple bell curve. Progressives took to calling the middle section of the bell curve of income "The Middle Class."

For a variety of economic reasons, the reported incomes of the ruling class, middle class and upper segment of the working class will fall in the middle of the bell curve of income. The really successful business owners fall in the upper section of the bell curve, unsuccessful workers make up the bottom of the bell curve.

By changing the focus of the middle class from wealth to its derivative income, progressives successfully sublated the term "middle class."

Middle class no longer refers to the productive business owners who built up the wealth of the nation. It now includes the parasitic ruling class and some of the higher paid workers.

The term "middle class" now means its opposite. The group of capital owners who sat between the rulers and working class is now in a separate vilified class, while the proletariat is lionized as the middle class.

Of course the progressive definition of middle class is absurd. By simple economic laws, most people will fall in the middle of the distribution of income.

It is the distribution of capital that matters! With a centralized economy, control of the wealth of the nation falls into an increasingly small number of very corrupt hands.

While progressives pound the sublated definition of "middle class" the real middle class that gave us our prosperity is being systematically destroyed.

The Middle Class is the New Proletariat

Progressivism is a system of rule by manipulation. Long ago, the left learned that it can affect change subliminally by changing the language (aka sublation or the German aufheben).

One curious example of manipulating terms happens with the term: "Middle Class."

Traditionally the term "middle class" referred to the social class between the ruling class and the working class (The Third Estate). The ruling class referred to those who derived their income from ruling. This would be the kings, feudal lords and massive bureaucratic structure of the state.

The middle class referred to business owners who were making money independent of the state. A primary characteristic of this class was ownership of capital. The middle class would re-invest their capital and improve their lot. Note, the middle included trained professionals who invested as heavily in their careers as merchants and manufacturers invest in their businesses.

The working class and underclasses made up the vast bulk of the people.

Back in the days when Marx spewed his venom, he used the bizarre terms "bourgeoisie" and "proletariat." The French term "bourgeoisie" meant a person who [gasp] owned a business in town. [The Horror] [The Horror] The English translation of bourgeoisie is "The Middle Class." [The Horror] [The Horror]

During the Industrial Revolution, the Middle Class gained influence and the traditional ruling class waned.

The Middle Class was an open society. The markets created by the bourgeoisie pulled hundreds of millions of people out of poverty and into the maligned middle class.

Intellectuals loathed the people benefiting from the new found wealth with a deep passion.

So, an intellectual named Marx sought to unite the ruling class and working class (the proletariat) in a revolution against the horrible Middle Class (the bourgeoisie).

Marx succeeded in igniting a revolution and hundreds of millions of people died in agonizing ways.

History proved Marx a rogue. The bourgeoisie he loathed brought wealth to millions, while his revolution brought death and hardship.

If we were a people who learned from history, we would have rejected Marxism and adopted the ideals of the bourgeoisie.

Unfortunately, there is a group of low lives called progressives who continue to craved the totalitarian power promised by Marx.

Progressives seek the same goals as Marx. But they realized that, if they captured the university and media, they could accomplish the goal of a totalitarian state simply by manipulating the language. One can simply use the process of sublation to turn words into their opposite.

Transitioning the term "Middle Class" into its opposite was rather easy.

So, traditionally, the middle class referred to a relatively small class of business owners who sat on the social scale between the ruling class and the workers.

To change the definition, one simply de-emphasizes the source of the wealth and claim the distinguishing characteristic of the source of the middle class as income. The new definition of middle class labels all the people in the middle of the bell curve as "The Middle Class."

Since the bulk of the massive state bureaucracy (the new ruling class) have incomes that fall in the center of the bell curve, progressives have created a new paradigm where the ruling class is embedded in the definition of the middle class.

So, by clever manipulation of terms, we've arrived at a situation where the left is able to use the "Middle Class" in place of "proletariat."

This is problematic for our nation because it turns out that the source of the wealth does matter.

See, the source of the wealth of the traditional middle class was the re-investment of capital. This traditional middle class had the knack of creating new wealth and increasing the wealth of the nation.

The current middle class gains its wealth largely through redistribution. The modern American middle class consumes more than it produces and created a negative system in which our nation declines.

Since conservatives are too stupid to actually look at the roots of today's problems, I guess there is little to do but applaud progressives for their manipulative ways and lament the decline of our nation.

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Utah's Immigration Law

Utah is considering an Arizona style immigration law.

Personally, I think this is silly as Utah is not a border state. I think it is wiser to wait a year or two to see how the Arizona law plays through before taking action.

I suspect that the 2012 election will produce a president who is eager to work with states on immigration, negating the need for the law. Passing a law with a 2 year horizon is foolish.

What is interesting about the Utah immigration debate is that the LDS Church is putting it's iron boot down on the throat of the subject.

Latin America is a growth area for the LDS Church, and this powerful entity wants to avoid any issue that might adversely affect that growth. It is in the interest of the LDS Church to stop the Utah immigration debate. Not surprisingly, the LDS Church issued a statement.

One particular section of the statement caught my attention: It reads: "Elected officials have the primary responsibility to find solutions in the best interests of all whose lives will be impacted by their actions."

This statement is counter to the ideals of a representative democracy.

The primary responsibility of a representative is the people being represented.

It is when government leaders start seeing themselves as the conduit of a higher good that tyranny sets in.

The world works best when different groups focus on different responsibilities. In this world we find one's family is the primary concern of most people. Businesses are concerned with the financial health of their property. Elected officials have a responsibility to the voters. Schools have a primary interest in educating their students. Churches and pundits might focus on higher concerns, etc.

When different groups focus on different aspects of our problems, we end up with better solutions.

Most problems are multi-dimensional and require multi-dimensional solutions.

The LDS Church is a powerful entity with an important and influential view in Utah. Because the group is so powerful, any statement will influence the views of the Utah electorate. Consequently, it will influence the decision of Utah Representatives.

Sadly, the Church chose to state its position in a way that was counter to the American tradition of representative democracy.

This saddens me.

Would they have made the same high sounding moral statement if it was not in their interest?

I agree with the desire to avert a local immigration debate, but disagree with the statement.

Anyway, some people have asked why I have no interest in starting a Medical Savings and Loan in Utah. This program is an alternative to insurance. It takes the bulk of the money from insurance and puts it back into the pockets of the people who earned the money.

The second actuaries run the numbers and see the amount of money that will flow from the ruling elite and back into the pockets of the people who earned the money, the institutions of the ruling elite will come back in full force against it.

The LDS Church has a substantial amount of money in insurance.

I would be messing with their money.

I have experienced the iron boot of the LDS Church in the past. I have no idea how to counter it. To make the system work, I need to find a different area.

As for immigration, I hope Utah State chooses to avoid the issue in this up coming legislative session. It is an issue best left for the 2012 election.

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Federal Power and the Dream Act

The Dream Act is a tool that grants citizenship to families for joining the military or taking on other select government jobs.

The relative size of the Federal Government has been the most contentious issue of in the United States since its founding.

An act that grants citizenship for getting a government job weighs the body politics to those who want more power in the hands of the government. A government agency that wants expanding authority will hire new citizen/employees who will vote for expanded government power.

This fluffy sounding bill is one of the most manipulative bills ever put before Congress. In order to gain more power, the government simply grants a few million people who will support their power grab.

An act that allows the government to change the make up of the nation in favor of bigger government creates a dangerous feedback loop. This power grab is an attack at the very foundation of Democracy.

The founding principle of the Dream Act is "If you don't like the will of the people, change the people."

That said, I will now sit back and be labeled a racist by small minded progressives.

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An Elaboration for a Twitter Post

In a twitter conversation I was first instructed to "wake up" then to "elaborate." It's hard to elaborate in 140 characters.

In recent years "conservatives" have been waking up to tricks of the "progressives."

I put the words in quotes because I've discovered that terms have more than one meaning.

For that matter, I've learned that many of the tricks occur at a root level. People have been manipulating Americans for well over a century.

For example, progressives pulled the study of logic out of the curriculum over a century ago.

Progressives favor a system in which the elite manipulate the evolution of society through changes in language and style. Marx named his style of manipulation "Material Dialectics." His work was based largely on observations of the French Revolution. The idea of Hegel and Marx is that society evolves through a system of thesis/anti-thesis conflicts. Conflicts resolve in a catharsis then move on to the next conflict.

One of the fundamental believes of this "modern" style of thought is that every civilization lays the seeds of its own destruction.

This dialectical model is different from the logical (analytical) model of the Founders. The founders believed there was a truth and esteemed logic. They believed in a process where civilization built upon itself and improved with time.

The foundational thought system of the US Founders was never fully developed. The founders failed to see the entrenched party system. The Left/Right split that dominates modern politics came out of the French Revolution.

While American conservatives admire the American Revolution and disdain the French Revolution, the name for the "conservative" movement comes from the French Revolution.

Like American Conservatives, I admire the US Founders and believe the US Founders were on the right track.

A major problem of Conservatism is that self-described conservatives are often drawn into the culture war with the Progressives. When drawn into the culture wars, one runs the risk of assuming the underlying rational style of this modern dialectical process.

A great example can be found with the definition of "capitalism."

Marx wrote a big long book called "Das Kapital." He believed that society evolved through a scientifically predictable series of conflicts. Marx claimed that the modern period was dominated by a conflict between groups he called the bourgeoisie and proletariat. Marx predicted that the intelligentsia would unite with the proletariat in a revolution against the bourgeoisie. The catharsis would be a new thing called "Communism."

Marx wrote in German. Translated into English, the bourgeoisie became "capitalist" and proletariat translated to "worker."

The term "capitalism" and "capitalist" were rarely used before this period.

The US Founders were trying to establish a free society. They admired "The Wealth of Nations" which was published by Adam Smith in 1776. Many of the founders disliked the way the Europeans manipulated the financial system (a different, longer story). The US Founders did not use the term "capitalism" to describe their free market.

I really wish Conservatives would look at the terms they use, and use them with caution.

Marx hated the free market. He wanted it overthrown. He believed society evolved through conflict. Marx wrote a really long book called "Das Kapital" which highlighted and magnified every fault of the financial system. He then wrote a second short book called "The Manifesto" which showed revolutionaries how to use the false image he projected on the market to raise people in revolution. In the Manifesto, Marx promised that, after the revolution, a wondrous new world order called "Communism" will evolve.

Don’t you see the irony?

Marx never defined Communism beyond the vaguest of terms. What Marx did was to describe a perversion of the free market in minute detail. This perversion of the market is called "capitalism."

The term "Capitalism" was essentially defined by the enemies of capitalism. A central part of Marx's trick was that he over-emphasized the role of money, and de-emphasized the role of freedom in his description of the market.

The free market of Adam Smith was a description of how free people optimizing their individual resources tend to optimize the resources of the community at large.

Marx's perversion of the free market was a description about how a corrupt ruling class uses money (the financial system) to dominate society. Marx's goal in defining capitalism was to lay the seeds that would destroy the free market!

Apparently Marx was compelling to our intellectuals because it drew everyone into the conversation.

Today, we find ourselves in a strange situation where a group called "conservatives" defends a thing called "capitalism." The problem is that the etymology of terms undermines the cause.

Many conservatives use the term "capitalism" to describe the free market described by Adam Smith. The term also can refer to a perversion of the market in which a ruling class creates a corrupt financial system which empowers an elite.

As for the word "conservative," this word emerged as one side in the left/right split.

Patriotic conservatives in the United States are trying to preserve the thought system of the US founders. The problem is that their ideas are being defined as part of this dialectical split.

For example, the fact that the term "conservative" rose to describe a "left/right" split has the effect of making the split the center of discourse, rather than the underlying structure of society.

The enemies of the American experiment have laid before us a terrible series of traps. To restore the American system, we have to be wary of the origin of terms. When discussing ideas, we need to be wary of what people mean by "conservative," "capitalism," etc..

This post is getting too long. I wanted to give an example of how our terms are used against us.

A good example is ObamaCare. This system creates a centralized health exchange. An exchange could be described as "capitalism" because it uses the flow of capital through the health care system to control the behavior of people and to empower a ruling elite.

Health Care and Diabetes

This just in The Number of Type Two Diabetes Cases is Soaring.

The primary cause of type two diabetes is Americans are failing to draw the connection between their diet and long term health cause.

A primary reason for our failure to draw this connection is that our health care system shields people from the consequences of their actions.

Type Two Diabetes is the one disease that the Medical Savings and Loan could really can really help reduce. This system asks that its policy holders self-fund their health care.

The system confronts policy holders on a regular basis with the consequences of lifestyle choices.

I have not been playing up the central character in the Medical Savings and Loan. The program creates a new position called the Health Care Advocate. The primary charge of the advocate is to educate participants on expected health care expenses.

It is a financial position, not a medical position, the advocate will use the language of money to explain basic things like if you get this preventive care, your health expenses will be like x. If you don't get preventive care, your expenses will look like y ... and you can't afford y.

I repeat, the HCA is a financial position, not a medical position.

The goal of the program is to engage participants in a multi-dimensional discussion of their health.

Insurance and these crazy health care exchanges treat people as if they live one dimensional lives (with speculators trading individual risks on the exchange).

The Medical Savings and Loan sees advantage of people owning their own risk as it forces people to take a multi-dimensional view of their health.

Here is an example of the type of financial questions I find beneficial. Share-A-Sale has a new advertiser called 360 Cooking. This company makes expensive stainless steel pots designed for a waterless cooking technique. These expensive pots have a multi-layered construction to evenly distribute heat. Their claim is that their design lets people cook with no oil and less water.

This increases the nutritional content of food and improves taste. They claim waterless cooking reduces energy consumption.

The company's claims may prove bogus. The pots are way outside my price range, and I am sure I could do "waterless" cooking with other pots.

However, I found that the expensives pots started an interesting line of inquiry. Could waterless cooking reduce my consumption of fat? Would it increase my consumption of veggies? What impact would such a decision have on my long term health?

Consulting a doctor about buying a pot would be ludicrous.

However, if we developed a system where people owned their own health care risk, then we would see people engaging in this type of decision making on a regular basis. It is through the repetition of this type of conversation that leads to quality life style choices.

By creating a system where people own their own risks and are directly confronted by these risks in a conversation with a health care advocate would create a paradigm where people engage in this type of discussion.

A system where traders speculate on people's health risk in a centralized exchange will result in conversations, but not conversations that help people.

Debt Per Taxpayer

The Debt Clock tells me the national debt per citizen is over $44,000. It is over $126,000,000 per taxpayer. Total debt per citizen is about four times that. It is $176,000. Current unfunded liabilities are over a million dollars per person.

Our savings are a scant $9,703 per citizen. This is barely twice the interest we pay on the debt which is about $4,600 per person.

A devaluation of the dollar and higher interest rates could easily throw our economy into a tail spin.

This sad situation is not the result of a moral default of the American people, but is a result of the stupid way we've structured our financial world.

In efforts to buy power, our political and business leaders structured our economic system so that we use pay-as-you go schemes supplemented by debt financing for necessities that should be financed through savings.

What I want to do with the Medical Savings and Loan is to take the massive premiums we are paying for pay-go insurance and place it into a structured savings program.

The current savings to debt ratio is $9K/$176K.

Insurance premiums are over $10,000 per year. A student coming out of college is likely to pay over a half million in insurance premiums and deductibles over a working career. The structured savings program would put over half of that money in the savings accounts with the other half going to grants and loan defaults.

As people tend to be healthy when they are younger and require medical attention when they are older, one would see a phenomena where a large number of people had a large amount of money in their medical savings account. If the system worked the average policy holder would have about $20K in savings with some people having upward to $100K in savings.

Were the entire US to switch to a Medical Savings and Loan paradigm (something which I am not demanding), we would see savings balloon and a more reasonable savings to debt ratio of $30K/$176K would emerge.

The Medical Savings and Loan is not totalitarian. It is not like silly health care exchange systems that must force everyone into a complex scheme for some perceived benefit. The Medical Savings and Loan simply provides financial tools that allows people who wish to self fund their care take a stab at the challenge.

People who switched to the MS&L for self-funding their care would increase their savings and decrease their personal contribution to the debt problem.

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Zarephath Health Center

Wow!

This is what I am looking for!

Zarephath Health Center is a faith based effort to provide health care to the poor and uninsured.

These are the people who would thrive with the Medical Savings and Loan.

I discovered the center through an article on Freedom Blogging. Doctor Alita Eck sees the Health Care Exchanges for corrupt fluff that they are. She gets right to bare knuckles of providing health care and explains that the best health care is a system with the doctors and administration focused directly on the patient.

This is what happens with the medical savings and loan!

If I could get the equations for the Medical Savings and Loan in front a pair of astute eyes like this; the system would pop.

The MS&L essentially takes the money that goes into insurance. It splits this money into a Savings and Loan component. This component empowers the people who can self-fund their care to self-fund their care. The system carves off a big chunk of cash to be distributed as grants. Anyone who takes a grant must agree to take part in the savings plan.

The people who self fund their care will spend their money on the care that best suits their needs.

When people cannot, the group administering the grants would be spending their resources in the best possible way.

(As mentioned earlier, a Medical Savings and loan with 10,000 policy holders would probably have about $800,000,000.00 for direct self-funded health care and $200,000,000.000 in grants over a ten year period. 10,000 * 10,000 * 10 = 1,000,000,000.)

I have more faith in a group Zarephath Health Center with a few hundred million bucks in grants than the Utah PAC with a totalitarian exchange and the unconstrained political power the Political Action Committe desires.

Unfortunately, the Zarephath Health Center is in New Jersey.

That's too far to travel.

What I need to start a Medical savings and Loan is a group of people who want to save the health care freedom (while cutting costs) and a network of faith based groups like Zarephath.

It would be so easy to start. The business model is ready. All I need is some victims people to launch the plan.

Formula for Disaster

Anyone watching the Debt Clock knows that our nation is in a perilous state. I looked today. The National Debt is at $13 trillion, personal debt is at $16 trillion. Unfunded liabilities stand at $111 Trillion.

The reason for this sad state of affairs is the stupid way we fund things.

We do several stupid things: The first is that we adopted a fractional reserve banking system. Banks lend out multiple dollars for each dollar saved. Anyone familiar with math knows that fractions show up as multiples when looked at from a reciprocal perspective.

A fractional reserve banking system effectively multiplies the debt of the people.

Oddly, the fractional reserve devalues savings. It is the bank that gets to multiply savings, not the saver. The dollar I put in the bank is equal to all of the other dollars on the market. It has to compete with the dollars created when the bank uses it as a base for multiple loans.

The history of fractional reserve lending is bleak. Historically banks that create their own fractional reserve scheme have failed. They get rich and implode in a panic when investors realize the bank has inadequate reserves to pay investors.

A fractional reserve banking system depends on constant regulation to stave off panics.

One can argue that, by increasing debt, fractional reserve banking creates systemic risk. One can also argue that fractional reserve banking is counter to the free market. In the market described by Adam Smith, people re-invested the profit of real capital. Fractional reserve banking creates a multitude of paper money for each real dollar increase in capital.

A well regulated bad idea is simply a study in stupidity.

A second stupid mistake that we made was to move from save-and-pay systems for health care and retirement to ill conceived pay-go schemes.

The idea behind both Social Security and Insurance is that people can fund basic human needs through a stable Ponzi Scheme. A Ponzi Scheme is an investment scam where a con artist builds market credibility by paying higher than average returns from the investments from other schmucks in the system.

Ponzi schemes tend to implode when investors discover their investments are at excessive risks. Small insurance companies tend to fail because they develop inadequate reserves for their promised benefits.

Bernie Madoff had a Ponzi scheme that ran for several decades before investors realized their billions of dollars of savings were fluff.

Through the years, a large number of people have been hurt by insurance schemes that failed to maintain adequate reserves.

To maintain stability, insurance requires substantial regulation.

The need to regulate insurance is interesting in that the promise made by insurance is that insurance would help people regulate their health care expenses by placing their health care money in a pool.

The deregulation that took place in the Clinton years failed because we removed the political regulation away from financial schemes that were dependent on regulation. Bush failed because he did not figure out basic laws of finance.

Many people would like to transition away from the Federal Reserve and fractional reserve banking.

To do so requires a concurrent effort to increase savings.

Wouldn't it be wonderful if someone happened to have a plan to replace insurance with a system of structured savings?

Golly, if only there was someone who's been talking about the need to move from insurance to structured savings for the last several decades. Such a person might even have a ready made product that allowed companies to replace their insurance benefit with some sort of Medical Savings and Loan.

For progressive minds driven by wealth envy. I should point out that it's the fractional reserve system that created the disparity of income between the rich Wall Street bankers and middle class. Transitioning back to save and pay would have the reverse effect and decrease the gap between rich and poor.

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Not A Compelling Business Model

I present the Medical Savings and Loan as a business model. The primary reason for this is that I want people to see how they would interact with the system.

The system, however, is not as compelling a business model as insurance.

A group of 10,000 people paying $10,000 a year in health premiums for ten years would pipe a billion dollars through the system.

Insurance has people paying this money into a group pool that the insurance company controls. This is a compelling business model as it gives people controlling the insurance pool enormous power.

The Medical Savings and Loan has people putting their money into investments that they control.

Suddenly, this enormous wealth that the insurance company gets to control is controlled by the policy holders. The business owners of the Medical Savings and Loan reduces the rich financiers to middle class stooges.

Yes, the people doing business with the Medical Savings and Loan are better off. The people running the shop are no longer enormously rich and powerful.

Investors, Wall Street Bankers, and power brokers and the country club all dispise the idea.

My decision to present the Medical Savings and Loan as a business has the problem that progressives seeking government ownership of healthcare can frame the program as some sort of evil capitalist contraption.

The fact that the system can be attacked from left and right might be a sign that the system is on the right track.

Afterall, the long term determination of the quality of a business model is not the amount of wealth it consolidates in the hands of the few, but how well the business model serves the society as a whole.