It's very late -- or actually very early -- and I'm listening to this talk radio show. A guy just called in and said something like, "The executives of government-funded free market businesses shouldn't get bonuses."
What's wrong with this picture?
If an enterprise is "government-funded" it ain't "free market." That's like saying your bull had a baby.
Listening to a lot of chatter for weeks now about the "stimulus" bill, cap-and-tax, the GM takeover, bank bail-outs, etc., it occurs to me that most people haven't got any idea what free enterprise or capitalism is. They seem to look at it as some kind of virtual bank with limitless resources where they can draw funds forever and never run out.
So anyway, if a company, an industry, or any type of initiative is government-funded, government-regulated, or established by the government, it's not strictly "free enterprise."
Just because an organization might be privately-owned, like the pharmaceutical companies, doesn't mean it's free enterprise. The pharmas, for example, are so heavily regulated by the FDA and heaven only knows how many other regulatory agencies, they survive pretty much on the good graces of the government. They kiss a lot of rings. They're allowed to make only a few of their own decisions.
Relative to health care reform, the insurance industry also is very highly regulated. One of the reasons citizens of one state may not have more than two or three insurance carriers to choose from is because every state has its own insurance regulatory board, and these boards impose the terms under which any insurance company can do business in the state. These regulations can include things like insisting that every health insurance policy include coverage for maternity costs or fertility treatments. Well, older families probably wouldn't need this, but the state requires they buy it, anyway, as part of their general health coverage.
Worse, some of these companies are so in bed with state regulators, they enjoy almost monopoly status -- which has often led to all kinds of corruption and intrigue. The situation certainly is not "free enterprise" or "free market."
One way this state-level regulation seriously skews insurance availability and costs/prices, is apparent in places like North or South Dakota and Wyoming, all states with relatively small populations. How many people do you suppose have, say, leukemia, in Wyoming? Let's say two dozen. OK. So you've got two dozen leukemia sufferers in a pretty small population. Costs for leukemia treatments will be divided up amongst the population, so those leukemia sufferers are going to send the rates for everyone through roof. So the leukemia sufferers are denied coverage.
OK. So the government might fund health care for the leukemia people. But another, free market solution would be to create a region that includes Washington State, Oregon, Idaho, Montana, Wyoming, and maybe North and South Dakota, so that the costs for the leukemia sufferers are spread among many more people in the pool and the costs are more affordable.
I may be making a fool of myself discussing this, because I'm not an actuarial and have only a very vague idea how insurance companies calculate risk. I'm way over-simplifying. For instance, when you expand the number of people covered, you're also taking on the additonal risks the larger population brings with it. But the more people you have paying into the pool, the lower the cost for everyone.
This, I believe, is the real reason the liberals want to nationalize health care. Medicare is broke; Medicaid is broke. They think if they can expand the pool of people covered by Medicare/Medicaid to include every insured person in the entire US population, they can cover costs.
However, Medicare and Medicaid are not "insurance." Rather, they provide health care coverage for certain groups in the population -- they're entitlement programs. Actual "insurance" has another dimension beyond simply spreading costs.
Here's how it works: Insurance companies collect premiums from their members, then they take that money and invest it to grow a capital fund. This capital fund is what supports the pay-outs on insurance claims. It's like if you and me and Bobby McGee all put in $100 dollars. We take our pool of $300 and invest it in MacDonalds stock, and over a few months, we have $500. That $500 dollars is what will pay for our health expenses.
Another, bad example: AIG is an insurance company that went bust on crappy investments in things like junk mortgages and bizarre derivatives from Fanny Mae and Freddy Mac -- supposed "businesses" underwritten by the federal government.
By contrast, Medicare and Medicaid are not insurance companies at all. Rather, they're entitlement programs. They are essentially a type of welfare. They're funded by tax monies collected from program users and all other taxpayers. And the government has no means of "growing a capital fund" to pay the claims. All the government can do to raise money is to raise taxes.
So we're talking about two different things here. First, insurance is a profit-making enterprise; insurance actually produces something.... capital... which is invested in all kinds of things to earn a return and to literally "make" money. In this way, insurance companies are similar to banks.
Second, Medicare/Medicaid are not productive business enterprises at all; they're tax-funded public entitlement programs.
By eliminating profit-making insurance businesses and replacing them with an ever-expanding government-funded entitlement program, the only result will be... a reduced pool for capital for investment in other businesses and in things like municipal bonds, more poverty for all, tighter credit, higher taxes, less overall economic growth.
The very fact that Comrade Osama and his cohorts equate private insurance with public entitlement programs is a flashing red light that indicates they don't have a clue about what they're talking about -- or maybe they do.
By trying to destroy private insurance, they're essentially eliminating a significant means of capital formation for investment in private enterprise and capitalist economic growth. They're killing one of the geese that lays the golden eggs, destroying free market capitalism. They've already taken control of much of the banking industry, which is also an engine for capital formation.
See why I believe The Comrade is a marxist? His targets are so calculated to destroy free enterprise. He took over the bigger banks and now he's going after the insurance industry. I can't believe it's all the result of accident or ignorance, and it's certainly not altlruistic concern for his fellow man. No true marxist gives a damn about the human race, except as props for his personal vision of Utopia. After all, it was a marxist who said, "You must break eggs to make an omelet."
Let's not be the eggs.
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