Barack Obama Otold the Detroit Economic Club that “the auto industry is on a path that is unacceptable and unsustainable because of its fuel inefficiency and the high costs of health care for employees and retirees. He proposed to let the government take on some of those costs if the industry would produce more efficient vehicles.

On one hand, this is a politically smart exchange. Detroit claims that these healthcare costs are the reason why they are losing out to Toyota in sales, in fuel economy, and arguably in quality and design. There is little doubt that those costs are high, certainly higher than for companies based in nations with national healthcare and fewer retired American workers.

On the other hand, I have a hard time believing it would cost that much to increase fleet fuel economy. I suspect that the intransigence of the Big Three has more to do with historic and financial ties to the oil industry and a lack of imagination that also explains their falling marketshare globally and domestically. They keep producing cars that people wanted last year, with fuel and maintenance demands that match those of yesteryear, and then want the government to bail them out. The days when “what’s good for GM is good for America” are long gone, and there’s no need for taxpayers to subsidize Detroit’s failure.

A plan like this would be necessary to get legislation passed, but Obama passed up two important opportunities by proposing this plan this early and in this much detail. First, if he wins, he’ll now have to negotiate from an opening position that already gives Detroit most of what it wants. Taking a tougher stand, and demonstrating a willingness to negotiate subsidies in broader terms would have left him a tougher negotiating stance and probably wouldn’t alienate anyone who isn’t alienated by the more detailed proposal.

Second, he missed a chance to leverage this into a push for comprehensive health insurance reform. The costs of retired auto workers are also problems in the other blue collar industries with a history of effective unions. Airlines, steel, and mining are the examples that come to mind of industries which have used retiree benefits as key negotiating points and key arguments in decisions to move operations abroad. Dealing with GM’s costs but not Bethlehem Steel is not the visionary approach I’d like to see from Obama. I know he’s capable of more.

We need national healthcare. We need it because it’s immoral that we allow working Americans to die of untreated disease, and it’s immoral to think that working Americans have to rely on emergency rooms for their primary care. It’s also inefficient. Emergency room care is expensive care. People who can get routine care from a primary care doctor head problems off before they need an ER, and have a better quality of life. We also need national healthcare because the system we have is making American companies less competitive.

Bridging between society’s need for insurance against illness and our need for insurance against a changing climate could have made a powerful hook for Obama’s speech. Obama could have used auto industry support to lay the groundwork for a national healthcare plan in exchange for their commitment to fuel economy standards.

That might not have allowed the level of detail he offered, but it would have highlighted the principles involved more clearly. To my way of thinking, those principles are what matter most this early in the campaign. It would demonstrate a commitment to environmental concerns, economic competitiveness, social justice, and the need to for policies to benefit all involved.

Comments

  1. #1 SmedRock
    May 8, 2007

    Very well written. But let us not forget, without those unions we would have a very different workplace today. please, do not get me wrong, the unions have abused power given to them by the workers, by for the most part, they have done well. I work in a union shop, but I am not a union member. I get the benefits of representation from the bargaining unit, without taking my pay. It does work when used properly.

    On health care, you are right. A country of our ability should never have let anyone die because they cannot pay.

  2. #2 bigTom
    May 8, 2007

    Well done.
    The legacy health costs were created when the executives gave in to union demands. I have no problem with companies promising future benefits to current workers -but the funding for such benefits must come from current revenues. Lax accounting standards, allowed those costs to NOT be accounted for, leaving executives an easy way out of difficult labor negotiations. For any shrinking industry/business deferring costs to the future is a prescription for disaster.

  3. #3 Richard W. Crews
    May 9, 2007

    National Health Care needs to be presented as capitalist Freedom. The freedom to have your own business, to be an entrepreneur without the baggage of who you hire. The Freedom to change jobs without the mystery or mirage of the new health insurance situation. The Freedom to go out on a limb with new ventures. The Freedom to entice Toyota to build their plants in our country. The Freedom to plan ahead. The Freedom to stay home and raise a family or care for others. The Freedom to go to school, to improve yourself. The Freedom to marry someone not in perfect health. The Freedom to live with dignity when ill. The Freedom to have medical hope no matter who you are.

    This will strengthen marriages, lessen the financial strains, and eliminate half the bankruptcies. It will lower auto insurance and homeowner liabilities rates, and reduce lawsuits, since we’ll all get the care without costing each other.
    It will lower public liabilities, such as schools and parks.
    It will equalize the country = same basic boat = freedom to be decent

  4. #4 Andrew Dodds
    May 9, 2007

    I have to point out that here in Europe, both GM-Vauxhall and Ford produce cars with good quality, efficient diesel engines – not quite up to Peugeot or VW quality, but certainly sufficient to make a real (30-40%) improvement in fuel economy in their US operations without changing anything else.

    Indeed, diesel engines are becoming the norm in Europe. They are certainly preferred for the SUV/light truck segment for better pulling power, so I really can’t understand what’s stopping them rolling out the technology in the US. Any ideas?

  5. #5 Stephen
    May 9, 2007

    I have a 2000 Saturn SL (4 door sedan). That’s GM, buy the way. It has a 40 MPG EPA highway rating. It achieves this with a 1.9 liter 4 banger and a 5 speed manual transmission. Small engines get better fuel economy on the highway. That’s because engines that are capable of 300 HP are poor at turning gas into 15 HP, needed for highway cruise.

    It’s not an expensive hybrid. It just gets double the gas mileage of my friend’s cars. And I don’t mind that some Detroit company sold these cars to my friends. They can justify how they needed a bigger car for their telescope, even though Steve’s 18 inch monster fits in my car. I think.

    But I don’t see a 2007 or 2008 vehicle from an American company that gets 40 MPG. Not one. I checked on fueleconomy.gov. Is one offered, and just isn’t listed? If so, why isn’t it listed?

    So when my car dies, i’ll be forced to buy a Toyota. Or another used car. OK, so all my cars were always old.

  6. #6 Richard
    May 9, 2007

    As an American living in Canada, I’ve had a chance to see the economic benefits of a national health insurance program. The automakers are less likely to close the Canadian auto plants, in part because of their much reduced health care payments to Canadian employees (and partly because of a lower Canadian dollar). However, I’m skeptical that the U.S could ever adopt such a health insurance system because of the power of the insurance lobby, the AMA, and the general ideological distaste for government programs, even when they work.

  7. #7 Flex
    May 10, 2007

    As an automotive engineer working in Detroit for a major automotive supplier, I have a couple of comments.

    First, I’ve never seen any obvious or deliberate ties to the oil industry. In fact, the prevailing sentiment in Michigan is that the oil industry has been getting government subsidies that the automotive industry thinks it deserves. I’m not asking you to agree with this sentiment, just realize that it exists.

    Second, as long as the automotive industry could push larger vehicles, they were going to. Larger vehicles have higher profit margins. As a rough estimate, figure that the materials cost for a vehicle is 50% of the selling price. A $24,000 truck costs about $12,000 in material, leaving $12,000 for manufacturing costs, overhead, and profit. Manufacturing costs and overhead are roughly the same on any car line, so if you sell a $16,000 car with a materials cost of $8,000, you have $4,000 less to report as profit.

    Larger cars make a higher profit. So Detroit has willingly promoted the idea that everyone needs a larger car. With cheap gas and the popular belief that SUVs are safer, the automakers were willing to cede the lower profit margin cars to the imports.

    Third, all the U.S. automakers have large bureaucratic organizations. Innovation is regularly squashed simply because managers don’t want to assume any risk. The large automotive suppliers are the same way, until the OEMs express interest in a new idea, we aren’t willing to invest any money into it. I’ve lobbied for years to get an R&D group started in my division, I don’t think it will happen. These days the innovative automotive ideas are found in Europe first, then enter the American market through the imports, finally the American OEMs take an interest. For example, some European automobiles are starting to include a pedestrian airbag in front of the hood. If the car hits a pedestrian, the airbag deploys to prevent the pedestrian from getting badly injured.

    Forth, and to Andrew Dodds’ comment, while there are differences between European and North American automotive requirements (like the type of safety glass used), if an OEM wants to transplant a successful European design to the North American market the bureaucracy of the OEM means that the OEM assigns it to a platform team. This team has the power to change the vehicle as much as necessary to have it meet North American preferances. So the platform team does this. Often leading to very different European and North American vehicles with the same nameplate. This works both ways, I owned a German-made Ford Grenada when I was in Turkey which was a nice sports car. In the North American market the Ford Grenada was a very boxy family sedan.

    The corporate structure of the North American OEMs builds silos around every platform, severely punishes failed innovations (which discourages any innovation), and offers fast-track promotions encouraging short term profit reporting before long term mistakes are uncovered.
    The corporate structure of the American OEMs ensures they will be playing catch-up to the imports and transplants.

    Will the corporate structures change before these companies collapse? It’s hard to say. There is continous speculation about this in the industry. Most of the OEMs managers appear to be are aware of the problems, but seem powerless to make changes of any lasting nature. The opinion of many employees seems to be that any managerial changes are simply the ‘flavor of the month’, and the rest have a ‘wait and see’ attitude. Too much managerial focus on short-term profits and the very antagonistic managerial attitude toward employees (which does seem to be changing) has left most employees jaded and cynical. Sometimes I think many of the employees would view a collapse of their company as a type of payback to their managers.

    To be blunt, the costs of health care are only a small part of the problem with American automakers.

  8. #8 JoJo
    May 14, 2007

    You said, “We need [national healthcare] because it’s immoral that we allow working Americans to die of untreated disease…” What is actually immoral is forcing others to abide by your personal opinion of morality. If you believe people have a moral obligation to help others, that is fine. But, not everyone agrees with you. So, don’t force your morality on other people. The only universal moral rule possible is that no individual should force their morality on anyone else.

    There is only around 6% of the U.S. population that doesn’t have healthcare insurance because they can’t afford it. Therefore, don’t impose a national healthcare system on 100% of the people. That would be egregiously immoral.

    From Wikipedia (and sourced): In 2005, 41.2 million people in the U.S.14.2 percent of the population were without healthcare insurance for at least part of that year.[131] Many of these people may have been between jobs for part of the year, which could leave them without coverage as health insurance is often provided as a benefit of employment. Not all those without insurance were unable to afford it — approximately one third of the 41.2 million who were without insurance for part of the year lived in households with annual incomes greater than $50,000, with half of these having an income of greater than $75,000.[132] Presumably some of these people chose not to purchase insurance, for example because they perceived themselves as being at low risk of serious illness. Another third of the 41.2 million were eligible for public health insurance programs but had not signed up for them.[133] This leaves substantially fewer than 41.2 million people who were without access to healthcare insurance because they could not afford to purchase it privately.

  9. #9 Flex
    May 15, 2007

    Jojo wrote, “This leaves substantially fewer than 41.2 million people who were without access to healthcare insurance because they could not afford to purchase it privately.”

    By your own figures, assuming they are right, that leaves 1/3 of 41.2 million people, or about 13.8 million people. Or about 1 in 20 people in the U.S. who don’t have health care insurance because they can’t afford it.

    Or to put it another way, it’s greater than the combined population of New York City and L.A.

    As for your earlier comment: “If you believe people have a moral obligation to help others, that is fine. But, not everyone agrees with you. So, don’t force your morality on other people. The only universal moral rule possible is that no individual should force their morality on anyone else.”

    By the same logic, ensuring a clean water supply is a moral choice. Everyone should have the freedom to evaulate their water supply and chose the level of contamination they are comfortable with.

    But you are right in at least one sense, no one is proposing that an individual would force their morality on someone else. That’s a misrepresentation of Josh’s argument.

    What is being proposed is that there is enough of us who see that improving the general level of health in a population leads to an improved quality of life to the entire population, rich and poor alike. If enough of us understand this insight, and are willing to contribute to seeing to the promotion of the general health, the state (which is a reflection of the people’s desires) can provide a basic level of health care to all citizens. Just like the state tries to ensure clean water to it’s citizens.

    No one will force the citizens to partake of this healthcare service, just like no one is stopping you from drinking rainwater collected from your roof. There is no forcing of moral standards on any individual.

    Of course, if the state does provide a minimum level of health care for all it’s citizens, you will be asked to contribute through taxation (and against your will too!). I presume that the possibility of increased taxation is at the root of your objection to general healthcare. But as you will enjoy the benefits to society created by an improved level of healthcare, I have little sympathy with your whining about your taxes.

  10. #10 JoJo
    May 15, 2007

    Flex, it took you all that thinking to come to the realization that what “imposing” a national healthcare system on everyone means, is taxing individuals to fund it. But, at least you did come to that realization.

    It is not taxation, per se, that is opposed. It’s what taxation is used for. The only just involuntary tax is a tax which charges people for something that they use. For example, we all use national defense, so it makes sense to charge us all for that services. This is because if you don’t then there will be free riders.

    Healthcare is entirely different. People like me enjoy having a voluntary system and contribute to charity when we feel the desire. We prefer the efficiency of a voluntary system. If you tax everyone to create a national healthcare system, you are forcing people to take care of others. You are imposing your phony altruistic morality on others. It’s an essentially fascist mentality. There is no free rider problem to justify the creation of such a system. It is immoral to impose a cost on a party for something that they does not use. Again, the only moral principle that can possibly be applicable to everyone is that everyone refrain from imposing their moral principles on others.

  11. #11 Flex
    May 16, 2007

    JoJo,

    It didn’t take me all that much thinking to realize that funding is a major issue. I don’t think that anyone who has even considered the problem of nationalizing health care has done so without considering funding. I find your attitude of moral superiority and the suggestion that those of us who support the idea of a general level of health care for all citizens extremly patronizing.
    I am not imposing my “phony altruistic morality” on others. Face it, we don’t turn away anyone who needs health care now from emergancy service. We have a level of health care for all citizens today. Or are you suggesting that the 13 million people (your figres) who have to rely on emergancy room service should be turned away? Those are the free riders in the current system that you want to eliminate.
    Second, if it is immoral to impose a cost on someone for something they do not use, I could give you hundreds of examples of government spending which you personally do not use. Everything from roads to vaccinations to bombs. Your attitude appears to be a very selfish one, that you want to enjoy the benefits which accrue from investing public funds without contributing to those funds. To accept paying taxes for bombs to drop in Iraq and yet balk at paying taxes for health care for citizens of our own country suggests a good deal of confusion in your thinking about morality.
    Or, to use a less inflammatory comparison, in many municipalities the local government contracts for garbage collection. The money which pays for this service comes from the general fund which comes from property taxes. Everyone in the city gets garbage service, no matter how much garbage they throw away each week (although there are often some limits). The amount payed into the fund to pay for the garbage service is different for everyone, the rich people pay far more than the poor people. Yet the poor person may well throw out more garbage than the rich. Is this a fair system? Not if you look at cost per household. The rich people effectively pay quite a bit more for the garbage service than the poor. But if the alternative is completely privatized garbage service, there will be homes in the city which can’t afford garbage pickup. Which doesn’t just hurt them, but the areas surrounding them, and may even affect those people who are rich. The general level of health and quality of life in a community is improved by the public funds providing trash collection.
    To put it in your terms, if you tax everyone to pay for garbage collection, you are forcing people to pay for the garbage collection of others. Municipalities are imposing a ‘phony altruistic morality’ by providing garbage collection and engaging in an ‘essentially fascist mentality’ by imposing their moral principles on others. Sorry Charlie, your attempt to recast the national health care debate as a violation of morality fails. Your attempt at a moral argument is apparently that using public funds to promote public health is immoral because you may have to pay more taxes.
    Providing a general level of health care for all citizens benefits JoJo as much as it benefits Flex. It will reduce waiting times, and thus costs, in emergancy rooms. It should (although there are other factors involved) reduce healthcare insurance costs to private individuals as well as businesses. It will free up employees (possibly even JoJo) who feel trapped in their current jobs because they can’t afford to loose their health care, allowing these people to pursue educational or personal goals. It will allow people to get medical advice on conditions before those conditions become harmful to themselves, preventing them from working. It will allow earlier detection of STDs, slowing the spread of STDs through the population. And it can be done far more efficiently than the current system.
    But, you are against it because you will personally have to pay more taxes for it.

  12. #12 JoJo
    May 16, 2007

    Flex,

    If you want people to be forced to pay for the healthcare of others, then you indeed have a phony altruistic morality. You want to help other people, but you want to help them with other people’s money. The shows a lack of basic respect for individual liberty.

    You bring up “roads.” Roads should only paid for by gas taxes. In fact, that what most of their funding comes from. If there was ever a fair tax, that’s one. Those who use the roads the most pay for them with their gas taxes. About national defense, ideally we shouldnt have to pay for any bombings that we don’t want to happen, but this is untenable. The reason, as I pointed out, is a free rider problem.

    About “garbage service,” that should be totally privatized. People should have a choice among private garbage collection services, which would provide lower rates and better service, and most importantly respect individual liberty. A compulsory monopoly should never be imposed on people. Ever noticed the U.S. Post Office monopoly? They keep raising the prices of stamps. Has it not occured to you that if competition were legal that prices would be dropping instead of rising (such as what happened when competition in package delivery services was legalized)? Do you realize that in countries where they have a national healthcare system that private competition is outlawed? Socialism is dying. Until recently, private health insurance was illegal in all of Canada. All insurance was supplied by the government. Recently, the Supreme Court of Quebec ruled, in Choulli v. Quebec that private business must be allowed to offer health insurance and compete with the public program. The rest of the world is moving toward more privatization, but you want the U.S. to move toward more socialism.

    There is no free rider problem with a truly private healthcare system. I, you, and no one else has a moral obligation to take care of anyone else. It should be up to the individual whether he will aid others, through charity. That’s the only position consistent with a basic respect for humanity.

  13. #13 Flex
    May 17, 2007

    JoJo,

    If you read the arguments I gave you carefully, I outlined a number of benefits that JoJo gets by funding national health care. National health care may be directly helping others, with your money, and my money, and Josh’s money, I understand that. But a national health care system also benefits you.
    The same can also be said for garbage services. You benefit when your entire neighborhood has a garbage service.
    Your statement about the only position consistant with a basic respect for humanity is one which is only possible provided you never actually interact with any humanity. I’m sorry, that’s probably a bit harsh, you seem to be unaware of the nature and purpose of representative government. Representative government is to represent society, in a general sense, and regulate the operations of aspects of that society in order to promote the general welfare of that society. Which includes ensuring services which are not offered privately, or services which are necessary to the health of the members of that society when those members cannot afford such care.
    We care for all those people today. You don’t seem to recognize that simple fact. We don’t turn away people for emergancy medical services. Who is paying for these services? The hospitals. The hospitals can only compensate by increasing the amount they charge the insurance company (or else they get government funding, which by your morality is unethical).
    Do you doubt this? Go to a hospital and ask them how much a specific procedure costs if you don’t have health insurance, then ask how much they would charge the insurance companies for the same procedure. At one point I was between health insurance coverage and needed an x-ray on my knee. I was charged about $80, they were going to charge the insurance company (until we worked out that I wasn’t covered) close to $400.
    The insurance companies pass on those increased costs to those who want insurance, and in order be competitive in the marketplace they start violating the basic principle of insurance; to wit, spreading the risks of individuals across a population. In other words, rather than charge a flat fee to account for all the various risks their members have, the insurance companies evaluate the risks of individuals based on population statistics and adjust individual rates accordingly.
    My friend, the alternative you are advocating is that hospitals refuse to provide emergancy (or any other) services to the 13 million citizens of the US who are unable to afford health insurance. And you are advocating this in the name of basic respect for individuals.

    I’m advocating that we should identify these costs which we are already paying, and spread these costs across society in general. And that to minimize these costs we should evaluate alternative means of getting treatment to individuals rather than rely on emergancy room services.
    Josh is pointing out that if it is a positive moral value to ease the suffering of others, then as a society we should be committed to this goal.

    As I read it, JoJo is saying that the only moral position consistant with JoJo’s interpetation of basic respect for humanity is to let other people suffer if private charitable donations can’t fully pay for the health care of those who cannot afford health insurance.
    In other words, your distaste for the taxman picking your pocket is more important than easing the suffering of people unknown to you.

  14. #14 JoJo
    May 17, 2007

    You said, “Your statement about the only position consistant with a basic respect for humanity is one which is only possible provided you never actually interact with any humanity.” That’s absolutely false. I simply wish to interact with humanity on a voluntary basis, whenever possible, instead of humans having to interact at the end of a bayonette. My purpose of government apparently is not the same as your purpose. Your purpose of government is to force your will on others. My purpose of government is to protect individuals from being forced by others to act against their will..Yours is a government of fascism. Mine is a government of liberty. The U.S. government and the constitution which backs it was instituted precisely to protect individuals from you and others like you who wish to force their will on others. The U.S. was never meant to be a pure democracy, but a constitutional republic where no faction, minority or majority, are able to force their will on others. Your society is a society of forced collectivism. My society is a society of allowed individualism, where individuals help each other based on their own wilingness to do so. No one may force any other individual to act against his own will. There is a long-standing tradition of individualism that permeates throughout American society, and that’s why a national healthcare system will probably never be implemented, fortunately. If you want forced collectivism, go somewhere else. Leave us free here in the U.S.

    I am not “advocating that hospitals refuse to provide emergancy (or any other) services to the 13 million citizens of the US who are unable to afford health insurance.” I’m simply advocating a voluntary society. For your information, I was poor at one time, and I went to the hospital. Guess who paid my bill? Charity. All hospitals have a charity fund donated to by private people that anyone can ask for if they go to the hospital. All you have to do is apply for it. If you meet the criteria, they pay your hospital bill. That’s the kind of society I want to live in, rather than your society of savagery.

  15. #15 JoJo
    May 17, 2007

    Flex, You said, “Your statement about the only position consistant with a basic respect for humanity is one which is only possible provided you never actually interact with any humanity.” That’s absolutely false. I simply wish to interact with humanity on a voluntary basis, whenever possible, instead of humans having to interact at the end of a bayonette. My purpose of government apparently is not the same as your purpose. Your purpose of government is to force your will on others. My purpose of government is to protect individuals from being forced by others to act against their will..Yours is a government of fascism. Mine is a government of liberty. The U.S. government and the constitution which backs it was instituted precisely to protect individuals from you and others like you who wish to force their will on others. The U.S. was never meant to be a pure democracy, but a constitutional republic where no faction, minority or majority, are able to force their will on others. Your society is a society of forced collectivism. My society is a society of allowed individualism, where individuals help each other based on their own wilingness to do so. No one may force any other individual to act against his own will. There is a long-standing tradition of individualism that permeates throughout American society, and that’s why a national healthcare system will probably never be implemented, fortunately. If you want forced collectivism, go somewhere else. Leave us free here in the U.S.

    I am not “advocating that hospitals refuse to provide emergancy (or any other) services to the 13 million citizens of the US who are unable to afford health insurance.” I’m simply advocating a voluntary society. For your information, I was poor at one time, and I went to the hospital. Guess who paid my bill? Charity. All hospitals have a charity fund donated to by private people that anyone can ask for if they go to the hospital. All you have to do is apply for it. If you meet the criteria, they pay your hospital bill. That’s the kind of society I want to live in, rather than your society of savagery.

  16. #16 Flex
    May 18, 2007

    Jojo writes, “If you meet the criteria, they pay your hospital bill.”

    And if you don’t meet the criteria, what happens? Are thrown out on the street? Or does the hospital absorb the cost?

    I had a short discussion at a bar last night with a fellow who had no health insurance a couple of years ago. He was in an accident and endured a 40-hour hospital stay. He was charged $7,000, and the hospital wouldn’t accept partial payments. This was hospital policy because of the number of people who default on their payments. No charities helped him, and the hospital sent their lawyers after him. He’s working it out, but it’s a burden he’s been under for the past two years, and things are just now starting to get a little easier for him. I know this is an anecdote, and anecdotes are not data, but it does indicate that charitable contributions do not (and will not) cover all hospital expenses.

    You state that you want a society of individualism. But you don’t indicate where you place the limits of individual behavior. I assume you have no objection to society condemning and punishing theft or murder. That is a form of ‘forced collectivism’ as you call it. It already exists in the US, I don’t have to move to find it. Extreme individualism is the society of savagery, not the society which adopts and respects law.

    Your use of personal pronouns is interesting. You suggest that I assign the government the purpose of forcing my will on others, while the purpose you assign to government is protect others from being forced to do anything against their will. This is silly. First of all, my will is unimportant. What does matter is a consensus among the citizens that there are greater benefits to our country if we have a national health care system than the costs to our society to implement one. Any minority voices who feel that the burdens placed upon them by implementing a national health care service are too great will still have the avenue of the justice system.

    This consensus among citizens is why zoning laws are legal. It has nothing to do with what Flex or JoJo personally feels about the ideal form of a government. This is reality, this is how our form of government operates. What you appear to want is government according to JoJo. A single person defining government is known as a dictatorship, not democracy. I assure you I don’t want a government according to Flex.

    Second, your ideal government is not only contrary to what we have today, it is also unworkable. All taxation is against people’s will, but we accept that the government services provided, from roads, to schools, to bombs, to courts, to police, etc., are generally of greater benefit to our society than the inequities which develop in a privatized system.

    Nex you, for some reason, want to conflate individualism with government provided services. Which once again, stripped of your flowery language, is a complaint about taxation. Would you support a national health care system that relied on charitable donations? That is, if a non-profit organization was formed to collect money and pay health care costs for the needy you wouldn’t appear to have any objection. It’s not the proposed national health care system you care about. It’s government taxation. And no matter how you define it, taxation is backed by force, and your government already engages in it. I’m not denying reality, you are.

    Finally, if you want to haul in our Federal Constitution? Consider Article 1, Section 8, Paragraph 1, which states, “Congress shall have power: To lay and collect taxes, duties, imposts, and excises, to provide for the common defence and general welfare of the United States.”

    My friend, we are talking about the general welfare of the United States. I know, you don’t see it in that light.

    Some of us do.

  17. #17 JoJo
    May 18, 2007

    Flex,

    If a person is ill and there is no one who will voluntarily help him, then he must left to die. That’s only common decency. People shouldn’t be forced to help others. There are people dying in Africa from hunger. Does that make it OK for you to confiscate part of my income to send over there? Of course not. Why would anything change simply because the person is closer in geographical location?

    My “ideal government” is close to what we have today in the U.S. We don’t have a national healthcare system. You’re the one that wants a system other than what we have today. You want socialism. I am not against taxes. I already pointed that to you. I am against being taxed for things that people don’t use. Everyone uses the liberty itself that the U.S. government provides (through police, military, etc.) therefore people should be forced to pay for these services. Again, there is no free-rider problem with healthcare services, therefore there is no reason to tax people to pay for healthcare. Those who choose to pay a private system for their own healthcare insurance shouldn’t be forced to pay for someone else’s. Don’t impose a socialist system on us.

    “Congress shall have power: To lay and collect taxes, duties, imposts, and excises, to provide for the common defence and general welfare of the United States.” Why do you quote that? The general welfare to you is socialism. The general welfare to me is protection of each individual’s right to live his life as he choose, to make his own decisions over who he will help and who he will not help, and to be free from being forced to pay for things that he does not use or want. The general welfare is individual liberty. That’s something you’ve yet to comprehend or appreciate.

  18. #18 Josh Rosenau
    May 19, 2007

    Why not a mercenary military? Why not move to private police forces, so that each person can protect himself according to his ability to afford protection?

    The answer, as you ably observe, is that doing so would undermine people’s liberties. So does leaving healthcare entirely to the private markets. I know of no moral tradition in the world which regards allowing someone to die as “common decency.” Nearly all, if not every single moral tradition, has some form of the Golden Rule (or Kant’s Categorical Imperative, or Rawls’s veil of ignorance) which provides a sound basis for altruistic behavior.

    An important insight that people gained in the 20th century, which the founding fathers didn’t fully appreciate, is that economic freedom is a precondition to other forms of liberty. Economic discrimination through Jim Crow laws are one obvious example of how restrictions on economic liberties can be leveraged to eliminate many of a person’s liberties.

    The general welfare must be general, not individual. A statement about the general welfare of the nation which does not actually address the general welfare of the nation as a whole is obviously flawed. If the Founders meant to protect only individual liberties, they would have said that. They put it in terms of the general state of the Union for a very clear and very good reason. A rising tide that swamps some boats is worse for everyone (in particular and in general) than a tide that raises all boats.

  19. #19 JoJo
    May 19, 2007

    Josh,

    I didn’t say that it was common decency to allow someone to die. I said it was common decency not to force people to aid those in need. “Altruism” is fine if that’s what you want to engage in. But, that’s quite a different thing from forcing someone to help someone else. I, you, nor anyone else has a moral obligation to help anyone else. If we help others, we do it because we want to. To force others to abide by your personal morality, to force them to aid others, is uncivilized. It is fascism. It is immoral. One should never be allowed to impose his morality on anyone else. Preventing people such as you from doing that is the essence of freedom.

    Apparently you have a perverse idea of “liberty” if you think a capitalist healthcare system “undermine’s people’s liberty.” What else is liberty but the lack of coercion against the individual?

    I find it ludicrous that you make the statement “An important insight that people gained in the 20th century, which the founding fathers didn’t fully appreciate, is that economic freedom is a precondition to other forms of liberty.” Apparently you dont know what “economic freedom” means. Economic freedom is exactly what I advocate. Economic freedom is another term for laissez-faire ..for free markets. I advocate personal and economic freedom ..the freedom, as far as is possible, for the individual to live his own life as he sees fit without having people such as you forcing your morality on them.

    Do not impose a socialist/fascist national healthcare system on free people. I, and many others, prefer a society where people interact on a voluntary basis, as much as that is possible.

  20. #20 Flex
    May 21, 2007

    JoJo wrote, “What else is liberty but the lack of coercion against the individual?”

    I’m so glad you agree with me on this.

    Where we apparently don’t agree is that I feel that government is not the only source, or even tha major source, of coercion. And in fact I suspect you wouldn’t believe that government coercion can be far more benign than peer pressure, corporate decisions made simply for profit, the results of fraudulent claims for products, or the resultant coercion inherent to being exposed to tainted food or water.

    The big difference is that we, the public, can control the level of government coercion to maintain level we prefer. Apparently, the level we have today is what you think of as the ideal level. Not everyone agrees with you. Some people would like to see a relaxation of government regulations; increasing the liberty for religious organizations to put pressure on schools, or relaxing the safety standards in mines. These government regulations are restrictions on libery.

    As for your comment about economic freedom, I don’t know if you have studied economics, but if you have you realize that laissez-faire economics is just about the worst thing that can happen to the individual consumer. The result of extended laissez-faire economics is that the corporations increase the barriers to entry and consolidate their market positions until they have formed monopolies. In a monopoly market, the supplier sets the price. In a monopolistic market the mathematically best price point is at twice what a perfectly competitive market would charge.

    That’s not increased libery for consumers, that’s increased liberty for corporations. Government regulations on the market are necessary to reach toward the ideal of perfect competition. Although I’d agree with you that socialism is the worst form for an economy, laissez-faire capitalism is a close second. A regulated capitalism is by far the preferable one from an economic theory perspective. Luckily, that’s what we have today.

    What Josh is advocating (as I read it), is that the economic freedom of an individual consumer is a precondition to other forms of liberty. That is, when the consumer’s income is entirely disposable income the consumer has the most liberty. A consumer is not free to the extent that their income is consumed by non-disposable demands. Food, clothing, shelter and health care are non-disposable demands on a person’s income.

    A person who chooses to forgo health care insurance voluntarily may have a temporarily increase in disposable income. But when health problems occur either that individual has entered a period without any disposable income (and thus no liberty) or, and increasingly, the society has to absorb the costs of their health care needs.

    Yeap, you have indicated that those people who can’t afford health care insurance should die to protect you from the government increasing the economic liberty of others. That’s not quite as patriotic as Patrick Henry, at least he was (rhetorically) willing to give up his own life.

  21. #21 Josh Rosenau
    May 22, 2007

    Yes, JoJo is apparently unaware that even advocates of laissez-faire capitalism (Adam Smith, Milton Friedman) see an important role for the government in regulating the market to prevent certain sorts of market inefficiencies.

    Let us accept JoJo’s definition of liberty for the moment. It’s flawed, but it offers a useful starting point.

    “Lack of coercion of the individual.” Are we to believe that there’s no coercion, no forced removal of life, in the scenario JoJo offered: “if a person is ill and there is no one who will voluntarily help him, then he must left to die.” He “must” die. Not because of some law of nature, but because he was coerced. It seems that JoJo only wants to talk about the people who aren’t in the scenario, the ones who could contribute to an insurance pool in case they should ever wind up ill and with no one to help them. There is still a person in the center of that scenario, the one dying. I think that allowing someone to die in those circumstances is indecent, and you don’t seem to disagree.

    Freedom from fear, freedom of religion, freedom of speech, and freedom from want. The famous four freedoms. And as the great man said, “freedom from fear is eternally linked with freedom from want.” Economic freedom is about freedom from want.

  22. #22 Flex
    May 22, 2007

    No Josh, I don’t disagree with you. I do feel that there is a good moral argument for national health care.

    However, I find the trouble with using moral arguments is that they work best on people who have already given you the authority to make moral arguments. A pastor can make a moral argument as part of a sermon, and the congregation will listen and accept his argument.

    A person who doesn’t think you have the right, or ability, to make a moral judgement will often disagree with you simply because they don’t think they should be bound by your morality. It’s not a fair way to argue, because moral arguments should be evaluated just like any other arguments; dispassionately.

    I’ve developed some techniques to argue with those who have bought into the weird idea that the one part of society that everyone has a voice in, i.e. government, is inherently evil. While private business, which would prefer to be answerable to no morality other than contract law (caveat emptor), is inherently good. This seems to happen because government taxation is visible, but private taxation by obscene profit margins is not visible.

    The technique which seems to work the best is to show how they would benefit from the social programs. I know, it’s engaging their cupidity, but it works.

  23. #23 JoJo
    May 23, 2007

    Flex,

    You said “I don’t know if you have studied economics, but if you have you realize that laissez-faire economics is just about the worst thing that can happen to the individual consumer. The result of extended laissez-faire economics is that the corporations increase the barriers to entry and consolidate their market positions until they have formed monopolies. In a monopoly market, the supplier sets the price. In a monopolistic market the mathematically best price point is at twice what a perfectly competitive market would charge.”

    Actually I have studied economics, and I know that government create monopolies. Laissez-faire doesn’t cause monopoly. There’s never been a case of a monopoly arising that wasn’t brought on by government-imposed barriers to entry. As long as there is laissez-faire, a business can’t become a monopoly, meaning a firm for which there is no competition for the long term, unless they are able to sustain providing a good or service at very low prices and very high quality. A firm would have to keep their prices low and quality high for a sustained time to acheive a monopoly. It’s never happened. If it did happen it would be nothing to worry about. Low prices and high quality is exactly what I’m looking for. The example I pointed out earlier was the United States Postal Service. It is ILLEGAL to compete with them in delivering the mail. And, it’s absolutely ludicrous that you’re complaining about monopoles when you want to institute a government-imposed monopoly healthcare system. You have a twisted view. You think it’s OK for government to impose monopolies, but at the same time you claim to be in fear of free-market monopolies..which don’t even occur. Your position is absurd.

  24. #24 Josh Rosenau
    May 23, 2007

    In what fantasy land does private industry not create monopolies? As Adam Smith put it: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. … But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies.” The government has a legitimate role in regulating markets to prevent price-fixing, monopolies and trusts from breaking the market.

    The trusts created by the robber barons were not government monopolies, and resulted from exactly the sorts of contrivances Smith described. Anti-trust laws were created to prevent such abuses. See also ADM’s price-fixing case for a recent example.

    Yes, a monopolist must underbid the market to establish the monopoly (economists call this a loss-leader). Having done so and bought up or bankrupted their competition, they can set any price at all. If the major suppliers all have exclusive contracts with the monopolist, and/or if the monopolist controls distribution through ownership or contracts, a new player cannot successfully enter the marketplace. This is especially true of industries with high barriers to entry (expensive equipment or high R&D costs, for instance).

    You say you studied economics. You don’t say whether you did well in that course, and I’m inclined to think you didn’t.

  25. #25 JoJo
    May 23, 2007

    Josh,
    The question is, who was your economic history professor? I call for his resignation.

    Any particular businesses would certainly love to become a monopoly, however they cannot do this without the government assisting them in doing so by putting up coercive barriers to entry. What “trusts created by the robber barrons” are you talking about? Please name one. If it was really a monopoly, I’ll show your the government intervention that was causing it. I’ll assume your example is every amateur socialist’s favorite example, Standard Oil? Am I right? Ok, then. Standard Oil was not a monopoly, with monopoly being understood a sustained lack of competition. For your information, and left out of your socialist-authorized account of history, by the time the trial started which eventually broke up Standard, Standard controlled only 64% of refining was in competition with over 100 other refiners. It was no a monopoly. It had a greater share earlier, but it was being eroded by competition. That’s what happens in a laissez-faire market. What’s more they were driving prices DOWN, not up, in their efforts to control market share. Again, that’s the only way you can become a monopoly in a free market – reducing prices for consumers, which is not a problem for consumers. But again, a monopoly, a sustained situation like that, has never even happened. As long as government stays out of the way, there is competitive pressure to keep lowering prices.

    Next you talk about what is called “predatory pricing” where a business lowers prices to get rid of the competition and then raises prices when they’re gone. For your information, and to bring you up to date with modern economics, the theory is now recognized to be bunk. It’s fantasy. The firm would have to KEEP prices low in order to prevent competition from arising. If that’s what was happening what is the problem? Read “The Myth Of Predatory Pricing” for more information: http://www.cato.org/pubs/pas/pa-169.html

    Again, like user Flex, you have a problem with what you perceive a danger of monopolies arising in a free market, yet you have no complain whatsoever of actual government monopolies, such as the US Post Office, and the monopoly national healthcare system you wish to have.

    Finally, I’ll leave you with the word of pretty good economist named Alan Greenspan, who opposed anti-trust: “No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible.” http://www.polyconomics.com/searchbase/06-12-98.html

    There is no such thing as a monopoly arising due to laissez-faire.

  26. #26 Flex
    May 24, 2007

    I’m sorry,

    I must have missed the collapse of the Microsoft monopoly. How did government create that one? And do you think that deliberately, and without any technical justifications, tying their internet browser into the operating system wasn’t creating a barrier to entry to other internet browser companies? Netscape went from a 70% share of the internet browser market to <20% in a couple of years. Which browser do you use? Why? Because Netscape and Firefox are still free to non-business users.

    Or how about Microsoft’s documented behavior concerning it’s API’s?

    Or how about the fact that due to their monopolistic power, they declined to add the technical features available in other broswers for many years?

    For your information, the Sherman Act does not forbid monopolies. What is does is prohibit companies from using their monopoly power to manipulate the market. Let’s go back a few years to the original AT&T. This was a monopoly, allowed to continue under the Sherman Act because AT&T agreed to regulation and never abused it’s monopoly power. It was of general benefit to society for a single phone company to manage all the lines.

    It wasn’t until the laws were changed (due to the rise of the cable television companies) which forced companies to allow competetitors to rent their lines rather than run their own. That’s a bit confused, but in essence if Comcast wants to rent Time-Warner’s cableplant, Time-Warner can’t say no.

    JoJo, I draw a distinction between services which generally benefit all members of society, and those services which are of benefit to those that chose them. Roads, schools, postal service are of benefit to all members of our society. Maintaining the quality of these services cannot be left in the hands of private industry without having some segment of society which would be left out. AT&T would never have run the twenty miles of wire to an isolated farmhouse in the 1930′s without the government footing some of the bill.

    There is another example of a service which is generally felt to be becoming necessary to all members of society going on right now. You may not have heard about it, but local governments across the nation are installing free WIFI coverage over their entire municipality. The local governments, elected by the citizens, feel that having access to the internet is important enough to all of their constituants to pay for it out of your tax dollars. The speed is not fo great, but it will be accessable by everyone, without charge. How do you feel about this? Is government picking you pocket again?

    Once again, government (ideally) is transparent and ultimately controlled by the population. Private industry is not transparent (often deliberately obscure), and inefficiencies are buried. If a service is to benefit society as a whole, giving all the stakeholders, that is all of society, the ability to review and comment on the quality and efficiency of the service is desirable.

    I hope you now see that monopolies, and near monopolies which can have a large impact on a market, can arise from laissez-faire economies, I’ve given you a few examples. I don’t argue that monopolies can be created by government. The whole point of The Wealth of Nations was to illustrate that royal patent monopolies will not generate innovation and wealth like competition does. At the time Adam Smith was writing, there were very few examples of monopolies forming strictly within a market. We have several examples of them now.

    Finally, in the Standard Oil case, no one contests that Standard Oil wasn’t a complete monopoly. But they did have monopolistic power over the market. When Standard Oil raised prices, so did most of their competitors. When Standard Oil lowered prices, some of their competitors went bankrupt. That’s why they were prosecuted under the Sherman Anti-Trust Act. They abused their monopoly power. It’s not illegal to be a monopoly, it’s illegal to abuse the power that an monopoly gives you.

    Alan Greenspan may be a pretty good economist, even though he comes from the Classical school which says that in the long run everything will balence out (although it may take several hundred years). I tend to think that John Maynard Keynes comment on this idea is appropriate, “In the long run, we are all dead.”

  27. #27 Josh Rosenau
    May 24, 2007

    Flex makes the important point that the Sherman Anti-Trust Act only forbids companies from abusing their monopoly power. It was necessary to demonstrate that Standard Oil had harmed consumers using its monopolistic control of the market. How can a monopolist maintain excessive prices? I already pointed out that high barriers to entry are one way, and exclusive arrangements with suppliers and wholesalers are another. Had JoJo studied economic history, I would not now have to explain that is precisely how trusts operated. The monopolist would cut exclusive deals with railroads, ensuring that competitors could not bring steel, cattle or oil to market (a precedent-setting anti-trust case was Teddy Roosevelt’s suit breaking up a railroad trust). Rockefeller’s Standard Oil famously used his monopsonistic control of railroad prices to crush his competitors, forcing railroads to give him good prices and to give his competitors unsustainable prices.

    I do not know where government is supposed to have been involved in that.

    I don’t dispute that government monopolies exist, and no one here is arguing that they are all bad. JoJo acknowledges benefits to having a government military and government police forces. No one thinks courts of law ought to be privatized.

    As Flex and I have pointed out, monopolies are only problematic when they harm consumers. Consumers upset about a government monopoly have a very direct means of changing those conditions – the democratic process. Mayors who mismanage the police get booted, as to Presidents and Congresses who mismanage the military. The same is already true of government healthcare. VA care and Medicare were big parts of the 2006 election, as was the state of the military.

    Health insurance is a situation where monopoly can be to the great benefit of consumers. Larger risk pools mean lower premiums and less aggregate risk. You get an even larger risk pool if you require people to purchase insurance. To ensure that the consumers aren’t abused or treated unfairly, you need an open and carefully regulated process. At which point you have government health insurance, or its moral equivalent. Bringing it entirely within the government ensures accountability and reduces administrative costs (as seen with Medicare).

    Calling it “socialism” is not a counter-argument. It’s a petty, inaccurate ad hominem that serves only to demonstrate that you have no actual economic argument, just ideological table-pounding.

  28. #28 JoJo
    May 24, 2007

    I’m not even going to read your latest messages. This discussion is going in all sorts of directions. Both of you guys think like the uneducated masses think. You don’t understand laissez-faire economics. You go on and continue believing what what your manipulators have told you: The economy must be controlled by central planners. Freedom of individual economic decision should not be allowed because it is chaos. People should not be allowed to spend their money how they wish but those decisions must be overridden by a central controller or faction who knows better. Individual liberty is dangerous. I know how you guys think. I know the cloud you’re living under. I’ll just leave you both in “the Matrix.” I’m sorry I wasted my time. So long.

    P.S. The fortunate thing is that the US will never have a national healthcare system, even if a majority supported it. That’s the beauty of a constitutional republic as opposed to actual democracy. In a constitutional republic, the majority is limited in its ability to enforce its will on the minority. http://en.wikipedia.org/wiki/Constitutional_republic

  29. #29 Flex
    May 25, 2007

    HAhahahahaha!!

    Well, I guess JoJo has left the building.

    Without doing anything more substansive that making a fool of himself. Look JoJo, You are welcome to make ad hominen accusations about my level of understanding of history and economics as much as you want. However, until you have dissected my arguments and shown where I’ve made mistakes, I’ll give ad hominem attacks the exact level of attention they deserve… a horselaugh.

    An ad hominem attack is completely worthless against an anonymous individual. For all you know I teach economics.

    You are absoutely correct that our republic limits the ability of a majority to enforce it’s will on a minority. However, you will find if you read the various arguments by tax dodgers in courts, and the subsequent court rulings, that a tax applied to all members of society does not qualify as suppression of a minority by a majority. A minority does not get exemptions from those social costs applied to all of society. Another area where this ruling applies concerns zoning laws.

    None of this means that nationalize healthcare is against the rules of our constitutional republic, despite your claim to the contray.