Economic Morons in Europe, but is Congress Much Better?
Via Tim Worstall, Gawain Towler reports this bill in front of the European Supreme Soviet Parliament:
Written declaration on fixing fuel prices
The European Parliament,"“ having regard to Rule 116 of its Rules of Procedure,
A.
Whereas we are witnessing an unprecedented rise in fuel prices, and
this scandalous surge is having a devastating effect on economic
activity in various sectors: transport and other services, industry,
agriculture and fisheries,
B. Whereas in Portugal, the major oil
companies in the first quarter of this year, vis-Ã -vis the first
quarter of 2007, made net profits of 22.9% (GALP), and consolidated
profits of 36.5% (REPSOL) and 63.4% (BP), which were fundamentally the
result of practising speculative pricing, as a result of the
speculative valuation of oil stocks
bought at lower prices,1.
Calls for the establishment of a tax, for each Member State, to be
levied exclusively on these profits so as to bring them back into the
coffers of the Member State. This tax should be paid within 60 days
after the end of each quarter, with the value and scope of the levy
depending on the readiness of the oil companies to reduce their
speculative gains thanks to the 'stock effect';
2. The revenue
generated by this tax should be returned on a proportional basis to the
various economic sectors in each Member State;
3. Instructs its
President to forward this declaration, together with the names of the
signatories, to the Council, Commission, and Parliaments of the Member
States.
"depending on the readiness of oil companies to reduce their speculative gains thanks to the 'stock effect'"?? What the *&#$@% does this mean? What economic concept are they even trying to get at?
Further, I was amazed at the statement that BP made net profits of 63.4%. It took me a while to figure out that this was the quarter over quarter profit growth, not the profit margin. I can't tell if these guys are just ignorant or if this is a translation issue into English, so i will give them the benefit of the doubt. In case you are wondering, BP's net profit margin in the first quarter of 2008 was 8.3% of revenues, which in the grand scheme of industry is actually below average.
One reason fuel prices are so high in Europe is because the government takes more than half of fuel revenues in taxes:
Fuel taxes are also the central issue for truckers in Europe, because
they account for a large portion of the retail price of fuel. Unleadedgasoline
sold for $8.65 per gallon and diesel for $9.62 per gallon Tuesday in
Britain, which charges a flat $3.77 per gallon in fuel duty and imposes
a 17.5 percent consumptiontax on the total price
So, 61% (44% from the $3.77 plus the 17.5%) goes to government and 8.3% goes to the BP shareholders. So lets tax BP shareholders more to lower the price!
Dr. T:
The reason you don't understand what the EU is doing is because you are thinking in terms of real economics instead of government economics. In government economics, supply and demand are irrelevant -- what counts are the feelings of major campaign contributors and large voting blocks. In government economics, you take money based on rate of increase of profits, not on actual profits. In government economics, you claim that a program's funding was cut because you decreased its annual rate of funding increases. In government economics, forcing businesses to increase wages is improving the free market. In government economics, you repeatedly overestimate tax revenues and economic growth and repeatedly underestimate government expenditures, interest on debt, and future obligations.
There must be some secret place where government economics is taught, since it doesn't appear in university catalogs. Maybe that's what goes on at Area 51.
June 25, 2008, 5:09 pmScott:
I think what they're getting at is gains on value of inventory due to price movements. Fact that these companies want to hold as little inventory as possbile never occurs to them.
June 25, 2008, 9:02 pmSameer Parekh:
I think your numbers are a bit off coyote. The 8.3% profit probably doesn't account for the taxes as part of the expenses. Normally when taxes are reasonable the difference is negigible, but not in this case.
So if you're looking at 9.62/gallon, a company's revenue from a gallon sold will be (9.72 / 117.5% - 3.77) = 4.41 .. 8.3% of that is 0.36. Which is in fact 3.7% of the retail price, not 8.3%.
Your 61% figure is slightly off too. The tax is 54% of the price at the pump, not 61%. Which means the tax rate come out to 120%.
June 26, 2008, 7:00 amSameer Parekh:
I think your numbers are a bit off coyote. The 8.3% profit probably doesn't account for the taxes as part of the expenses. Normally when taxes are reasonable the difference is negigible, but not in this case.
So if you're looking at 9.62/gallon, a company's revenue from a gallon sold will be (9.72 / 117.5% - 3.77) = 4.41 .. 8.3% of that is 0.36. Which is in fact 3.7% of the retail price, not 8.3%.
Your 61% figure is slightly off too. The tax is 54% of the price at the pump, not 61%. Which means the tax rate come out to 120%.
June 26, 2008, 7:01 amYoshidad:
Untangling the accounting business as currently practiced by the petroleum industry is like entering some Byzantine maze designed to confuse and confound every attempt at rational analysis. There just ain't no simple way around it.
Coyote protests high gas and diesel taxes in Europe, for example. But what if ... regardless of the stated rationale, which we can discard as ridiculous at the start... What if those higher taxes are part of a public policy choice designed to discourage petroleum consumption? Do the Europeans have the right to do that? And does that right supersede oil companies' rights to profits?
That's actually a good general question about society in general. Do the rights to corporate profits trump societies' rights to public health and safety, for example? Or should, for example, the tobacco companies not be liable at all for the effects of their products?
It was apparently known in the 1920's that lead paint would be harmful when humans were exposed to it, but the paint companies claimed their right to profits, and were successful in stopping any public policy that would deny them that "right" literally for decades, as the public, and probably the paint companies' own executives' children, were poisoned by their product. Is that OK?
The short-sightedness of humans about such things is really apparent, throughout history. What was the guy who cut down the last tree on Easter Island thinking?
Back to petroleum: Probably the biggest mess to untangle about petroleum is the surreal accounting that governs financial reporting about it. Current accounting standards say that oil production is "income," but a look at the reality we're trying to model with accounting would indicate oil is really more like natural capital than income.
To appreciate the difference: try applying for a loan, claiming your income is what's in a savings account. They'll eject you from the bank as a crazy person, but that's literally the kind of accounting that is the standard in the oil business. Economics is full of what Alfred North Whitehead calls the "fallacy of misplaced concreteness" -- roughly like going into a restaurant and eating the paper menu. (Thanks to Herman Daly's "Beyond Growth" for these insights)
That the accounting is deceptive is relevant for Europe because -- again, despite public labels describing what's going on -- what they've really done with those petroleum taxes is assemble an alternative infrastructure of transit that is far more energy-efficient. This is what a prudent person does when the capital is depreciating: start building the alternative to that depreciated capital.
So here's the contrast: In the U.S., we have low gas taxes -- in fact, petroleum is subsidized ($300 billion annually, says the World Resources Institute) so the price is artificially low -- and oil companies get their "rights" to a profit. This can build only a really puny alternative infrastructure and encourages the buying public to burn far more than they would otherwise, buy energy-inefficient homes, Hummers, build sprawl, etc.
...Or, as in Europe, you can have high petroleum taxes, and still have profitable petroleum companies (BP, Shell, etc....though they don't get to keep as much money), but with those tax revenues you can build an alternative infrastructure, and encourage a frugal use of energy.
I'm told (by Amory Lovins, rmi.org) that per dollar of GDP, Europe uses about half the energy of the U.S.
So which alternative do you pick?
June 26, 2008, 8:24 amBilly Beck:
"So which alternative do you pick?"
I say: fuck Europe, and fuck you too.
June 26, 2008, 8:28 amMark:
I pick the alternative of FREEDOM. Rather than let some bloated EU bureaucrat determine how I shall live my life, I let the market determine how I live my life. The market price of a commodity is set, and I determine, based upon those prices and my income how I consume those commodities. Everyone's preferences being different, I may choose to allocate a higher percentage of my income than others to housing or transportation. But that is my CHOICE. The aggregation of CHOICE is FREEDOM. And, the value of FREEDOM is infinite.
June 26, 2008, 9:37 amoccasional visitor:
This is not a bill, it's basically a non-binding petition drive among parliament members. Rule 116 of their Rules of procedure explains, what a "written declaration" is:
"
Rule 116 : Written declarations
1. Up to five Members may submit a written declaration of not more than 200 words on a matter falling within the sphere of activities of the European Union. Written declarations shall be printed in the official languages and distributed. They shall be included with the names of the signatories in a register. This register shall be public and shall be maintained outside the entrance to the Chamber during part-sessions and between part-sessions in an appropriate location to be determined by the College of Quaestors.
The contents of a written declaration shall not go beyond the form of a declaration and shall not, in particular, contain any decision on matters for the adoption of which specific procedures and competences are laid down in the Rules of Procedure.
2. Any Member may add his signature to a declaration included in the register.
3. Where a declaration is signed by the majority of Parliament's component Members, the President shall notify Parliament accordingly and publish the names of the signatories in the minutes.
4. Such a declaration shall, at the end of the part-session, be forwarded to the institutions named therein together with the names of the signatories. It shall be included in the minutes of the sitting at which it is announced. Publication in the minutes shall close the procedure.
5. A written declaration that has stood in the register for over three months and has not been signed by at least one half of the component Members of Parliament shall lapse.
June 26, 2008, 10:13 am"
So far a grand total of 8 Idiots have signed.
Yoshidad:
> Billy Beck says: "So which alternative do you pick?" I say: fuck Europe, and fuck you too.
Rather than rely on invective, let's take a look at reality for a moment, shall we?
- In Europe, vacations are six weeks long while U.S. workers are breaking world records for most time spent on the job.
- In Europe, crime is a fraction of what it is in the U.S. There's actually a correlation between crime rates and paid maternity leave. But that apparently would be too expensive for the U.S. to offer, as it routinely is in Europe. Prisons are cheaper, right?
Incidentally, "Freakonomics" says that (still high by European standards) U.S. crime rates declined in recent years because abortion was more readily available. Interesting, no?
- Europeans actually *treat* illnesses like addictions rather than incarcerating the sufferers. They have apparently abandoned torture and witch burning too.
U.S. incarceration rates are literally more than ten times the world average. (roughly 800 per 100,000 v. 65 - 75 / 100,000) Naturally lots of addicts are in jail learning burglary, extortion and the other criminal trades.
- Europeans routinely have higher taxes than the U.S., but they have lower total living costs in areas like health care. Apparently when the government is not controlled by a small elite oligarchy, and produces actual public service people are much likelier to trust it to provide public service.
True fact: The arts budget for the City of Berlin exceeds the U.S.' National Endowment for the Arts for the entire country. I couldn't make it up.
And imagine defending the U.S.' public realm as better than the Europeans! Or imagine claiming one can live (outside the cave) without a public realm! Such is the state of U.S. public policy thinking.
Apparently "real" Americans would rather bitch about some government malfeasance than look at the possibilities available from pooling our resources.
News flash: finding government stupidity is like shooting fish in a barrel. Government has FOIA and other public disclosure requirements. Do you honestly think Enron didn't have insanely delusional executive meetings? But we only know about the private stupidity when those equally human institutions declare bankruptcy.
Meanwhile, U.S. healthcare costs nearly double the next most expensive European single-payer plan (German health costs are 60% of ours), but with *much* worse outcomes. While the French are first in outcomes (infant mortality, life expectancy, etc.), the U.S. is 37th.
It's as though the U.S. is getting Costa Rica-level healthcare, but paying six times more than the Costa Ricans to get it. See http://hr676.org/ for a way to get single-payer healthcare in the U.S.
- European unemployment is high, but if you count the U.S. prison population as unemployed, the difference from U.S. rates is much smaller than the publicly stated figures you'll often see.
Don't get me wrong, Europeans aren't perfect: they persecute their illegal immigrants too. At least Europeans have the consolation that only their past depredations impoverished their former colonies, while the U.S. recently passed NAFTA, after which real incomes in Mexico declined 34% (Gee, why are all those illegals coming here?).
- European CEOs make 50 - 100 times what the line workers make. In the U.S., that figure is closer to 500 than 50-100. It doesn't matter whether the company makes money or not, the U.S. guys get their golden perks and parachutes.
- The European tradition of progressive taxation has eroded in recent years, as the Reagan-Thatcher virus is working its way through the system, but European taxes remain far more progressive than U.S. taxes. (See Ravi Batra's "Greenspan's Fraud" for the details)
Consequently, European consumption levels can remain high, and GDP gains can remain high too, without something like sub-prime mortgage debt. That is not true in the U.S.
Batra observes that the times of highest U.S. GDP growth occurred when income taxes were the most progressive (92% top rate in the 1950's, for example), and Social Security taxes were lowest. The U.S. has moved to "reduce taxes" (actually Reagan signed eight tax increases) by reducing top brackets, but increasing FICA and sales tax rates. This hasn't worked -- GDP growth slows when top brackets get lower because, absent debt, the consumers can't keep demand robust.
This is one of the real meanings of the sub-prime mortgage crisis. U.S. consumers have run out of assets against which they can borrow.
So the question here is: Who is *really* getting fucked now? Your thoughts, Billy Beck?
> Mark writes: I pick the alternative of FREEDOM. Rather than let some bloated EU bureaucrat determine how I shall live my life, I let the market determine how I live my life. The market price of a commodity is set, and I determine, based upon those prices and my income how I consume those commodities. Everyone's preferences being different, I may choose to allocate a higher percentage of my income than others to housing or transportation. But that is my CHOICE. The aggregation of CHOICE is FREEDOM. And, the value of FREEDOM is infinite.
Clearly Mark is one of the rugged individual who elects to live in a cave, hunts and gathers or grows his own food and fiber, mints his own money, enforces his own contracts, does his own mosquito abatement, vets his own medications, etc., etc., etc. Mere government cannot contain his mighty FREEDOM! Ye lesser mortals take heed. I said TAKE HEED! ...8^)
A couple of interesting factoids that may at least give our trogdolyte brothers pause from their sad certainty about how free they really are:
1. The Wall St. Journal recently surveyed various countries for their social mobility. How likely is an ambitious but poor person to really get ahead in the vaunted land of opportunity (home of the free, land of the brave)? I think the U.S. came out 11th, and (more socialist) Norway was first.
2. Never mind bureaucrats -- a necessary evil if you really want to come out of the cave -- if you were really free, Mark, you could control your own thoughts. You can't even do that, and I'll prove it.
The experiment is this: Look at the second hand on a clock or watch and think of nothing else besides that second hand for 30 seconds. Notice that this is not an impossible double-bind thought experiment like "Don't think of a white bear."
They say Buddha could actually do this. Mere mortals like you and I have a very tough time controlling our own thoughts for even 30 seconds at a stretch. So really, man, if you can't control your own thoughts, how can you claim to be free? I mean really, not delusionally free?
And, in light of the differences between the U.S. and Europe cited above, where's the beef that all this U.S. / Libertarian / non-commie freedom is supposed to be supplying? Or do I need to enter the matrix to taste it?
June 26, 2008, 12:16 pmMike:
Personally, I believe Mark hit it right on the head. I don't even think this is really about oil for the EU. I think it is more about control and the EU trying to assert it. What better way to assert their control than to attempt to take control over something everyone needs? In this case energy. Food would also be a good example, and we have seen this used by some of the most ruthless warlords throughout Africa and Southeast Asia.
This is just one more step in the direction of a totalitarian society throughout Europe, which is what the EU ultimately wants, IMHO. And their behavior so far has done nothing to change that opinion.
What you say may very well be true, Yoshi. But like I said, I don't think this really has anything to do with oil for the EU.
June 26, 2008, 12:18 pmSameer Parekh:
Yoshi-- societies don't have rights. Only individuals do. A corporation has rights only insofar as it is made up of individual owners, who have rights individually.
June 26, 2008, 3:44 pmSameer Parekh:
Yoshi-- societies don't have rights. Only individuals do. A corporation has rights only insofar as it is made up of individual owners, who have rights individually.
June 26, 2008, 3:45 pmMark:
" Mere government cannot contain his mighty FREEDOM! Ye lesser mortals take heed. I said TAKE HEED!"
ANd this clearly indicates that you have absolutely no understanding of freedom. The government performs, with my consent, many functions from which society derives welfare. THere are indeed some functions that government performs where the cumulative social welfare outweighs the aggregate individual welfare. But, these functions are very limited and few and far between.
The freedom of personal choice will alway create more welfare than choice dictated by someone else. When governments choose to reduce personal choice, and hence personal freedom, they must do it carefully and the burden of proof of the decision lies with them.
The limited and ambiguous choices that socialist make when they try to control other human beings, especially when they are controlling them with limitations that THEY THEMSELVES DO NOT FOLLOW, is the fundamental and OBVIOUS reason why socialism in all its forms is a failed experiment.
June 26, 2008, 5:38 pmYoshidad:
Mr. Parekh, you'll have to tell me what is the point of your comment. Sorry, I don't get it. If a court grants the American Tobacco Company the right to sell its product without penalties, then it has that right, whether it's the individuals that comprise the company or the company itself. That's a distinction without a difference, IMHO.
And poster Mark reminds me that I "have absolutely no understanding of freedom." To which I reply: of course, freedom is mysterious, otherwise it wouldn't be freedom. So tell me, Mark: Do you understand freedom?
But more to the point, Mark has this impression that "The freedom of personal choice will alway create more welfare than choice dictated by someone else." But what about the child who wants to eat only ice cream? Is his personal choice really creating something called "welfare"? Or is it creating obesity, type II diabetes and other health problems?
This is why libertarians can't raise children, or deal with criminals, the disabled or the mentally ill -- real social problems, for which collective solutions are required. Let's all remember that few, if any of us are more than a mugging or a bad illness away from sleeping in a refrigerator box.
You can have humility or humiliation. There is no third choice.
Incidentally, I'll agree that governors don't always follow the laws they create for the governed, otherwise we'd all have health care like the congress. This is an old problem that is insoluble. Are those governing our institutions in them or above them? It is absolutely ambiguous in an insoluble way, at least according to mathematician Godel.
Incidentally, you have the same problem with CEO compensation.
You could say that one of the inspiring ideas responsible for American democracy is that the governors would be responsible to the governed, as opposed to the divine right of kings, but you'll get no quarrel from me if you assert that that idea has been imperfectly implemented.
Poster Mark also adds "socialism in all its forms is a failed experiment" -- an interesting assertion, but one that is patently false. If it were true, then socialized medical insurance like Medicare, would be more expensive with worse outcomes than private medical treatment or insurance. The opposite is clearly, and really uncontroversially true. (Note: I didn't say Medicare was perfect, just cheaper and more effective.)
So Mark, I say you are fighting a chimera -- an imaginary beast. You and I can both point to failures of government, socialist or not. The real issue is not government or socialism, it's the correct guidance for collective action. Even the caveman had his tribe. People are empowered, i.e. gain welfare, by their membership in a group, a tribe, an institution, and lately a nation.
The question is this: How do you manage the institutions?
And should the institutions that empower us be private or public? That's at least one significant issue. You can suggest that private institutions are best, but they are clearly flawed. They are not always best here in the real world. Consider Enron, or Worldcom, or Adelphia, or Neil Bush's Silverado Savings and Loan.
All human institutions, public and private, are going to be subject to all-too-human corruption, even when individuals, no matter how sacrosanct and almighty they might be, make individual choices. The question is whether you prefer institutional choices whose agenda and motivation is hidden -- like completely private institutions -- to those that at least have the color of public insight and input -- in other words, public institutions like government.
And the solitary, naked "free" individual couldn't be less powerful, particularly in the modern world. We have very few real cavemen left. Therefore, disempowering government, to which there is at least some right of petition, disempowers the individual, especially when that individual confronts the likes of the modern corporatocracy. Do you honestly think that a single person could stand up to the likes of Exxon without the courts, for example?
When I say "disempowering government" I mean the constant complaining about how stupid government is without the slightest mention of the equal or greater stupidity of private institutions. It's one of the least attractive features of this blog.
I couldn't say this better than these guys (from http://www.chomsky.info/interviews/20080519.htm):
What are the implications of private control of public resources, such as education, in this instance, or health care, telecommunications, Social Security, etc.?
NC: Well, there are actually two components to that, both of them leading themes of the Bush administration's domestic policies, and of reactionary policies generally. One of them is, to put it simply, to put as many dollars as you can in the pockets of your rich friends: that is, to increase profits for the wealthy -- to increase the wealth and power of concentrated, private capital. That's one driving force in the administration's policy. The other is to break down the social bonds that lead to people having sympathy and supportive feelings about one another. That contributes to transferring profit and decision making into the hands of concentrated private power. A component of that is to undermine the normal relations -- sympathy and solidarity -- that people have.
Take Social Security. Social Security is based on a bond among people. If you earn a salary today -- somebody your age -- [young people of twenty or so] you're paying for the welfare and survival of your parents' generation. Well, okay, that's a natural feeling. If you want to increase the control of concentrated private power you have to drive that out of people's heads. You have to create the kind of people that Ayn Rand is talking about, where you're after your own welfare and you don't care what happens to anyone else. You have to think, "Why do I have to care about that disabled woman across town who doesn't have enough food to eat? I didn't do it to her. That's her problem. She and her husband didn't invest properly; she didn't work hard enough, so what do I care if she starves to death?" Well, you have to turn people into pathological monsters who think that way, if you want to ensure that unaccountable, concentrated, private power will dominate the world and enrich itself. So, these things go together.
I don't happen to have children in the local school -- I did, but my kids are all grown up. So, if I were to follow this line of reasoning, I would say, "Well, why should I pay taxes? My kids don't go to school; I'm not getting anything out of it. What do I care if the kid across the street doesn't go to school?" You can turn people into pathological monsters who think like that. And eliminating the public school system is one part of it.
The public school system is a sign of solidarity, sympathy, and concern of people in general -- even if it doesn't benefit me, myself. There's a pathological brand of what's called libertarianism which wants to eliminate that and turn you into a monster who cares only about yourself. And that's one aspect of undermining democracy, and undermining the attitudes that underlie democracy, namely, that there should be a concern for others and a communal way of reacting to community concerns.
June 27, 2008, 9:27 amMark:
"ut what about the child who wants to eat only ice cream? "
Maybe in your world children are allowed to do whatever they please. The real world is much different.
"then socialized medical insurance like Medicare, would be more expensive with worse outcomes than private medical treatment or insurance"
THis statement is assinine. If it were true, when Ted Kennedy had his brain surgery he would have went to a local hospital and received whatever treatment that the state rationed him. Instead, he actively searched for the best doctors and had his surgery in North Carolina.
The documented fact is that socialized medicine is far worse from an outcome basis than the "privatized" American medical system. While someone who thinks the opposite will point to "Life Expectency" or "Infant Mortality" as the ultimate proof of their assertion, that these measures are the only thing they cling to is very telling. The fact that these measures incorporate many other factors beyond health care probably never occurs to such individuals.
In fact, the higher infant mortality rates in the US is a measure of the high level of care that is not found in the socialized health care systems of EUrope or Canada. The real definition of "infant mortality" is "LIVE BIRTH infant mortality." THis rate is much higher in the United States because more treatment is available for infants born early or with defects.
WHen we are looking at health care efficiency, there are several ways of measuring. On an outcome basis, the US is far ahead of Europe and Canda because patients receive faster treatment, more advanced technology, and more cutting edge drugs. These outcome measures are readily available and NEVER cited by people who are advocating socialized medicine. This explains why they cling to the "Life Expectency" measure.
Further, because of the extended waiting times and lack of procedures, the United States is far superior in qualitative issues that cannot be measured. In Europe and Canada if you injure yourself and suffer pain you will be forced to wait, often times for months, before you can receive treatment. The system in the United States is more expensive because our treatment options are more readily available. The result is that you will receive a "cure" faster and more efficiently. If you are old you will more readily receive new joints and other treatments in far higher levels than in Europe or Canada, another example of expensive treatment that contributes to the quality of life.
I also find the person claiming that I am fighting "an imaginary beast" simply makes up poor analogies and "cavemen", clearly because they do not have the intellectual understanding of the basics of freedom.
Here is one of them he clearly does not understand. Associations happen. The free association of free individuals increase the welfare of all those who choose to associate. They associate through family, kin, community, religion, and more. When I go to a sporting event I am freely joining a community of individuals with common interests, and the welfare I get from attending is enhanced because of the community.
SOcialists like Yoshi completely ignore the associations of individuals, and instead pretend despite all of the evidence, that only government can act for any collection of individuals. Further, they consistently believe that their own preferences can make everyone else better off when these preferences are enforced by a central government.
June 27, 2008, 10:42 amCorky Boyd:
I think stock effect is the price gains on what is in stock. We call them inventory gains.
Will the EU give the taxes back when there are inventory losses?
June 27, 2008, 11:35 amYoshidad:
Mark, I say "Strong words belie a weak argument" as do the the Chinese with their inscrutable wisdom. Naturally I can't hope to compete with your intellectual horsepower, but let a poor non-ideologically-inclined person try.
The statement "What about children who want to eat only ice cream?" is what's called "an example" -- it happens to be one of many that demonstrate the limits of libertarian thought.
There are plenty of children, or child-like impulses in the population. A completely consistent libertarian would say "the government shouldn't prohibit anyone from shooting up heroin, or eating only ice cream, or any other self-destructive behavior."
In the real world, however, alcoholics, or ice-cream-holics have families. Such actions have consequences that ripple out into the larger population. In my younger days --possibly like you -- I would have said "legalize those drugs" but now, knowing how many emergency rooms would see new patients if we just did that, I'm not so sure.
So should tobacco companies be able to sell their product without paying for the social and health consequences? This is, as far as I can tell, completely unaddressed by pure libertarians.
If, on the other hand, you want to charge the social costs for such activities at the cash register -- "Sure, you can have some heroin, it'll be $1,000 a gram" -- I have a lot more difficulty arguing with you. This would be a "pigovian" tax that pays for the externalities of such behavior. But a tax needs a government to administer it. And there's that darned government, telling you to pay more for cigarettes (and heroin too).
Meanwhile, about infant mortality and healthcare:
From Wikipedia (http://en.wikipedia.org/wiki/Infant_mortality} "While the United States reports every case of infant mortality, it has been suggested that some other developed countries do not. A 2006 article in U.S. News & World Report claims that "First, it's shaky ground to compare U.S. infant mortality with reports from other countries. The United States counts all births as live if they show any sign of life, regardless of prematurity or size. This includes what many other countries report as stillbirths. In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth; in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long. In Belgium and France, births at less than 26 weeks of pregnancy are registered as lifeless. And some countries don't reliably register babies who die within the first 24 hours of birth. Thus, the United States is sure to report higher infant mortality rates. For this very reason, the Organization for Economic Cooperation and Development, which collects the European numbers, warns of head-to-head comparisons by country." [2] However, all of the countries named adopted the WHO definition in the late 1980s or early 1990s.[2]"
That last statement ("all of the countries named adopted the WHO definition") contradicts your assertion, seemingly justified by the preceding sentences.
According to the WHO standard, shared by those countries, the U.S. ranks 37th in public health care measurements, including measures like infant mortality, and life expectancy. In other words, private health care ranks below socialized health care. You have produced no contrary study or ranking, just an unsupported assertion.
You can Google this ranking for yourself if you want. Here's one link: http://www.photius.com/rankings/healthranks.html
I say again that the countries (including the U.S.) have adopted the WHO standards for infant mortality reporting, despite previous variations reported in that same Wikipedia link above.
Since you have not protested the reporting of U.S. health care costs as I characterize them (roughly twice as expensive as socialized care), I'm assuming you accept what has now become common knowledge. The U.S. is more expensive.
This clearly demonstrates Socialized medical care or insurance like Medicare is less expensive with better outcomes than private medical treatment or insurance.
Q.E.D.
Notice, BTW, that rather than asserting "The documented fact is that socialized medicine is far worse from an outcome basis than the 'privatized' American medical system" -- I actually provide you links and references to the documents themselves. This makes the argument more powerful.
On the other hand, you just make the statement... and what, I'm supposed to believe you because you're Mark and you're mighty?
Here's a little secret that an eighth grade teacher shared with me: He said we needed to provide footnotes because our opinions just weren't that important. Take it to heart.
Mark says: "WHen we are looking at health care efficiency, there are several ways of measuring. On an outcome basis, the US is far ahead of Europe and Canda [sic] because patients receive faster treatment, more advanced technology, and more cutting edge drugs."
No citation, just the bare assertion again. And not even an assertion of how to measure the "betterness" that's precise. No mention of the way the Europeans ban chemicals to which the U.S. population is exposed, either. In Europe, such chemicals are guilty until proven innocent; they're serving the public health, not corporate profit.
And let's not forget, Mark: When patients don't have health insurance, and 40 million Americans don't, they don't get better health care. Go rent "As Good As It Gets" for a fictional, but perfectly believable example.
So where's the beef in this argument?
I leave it to you to Google the Canadian studies that show that even the preference for private is a false statement. Actually the study I saw debunked the notion that Canadians are flocking to the U.S. for treatment because the waits are too long. Another right-wing canard, in a long list of them. (Hey! Where are those WMDs?)
But don't confine yourself to that Canadian study. Consider why the new Toyota plant is now being built in Windsor (Ontario) rather than Detroit. The Toyota people said they didn't want to be saddled with the higher health care costs on the U.S. side of the border, so they built their plant there.
NAFTA removed the tariff barriers to importing Canadian autos, so we're stuck with cheaper Toyotas and GM with higher health care costs. (Oh I know, if we only would grind the GM workers to accept no health care, or what about a longer work week, or Simon Legree standing over them with a whip...etc. This must be the "welfare" libertarians prefer...8^)
The last part of your message is the most puzzling: "SOcialists like Yoshi completely ignore the associations of individuals, and instead pretend despite all of the evidence, that only government can act for any collection of individuals. Further, they consistently believe that their own preferences can make everyone else better off when these preferences are enforced by a central government."
I don't think *any* of that is accurate.
A) I'm not a socialist. I never said I was. I just want a little balance in a blog where government can do no right and private enterprise can do no wrong, so I've played devil's advocate to help you expand your thinking.
I'm just not so bound to ideology that I believe one theory (SOcialism, or libertarianism, or capitalism, any other ism) masters all of reality. "There are more things in heaven and earth, Horatio,/ Than are dreamt of in your philosophy" is what I say.
This means that government does some things best. Private enterprise does other things best. Sometimes they are even hard to categorize as private or public.
Reasonable people can disagree about where to draw the line between who does what best, but I doubt you've got anything but naked assertions (or hoaxes -- I've seen that too) about why private health care is best. Socialism doesn't *always* fail. Nor does it *always* succeed. The world of reality is no great respecter of ideological purity.
B) I didn't say (as you state) government was the only institution that could act for a collection of individuals. On the contrary, I spent some considerable time discussing the roles of institutions, both private and public in society.
The question is whether the institutions have to be answerable to their constituents -- *not* whether institutions boss you around. That last is intellectual bullshit. The truth is that even *you* boss yourself around. Make a new year's resolution, then regret it. But keep your promise (to yourself) anyway.
And of course I believe my own preferences can make everyone better off! ("If they'd only ask *me*!" says a friend of mine) Who doesn't? YOU? Ha! And get the government to enforce my preferences? Who doesn't want that? You want government to enforce your preference, even if that preference is no government enforcement of preferences... Government neglect is just as much a government action as government micromanagement.
OK, I think we've beat this horse as much is as it can stand for now. I doubt I've persuaded you, or even dented that shell of libertarianism, but it's been fun to articulate some of this stuff. Have some fun yourself. Seriously.
June 27, 2008, 4:15 pmMark:
Since I am not a libertarian I will not even attempt to argue their case.
However, concerning health care systems the facts are all out there. Again, you rely on infant mortality and life expectency, broad measures that are meaningless in this argument. Because such entities like WHO shill for socialistic medical systems theiy have inherent bias against the more private market systems like the United States. Who cares how WHO "ranks" countries.
Regardless, here is an example of statistics idiots like Yoshi refuse to learn about because of their inherent bias.
The survival rates for all cancers (we are talking age adjusted 5-year survival rates henceforth referred to as survival rates) in Europe is significantly lower. In Europe males survive at a rate 47,3% and women 55.8%. The comparison statistics for the United States is 66.3% and 62.9% respectively. For some cancers the survival rates in Europe are dismal compared to the US. For example, the survival rate for breast cancer is over 90% in the United States, but in Europe it is only 79%. In the United State, the survival rate for prostate cancer is 99.3%....AGAIN, 99.3%,,,,One more time Ninety-nine point three percent. In Europe the survival rate is 77.5%.
I guess that Yoshi should be telling the 20 or so percent of those that die from prostate or beast cancer in Europe that they have such a great health care system, when survival in the United States would have been routine.
THe most significant factor in these survival rates is attributed to the timliness of diagnosis. The reason why health care cost more in the UNited States compared to Europe and Canada is that it IS MUCH SUPERIOR IN THE UNITED STATES. Instead of having wait times measured in months to get a MRI ,r angiogram, or other diagnostic test you can get one almost immediately, which means your breast or prostate cancer, heart blockage, or other ailment can be detected in a more treatable stage.
The apologists for "universal care" on the European model are not only lazy, but they are effective liars. They only regurgitate the talking points of the leftists. When you think about getting something for "free", you are usually getting something of much lower quality. The European/Canadien systems are cheap because they do not have the investment in fixed costs. Since almost all of the health care expense is fixed cost, this means that they do not have the facilities, expertise, and quality care that you will get in the United States. Imagine if we let these idiots get their way. Will it be your parents that die from this neglect? Or you?
June 27, 2008, 6:05 pmMark:
Oh, btw, since you are toooooo lazy to look up your own data here is a link:
http://www.medscape.com/viewarticle/561737
June 27, 2008, 6:07 pmYoshidad:
Oh I say, Mark, how courageously you flame! Calling my arguments those of the "lazy" and "liars." "Regurgitating talking points of the leftists!"... (Why I can't even speak! I have to regurgitate!)
What, you are always diligent, you have never lied, and you're not regurgitating right-wing talking points? I'm sorry, what's the relevance of this? Tend to the beam in your own eye before you comment about the mote in your neighbor's.
You must be under the impression that your good opinion of me is significant. Oh you delusional silly! Wake up, man. Grow a pair. You don't have to inflate yourself to your full size to convince me. Just pursue the truth rather than just attempting to win the argument (although you're welcome to win too).
So far, your invective and citation of some limited truth does not convince me you're more interested in finding out the truth than in winning an argument.
I *did* read your article. Very interesting. Full marks for trying.
However, you cite only one set of illnesses (cancers), and cite only survival rates for those already ill, ignoring the overall death by cancer by country.
For those interested in the truth, here are those stats:
#1 Netherlands: 433 deaths per 100,000 peopl
#2 Italy: 418 deaths per 100,000 peopl
#3 Hungary: 411 deaths per 100,000 peopl
#4 Luxembourg: 409.7 deaths per 100,000 peopl
#5 Slovakia: 405.3 deaths per 100,000 peopl
#6 Ireland: 357.6 deaths per 100,000 peopl
#7 Czech Republic: 335.4 deaths per 100,000 peopl
#8 New Zealand: 327.3 deaths per 100,000 peopl
#9 United States: 321.9 deaths per 100,000 peopl
#10 Australia: 298.9 deaths per 100,000 peopl
#11 Norway: 289.4 deaths per 100,000 peopl
#12 France: 286.1 deaths per 100,000 peopl
#13 Austria: 280 deaths per 100,000 peopl
#14 Sweden: 268.2 deaths per 100,000 peopl
#15 Finland: 255.4 deaths per 100,000 peopl
#16 United Kingdom: 253.5 deaths per 100,000 peopl
Total: 5,350.7 deaths per 100,000 peopl
Weighted average: 334.4 deaths per 100,000 peopl
(from http://www.nationmaster.com/graph/hea_dea_fro_can-health-death-from-cancer)
Notice that U.S. cancer (death) rates exceed those of France, Finland, etc. which have socialized medicine -- although, in fairness, U.S. rates are less than average.
What we can conclude, I believe, is that the French don't have to survive more frequently from cancer because they don't get it in the first place. This make sense because places with socialized medicine have more restrictive laws concerning new chemicals introduced into the environment.
Did you know, for example, that African-American women have much higher breast cancer rates than the general (or white) population? Some medicos hypothesize this is because of the influence of some very toxic hair-straightening chemicals these women use during adolescence.
Because chemicals are innocent until proven guilty in the U.S., we can't ban such a thing until there's conclusive proof. That's why the U.S. population is routinely exposed to many more pesticides, fertilizers, etc. than Europeans. I wonder why it doesn't help the Dutch... Don't know.
I'm guessing that you cannot really make a good comparison of health systems based on a single disease or set of diseases (more frostbite in Finland and Russia, but so what?). And things like diet (the heavy cheese-eating Dutch!) and recreation (the dope-smoking Dutch!) probably have a bigger influence than just the health care system.
Here, for example, you can see some interesting correlations between vegetarian diet and cancer rates:
In fact, if you are not too lazy...8^)... you can read "The China Study" by Colin Campbell. This recounts the largest study of the connection between diet and health ever conducted. Chinese diets are also uniquely suited to this kind of inquiry. The author, Colin Campbell was a Columbia biochemist who discovered aflatoxin, a mold carcinogen. He was raised on a dairy farm, and ate and drank plenty of animal products. He now is a vegan, convinced by his own research.
I'll send you some links to Campbell and others making their case, if you like.
Meanwhile, not content to call names and cite half truths, you conclude with this completely unsupported salvo of "facts":
> "When you think about getting something for "free", you are usually getting something of much lower quality. The European/Canadien systems are cheap because they do not have the investment in fixed costs. Since almost all of the health care expense is fixed cost, this means that they do not have the facilities, expertise, and quality care that you will get in the United States. Imagine if we let these idiots get their way. Will it be your parents that die from this neglect? Or you?"
Who says single-payer is free? It's just cheaper and more effective. Then you say "European / Canadien [sic]" systems do not invest in "fixed costs" ... What on earth are those? Did you know French doctors will make house calls?
Is educating a workforce of doctors a fixed or variable cost? Does the AMA's control of the schools and licensing -- restricting the supply of doctors -- even bother you? Or the fact that doctors here make roughly twice what they do in France? (If you want to see lending secured by fictional assets, see what kind of SBA loans are made for doctors selling practices, BTW. You can borrow 95% of a house's value, but 20,000% of a doctor's income... No joke!)
Will my parents die of neglect? No, dear boy, they'll die because people who think invective and half truth are convincing bore them to death.
June 27, 2008, 8:08 pmMark:
"Notice that U.S. cancer (death) rates exceed those of France, Finland, etc. which have socialized medicine -- although, in fairness, U.S. rates are less than average."
But that has nothing to do with medicine. That is exactly why "LIfe Expectency" is such a bogus value to use for measuring the efficiency of the health care system.
""fixed costs" ... What on earth are those? Did you know French doctors will make house calls?"
LOL..I like it. THis statement clearly indicates that you have absolutely no knowledge of the health care system. IF you do not know what a fixed cost is, or cannot even imagine what the fixed costs are in the health care system you clearly cannot offer any insight. The fact that almost all of the cost of a health care system is fixed means you have no understanding of the economics. Think about it. And, the problem with fixed costs is that they exist whether you are treating patients or not. Health care economics is basically the allocation of these fixed cost.
Basically, the importance of this fact is that the only way you can reduce health care costs is to have less fixed investment. That means fewer hospital beds, fewer diagnostic machines, and fewer specialists. Even input factors that in most industries are variable cost are more fixed in the health care industry. That is, when you are hurt and injured you expect treatment, at least in the United States. This means that there needs to exist a high enough capacity of doctors, nurses, technicians, x-ray machines, emergengy room beds, and hospital beds, all equipped with the facility, skills, and drugs for whatever illness or injury you have.
The only way to reduce cost is to reduce capacity. This is what the Europeans do. Instead of getting treatment or diagnosis immediately you have to wait because they do not have the capacity to treat you. IT is cheaper, but clearly it is not as effective. THe end result, as we have seen, is that their treatments are less effective. When you have cancer you are more likely to die in Europe than in the United States, even for a cancer that in the United States has become routine like breast and prostate cancer (survival rates of over 90% in the United States). And, the fact is that you are going to suffer more pain because you will not be able to get a knee replacement or diagnosis/treatment for your injury as quickly.
June 28, 2008, 8:25 amYoshidad:
Sorry Mark, while I see the point of the following paragraphs (winning the argument), it looks so narrowly focussed that it wins the battle but loses the war:
"[Yoshidad said previously]"Notice that U.S. cancer (death) rates exceed those of France, Finland, etc. which have socialized medicine -- although, in fairness, U.S. rates are less than average."
> Mark says: But that has nothing to do with medicine. That is exactly why "LIfe Expectency" [sic] is such a bogus value to use for measuring the efficiency [!] of the health care system."
Mark, *YOU* are the one who brought up cancer rates, but when I demonstrated to you that those cancer rates (not the cure rates, but the deaths from cancer) were lower in the countries whose health care was socialized, you insist this has nothing to do with medicine. Well, OK, if that's what you believe is the point of this discussion. I'd say I'll take a healthier population over fancier medical care any day, but OK...
BTW, This makes you a perfect customer for the U.S.' pharmaceutical industry. Recent studies show that exercise has all of the benefits of anti-depressants, without any of the side effects or the expense. Hearing this, I can guess you'd say "See, the U.S. has better anti-depressants than the Europeans who haven't built walking out of their cities."
And you'd be *right*. You wouldn't have the satisfaction of a healthier population. You'd have a bunch of impoverished anti-depressant-taking zombies roaming around, experiencing side effects, and some wealthy pharmaceutical companies.
This is the contrast between being right and being satisfied.
So you're not disputing that the U.S. population is sicker, overall. You apparently believe better treatments that still don't let the population's overall health catch up to healthier populations means that we're winning some kind of battle against illness. I beg to differ.
This is germane in the conversation about agriculture too. No, agriculture isn't medicine, but it's part of a comprehensive approach to health, as it happens also pursued in European public policy.
U.S. agricultural subsidies produce high fructose corn syrup-a-plenty, and have gradually made food cheaper and more petroleum-dependent since the sixties, but with more junk calories. That's the U.S. health / agriculture combination. Prices are lower at McDonalds, but you'll get sicker if you eat the food. (See "Super-Size Me")
And this is the result of U.S. public policy. Forty percent of agricultural income is subsidy in the U.S. Unfortunately that gigantic bonus for Cargill and ADM has come at a price. Health care costs have been rising to more than compensate for the cheaper food.
If you don't think food and health are related, then that's fairly typical for a citizen of the U.S., but doesn't make it true. I guess it's a kind of peculiar tunnel vision.
This is also like the U.S. public policy that promotes building sprawl -- which presents enormous obstacles to walking anywhere. Then exercise equipment manufacturers get to sell Stairmasters to make up for the exercise of walking that people miss. The U.S. is still dealing with the epidemic of obesity and type II diabetes because of this clueless kind of city design. Your comment would probably be: "Yeah, but the U.S. has better Stairmasters!" Kind of a hollow victory, I say.
I say the object here is "having a healthier population," not "having fancier MRI machinery that can swoop in and save a much sicker patient than would appear in Europe."
So perhaps they have less fixed costs in Europe because they don't need the hospital beds or fancy acute care equipment. What about that possibility? Hard to prove, either way, I'd guess.
FYI, Here's a survey of life expectancy (death from all causes, not just cancer). Note that *all* of the countries whose citizens average longer lives are socialized medicine or socialized medical insurance.
Sorry for the hard-to-read format, I've had to make the columns wrap around, but the first one is Country, then life expectancy. You can figure out the rest:
Country Life expectancy
Infant mortality rate
Physicians per 1000 people
Nurses per 1000 people
Per capita expenditure on health (USD)
Healthcare costs as a
percent of GDP
% of government
revenue spent on health
% of health costs
paid by government
Australia 80.5 5.0 2.47 9.71 2,519 9.5 17.7 67.5
Canada 80.5 5.0 2.14 9.95 2,669 9.9 16.7 69.9
France 79.5 4.0 3.37 7.24 2,981 10.1 14.2 76.3
Germany 80.0 4.0 3.37 9.72 3,204 11.1 17.6 78.2
Japan 82.5 3.0 1.98 7.79 2,662 7.9 16.8 81.0
Sweden 80.5 3.0 3.28 10.24 3,149 9.4 13.6 85.2
UK 79.5 5.0 2.30 12.12 2,428 8.0 15.8 85.7
USA 77.5 6.0 2.56 9.37 5,711 15.2 18.5 44.6
(from http://www.answers.com/topic/health-care)
So anyway, I see your point: U.S. can do acute health care better than the Europeans, but the overall result is still worse (see life expectancy, or infant mortality, etc.).
Yes, I know the World Health Organization is an awful commie front with the agenda of promoting socialism everywhere, etc. But don't you believe the pharmaceutical and HMO industries (not to mention the military industrial complex, ADM and Cargill, the prison industry, and the petroleum-auto complex) are at least this diligent in promoting their health-impairing agenda(s)?
Personally, I prefer the comprehensive bottom line approach to focusing on a single disease, in fact I think your approach is nuts, but that's you're thing.
So...you win the argument! And you get to die sooner...if that's how you want to do it...8^)
June 28, 2008, 6:06 pmMark:
"YOU* are the one who brought up cancer rates,"
No, I brought up cancer SURVIVAL RATES, a much different measure. Cancer "rates" or the proportion of the population that suffers cancer is independent of the health care system.
Again, your consistent utilization to such general statistics as "Life Expectency" weaken your case rather than supports it. The higher infant mortality rate in the United States, as I explained earlier, actually demonstrates the superior quality of the United States health care system because the US has more live births of at risk children than other countries because we have the technology and capacity for these children to survive. Other nations simply abort these problems away.
And, a great deal of the illness in our society can be explained by diet, as you alluded to. HOwever, part of this issue is that in general Americans are richer than other countries and have access to a diet that is not as healthy. This does cause health problems, and that is for sure. But that is not the argument that we were on. You have simply shifted the argument. In other words, that the US is healthier or less healthy of a country is an independent argument over socializing the health care system.
June 28, 2008, 9:42 pmSolar Lad:
[What Europe has] really done with those petroleum taxes is assemble an alternative infrastructure of transit that is far more energy-efficient.
Really? Then why were Spanish truckers able to effectively shut down the Spanish economy by refusing to transport goods, to the point where thousands of Spanish police ended up escorting convoys of food and fuel trucks, to ensure that common Spaniards were able to get the basics ?
If there were indeed "an alternative infrastructure of transit", then striking truckers shouldn't have been a big deal, right ?
Also, while listing the myriad ways in which the clearly-superior Europeans are living in Utopia, you forgot to mention that the average European family lives in cramped apartments that are less than HALF of the square footage that the average American enjoys.
Apparently when the government is not controlled by a small elite oligarchy...
Yeah? You're claiming that the leaders of Spain, the UK, Italy, and especially France, to name a few, are NOT drawn from the elite ?!?!?
Perhaps you should brush up on your current European history...
Further, you appear to be asserting that America is "controlled by a small elite oligarchy", but was Bill Clinton an elite oligarchist before being elected ?
Is Mike Huckabee, who made a strong run for the GOP nomination, an elite oligarchist ?
Is the likely next President of the United States, Barack Hussein Obama, an elite oligarchist ??????
All of them grew up in working-class families without political connections.
...let a poor non-ideologically-inclined person try.
LOL
C'mon, Yoshidad, although I disagree with you about almost everything, I respect you enough to believe that you have more self-knowledge than that. It's like calling NPR "non-ideologically-inclined".
For example, you posted "True fact: The arts budget for the City of Berlin exceeds the U.S.' National Endowment for the Arts for the entire country. I couldn't make it up." That you think that forcing people to pay for purported "art" is a good idea, speaks volumes.
Take Social Security. Social Security is based on a bond among people. If you earn a salary today [...], you're paying for the welfare and survival of your parents' generation.
Ah, but what if one party violates the contract ?
Which is what the Boomers have done by not saving enough for their pending retirement. They could have done this in one or both of two ways:
A) They could have invested heavily in private savings and retirement funds. That they didn't do so is regrettable but not unexpected; it's human nature to put off making a sacrifice that won't pay off for decades.
B) They could have used the power of their collective vote to demand a balanced Federal budget, so that when they retired, the gov't wouldn't already be trillions of dollars in the hole, and would be able to easily borrow more trillions to fund the Boomers' retirement. But no, the Boomers wanted to enjoy a luxurious array of services now, whilst not paying for them.
By doing neither of those things, the Boomers are effectively saying to later generations "give up 20% of your wages to let us live in a style which we think we deserve, plus pay the normal 20% to fund everything else, and oh yeah, forget about being able to save for your own retirement."
Well, that's a lousy deal, and the Boomers are delusional if they think that future workers are going to put up with it until the last Boomer is in the ground.
June 29, 2008, 6:01 amSolar Lad:
"We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power."
June 29, 2008, 8:39 am-- Alan Greenspan (Chairman of the Federal Reserve US Central Bank), appearing before the Senate Banking Committee on February 15, 2005, in response to Democratic Senator Jack Reed of Rhode Island on the topic of funding Social Security.
Yoshidad:
Poster Mark is still under the impression that overall statistics like life expectancy and infant mortality are somehow not a good indicator of comparative health outcomes. These were normalized since the '80's so that European and U.S. infant mortality rates *are* comparable, despite his stubborn belief otherwise -- as confirmed by the Wikipedia article I cited. His citation? Zip, nada, bupkis,.
These are normalized also in the WHO study so that inter-country comparisons are valid. But of course poster Mark believes that the WHO gets some kind of prize for promoting socialized medicine and Pfizer doesn't get anything for promoting Vioxx, so overall measures are inferior indicators of health care.
According to him, the best measures are therefore comparisons of different countries as they treat individual diseases. France doesn't treat warts as well as the U.S., therefore it has worse healthcare. OK, he said "cancer," not "warts," but the principle is the same.
I've had a little time to reflect about that mentality, and believe I've finally understood some of it. Thank you poster Mark! (Really)
It's internally consistent to say that medical treatment in the U.S. is superior even if the population is sicker. France has fewer deaths from cancer, overall, but the U.S. has better treatments once you get cancer. So its population has plenty of chronic health problems, but, like health care commandos, the U.S. medical care system can swoop down and destroy any illness that dares become acute. We'll just ignore what happens to the 40 million without health insurance, shall we?
Naturally the medical commandos will have more, and more elaborate equipment. They will have prozac, an excellent, if expensive, anti-depressant drug with side effects that is no better than exercise. Exercise is cheaper, has no side effects but better health... But the health care commandos will have superior anti-depressants to the poor primitives who deign to walk so they can stay healthy.
It's even internally consistent to say that U.S. public policy that allows less-than-healthy food on the market at what amounts to subsidized, lower prices and that is a form of "wealth."
This reminds me of an old Volkswagen I owned. Overall, it was incredibly unreliable, but it was also very easy to fix. I got rid of that car in a hurry rather than invest in my mechanical education.
So Mark's position is consistent, but (IMHO) nuts. My choice is public policy that is not so focussed on ensuring big profits for Pfizer, McDonalds, ADM and Cargill, and produces better general public health, even if it can't cure the less-frequently-occurring cancers as well. I don't think there's anything more to say about this.
Sincerely, though, Mark, thanks for clarifying your thinking about this stuff. I really hadn't understood how cleverly the matrix worked previously.
Meanwhile, poster Solar Lad weighs in debunking many of my other misconceptions
About Social Security he says: The Boomers have violated their social contract regarding retirement "by not saving enough for their pending retirement. They could have done this in one or both of two ways:
"A) They could have invested heavily in private savings and retirement funds. That they didn't do so is regrettable but not unexpected; it's human nature to put off making a sacrifice that won't pay off for decades.
"B) They could have used the power of their collective vote to demand a balanced Federal budget, so that when they retired, the gov't wouldn't already be trillions of dollars in the hole, and would be able to easily borrow more trillions to fund the Boomers' retirement. But no, the Boomers wanted to enjoy a luxurious array of services now, whilst not paying for them."
Yoshidad says: This is monumentally misguided, and hilarious ("luxurious array of services" in a country whose arts budget is exceeded by the City of Berlin amused me, at least). And yes, arts spending is orders of magnitude higher, but so are many other things. Here's a quote that really demonstrates this in spades, IMHO:
"Can America send a man to the moon? Check. Build a swift, stealthy bomber that can evade radar in pursuit of enemies? Check. Write creative software that will fish through billions of bytes and pull out relevant few facts? Check.
But can America routinely build light, airy bridges that cross streams or gorges beautifully and sturdily, like Germany? Build high speed train lines like France, or giant gates that shut out the sea, like Holland? Set up a universal tolling system that allows trucks to travel without using toll gates, like Switzerland?
So far, the answer is 'No,' or at least, 'Not yet.'
"...In Louisiana, the failure to spend around $10 billion to strengthen levees and control the Mississippi River means that the federal government is now contemplating spending up to $200 billion to rebuild New Orleans and other affected areas. And this doesn't include the huge costs that insurance companies and private businesses and residents will incur." – from Alex Marshall's "Our Infrastructure Gap"
Notice, BTW, how consistent the U.S. is in its preference for battlefield medicine, the conquest of space, and the war on drugs. We're drunk with military metaphors, whether in aerospace or health care.
Back to Social Security: First of all, Social Security is an insurance policy, not a savings account. The current wage-earning generation transfers part of its income to the retirees (and some widows and orphans), so savings play really no role in this at all.
(Note: There's a slight exception for the Reagan / Greenspan social security tax increases that I'll get to in a minute, but I'm mostly speaking truth here. You probably remember the savings that was the Social Security "lock box"...)
In fact, the recent (Bush) moves to privatize Social Security would not have worked because Social Security is a program of transfer payments rather than savings. A scheme like Bush's vague "privatization" cannot answer this question: "If we start setting money aside in private savings (to invest in the stock market!) then where does the money that would pay the currently retired older generation come from, if not in even higher taxes?"
The whole proposal was a scam, perpetrated to break one of the genuine successes of the New Deal -- Social Security. Here's an elaboration of this point: http://www.rollingstone.com/politics/story/6822964/the_fake_crisis/
The actual origin of the social security, and many other problems, was not the Boomer's lack of investment foresight, or their unwillingness to forego their "lavish" (hahahaha!) public realm. It was the Reagan "tax cuts" which actually turn out to be transfers of tax burdens from the rich to the poor.
Reagan signed eight tax increases, and Mr. "Read My Lips" went back on his pledge to hold the line on new taxes and increased FICA taxes. This ultra-regressive tax increased fourfold as a consequence, and average people -- Boomers included -- had less money to save overall. Tracking the savings rates validates this, too, and exactly follows the course of those reduced progressive tax rates.
So no, my libertarian / "Conservative" brethren, lowering taxes did not increase economic activity enough to increase collections. The eras of highest economic activity coincide exactly with higher tax rates (92% in the 1950's and 70% in the 1960's)
Lowering taxes lowered revenues, so the social programs that were so "lavish" were squeezed even further. Incidentally the chronic state budget deficits rolling through the country now are directly related to the squeezed federal revenue sharing, not state spending or state taxes.
The pathetic American public realm was made even more pathetic by this squeeze. Think of those "lavish" bus stops you can see everywhere -- a naked sign stuck in the gravel shoulder of the road with no sidewalks accessing it, and not even a bench to sit on while you wait for a bus that comes every three hours. Man, I'm just struck by the lavishness of it all, especially compared to those bad, bad Europeans. Ouch!
Remember too, that Reagan's premise for lowering the upper tax brackets (70% down to 35%, if memory serves) was "Supply-Side" economics. His budget director David Stockman famously confessed that Supply Side economics (AKA "voodoo economics") was just a pretext to lower the top rates. (Stockman was in the news recently, being led away in handcuffs, indicted for securities fraud. I couldn't make it up.)
This lower-the-progressive-income-tax-raise-the-regressive-FICA move make perfect sense if you're paying the top rates too. If you save 35% in income taxes, the money otherwise taxable is like an investment yielding 35% after tax -- something that is by no means easy to find.
So, Solar Lad, you may blame the "Boomers" or the tooth fairy for the lower savings rate, or the "lavish" public realm, but the truth is something different. Incidentally, the first Boomer president was Clinton, and he left a federal budget surplus.
Your point about elites governing in Europe is fine, as far as it goes. Of course the best and brightest sign up for public service. But even the Wall St. Journal's study says that the ambitious poor have a better chance at social mobility in Norway than the U.S. (my memory says the U.S. was 11th in such a ranking of social mobility). It doesn't matter if the duke of Blah is in Parliament if his policies serve the general public rather than, say, General Electric.
Finally, the entire debate about taxes and spending is polluted by the irrelevance of those categories of consideration. All but 15% of federal spending is interest on national debt, social security and Medicare, and the military. Now I know you may believe the social programs are "lavish," but I'd advise you to get real.
They're not, especially compared to other countries'. It's completely politically unrealistic to consider cutting them, too. I've heard "Don't you let the Guv'mint touch my Medicare" from "conservatives," but you can see the nonsense of that statement, surely.
So unless you want to shut down the Federal Courts, the mint, and the Centers for Disease control, stopping that "lavish" spending is a non-starter. The programs have been squeezed so much that there's nothing more to cut unless you want to close things that are necessary (the FBI?)... And you'll *never* see a "conservative" proposal to cut anything significant. Even all the earmarks added together are a tiny percentage (1%?) of the total Federal budget.
So what's the real story? When industry gets a free ride (the depletion allowance for petroleum), or an enormous subsidy (1031 exchanges for real estate), that's far more important than taxes or spending. Neither of these show up on the P&L for the government, either. Read David Cay Johnston's "Free Lunch," if you don't believe me.
Meanwhile, back in Europe, I apparently "think that forcing people to pay for purported "art" is a good idea." Nope. I think allowing the majority of the population who understands that it's cheaper (both individually, and to society as a whole) to build a public swimming pool than to require everyone who wants to swim to build their own -- allowing that majority to determine public policy is a good thing.
But don't take my word for it: Go to Europe and ask the people whether they'd give up their socialized health care system, or their concerts in the park. They *want* it. They want it enough to favor it as a public policy and vote for it. They want the public policy that includes pooling their resources. There's nothing wrong with that. It's called the "consent of the governed"... In the U.S., a small enough portion of the population votes that you can't really say even that Reagan's policies have that level of consent.
Incidentally, I'd say that larger American homes come from the public policy decision to allow home mortgage interest write offs. See what would happen without that bit of off-books subsidy, or the subsidy for stadiums. Or what about the subsidy (again off-books) of allowing sports to have monopolies. In London, they have 13 soccer teams, but in America, the sports teams can blackmail the cities (see the incredible con game Al Davis ran on Oakland and Anaheim, for just one of many, many examples).
I'm guessing you won't agree. Do I win my bet?
June 29, 2008, 11:28 amYoshidad:
I just re-read some of this, and see Mark believes "the only way you can reduce health care costs is to have less fixed investment."
How about the cost of excluding less-healthy or older people from insurance coverage? That, and health insurance plan profits and multi-million-dollar CEO salaries is the biggest difference between private and public health care, I'd bet.
Poster Solar Lad quotes Greenspan. I suggest you read Ravi Batra's "Greenspan's Fraud" before you take anything the maestro says without an extra-large grain of salt. Greenspan's agenda was to tax the poor so the rich could prosper. He (and Reagan, & Bushes) succeeded too.
June 29, 2008, 1:26 pmSolar Lad:
I suggest you read Ravi Batra's "Greenspan's Fraud" before you take anything the maestro says without an extra-large grain of salt.
You're seriously suggesting that there WILL NOT be greater inflation in the future than we've become accustomed to, simply because Greenspan told us that we would ???
That's extra-funny because WE'RE ALREADY FEELING THE EFFECTS OF MUCH HIGHER INFLATION !!!
Thus you're saying that we should take with an extra-large grain of salt a prognostication that's manifesting even as we type.
As to the rest...
June 29, 2008, 5:52 pmI'd love to respond, but don't have time. Sorry.
Mark:
"How about the cost of excluding less-healthy or older people from insurance coverage?"
It doesn't matter HOW many people use the system because the expenses are already incurred.
SInce you are dense we have to make this simple. You build a hospital that has 500 beds. In the hospital you have some x-ray equipment, a MRI, and other diagnostic tools. YOu build a few operating rooms, an obstectricts ward, etc, etc, etc......THen, you staff this hospital with doctors, nurses, technicians, administrative support, and other employees.
WHen you are done it lets say it cost $100 million and your annual staff costs are $10 million. The money is spent.
Now, that money is spent whether 0 people come into the hospital or 100,000 come into the hospital. THe fact that I "charge" you for your visit is simply the allocation of the fixed cost of my $100 million investment and $10 million annual operating cost. The amount I charge you is simply an allocation of this cost.
The only way to reduce the cost is to eliminate the fixed overhead, which is most of the cost. That is, the hospital can shut down or reduce services (meaning less staff and thus less service). That is the only options that are available.
June 30, 2008, 4:12 pmYoshidad:
Mark, I've had a life to live, so haven't revisited this for a little while, but find that you are, in the words of Melvin Udall, a "last word freak"! Wow, we have something in common!
Your point about "fixed costs" is something you're particularly fond of, but happens to be a blip in the real story of the difference between U.S. and European healthcare systems. We've already heard how European populations are generally healthier, so may require less "SWAT-team" medical care, fewer MRI machines, etc. But that is not the source of the higher costs of U.S. care.
U.S. physicians earn roughly twice what the Europeans do and have strict controls on the number of medical schools to keep the shortage of physicians constant. This is the AMA's version of "managed" care. Also: Insurance companies in the U.S. spend a lot of time and money trying to eliminate potentially unhealthy patients from those they insure. Their overhead is something like eight times higher than the Europeans, as a consequence.
The idea of overbuilt hospitals in the U.S. is not foreign to me, either. For example, Oral Roberts attempted to build a medical school and hospital in Tulsa, despite the other hospitals having more than enough beds. He was private, so he got his way. I think the med school and hospital are now shut down. Oral had difficulty recruiting faculty willing to tow the party line that praying over patients was equivalent to medical treatment. I couldn't make it up.
July 8, 2008, 10:37 am