Fear, HilllaryCare and ObamaCare

When Bill Clinton was selling HillaryCare in the House of Representatives back in the fall of 1993 he held up a credit card mockup in his right hand and said that HillaryCare was health care that could never be taken away.



That sounded like a winner, but the American people, persuaded by the TV personalities Harry and Louise, thought otherwise.  They reckoned that HillaryCare would raise the cost of their health insurance.  In other words, a take-away, as the labor union guys put it.



So you can understand that the Obamis went out of their way to tell the American people that ObamaCare would allow them to keep their current insurance and doctor and that it would reduce health costs.  And they bought off the insurance companies that had bankrolled the Harry and Louise ads.



And they passed ObamaCare without anyone knowing what was in it, and they gamed the costs so that the total cost as reported by the Congressional Budget Office (CBO) in 2009-10 would be under a trillion dollars over ten years.



But now that we are two years on from 2009-2010 the out-year costs of ObamaCare are appearing in the official CBO scoring.  Now the gross cost is up to $1.76 trillion over ten years.  And the American people have just experienced a couple of years of rapid increase in their health insurance premiums.



So we are back to the end game of HillaryCare, when Americans became firmly convinced that they would be paying for freeloaders, the fabled "uninsured."



There is another thing.  My friend Stephen reminded me of it.  A lot of Americans are afraid of what ObamaCare will mean for them.  In other words, a lot of American women are looking out at the future, and wondering if they will be able to afford the drugs and the care they need for their chronic health problems.



How right he is.  Fear is never far from the surface where health care is concerned.  The dreadful National Health Service in Britain is still celebrated because it took the fear out of health care.  You didn't have to worry about whether you could afford your doctor bills any more.  What a relief!



What slides under the radar is that government health care is not the best and, especially in Britain, it gets worse and worse as the nursing gets worse, and the rationing starts to bite, and old people get neglected.  Looking at it that way there is plenty to fear.



It's just like government education.  Government schools are so-so in the suburbs.  But then the middle class would get a so-so education whatever the government did.  But government education is lousy in the inner city, just where it is needed most.  Health care is OK for people with private insurance.  But Medicaid, the health care program for the poor, is a train wreck.



I imagine that, right now, the Romney campaign is thinking about how to play the "fear" angle on ObamaCare without seeming to be too blatant about it.  Because fear sells, especially with older women, and politics is a dance of our hope against their fear.

Big Government, ObamaCare and Freeloaders

According to Shikha Dalmia in Reason, ObamaCare is all about dealing with freeloading.   After sneering at Dahlia Lithwick's hissy fit over at Slate, she writes:

Liberals insist that the individual mandate forcing everyone to buy coverage is necessary to prevent freeloaders from saddling everyone else with the cost of their emergency care.

But it was liberals that set this mess up right after World War II when the feds created a program to finance hospital construction.  The only gotcha was that if you took the money you had to accept patients irrespective of ability to pay.  By the 1960s they had to clean up the mess with a formal program of indigent health care, called Medicaid.  Now they want to expand it society-wide even though uncompensated care is around 3 percent of total costs.



Anyway, why are liberals suddenly concerned about freeloading.  The whole point of progressive politics is to legitimate freeloading.  Yet now liberals say that freeloading is such a problem that we have to force all Americans into a one-size-fits-all comprehensive and mandatory program of health care?  Who could have seen that coming?



When government gets into the business of curbing freeloading it gets into nothing but trouble.  Because government is force, and that means that the freeloaders must be coerced.  Coercion is expensive: just ask Mao and Stalin.  To be really effective it needs the authority of the bullet to the head.



Freeloading is the big problem for humans, the social animals.  How do you stop people that want to live at the expense of others?  Nicholas Wade in The Faith Instinct has the answer.  The human solution to the freeloading problem is religion.  Religion has developed a number of ways to discourage freeloading, using both carrots and sticks.  There is, for example, the all-night dance party.  There is something about rhythmic dancing that gets people all into the community mood.  Then there is the divine judge.  Freeloaders may not get caught in this world, but they certainly get their deserts in the next one.  Or they come back reincarnated as a donkey.



The problem that liberals are facing is that their whole model of governance is collapsing around their ears.  It was built on the idea of "rights," that people had a right, through government, to enforce their access to valuable things like health care and education.



These social goods are valuable things, and the whole point of society is to spread these goods as wide as possible.  The great question is whether government is the right social institution to deliver these goods, whether force and coercion are efficient in delivering social goods.



Conservatives argue that government is only effective at fighting wars.  You identify an emergency, you mobilize the nation, you convert the economy to the supply of war, and then you send the young men off to defeat the enemy.  After it's over you wind down the engines of war, return to peacetime pursuits, and pay off the debt piled up in the war.  Government shrinks into a midget.



The problem with progressive politics is that it makes everything into a war.  Our liberal friends like to complain about the permanent war of the national-security state.  But it is nothing compared to the war on poverty, the war on insurance companies, and the war on Wall Street and the war on private education.



The point is that everything that government does ends up as a war.  Why?  Because in order to justify the coercion, you have to frame every issue as a matter of life and death.



It ends up being a very cramped view of human social relations.  War is the state of relations with unfriendly states beyond the boundaries of our state.  It is a dreadful thing to turn everything inside the boundaries of the state into a war.  Because that means that there is always a low-level civil war going on.



We humans have developed a whole universe of social institutions to facilitate cooperation and exchange between humans, from the family to the clan, from the village to the town, from individual prayers to the church, from the neighborhood association to the market to the corporation.  These are all institutions that attempt to enroll citizens in projects of social cooperation without the need to bring in coercive fist of police power.



Every time that government steps in with a new program it substitutes coercion for cooperation.  Does it ever solve the freeloading problem?  Not likely.  For the end-point of new programs is the totalitarian coercion in the communist-fascist state of universal freeloading, where the joke is that "we" pretend to work and "they" pretend to pay us.



Most of the time liberals manage to disguise the mailed fist of government power beneath a velvet glove of caring and compassion.  It is the achievement of President Obama to have stripped this naked truth of its sentimental veil.



This year the American people will have a choice, not an echo.  Do they want to intensify the coercive state?  Or do they want to try another path?  The answer will come on Wednesday, November 7, 2012.

Impiety, Ancient and Modern

In the Plato course this morning, Prof. David Keyt tried to help the modern student understand the meaning of "pious" and "impious" as used in the context of Socrates and his trial for impiety and the dialogue on the meaning of impiety in the Euthyphro.  You should think of the Greek "to hosion" as "religious" or "reverent", he said.

But he left out the most obvious way in which modern students interact with the pious.  It's pretty obvious when you think about how Socrates got into trouble with the censors.  It was because he was corrupting the minds of the youth and "creating new gods while not believing in the old."

We tend to be rather patronizing when tut-tutting about the Greeks for putting Socrates to death for meddling with the young.  But, of course, every society sanctions people that want to dissent from orthodox ideas and teach the youth something new.  Our liberal friends bend our ears endlessly about the evils of putting witches to death and of censoring the noble Galileo for the impiety of  publishing an innovative science that had the earth revolving around the sun instead of the other way around.  They are outraged that fundamentalist Christians want to hand on to pre-evolutionary ideas about human origin.

But our age is the age of liberal piety.  Today's Euthyphro would tell students that piety is action or speech pleasing to liberal professors.  Violate the canons of liberal piety and watch the gods of the university administration fall on you.

Election time is a good time to watch for the dance of the pieties, and the 2012 election is shaping up as a dandy for the piety watcher.  In just the last month we have had the indictment, the graphe, of Rush Limbaugh for the impiety of calling a middle-aged female liberal activist by the s-word.  A casual watcher of the culture might have been surprised.  Isn't casual obscenity considered rather "edgy" and anti-establishment?  Not when the liberal pieties are involved.  Defenders of public decency rushed on the air and into print.  President Obama himself called the middle-aged woman in question because, he said, he thought of his daughters.  Hemlock was not required to bring Rush Limbaugh to heel; merely the threat of advertiser defection.

After the Sandra Fluke affair about sexual impiety had died down the Trayvon Martin case reared its head.  Here we have a case of racial impiety in which a white man allegedly shot a black teenager.  The man from Mars might be excused for not getting the point here as well.  Although there were 346 white-on-black homicides in 2005 there were 945 black-on-white homicides in 2005.  So black on white homicides are a big problem, especially when you consider that there is a pool of 230 million "whites" in the US available to commit racial homicides and only 34 million "blacks."  Yet the narrative is that the homicide of a young black by a white is a national outrage, and it is impious to suggest otherwise.

In the Euthyphro Plato makes clear through Socrates' ironic questioning of the young twerp Euthyphro that the definition of impiety is arbitrary.  It is what society says it is, and what society says is what its loudest voices and sharpest elbows insist.  In America today it is our liberal friends that have the biggest megaphones because of their power in education, the media and the culture.  And so American piety today is liberal piety.

So whatever Socrates and Euthyphro might have decided in their dialogue we can say, with our modern knowledge, that humans are social animals and cannot allow people to veer too far away from generally accepted ideas and behaviors.  We have a way of describing people on the wrong side of the line: impious.

So in America you better watch how you corrupt the youth when a liberal is listening.  And you better not suggest that you think that the liberal idols: Social Security, Medicare, the "common school" are all superstitions.  You could get indicted and tried for impiety.  Hate speech, I think they call it.

Timberlake for Fed Chairman!

There was I, gliding along as unconcernedly as a seagull through an article about Ben Bernanke and the gold standard when I got that Timberlake feeling.

No, not Justin Timberlake and the "reveal."  The Other Timberlake.

What knocked me for a loop was this from Brian Domitrovic:

Milton Friedman’s greatest student in the area of monetary history, Richard H. Timberlake, has written voluminously, and definitively, since 1993, that no evidence exists that the Fed was following gold-standard rules or rubrics when it contracted the money supply from 1928 to 1933.

Uncle Miltie's "greatest student?"  How come I didn't know?  It's not as if I've been hiding under a rock for the last 20 years.  And that's when Richard H. Timberlake Jr. published his Monetary Policy in the United States: An Intellectual and Institutional History: in 1993.

So what, you say.  Uncle Miltie already published a magisterial A Monetary History of the United States, 1867-1960 with his collaborator Anna Schwartz.  What else is new?

But take a look at that title.  1867.  Very nice, and all that, but I would really like a bit of monetary history in the decades before the Civil War.  Specifically, I would like to know a lot more about the monetary mayhem caused by Andrew Jackson and his war on the Second United States Bank leading up to the nasty Depression of the 1830s and 1840s revolving around the Specie Circular.

Well I took a look at the book's Contents, and there is: Chapter 5.  "The Specie Circular and the Distribution of the Surplus."  Oh yes, back then the US had pretty well paid off the National Debt and the big question was what to do about all that lovely money that wasn't needed to fund the debt any more.  We should be so lucky.

Like I said:  How come I didn't know about this?  Well I do now, and I know now that, according to Timberlake, the Fed screwed up in 1929-33 because of the "real bills" doctrine.  That's the notion that the central bank should only discount bills of exchange that finance "real" economic activity--as opposed to investment and speculation.

The result in 1929-33 was that the Fed completely ignored the signals that the gold standard was sending.  The gold held by the Fed soared in the early years of the Great Crash, a clear signal that it should expand the money supply.  But did it?  No.  Instead it sent to the wall banks that were stressed by their investment exposure.

What should you get from this?  Just this.  From its very beginning, the Fed has been an amateur hour, run by political hacks that didn't have a clue what they were doing.  Most of the time, the Fed has been a lapdog for the US Treasury and its need to float its debt--as right now with toy-poodle Little Ben Bernanke.  The result has been that the dollar has shrunk from $20 per ounce to $1,600 per ounce and no end in sight.

More and more, we are seeing that the Progressive governance structure of the last century has been an utter, incompetent failure.  It's not that the Progressives have been corrupt.  They have, but what of that?  It's not that they have pushed bad ideas.  They have, and everyone has a right to push a bad idea or two.  The intolerable thing is their incompetence, and their utter failure to learn from experience.

It's up to us conservatives to put this incompetent ruling class out of business and restore America to its glorious freedom.  It can't come too soon.

Euthyphro gets tangled in knots

What is the right way to live?  And what is the right thing to do next?  What duty to we have to bow to the nation's gods?  And what happens when your idea of the right conflicts with the rest of society?

That is Socrates' problem as he runs into the young Euthyphro (the name means "right-thinking" or "sincere") outside the very court where he is shortly to be tried for the impiety of corrupting the youth.  Fortunately, Euthyphro is an expert on piety, at least until Socrates start to interrogate him.

To start with, Euthyphro believes that natural law takes precedence over positive law for he asserts that he can prosecute his father for encompassing the death of a non-relative of Euthyphro, an action not allowed in Athenian law.  His action against his father implies that the just or prudent man has a duty of care--even with respect to murderers.

Socrates' legal problem is that he is accused of religious innovation, putting words into the mouth of the gods against the general consensus.  But it is clear that, from the point of view of Euthyphro, the law of the gods is whatever is revealed to him.  If Euthyphro decides to prosecute his father, it is because he is right and doing the pious thing.  So what is wrong with Socrates doing the same thing and expounding what is revealed to him?

But Socrates, still concerned about his own case, presses Euthyphro on the definition of piety, or righteousness.  Piety is what pleases the gods, says Euthyphro, or, as we might say, righteousness is following God's law.  But the gods often quarrel, says Socrates, citing the poets, (suggesting that we can obtain knowledge of the gods from epic poetry) pointing out that it is often difficult to determine what pleases the gods, since they disagree, as humans do.  So piety is what pleases all the gods, or, as we might say, justice is following God's law scrubbed of scriptural inconsistency.


Then Socrates raises a chicken and egg question.  Do  the gods like piety because it is pious, or is something pious because it is loved by the gods.  In the one case natural law is binding on God, in the other omnipotent God defines what is good and bad.


Socrates sets a new trap for Euthyphro.  He gets him to agree that piety is a part of justice, in fact that the pious part of justice is concerned with "the care of the gods" and the rest of it "the care of men."  But this raises the question of just what the point of serving the gods is.  "Sacrifice and prayer" says Euthyphro.  In other words, "piety would be a knowledge of how to give to, and beg from, the gods."  This is to say that humans have a personal relationship with God.  But there are difficulties with this, for how could the gods possibly be benefited by a gift from a human?

In fact, it seems that Euthyphro is confused.  We would say that he is like the Supreme Court Justice that knew pornography when he saw it.

Poor Socrates: he still doesn't know how to defend against the charges of impiety.  He wants a logically consistent rule to define piety and impiety, suggesting that the idea of the good should be logically consistent.

So let us rank the philosophical ideas that bubbled out of Socrates and Euthyphro.

1. Natural law takes precedence over positive law
2. The just or prudent man has a duty of care
3. The highest good can be revealed to the seer
4. Righteousness is following the highest law
5. The idea of the good should be logically consistent

Bank Runs and Youth Runs

After we learned our lesson in the Great Depression it looked like the era of the bank run was over.  What with deposit insurance and all there were no bank runs in the developed nations for decades.  Only now, it seems, things have changed, according to economist Tyler Cowen.

The modern bank run means a rush to withdraw from money market funds, the disappearance of reliable collateral for overnight loans between banks or the sudden pulling of short-term credit to a troubled financial institution.

This "shadow" banking system, at about $15 trillion, is bigger than the formal banking system protected by deposit insurance.  Tyler Cowen goes on to worry about the danger of credit collapses and deflation, and discuss proposals by some to extend credit guarantees.  But that, he worries, would just expand the problem of moral hazard and "too big to fail."



From a macro perspective, of course, the problem is fairly simple.   The credit system needs to be small enough that its overleveraged sector can be rescued in a crisis by blending it with underleveraged actors.  That's what they did in the 1907 crash.  Wall Street brokers might have been overleveraged, but US Steel was not.  Unfortunately in the century since then the approach has been to use the entire nation's equity as a guarantee against financial panic.  That approach fails when the nation's credit comes into question in a sovereign debt default.



The basic problem is that plungers (private or public) endanger the whole system when they find themselves, in a crisis, underwater.  The plungers back in 1907 were the quasi-bank Trust Companies.  The plungers in 2008 were Fannie and Freddie and the homeowners taking out overleveraged mortgages encouraged by the politicians--and Wall Streeters along for the ride.  When you set up a system like that, designed to fail, you get what you pay for.  Sooner or later, average people realize what is happening and they head for the exits.



They talk about "extraordinary delusions and the madness of crowds" as if lordly elitists are not just as subject to "groupish" delusions as the average person.  But you wonder where else the potential for a "bank run" might lie.



You wonder if a panic might soon happen with the youth vote.  Here is Jeff Jacoby reporting on Mitt Romney.

"I don't mean to be flip with this," said Mitt Romney during a Q-and-A with students at the University of Chicago last week. "But I don't see how a young American can vote for a Democrat." He cheerfully apologized to anyone who might find such a comment "offensive," but went on to explain why he was in earnest.



The Democratic Party "is focused on providing more and more benefits to my generation, mounting trillion-dollar annual deficits my generation will never pay for," Romney said. While Democrats are perpetrating "the greatest inter-generational transfer of wealth in the history of humankind," Republicans are "consumed with the idea of getting federal spending down and creating economic growth and opportunity so we can balance our budget and stop putting these debts on you."

Yeah.  When you put it that way, you gotta wonder.  And what about student loans.  At least homeowners can get out of their mortgages by walking away from them.  But you can't walk away from a student loan.



Why do you young 'uns vote for Democrats?  Apart from the fact that you have just spent 16 years listening to unionized liberal teachers in government schools and universities?  Is it just the free sex--which isn't all that free any more?



The simple answer is, of course, that young people believed Barack Obama when he promised hope and change and the wonders of green energy.  Young people didn't realize that everything the Democratic Party stands for is a chimera.



But young people are finding out now.  And that makes you wonder whether all of a sudden there will be the political equivalent of a bank run this November as students and twentysomethings realize that they had better get out before it is too late.

Aristotle and Justice

These days when we talk about "justice" we either mean the "Justice!" of the left, the overturning of oppression, or the equable workings of bourgeois justice, the disentangling of the mess of bankruptcy or the curbing of single young men with the criminal justice system.

But it is obvious from the Nichomachean Ethics that justice was a rather different concept back in ancient Greece.  For instance, Aristotle starts right off in Book V with his virtue-as-mean approach when he asks "what sort of mean justice is, and between what extremes the just act is intermediate."

These days, we don't talk about a "just act," except when discussing an Act of Congress.  But Aristotle says that by "justice" we mean "that kind of state of character which makes people disposed to do what is just and makes them act justly and wish for what is just".  What is he talking about?

He continues by defining the unjust man, as "grasping and unfair", as men that "pray for and pursue" the things they should not.  So on this argument we are talking about justice in relation to our neighbor.   Indeed he goes on to define justice as "another's good", doing "what is advantageous to another".  Thus the "worst man is he who exercises his wickedness both towards himself and towards his friends, and the best man is not he who exercises his virtue towards himself bu he who exercises it towards another; for this is a difficult task."

Then Aristotle goes on to discuss the two divisions of institutional justice: "in distributions of honor or money" and in "a rectifying part in transactions between man and man."  In distributive justice he calls for a distribution of equal when the parties are equal and unequal when the parties are unequal.  And the distribution must be "according to merit".  The only trouble is that people disagree about merit.  Democrats identify is "with the status of freeman", oligarchs with wealth or noble birth, and aristocrats with excellence.  Thus the just is "proportional; the unjust is what violates the proportion."

When we come to rectificatory justice, the idea of proportion is different.  Here we have an inequality created by a injury.  The job of a judge is to try to restore a damaged equality with a penalty.  The man who has committed the injury has made a gain, and the other party has suffered a loss.  The idea is to rebalance gain and loss, penalizing the man who has made an unjust gain: "therefore corrective justice will be the intermediate between loss and gain."

Some think that justice is "reciprocity," and Aristotle finds that the normal exchange of goods and services is inspired by this kind of justice.

But what about political justice, the relation of all this to men as citizens?  It requires, Aristotle says, "men who are free and... equal."  Given their propensity for injustice "we do not allow a man to rule, but rational principle, because a man behaves thus in his own interests and becomes a tyrant."  So in Aristotle's time as in our own, people wanted a government of laws, not of men.

The Marxists have made a big deal about "reification" the objectivification under capitalism of ideas and social relationships into things and commodities.  You can see their point.  Justice in our time is a much heavier and ponderous thing than it seemed to be for Aristotle.  And the blame for that must lie mostly with the Left, beginning with the Marxians, who want to make everything into a matter of justice and "reify" every issue into a monster government bureaucracy.  There is something in Aristotelian justice that is still ethereal and light as air.

That is a spirit that we should try to recapture for ourselves in the long journey to escape the ponderous mechanisms of justice under modern big government.