Wednesday, November 4, 2009

How's that Obama thing working out for you?

As you may know, I wanted to give this president the benefit of a doubt. It is beginning to look like I was being more charitable than many who succumbed to his smooth talk only to be disappointed by 'The One'. The fact is: Mr. Obama is a one term president. I suspect he will make Jimmy Carter look good (I voted for Carter, which then led to my entry into the conservative politics game).

Please understand: Mr. Obama will not be ousted because of his skin pigment. He will be ousted because of his poor leadership,  leftist ideology, his "politics as usual," and because he is just plain out of touch with the majority of the U.S. population (before you retort with "He won the election" remember that he ran the best presidential campaign in history against the worst presidential campaign in history. This doesn't mean he was elected because he was a better choice. He simply played the game better -- sort of like how MS Windows became the ubiquitous operating system of the nation).

I don't consider Mr. Obama to be evil any more than I consider FD Roosevelt to be evil. FDR had good intentions when he tried to manhandle the economy by controlling prices, wages and production. But his policies ended up destroying wheat in one part of the country while other parts of the country had food shortages. Good intentions with an evil outcome.

Which brings us to this current mess: We're still trying to recover from FDR's socialist security program which spawned medicare which spawned medicaid which spawned subsidized drugs and etc. And now, the D's are frantically trying to pass another health care power grab in a well intentioned but ignorant attempt to fix the problem spawned by the previous socialist policies. As long as we're on this path, the fixing will never end. I can't wait to see the economic power house created by a 70% income tax!

Back in the 1930's and 1940's there was an economist who predicted the outcome of FDR's policies. His predictions will also apply to the outcome of Mr. Obama's and the Democrat party policies. His name is F. A. Hayek and his seminal work is "The Road To Serfdom," first published in the U.S. in 1944. His book is fairly heavy reading but it is filled with quotable paragraphs. Here's an excerpt which demonstrates the futility of the path our Democrat leadership is attempting to foist upon us:

"Once government has embarked upon planning for the sake of justice it cannot refuse responsibility for anybody's fate or position. In a planned society, we shall all know that we are better or worse off than others, not because of circumstances which nobody controls, and which it is impossible to foresee with certainty, but because some authority wills it. And all our efforts directed toward improving our position will have to aim, not at foreseeing and preparing as well as we can for the circumstances over which we have no control, but at influencing in our favor the authority which has all the power."

What Hayek figured out is that the path of planning has only one possible route to take: Planning leads to totalitarianism. It's really simple to understand. Let's use the health care debacle as an example: A government plans to cover the entire population with a health insurance program. If the government allows people to choose which program to sign on to, there will inevitably be some who choose 'none of the above'. Most likely, those who choose 'none of the above' will be currently healthy, not needing health care at the moment. This causes problems to the plan because without healthy people in the pool the risk factors increase for the rest of the pool, driving up the cost of insurance.

To remedy the disparity, the planners pass a law requiring that everybody buy into a policy. But another problem pops up: Now that this new group is in the pool, they will begin to use more health care resources. "After all, I'm paying for it, I may as well use it." This makes perfect sense doesn't it? But with more people seeking services the planners are now faced with a shortage of health care providers. More laws, more policies are required in order to encourage or goad more people to become providers. The cost of doing all this recruiting and incentives pushes the cost of health care higher. Keep in mind that in financial terms, health care providers fall more into the expense category than in the asset category, meaning that health care providers don't produce much. Moving producers into health care reduces the overall production capacity, a cost that it much more difficult to calculate. More planning, more control is required to make the plan work and then, one day, we begin to realize that we are no longer in charge of the government, it is in charge of us.

The "free market" solution is to allow society to determine what it values most. We will vote with our pocket books and accept the outcome. The market doesn't work because it is morally superior to planning. It works because it pits individual greed and desires against one another, achieving a better equilibrium, a better distribution of resources. It's not perfect but personally, I prefer an imperfect free market over totalitarianism.  Planning seeks to achieve equality among the people but the only way to achieve equality is to lower the standards of all to the lowest common denominator. I prefer to allow those who rise to the top to enjoy their success, knowing that those who linger at the "bottom" are still better off than they would be in an egalitarian society. The debate, it seems, will never end.

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