Once again it appears that Obama is preparing to redistribute taxpayer’s money to a favored constituency, budget deficit or not.  The next stop on the Obama Money Train, it appears, are senior centers and nursing homes around America where he will come riding in with a pile of $250 checks, totaling to $13 or $14 billion worth of increased debt depending on who happens to be counting.  The move is already being applauded (of course) by seniors groups and the AARP, and has the support of top Democrats in Congress.  If the Associated Press is to be believed, it looks like there’s even Republican support, though they’re at least (pretending to be) looking at the increase in deficit spending with concern.

The money handout comes, supposedly, as a result of the formula used for calculating annual cost of living adjustments (COLA) for Social Security dictating that there would be no increase in payouts this coming year. COLA is based explicitly on inflation and is intended to make sure that the purchasing power of payments to beneficiaries will not diminish over time.  Falling gas prices and a stale economy have actually caused a slight bit of deflation over the course of the past year.  To offset the lack of an official increase from COLA, Obama apparently wants to give away $250 to “senior citizens, veterans, retired railroad workers and people with disabilities.”

Looking over the list of recipients reveals an interesting collection of intended payees.  Senior citizens are obvious recipients as they are the primary beneficiaries of Social Security.  People with disabilities also make sense, because many of them are eligible for Social Security as well.  The payment to veterans is a little surprising; I wouldn’t have thought that they are on Social Security any differently than the rest of us, though many do get government pensions.  And then there are the retired railroad workers; where did that come from?  Plus, looking over another article, it looks like maybe all retired government folk (and railroad workers) might actually receive the benefit, whether they qualify for Social Security or not.

I wonder how many other favored constituencies might be added to the list before it’s all over.

Of course, the correct number to add is something on the order of negative four.  COLA is meant to maintain a level of purchasing power for Social Security beneficiaries, not to be a perpetually increasing rate of wealth redistribution from the young to the old.  We should be thankful, in fact, for the stagnation, as it increases seniors’ purchasing power without driving the program closer to its already impending bankruptcy.

As for the notion mentioned in the article that seniors deserve more because the cost of drugs has gone up, why is the payout not $250 to everyone who buys prescription drugs?  If that was really the concern, tying the money to drug purchases is the only logical way to address it directly.  Of course, the cost of drugs is being handled a different way: Medicare D is seeing an increase, which will serve to offset the (supposedly) skyrocketing cost of prescription drugs.

It is probably to anyone’s political turmoil to vote against this latest round of absurdity.  Nevertheless, seniors are going to get exactly what they deserve under the law.  There is nothing unfair about honoring a standing agreement.  It is, however, quite unfair to the younger generations to siphon their money and change the rules at a time when wallets are already tight and nearly one in ten members of the working population is not actually working at all.

One of the recurring themes in the health care debate is the plight of the uninsured American who is given a death sentence because he or she can’t afford to buy insurance and ends up with a major illness.  These people, the rhetoric goes, need a safety net (provided by government) to ensure that nobody is forced to die because they can’t afford the care they need.  The blogosphere has been filled with anecdotes of people losing coverage when they get cancer or some other major illness.  Conservatives have pointed out that there is already a safety net: America’s emergency rooms.  I recently heard about another safety net that already exists, in the form of an anecdote about an uninsured husband and wife who actually got coverage after finding out that the wife had cancer.

The couple in question is a classic couple from Anytown, USA.  The husband owns his own small business, the wife is primarily a mom to their 2.3 children and a dog.  They have enough money to pay the bills and have some fun, but the family isn’t particularly wealthy.  Neither one had employer provided insurance, and they made the decision to not take the plunge with an individual plan.  After all, they are young, healthy, and active; and adding an insurance payment would have put some strain on the family budget.  Put simply, they are the embodiment of the average uninsured American.

Then one day, the wife falls unconscious.  Her husband calls 911 and she’s taken to the emergency room, where she gets a bunch of testing done, more or less all on the hospital’s dime.  The safety net covered exams come back and say that she has a cancerous tumor.  A big one.

From everything President Obama, the Democrats in Congress, and the media have told me, this is the point where I’m supposed to be thinking, “She’s screwed.”  This story is a bit more interesting.

Instead of going home to die, her and her husband take a trip to their local Medicaid office to talk to someone there about getting some help.  An employee there takes a look at their bank account, and recommends a strategic withdrawal to bring the balance below the magical amount required by regulation.  Since the husband owns his own business, they also ask for some business records; mostly copies of the old bills that he’s paid to prove that the company is legit.  Though his paperwork was in a state of disaster, the husband managed to cobble together enough bills to prove what he needed to prove.

Medicaid said they would cover her cancer.

Shortly thereafter, she went in for surgery at one of the best hospitals in the region under the care of a nationally known surgeon.  The report from surgery was everything positive; it’s likely that she will recover quickly and respond well to treatment with radiation, chemo, or both.  Far from screwed, she stands a good chance of being cured.

The safety net worked.  Even without health care reform, the life of at least one uninsured American — who managed to get coverage in a situation where most people talk about losing it — was saved.

I happened across a video of Senator Tom Carper (D-Delaware) which one of my friends linked to on his blog which talks about the legislation being considered by Congress and the value that the senator places in reading the legislation his colleagues write.  The video itself is specifically aimed at the health care bill, but I get the sense that Senator Carper is really talking a bit more generally about a wide range of legislation and other legal documents.  The video can pretty much be summarized by the sentence, “No, I don’t read the bills, and I don’t know why anybody would; they do come with a plain English summary, so I just read that.”

Around the 3:40 mark, Senator Carper mentions some confusion with the desire of anyone to read legislative language, stating,”Why [legislative language] is of value, why someone should need to read that, I don’t understand.”  Well, Senator, maybe I can help you out with that.  The reason that people should read the legislative language is that it is the legislative language, not the English summary, which will ultimately become the law.  The legislative language becomes entered into the United States Code; a body of law which is binding on everyone to which the laws contained within apply.

When a person is accused of violating the law and brought to court, it is the duty of the judge to “begin … with the text of the statute.” (Hawaii v. Office of Hawaiian Affairs) There clearly must be something important about the legislative language if it, rather than the English summary, is the starting place for the courts.  Of course, it is simple enough to recognize that “something” as the fact that only the former is the law.

Freedom under the rule of law requires that everyone should be able to fairly know all of their rights and obligations.  Any person of average intelligence should be able to understand all of the laws which apply to him or her without needing to have the law explained by “experts” like lawyers, judges, and legislators.  What kind of freedom can there possibly be when even the experts are unable to understand the law?

It would not be hard for legislators to adopt a simple formula for deciding whether or not a law is too complex: If they can’t figure it out, it’s too complex.  In my view, that is reason enough to vote against a bill.  Doubly so when the bill is guaranteed to be invasive into the lives and freedoms of Americans, who deserve, at the barest of minimums, to know exactly the ways in which their freedoms are soon to be abridged.

I doubt there are too many people who remember this, but a couple of months ago the RNC published a survey asking people for their opinions on the health care debate as it stood at the time. One of the questions caught a bit of flak from the left, which caused the RNC to backpedal, calling it “inartfully worded.” The text of the question was this:

It has been suggested that the government could use voter registration to determine a person’s political affiliation, prompting fears that GOP voters might be discriminated against for medical treatment in a Democrat-imposed health care rationing system. Does this possibility concern you?  [ ] Yes, [ ] No, [ ] Undecided

The adjective describing that question is not “inartful,” but “prescient.”Garrison Keillor, in the Chicago Tribune, flatly suggests that dropping coverage for Republicans might be a good idea.  Even if Mr. Keillor meant that as a joke, I figure it’s only a matter of time before someone proposes the idea seriously.

Shame on the RNC for backpedaling.  The question they asked is important.  The issue they raised is real.  The political gamesmanship that health care permits is something that needs to be discussed, because even though party biased health care may not be part of this bill, how ever can we guarantee that it might not be part of the next one?

In skimming their website for something else, I stumbled across a Newsweek article making the case for health insurance for illegals.  The main thrust of the article is that there is an economic advantage to insuring people who are in the country illegally.  The advantage is based on the notion that illegal immigrants are, for their age and occupation, generally healthier than a similar American.  Because of the way insurance works, a healthy individual paying into the system reduces costs for everyone else because they contribute more money than they demand.  Unfortunately for Newsweek, even assuming that the average illegal is healthier than the comparable American, there are at least two fundamental flaws in the article’s argument providing them with insurance.

The first and most glaring flaw is that the article appears to simply assume that illegals are going to pay for their insurance like the rest of us.  Given that these people are “undocumented,” that they do not pay taxes, and that they do not appear on official company payrolls, this appears to be an assumption that deserves close scrutiny.  Furthermore, if the attraction of hiring illegals is the fact that they can be paid below minimum wage for long hours and given few benefits, these people are certainly not all that wealthy.  Most probably couldn’t afford insurance if they wanted to.  Thus, in order to be covered by universal health care, their premiums would need to be subsidized by raising the premiums (or taxes) on none other than the people whose costs they are supposedly bringing down.  Insuring illegals is a losing proposition the instant one of them goes to the doctor.

The second flaw is somewhat more subtle, but it amounts to the author assuming that the number of sick illegals entering the country will not increase.  That assumption will undoubtedly be false.  The reason illegals are so healthy now is because they need to be in order to not only cross the border but to then also work the long hours of physical labor required for them to succeed.  Insurance for illegals adds a new form of success: Without having done any work or paying a dime, an illegal would be cured of all that ails him.

It is a good sign that even the left understands the need to talk about economics.  They would be better served if their arguments were correct.  The economics are undoubtedly against the left on this issue.  Illegals should not be spending our tax dollars in our hospitals while American citizens are standing in line; they should be where they belong — at home.

In a New York Times op-ed, Paul Krugman offers his answer to the question of where economists erred in their treatment of the economic crisis.  (The article is lengthy and probably not all that interesting, but it does have a flow that keeps it going.)  While I may not be as educated in economics as Mr. Krugman, there were a number of points in the article that struck me as strange, lacking in context, or simply wrong.

For all the length and discussion, his basic answer to the topic question is that economists got it wrong by abandoning Keynesian economics.  Readers will find it unsurprising that his proposed solution going forward is to start thinking, again, more like Keynes.  In short, he believes that investors and economists came to rely too much on a view of financial markets which holds that they always get the right answer given the information available at the time, that “bubbles” are impossible, and that people in general can be counted on to act rationally.  Reality, he claims, is a lot more messy, and often needs to have the government involved to swim against the free market tide to bring stability to an otherwise unstable system and to head off the inherently bad problems of recession and unemployment.

The largest problem that I see with Mr. Krugman’s argument is that it ignores entirely one of the greatest destabilizing forces currently active in the market: The government itself.  Instead, Mr. Krugman appears to operate from the view that the current market is a largely untamed free market wilderness.  This position is not uncommon among liberals or other advocates of a centrally planned economy, who tend to label any market that does not behave as they desire as “free” (even such heavily regulated markets as health care) and in need of regulation.  In reality, it is hard to think of a market that hasn’t got a federal regulatory agency dedicated to it and which isn’t subject to countless regulations, not to mention the threat of lawsuit, even during “deregulation” periods.

Government meddling is certainly one factor which can, and likely does, cause “bubbles” to form in the economy.  A “bubble,” it has always appeared to me, is little more than a market response to incorrect or incomplete information which paints a rosier picture of the market than actually exists.  A bubble “bursting,” then, would simply be the market correcting itself once new information comes to light which points out investors’ exuberance.  In the late 1990s, the “tech bubble” grew from investor confusion as internet companies grew and appeared to succeed despite having no obvious business plan, strategy, revenue stream, or even product.  It burst when reality set in and people started to realize that traditional business rules applied to the web after all.  We know that the “housing bubble” was caused at least in part by the Fed driving interest rates (and, thus, mortgage rates) down and by the government pressuring lenders to make loans to people who had no financial business buying a house.  Here, too, something eventually had to give, especially once new government “mark to market”kicked in and eliminated any sense we might have had about how much anything might be worth.

Following any of the bubble bursts is a period which, as a matter of definition, we get to call a “recession.”  Whether or not this is bad would seem to mostly depend on whether or not recession values are more reflective of reality than the bubble values which preceded them.  If it is bad to live in the fantasy world of a bubble, it should be better to live in a post-bubble world where the value of things more closely reflects what the value ought to be.  Yet, Obama’s first reaction to the housing bubble collapse — of which Mr. Krugman seems to implicitly approve — was to exert government force to drive housing prices back up to their bubble levels, effectively locking in the bubble forever.

Of course, evidence so far suggests that even Obama’s Reality Distortion Field is not strong enough to pull that one off.  Despite the TARP money, the credit markets are still tight.  Despite the stimulus, unemployment continues to rise.  Despite bailing out GM and Chrysler, both companies still went bankrupt.  Despite every Keynesian action Obama has taken, he has utterly failed to produce a single long-term positive result for the economy as a whole.

So, how did economists get it wrong?  Well, Mr. Krugman certainly does have a point that it makes little sense to consider the correctness of housing prices by comparison to what other houses cost.  It also seems likely that they did put too much emphasis on the free market, neglecting to carefully analyze what effect government regulations were producing.  Whatever the conflicts within the economics community, we would seem to do ourselves no favors by pretending that central planning is any sort of economic panacea.

I have been spending a bit of time lately thinking about what I would like to see from a medical tort reform package.  Along with a couple of other things, tort reform seems, to me, like one of the most important and powerful ways to reduce the cost of health care in America.  America’s tort system is unique in the world (not only in medicine, but throughout the civil arena) because of the high damage awards possible in US courts.  Cutting these awards would reduce the need for and cost of malpractice insurance, which imposes a significant burden on doctors.  Changing the system of punishment in general would also offer a greater opportunity for targeting misbehavior and ensuring a more fair system overall.

Punitive damages are a form of non-economic damage that courts, through juries, are able to award to a victorious plaintiff.  In general, punitive damage awards are large, often several times the actual damages suffered by the plaintiff.  The logic of punitive damages is twofold: They serve as a way to compensate plaintiffs for injuries to which no dollar value can be easily attached, and they punish defendants for misbehavior in the hope that people in the future will not behave the same way.

The reality is that malpractice punitive awards tend to compensate lawyers and the IRS, and punish the doctor’s insurance company which is otherwise unrelated to the case.  The insurance companies, in turn, effectively punish all doctors by raising premiums to offset the huge losses that they suffer as a result of the lawsuits.  An individual doctor who loses may suffer a higher rate increase than the rest of his insurance company’s customers, but he will not suffer all or even most of the punitive damage cost.  After all, that’s why he bought insurance in the first place.  The result is that parties who were not injured reap most of the reward from insurance companies while doctors face very few consequences for their misbehavior, but have to charge patients more money to cover insurance premiums raised by other doctors’ mistakes.

Is there anything about this system that isn’t broken?

A better system, it seems to me, would be to do away with punitive damages entirely and, instead, expose doctors to non-economic punishments which cannot be insured away.  In particular, what I propose is that any doctor found liable would have their case referred to an oversight panel composed of practicing physicians and patient advocates.  The oversight panel would have the option to assign no additional punishment, to suspend the doctor’s license for a period of time, or to revoke the doctor’s license entirely.  The expert composition of the panel more accurately reflects a doctor’s peer group than does a lay jury, so they would be more likely to understand a doctor’s thought process and less likely to be swayed by hindsight bias in deciding an appropriate punishment.  Selecting both practitioners and patient advocates would ensure that both interests are fairly represented.  Finally, affecting a doctor’s license affects the misbehaving doctor directly, ensuring that he and he alone is punished for his misdeeds, that he is punished significantly by affecting his livelihood, and that other patients are made safer by removing a potentially harmful doctor from the market.

Tort reform is often opposed by people who believe it would prevent plaintiffs from bringing claims for certain types of injuries regardless of their claim’s merit.  Indeed, many tort reform proposals do exactly that.  Mine does not.  While this assumption may be questionable, I am willing to assume that every plaintiff who wins a case did receive an injury in fact and deserved to be compensated.  However, when compensation turns to punishment, I am convinced that there are more fair and cost effective solutions available than the punitive damage system we have today.

The Associated Press has an article which begins with a statement that “The national Republican Party has mailed a fundraising appeal suggesting Democrats might use an overhaul of the health care system to deny medical treatment to Republicans.”  The apparent suggestion comes from a question on a questionnaire which asked if people are concerned about the possibility that “GOP voters might be discriminated against for medical treatment in a Democrat-imposed health care rationing system.”  An RNC spokesman has apparently dismissed the statement as having been “inartfully worded,” but the question actually touches on a concern that I’ve expressed privately for several weeks.

One of the major considerations of the health care plans being worked through congress is a significant consolidation of information.  From the various reports I’ve read over the past few months, the government is planning to build a database which includes not only health history information, but also financial data, social security records, and various other things.  Campaign law requires the disclosure of names of “significant” campaign contributors, and it is probably not too hard an exercise for a party to identify most of their minor contributors as well.  Many states also require partisan registration for voting in primaries; which, while some people cross party lines, most people register straight up with how they usually vote.

If the voter rolls and campaign contribution lists are connected to the health care database, even if the connection is informal, it is difficult to ignore the abuses that would be possible.  Imagine how powerful it would be for a power hungry leader to declare that only people who vote for him get power.  With politics being essentially a power game, it would be only a matter of time before someone starts using health care as a tool to help their friends and subtly dispose of their enemies.  It may not be Obama, or his successor, or any President in our lifetime, but once a power is given, someone will figure out how to use it.  (And, by the way, that “someone” might be a Republican.)

Whether or not the survey question was properly worded, the issue it raises is real and significant.  Nobody is saying that Obama will only give health care to Democrats, but someone, someday, might.  That possibility alone makes the question worth asking.  We must be sure that health care cannot be rationed to partisan advantage.

Saw an article today saying that the Obama administration may be backing off its push for a public option in health care.  If this is true, it is good news.  But it makes me a bit nervous to see conservatives talking this up as some kind of victory.  As I posted in the comments section of another blog:

Without having done a lot of research, I can think of a few things to consider:

1. Depending on how the thing is set up, there may still be increased federal involvement. One article talks about government insurance whenever there are fewer than two private alternatives, and Schumer has said that he feels any co-op would need to achieve the same goals as the public option.
2. The co-op would probably need to be started by the federal government, probably with federal dollars. As we saw with the car companies, when the federal government gives money away, it thinks it owns the thing it gave money to. How independent is a federally funded co-op really going to be?
3. If these were such a good idea, why hasn’t private industry created its own co-op system yet?
4. The public option is only part of the government’s health care plans. A co-op may kill that, but it won’t keep the government from expanding its reach in other ways.
5. To me, it feels like socialized health care on an installment plan. They reached too far, and are now willing to make concessions and meet in the middle. If this passes, expect the next health care go-around to focus explicitly on single-payer, with concessions to get us back to about what we’ve rejected today.

With the left apparently on the run, now is the time to press the attack.  When fighting Medusa, one does not quit after removing only the first snake.