Sunday, September 7, 2008

Government Versus the Free Market

In today's Denver Post I was intrigued by John Andrew's citing of "Ten Principles" from Joe Bast of the Heartland Institute, so I did what all educated voters should do which is follow up on the source. Surprisingly, the alleged "non-partisan" source is actually heading a clearly conservative, most likely libertarian, think tank. Bast is listed as president of the Heartland Institute, and while his biography refers to his history as a high school debater who went to college, there is no information to qualify him as a source on energy, pollution, climate change, or health care. There are no clear credentials for his "academics" listed either. However, Andrews implies his principles are the last word on all these issues.

I would concur with his position that energy independence is an illusion, at least while we are using the internal combustion engine, though that's not a given. While using oil, we will always be importing it, but there's no reason to commit to always using it. When the Chevy Volt or Honda's new hydrogen fuel cell hit the road, we may be well on our way to independence, considering coal is not scarce here. I realize these are long term solutions; however, I wouldn't say we will always depend on oil, especially considering new drilling will take years to go on-line. Andrews does note that oil is a global commodity. Thus, drilling here does not mean the oil will stay here - Shell, BP, and Chevron will sell all oil - even that found in ANWAR - on the open market; sadly, American voters don't realize this.

However, Mr. Bast and Mr. Andrews should realize that the free market won't provide health insurance freely, and the current system is becoming unbearable for many voters. From a market perspective, health insurance companies are in the business of collecting premiums and denying claims - that is how money is made. That is why no business would choose to cover - for anything less than astronomical premiums - people with pre-existing conditions. It is in the interest of all nations to have their citizens covered. If I have a child with leukemia, a shift to HSAs or the ability to buy insurance across state lines is not going to help me at all. That is why large pools work effectively; they disperse the risk. That said, a blend of public and private coverage like the Wyden-Bennett plan or extending FEHPB to all Americans is the only thing that middle class voters are going to accept. Otherwise, they will be eventually priced out of free market coverage. Giving a $5000 tax credit to cover premiums that average $12000 for a population with an income of $420000 is the same fuzzy math we've seen for eight years, at which time we've seen an increasingly de-regulated economy run by conservatives generate huge deficits, debt, and financial precariousness.

In terms of the free market, I concur that less regulation can free up markets to respond to need. However, we must also admit that the free market can be irresponsible in search of quick profits. Let's not pretend that both Paulson and Bernancke don't acknowledge that an overly de-regulated mortgage industry has contributed to, if not outright caused, our current crisis. Similar criticisms can be said of the credit and energy industry. No "non-partisan" critic or researcher would argue that de-regulation didn't contribute to Enron's collapse. No one can logically argue that if we didn't regulate industry we wouldn't return to eras of widespread pollution that led to such tragedies as the Cuyahoga River in the 1970s. In terms of industry regulation, a logical, rational voter would follow Reagan's mantra of "trust, but verify." If we have a problem with illegal immigrants in the country, we must admit that industry will hire them if we don't regulate them. This seems to be common sense to me. Belief in free-market capitalism can't be purely ideological; we must be pragmatic.

I'm a fiscal conservative, but, like Ronald Reagan - the true not mythical one, I'm a pragmatist. I'm hoping voters will be seek to be more informed on the actual statistics before choosing McCain's fiscal warts.


PhreedomPhan said...

Michael, I had to laugh when I read your comment that you're a "fiscal conservative." I was reminded of a candidates night when the very liberal spending (our money not his) Democratic candidate started out telling the audience, mostly seniors, about all the wonderful programs he planned "for them." The Constitutional candidate got up and started talking about cutting back on government programs and spending. The favorable nods from the audience was not lost on the Democrat. His next time to speak he said, "I, too, like Bob am a fiscal conservative."

As we were leaving I said, "Hey, Pete, since when are you a fiscal conservative." He said, "Since fifteen minutes ago."

Anyway, if you're a teacher and have an interest in politics and economics you should be aware of this site: It has many books on history, money, and politics. Most are from the 19th Century.

If you are interested in some history mixed with analysis from a small government, more nationalistic perspective, you might want to look at my blogs. They're meant more to be a sort of reference than an ongoing blog, although I hope to get up the energy to add to the "americasenemies."


Anonymous said...


Thanks for posting, and I will be certain to check out your site and the recommended reading you offered as well. As a teacher I always encourage my students to read both sides of the issue before drawing a conclusion, and thus, I read the blogs of both Paul Krugman and Gregory Mankiw each day.

In terms of fiscal conservatism, I'm sure your amusement comes from the fact that I'm fiscally conservative, not libertarian, though, in all honesty, I often vote for the Libertarian candidates. I assert that, like the first libertarian Henry David Thoreau, I am for limited government, but I am not anti-government. There are numerous issues - chief among them is protecting individual liberties - that must be handled by a efficient and effective government. A strong military, law enforcement, fire protection, disaster relief, and, yes, even public education are included.

As Edmund Burke noted, "the revenue of the state is the state." Thus, a poorly financed government is ineffective in its duties. I'm more practical than that, as was, I noted, Ronald Reagan. The problem with the current crop of "fiscal conservatives (sic)" is that they are so ideological they have no concept of what it actually costs to run a government (and I don't deny that there is waste, fraud, and abuse). However, P.J. O'Rourke said it best when he noted, "Republicans run on the idea that the government can't work, and then they get elected and prove it."

Thanks for commenting.