That Healthcare Bill Thing

[Calin Leafshade]

Progz, this idea that government intervention is always bad just isnt true.

We all accept that free market capitalism works for the vast majority of cases. We wouldnt expect to see government run supermarkets, shoe shops or record stores. However, when we are talking about community services, regulation is almost always a good thing.

Many people consider true laissez-faire capitalism to be the purest form of democracy. If you dont like it, take your patronage elsewhere. However as I understand it (please correct me if i'm wrong) most americans get their healthcare through their employer. This means there is a disconnect between the provider and the customer. The employer will likely go to the lowest bidder since they are paying for the cover. This upsets the basic ethos of capitalism.

As i've said, my objection to the american system is mainly a moral one. My knowledge of economics simply isnt good enough to form a good argument. Even if universal healthcare turned out to be the worst choice in terms of economy i would still support universal healthcare.

Americans seem to have a real problem with tax in my experience. Some americans even oppose income tax as unconstitutional. I'm happy to pay my taxes and from what I can tell the more a country leans towards libertarian socialism, the better life becomes.

[Snarky]

Government intervention and regulation can make the marketplace more efficient as a whole, by reducing externalities and forcing each party to bear the costs of its own actions (similar to forcing polluters to pay for the cost of their destruction).

I just wanted to point out that this is hogwash and has never been true.  Historically, any interests taken over by government result in lower efficiency by virtue of greater bureaucracy (more red tape, more pointless interim government oversight,etc).  Better quality and higher efficiency only ever come from free market practice where the people decide what works best and cheapest by voting with their money.  What America should have is less bureaucracy in medicine, not more.

A moment's thought should show that this is nonsense. Capitalism couldn't function without government regulation. Governments institute and enforce property rights, they establish contract law, they provide a stable currency. Government regulation allows a company to declare bankruptcy. Try doing that in a completely unregulated economy!

On a smaller scale, governments break up monopolies and cartels, leading to clear improvements in market competitiveness and service to consumers (the clearest example of this in recent times is probably the breakup of AT&T). And as mentioned before, government regulation is one of the only ways to eliminate market externalities, so that among other things you can avoid tragedy of the commons scenarios. Government regulation imposes disclosure requirements, so rational actors have more perfect knowledge and there make better decisions, leading to more efficient markets. Finally, with the development of behavioral economics, we have a way to predict and identify how people make e.g. purchase decisions in non-rational ways, and with regulation we can manipulate that, giving people incentives to act in their own interest. (For example subsidies to weatherize homes, on the principle that people tend to discount running energy costs compared to an up-front investment in insulation.)

Does government regulation come at a cost? Definitely; and just as definitely there are many examples of unwise or at best sub-optimal regulations. But the only people who think regulation is always a bad thing are extremists like the von Mises Institute, who should be soundly discredited by the recent economic crisis. (Hell, even Greenspan admitted as much!)

[mkennedy]

Actually I would be fine with the government providing all products and services assuming that there was also competition from private companies. It is far preferable to a system where the government provides absolutely NOTHING and people have to turn to private companies even for things like police and fire protection. If you don't want medicare or medicaid you can get private insurance, however the option for government run health insurance should be available to provide competition to private companies. Likewise if you don't want to get your power from the government you can buy it from private companies. Regulation is also very much needed, lets say a company makes a product and to improve sales they add an ingredient to make it highly addictive, are saying there should be no regulation to prevent companies from doing something like this?