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A couple gems from Krugman’s -> Closing Arguments on Health Care – NYTimes

March 21, 2010

Whenever you read Paul Krugman, it is always helpful to remember that this man won a Nobel Peace Prize in Economics. It might as well have been for Pushing Water Uphill. Here are a couple remarkable statements from his latest New York times column. That’s right…THE New York Times – where The Vision of the Anointed is valued above any rational thought:

Beyond that, this is a story that could happen only in America. In every other advanced nation, insurance coverage is available to everyone regardless of medical history. Our system is unique in its cruelty.


So you end up with a tripartite policy: elimination of medical discrimination, mandated coverage, and premium subsidies.

Above, Krugman is referencing the much lauded “pre-existing conditions” angle. Now, in a tiny way, I actually agree that often insurance companies can be extremely harsh in their restrictions regarding people who have pre-existing conditions. However, the problem here is the screwy way some companies define “pre-existing.” That should draw Krugman’s ire – not the fact that any pre-existing condition must be ignored. The latter concept is lunacy. What would be the incentive to purchase insurance, if you were guaranteed coverage regardless of any pre-existing conditions? The whole point of insurance being that you are paying someone else to pool the risk that you may or may not require healthcare. It is not “discrimination” to willfully take on exorbitant risk.

So what of Krugman’s solution: 1) Force insurance providers not to “discriminate.” Coercing and removing the risk for mortgage lenders to make less “discriminatory” loans sure worked out really well for the mortgage industry. 2) Mandate everyone purchase insurance to increase the risk pool. Good idea…except that the poor are immediately and totally screwed. His solution for that – subsidize the poor. His solution to pay for that subsidy – you guessed it – taxing other groups of people. This is a fine strategy, if you endorse using the law to plunder various arbitrary groups of individuals. Since the law’s sole purpose is to provide justice by defending a man’s life, liberty, and property, you should be able to see the obvious contradiction. In short – Krugman solution is practicing injustice to promote justice.

Also, with regard to his, “every other advanced nation…,” statement; massive entitlement programs are exactly why most of these nations are going broke. Apparently, in Krugman’s mind, it is considered “advanced” to not only be fiscally irresponsible, but also to proclaim that A is not A.

Next quote:

Can you imagine a better reform? Sure. If Harry Truman had managed to add health care to Social Security back in 1947, we’d have a better, cheaper system than the one whose fate now hangs in the balance.

Yes, nobel laureate Paul Krugman just referenced Social Securityin the same sentence with “better” and “cheaper.” Anyone who grasps mathematics knows that Social Security is careening at breakneck speed into the abyss of insolvency. Furthermore – it is a textbook Ponzi Scheme,requiring an ever expanding population of people who pay into the system. (For the record – the current population growth in America is 2.1, a number which includes massive latino immigration rates. In order for a population to maintain itself, the absolute lowest-low population growth rate must be 2.11 children per family.) Krugman’s statement above relies on demonstratively ludicrous political platitude that Social Security is a trust fund.
The point I am trying to make here is not that I am a better economist than Paul Krugman. I am not. Rather, our basic assumptions about economics and law are fundamentally different. Paul Krugman’s flaw, is not a lack of intelligence — quite the opposite is true. His problems arise from the rather obvious flaws in his foundational assumptions.
For instance, Krugman’s appeals to the “cruelty” of our system. Surprise, cruelty exists on earth – but in Paul Krugman’s mind, only in our health system, and the only solution to this cruelty – is to reject the most basic principal of economics: scarcity. It may be cruel to view healthcare as a scarce resource, but this is an unalterable fact. Again, it is a fact that cruelty exists in our system, but only in a childish fantasy world can you assume this cruelty will be eliminated through the right government program. There will still be the very same amount of healthcare regardless of any program. The cost of healthcare is in direct relationship to its supply and demand, and some inherent inefficiencies within the current system. There may be things we can do to weed out these inefficiencies, but it is nearly a complete denial of human history to believe that a government system will be more efficient. The real cruelty here is perpetrated by the New York Times, by propping up a man who promotes such a Disney-movie level view of economics.
As much as he might try to hide it, Krugman holds firm to Keynesian economic theory, and is a classic purveyor of The Vision of the Anointed. These ideas aren’t directly expressed, but can be easily derived from his writings. Take for instance – his vision of law expressed above. Though he doesn’t state it directly, it can be determined by simply extending his arguments to their logical conclusion. It is clear that Krugman does not hold that the law is an instrument of justice alone, but that it may also be employed to correct certain economic inequalities within a society. The concept of “economic justice” is based on the simplistic and clearly false notion that all people have the same wants, needs, and drive.
The Vision of the Anointed is complicated, but can be summed up in the idea that broad and complex decisions are best made by “experts” or “intellectuals”, rather than individual persons. It assumes that if the right constraints are removed, human dispositions can be improved. Thus, the real key to societal advancement is to install the very best and brightest people to positions in which they have the power to make these decisions. This idea is really at the heart of Keynesian economic theory; that an empowered group is required to manage and provide direction to the vast economic forces within a nation. In other words – The Vision of the Anointed is the belief that an enlightened group of men can make people or society better.
I reject this vision. I tend to follow the Austrian School of economics which is essentially focused on liberty and understanding Human Action. I define law as Frederick Bastiat did:
The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.
In that statement, I find the proper definition and function of government – a tool, or an extension of individual rights. I acknowledge the depressing, yet true fact that health insurance and health care are scarce resources, and do not exist purely because of my desire for their existence. In my opinion – Krugman bends or discards these facts to serve his vision. His view of the law perverts the law’s only function, by legalizing plunder, and preforming actions which would be unlawful if practiced by any individual. Visions ought to be based on facts of nature, rather than attempts to bend nature to fit a vision. The same can be said for economics.
Be sure to read Krugman’s entire column here:

Posted via web from Andrew Colclough

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