Showing posts with label republicans. Show all posts
Showing posts with label republicans. Show all posts

Wednesday, March 24, 2010

Reconciling Socialism and Libertarianism through Federalism

When it comes to national politics, I am certainly a libertarian. I think the Federal budget needs to be cut massively to about a third of what it is, and I spare no department. Entitlement programs need to be put on a path of elimination, the military's focus needs to be realigned, and size needs to be drastically reduced. (100billion for an elite Navy, Air Force, Special Forces, and small Army, not two million soldiers for occupations) That said, I am not completely opposed to liberalism or socialism, and I reconcile the two via Federalism. As I said, I staunchly believe the Federal government's scope and budget needs to be drastically reduced, and that allows the freedom of the states to develop in different ways.

If the overwhelming majority of Californians want a socialist nanny-state, then that is okay with me. If Mississippians want zero government, low education levels and poor public health, that's fine with me as well. Sometimes people will say, "If you don't like X, (policy, law, politician) leave the country." That's not really feasible. When it comes to the state level, it's vastly more flexible. It's not perfectly ideal, even better would be decentralization to the city level which would allow for simpler Tiebout sorting. However, some programs rely on economies of scale, and are simply not feasible for the lowest level of government.

Here are the Tiebout assumptions

1. Mobile Consumers: Consumers are free to choose where they live. There are no costs associated with moving. Obviously there are costs associated with moving, but national mobility doesn't exist really. State does, and municipal certainly.
2. Complete information Obviously complete information is difficult, but it is easy to research social programs, tax levels, and public services. Ie- Property taxes, public school levels, etc.
3. Many Communities to chose from There's one nation. 50 states. Thousands of municipalities.
4. Commuting is not an issue The Tiebout model reflects more municipal living, not Federalism, so I ignore this one.
5. Public Goods do not spill over of benefits/costs from one community to the next This is an issue, particularly for municipalities. Suburbs are often free riders of city programs.
6. An optimal city size exists: Economies of scale Likewise to states.
7. Communities try to achieve "optimal size" Likewise to states.
8. Commuties are rational and try to keep the public 'bad' consumers away. This assumption reflects more the racial/monetary sorting within municipalities, and isn't really valid for state-to-state migration.

Thursday, October 15, 2009

Various thoughts on Universal Health Care

Universal Health Care in the United States

If anything highlights the dysfunctional and perhaps self-destructive nature of politics, it is the health care debate that has been raging over the past month or so. Let me first question Obama's decision to push this in the summer, July and August are notoriously slow political months and certainly I do not believe it has helped his cause. Here's my various thoughts on the health care debate in this country.

#1- What are we getting for our taxes in this country?
In a brilliant Daily Show clip, John Oliver goes to a anti-tax tea party in New Jersey. A protester tells him "New Jersey has the highest property taxes in the nation" to which his biting reply is "And what are you getting for it, because this is an awful state!" I wonder the same thing about our taxes, surely as far as social programs go, health care should be a priority. Yet European nations almost universally have universal health coverage, and moderate-to-high tax rates. Spain, for example has a well funded education system, a fantastic public transportation network, and universal health care. What everyone says is "Oh, European socialists have tax systems that kill business." European politics does put a bit of a stranglehold on business, and while I have no evidence to back this up, I would put it down more to regulation and disincentives to entrepeneurship, innovation, and R&D more than the tax levels. Perhaps not in Northern Europe, but I don't know for sure. The point which rends all of this argument moot anyways, is that in several OECD (1st World Countries) such as Spain and Italy, they actually have lower tax rates than some places in the United States! There was an article in the left-leaning Spanish paper El Pais that pointed out that in New York, Massachusetts, New Jersey, California, and a few other predominantly Northeastern states, the overall tax rates are higher in the American states! Which begs the question of how efficiently our tax dollars are being spent. (answer: not

#2- Universal Health Care in a European form is not feasible for the United States
Our health care is generally pretty good, with advancing technology, new medications, and generally short wait times. The US can provide health care for all of its' citizens, though a European-style National Health Service is probably not apt for the process. Particularly in a time with economic crisis and unparalleled government deficits and debt, we simply cannot afford the $1 trillion-dollar plus systems they have. To Obama's credit, he has realized this and his plan would not replace private insurers as much as it would cover those unable to procure this insurance for a variety of reasons. Having just spent trillions to avert financial armageddon, the US simply does not have the finances for this. Nor is it necessarily the best plan. But I think Obama's plan, however much of a scaled-down version it is, is also not financially doable for the US. Frankly as it stands, no large-scale overhaul, of any social service right now. We're looking at a $2trillion deficit right now. Unless we want to burden further the future generations of Americans, our priority's right now are to stabilize the economy and slow the sea of debt that the United States government is drowning in.

#3- Republicans are wrong in their rhetoric
On the Republican side, "Swift-boat" style ads are drumming up fears of "death panels" drawing on a specific part of legislation that simply provides for end-of-life-planning. Like hospice care, getting your will together, etc. There's a lot of people with terminal conditions in this country and many more that very old. Life-planning is an extremely, rational, important step. There is the concern of scarcity and a government-run health care that would have red-tape amok and an inefficient bureaucracy, these are very legitimate concerns. However, the "health care is between you and your doctor" ad by anti-ObamaCare activists is ridiculous. There's already massive bureaucracies out there, they are called the insurance companies. I personally have dealt with them extensively and while they have always allowed me to take expensive exams and such in a timely manner, some of the smallest things like getting reimbursed for medication is a time-intensive process. The scarcity argument and bureaucracy are ones they should expound upon, they do bring up legitimate concerns but not surprisingly, are going about it in the wrong way. But do the ends justify the means? I can see an anti-ObamaCare advocate justifying it by saying the other topics are simply not sexy enough (financial issues, scarcity) so they have to drum it up to accomplish their goal, derailing national health care.

#4- Democrats are wrong in their planning and rhetoric
This shouldn't surprise anyone, as the only thing the two parties can ever agree on civilly is how to pad each others pockets and keep any real independent groups out of government. But the Dems are equally culpable as the Republicans on slander and misinformation. Let's start with the plan first, obvious in a wholly Democratic-led government, it is their responsibility to lead the way, and the GOP will simply play defense. That is exactly how the Dems behaved during the Bush administration, it's natural. But they have failed poorly here, it seems none can agree on specifically what they are aiming for. The Congressional Dems want one thing, Obama says another, and the Health Secretary says another thing. Are we looking at a universal health care system? Is it going to be government run, or like Fannie Mae and Freddy Mac (probably poor examples to bring up) government-sponsored. Often they talk about creating a health care cooperative, but I question whether one can be financially healthy when a sizeable portion of their mission would presumably be insuring people who have difficulty getting coverage from existing insurers. All in all, they have done a terrible job of articulating their plan to the point numerous Democrats have said they will not support the current bill. But they are wrong in their rhetoric as well, senior Democrats have labelled anti-ObamaCare activists as "an angry mob" and figuratively as archaic hillbillies who are stuck in the 19th century. These people have legitimate concerns about the size and scope of the US Federal government, and in light of the massive expansion of government over the past 2 years or so, they are fairly justified. The US government has taken over large banks, an automaker, and pumped trillions into the economy in exchange for equity.

I'll cut it off for now, even if I haven't fully developed my thoughts.

Monday, March 9, 2009

The Crisis

There's been a lot of talk of the unprecedented nature of the recession, and all of these pundits (who certainly won't be losing their job) are probably right. Unfortunately, nearly everyone is wrong about how to go about solving it.

Everyone remembers the Dot-Com bubble from the late 90s/early 2000s. Companies were sprouting up everywhere offering home delivery of groceries, the iSmell, or my favorite bust, the CueCat. Financing was seemingly ubiquitous, venture capital flowed throughout Silicon Valley. Of course, we all know how the story ends. Bankruptcies, a declining economy, and well, people realizing how idiotic half these products were (like absolutely everything in SkyMall) caused a rapid collapse of the industry. The bubble popped, as many put it.

The crisis is too complicated to simplify, but I'm going to attempt to address one of the principle problems. The economic downtown originated in the mortgage industry; easy (and careless) lending caused rapid speculation in the market. Much as there were too many CueCat companies out there in the market, there were too many mortgages being laid out. Both political parties have blamed one side, unfortunately neither has come out and blamed it on both. Democrats blame greedy and unscrupulous lenders for pushing mortgages, and Republicans blame the people for signing up for mortgages they couldn´t afford. Both are culpable.

This crisis hit America on Wall Street first and foremost. Most of these mortgages were sliced up, repacked, and sold to other banks. (I´m not sure how lots of very risky assets is much better than a few, but I guess simple probability less likely you'll lose all of your money) The crisis then spread throught America´s financial system, causing various bank collapses, most notably Lehman Brothers and WaMu. With a lack of liquidity and a general economic downturn (damn business cycles) this plunged the US into a recession.

One of my chief complaints about all the plans to fix the housing sector are this; there were too many CueCats in the market, and there was too much speculation in this bubble. All plans thus far have tried to maintain housing values, far above what they should be! Everyone in the political sphere has seemingly accepted this, after all, no one wants the values to plummet. But this is an insanely idiotic way to get out of this problem, one that will do nothing but haunt the market for decades to come. If the value of a good is too high due to speculation, it must fall to its market value. Artificially maintaining the price of a home/mortgage will help no one.