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Monday, August 31, 2009

Debunking Health Care Reform Myths

The following article originally was published by the August 31 edition of Grand Junction's Free Press.

Debunking health reform myths

by Linn and Ari Armstrong

Advocates of Barack Obama's health proposals claim they want to debunk myths surrounding the health reform debate. We're happy to oblige.

Myth #1: Opponents of Obamacare are the ones creating myths.

True, some have made exaggerated claims about "death panels." However, rationing is indisputably part of any political health program. More subsidized health care leads to more indiscriminate use of the health system, which leads to skyrocketing costs. The inevitable "solution" is rationing.

If you think that those running a political, tax-funded health system will never deny treatment to those who claim to need it, then you are either a liar or a fool.

Myth #2: Opponents of Obamacare are "anti-health care reform."

A recent article in the Huffington Post claims that "opponents of Democratic health care legislation" are "anti-health care reform," which is nonsense.

What Obama offers is not "reform," but merely more of the same sorts of political controls that caused existing problems in medicine. Continued tax distortions promoting expensive, non-portable, employer-paid insurance. More political controls that jack up insurance premiums. Probably laws outlawing low-cost, high-deductible policies. More forced wealth transfers.

Real health reform means respecting liberty and individual rights in medicine. It means respecting people's rights to control their own resources and enter into voluntary agreements. Politicians should neither compel interactions, as through insurance mandates, nor forbid them.

The proper role of government is to enforce individual rights, which means to protect people from force and fraud and otherwise leave them free to lead their lives according to their own best judgment.

Real health reform means recognizing the individual's moral right to his or her own life. Obama's fake "reform" means politicians and their appointed bureaucrats telling people what to do.

Advocates of real health reform want expanded Health Savings Accounts with low-cost, high-deductible insurance, rolled back insurance controls, containment of health welfare, and tort reform.

Ironically, Obama lied in the very sentence in which he accused his opponents of lying, when he called for "an honest debate, not one dominated by willful misrepresentations and outright distortions, spread by the very folks who would benefit the most by keeping things exactly as they are."

Don't let Obama get away with his outright distortion that the only alternative to the existing system is a more-politicized one.

Myth #3: Opponents of Obamacare are criminals, thugs, and mobs.

Early on the morning of August 25, two people smashed eleven windows at Democratic Party Headquarters in Denver. The windows were adorned with posters endorsing Obamacare.

Democratic Chair Pat Waak quickly lashed out: "Clearly there's been an effort on the other side to stir up hate. I think this is the consequence of it."

Clearly Waak jumped to conclusions to demonize critics of Obamacare. Unfortunately for Waak, Denver police caught one of the alleged perpetrators.

Police arrested Maurice Schwenkler, a Democratic operative, left-wing radical, and gay-rights activist. During the last election, a Democratic 527 group paid Schwenkler $500 to campaign for a Democratic state-house candidate. Who's "stirring up hate" now, Waak? (See for details about the story.)

It is true that some Obamacare protesters have gotten overly heated at public forums. That happens among the left and right. It is also true that the vast majority of those who oppose Obamacare are thoughtful, peaceable citizens exercising their First Amendment rights.

Myth #4: We need Obamacare to give everybody health care.

Most Americans already have great access to the best health care in the world. The biggest problem is that, due to political controls that have squashed competition and jacked up premiums, many cannot afford health insurance.

As Cato's Michael Tanner points out, of the roughly 46 million uninsured, 12 million are eligible for existing health welfare, 10 million are non-citizen immigrants, and "most of the uninsured are young and in good health."

Is it any wonder that some young, healthy people decline to purchase expensive insurance premiums through which politicians force them to subsidize the health care of others?

Americans understandably don't want to let people die in the streets without care. That's why we should expand Health Savings Accounts and roll back insurance controls -- then more people could afford insurance without busting the budget. We wouldn't need nearly as much charity if politicians would stop interfering with people's ability to get health care.

Extensive health welfare programs exist now. Government spends nearly half of all health care dollars, especially through Medicare and Medicaid. Cover Colorado subsidizes high-risk insurance.

Ultimately, we advocate a return to voluntary charity, which remains a strong force in America even though political welfare has largely displaced it. If you think others should donate to a health charity, then persuade them, don't hide behind armed IRS agents and threaten to throw people in prison if they don't pay up.

We want everybody to be able get good health care. We want politicians to respect people's rights. That is why we reject Obama's health reform myths.

[Update: Cato's Michael Tanner debunks a fifth myth, Obama's claim that "If you like your private health insurance plan, you can keep your plan. Period." Among other things, Obamacare would outlaw high-deductible plans.]

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Sunday, August 30, 2009

Atlas Shrugged Reading Groups in Denver, Longmont, Colorado Springs



In response to record-breaking sales of Ayn Rand's novel Atlas Shrugged, readers will form study groups in Longmont, Denver, and Colorado Springs this fall.

Sales of Atlas Shrugged topped 300,000 for the first half of 2009, a 250 percent increase over that period last year (see Readers see eerie similarities between the 1957 novel and recent events, particularly with government take-overs and bail-outs.

While Barack Obama said "I am my brother's keeper," Rand renounces such claims and champions the individual's moral right to his own life.

One participant of a summer group in Lakewood said, "The novel offers rich moral and political themes, and reading it during this 'interesting' period of our nation's history sheds light both on the novel and on the culture in which we live."

The Denver group, sponsored by the Auraria Campus Objectivist Club, starts September 15th.

The groups in Longmont and Colorado Springs, sponsored by Front Range Objectivism, start October 1st. These two groups assume that participants are already fans of the novel.

The groups will meet for twenty weeks from the fall through the spring. A person knowledgeable about the novel and Rand's ideas will moderate each group. For details see

Front Range Objectivism is an organization dedicated to understanding and advocating Ayn Rand's philosophy of Objectivism along the Front Range of the Colorado Rockies.

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Friday, August 28, 2009

Rationing IV: Politically-Controlled Insurance and Rationing

This is the fourth of a four-part series on rationing.
Rationing I: Price Distribution Is Not Rationing
Rationing II: The Definition and Application of Rationing
Rationing III: The Harm of Conflating Price Distribution with Rationing
Rationing IV: Politically-Controlled Insurance and Rationing

The Big Lie in the modern health policy debate is that the current system represents a free market and that our choice is between the status quo and more political controls. The modern system is emphatically not a free market, and advocates of liberty in medicine call for free-market reforms as the only just and practical alternative to existing and proposed political controls.

Not only do politicians spend nearly half of all health-care dollars today, but they extensively control the so-called "private" insurance market. Health care, and particularly health insurance, is already mostly controlled by politicians; proposed "reforms" such as those offered by Obama threaten merely to expand those controls.

Yet Obama repeated the lie, ironically, in the very sentence in which he accused his critics of lying. Obama said health policy "should be an honest debate, not one dominated by willful misrepresentations and outright distortions, spread by the very folks who would benefit the most by keeping things exactly as they are."

Obama steadfastly refuses to acknowledge those who seek to reform health care by restoring free markets and individual rights in medicine.

In today's mixed economy, health insurance companies are neither entirely private nor entirely controlled by politicians. Thus, health insurance is not characterized by the price distribution and firm contracts of a free market. It is characterized by political distortions. This significantly complicates the question of whether insurance companies ration care and whether this rationing is political in nature.

Before turning to particular claims about insurance rationing, it is useful to briefly review some of the major political distortions of the insurance market. (Many of these points are covered by Lin Zinser and Paul Hsieh.)

* Through tax policy, the federal government drives the expensive, non-portable, employer-paid insurance system.

* Because most people are locked into the insurance program offered by their job, there is very little market competition for health insurance.

* The federal government imposes various other controls restricting entry into the health insurance market.

* State controls also impede a competitive insurance market.

* Because of the tax distortions, employer-paid insurance has moved away from real insurance (see my previous article) and toward pre-paid health care, leading to exploding costs.

* Because politicians have driven "insurance" into pre-paid health care, today most people rely on a third party to pay for all or nearly all of their health expenses, rather than pay health providers directly for routine care.

* Federal and state politicians significantly control whom insurance companies must cover and which benefits they must finance. This again helps turn insurance into pre-paid health care, contributing to exploding costs.

* Because of political controls, some people wait to get insurance until they get sick, or they change to more costly insurance once they get sick. This drives up costs to insurance companies and premium payers.

* Because politicians have forced insurance into a pre-paid health model, insurance is increasingly used to pre-pay minor expenses but not cover (or not entirely cover) major ones. Thus, in some respects insurance has been turned on its head. Rather than cover only high-cost, unexpected costs, now insurance covers low-cost, routine care and not all emergency care.

* Because of ever-changing political controls at the state and federal level, insurance companies simply cannot offer long-term or stable insurance contracts. Stable contracts have effectively been outlawed. One result has been that insurance contracts have become partly vague and ambiguous. (See also my article on pre-existing conditions.)

* One consequence of the host of political controls on health insurance is that, to control skyrocketing and unpredictable costs, insurance companies have sometimes turned to capricious methods of rationing care. Insofar as they do so, they do so because they are, in effect, agents of political controls, not part of any free market.

Despite the fact that political controls have largely destroyed the free market in health insurance, Obama and his supporters use existing insurance as their foil to advocate more political controls.

Downplaying the many cases of overt political rationing of health care, such as Jacob Appel describes, and ignoring existing political controls on health insurance, Obama and his supporters pretend that the way to overcome the partial rationing of the mixed economy is to adopt the total rationing of politicized medicine.

Of course, Obama is coy about the rationing his proposals would entail. On June 24, Obama said, "Maybe you're better off not having the surgery, but taking the painkiller."

By August 11, Obama was pretending that everybody can get all the "free" health care they could possibly desire, an impossible promise. Yet, rather than outright deny the rationing of politicized medicine, Obama tried to turn the debate by tarring the status quo with rationing:

The underlying argument I think has to be addressed, and that is people's concern that if we are reforming the health care system to make it more efficient, which I think we have to do, the concern is that somehow that will mean rationing of care, right? -- that somehow some government bureaucrat out there will be saying, well, you can't have this test or you can't have this procedure because some bean-counter decides that this is not a good way to use our health care dollars. And this is a legitimate concern, so I just want to address this. ...

Another way of putting this is right now insurance companies are rationing care. They are basically telling you what's covered and what's not. They're telling you: We'll cover this drug, but we won't cover that drug; you can have this procedure, or, you can't have that procedure. So why is it that people would prefer having insurance companies make those decisions, rather than medical experts and doctors figuring out what are good deals for care and providing that information to you as a consumer and your doctor so you can make the decisions?

Here Obama conflates clear insurance agreements, by which consumers agree ahead of time which services insurers will cover, with arbitrary decisions by insurers to deny care in some cases. Thus, Obama attempts to treat any sort of distribution system, including the price distribution of a voluntary market, as "rationing." Only decisions that are ad hoc, and not specified by contract, plausibly count as rationing, and these are precisely the sorts of decisions driven by political controls.

An August 22 article by Michael Booth and Jennifer Brown of the Denver Post describes some examples of health-insurance rationing. The title of the article illustrates the strategy of Obama's "reformers:" "Health care reform advocates say insurance companies already ration coverage." The journalists write:

All health insurance plans, whether privately run for profit or financed by the government, rely on a structure where some services are not covered. From prescription drugs to experimental surgeries, patients face limits in a plan's fine print or from people paid to make choices in a process called "utilization review."

"No system is wealthy enough to pay for every single request that comes from doctors and hospitals," said Wendell Potter, a former national vice president with insurance giant Cigna who now argues in favor of sweeping reform.

"Insurance companies have corporate bureaucrats on staff who many times will deny coverage for something recommended by a doctor. It happens all the time, in the name of 'not medically necessary,' " Potter said.

The Denver Post article contains not a single mention of how existing political controls have fostered such problems, nor how true free-market reforms would restore competitiveness and accountability to health insurance companies. Instead, the "debate" is summarized as the (ill-defined) "rationing" of the status quo versus the rationing of Obamacare.

On a truly free market, health insurance companies would compete, in part, on clarity of contract (as Brian Schwartz suggested to me). Moreover, the government would resume its proper role of ensuring enforcement of contract and resolving contractual disputes.

However, on a free market, insurers and their clients have every right to voluntarily agree to terms. As with the fictitious Twentieth Century Motor Company, people could voluntarily agree to enter a system of rationing, such as one involving ad hoc decisions about medical necessity. Significantly, on a free market, people would also be free to exit such a system. No doubt practically everyone would prefer a stable, long-term, well-defined insurance contract -- if only insurance companies were free to offer one. Such contracts would involve no rationing when insurers declined to cover care explicitly not covered by the contract.

Today health rationing is carried out by government agencies that control vast tracts of health care. To a minor degree, it is carried out by insurers acting under severe political controls. A free market features no political rationing. Any rationing in a free market must involve people voluntarily entering into contracts that allow it, and in such cases people are free to exit the system.

The advocates of politicized health care ignore the nature of rationing. They try to turn any sort of distribution into "rationing," and they ignore the fact that existing rationing in health care is caused by political controls. Their goal is to promote the notion that health care is collectively owned by the nation and properly distributed by politicians, rather than owned by its producers and properly distributed through voluntary exchange.

Those who value their lives, their health, and their liberty won't let such "reformers" get away with their distortion of the language or their political take-over of health care.

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Thursday, August 27, 2009

Rationing III: The Harm of Conflating Price Distribution with Rationing

This is the third of a four-part series on rationing.
Rationing I: Price Distribution Is Not Rationing
Rationing II: The Definition and Application of Rationing
Rationing III: The Harm of Conflating Price Distribution with Rationing
Rationing IV: Politically-Controlled Insurance and Rationing

Whether price distribution counts as a type of rationing is not merely some semantic dispute. Conflating price distribution with political rationing obliterates the crucial distinctions between the two. A system of property rights and voluntary association is nothing like a system of political control of goods and services.

Price distribution on a free market rests on the right of producers to their property. If you produce something, using your own resources and in voluntary interaction with others, you have the right to exchange your product with others as you see fit. Generally on a free market people exchange goods and services using money as the intermediary, according to the principles of supply and demand.

Political rationing means that some governmental agency assumes command of some set of goods or services, in violation of the producer's rights to the product and of the consumer's rights to offer a voluntarily exchange. Rationing entails collectivism in ownership.

In her 1946 letter (see pages 320 to 327 of Letters of Ayn Rand), Rand writes, "Rationing IS coercion, that is, orders, and nothing else whatever. The essential distinction of a free market, as against any other kind of system, lies in the absence of coercion and in the method of exchange by voluntary choice" (page 322).

She continues:

If we accept the idea that a free pricing system is a form of rationing, the unavoidable logical implications and consequences are as follows: if a free pricing system is a form of rationing, then every person living under it has an equal claim upon and title to all the goods produced. (To ration means to share; a free pricing system is not based on the idea of sharing anything; a rationing system is.) But anyone can see that under a free pricing system everybody is not getting an equal share of everything. Therefore, this form of rationing is not working well or fairly. Why isn't it? Because the rationing is done by private persons in their own selfish interests. What is the solution? Another form of rationing -- which would be run by disinterested public servants for the common good of all.

Once the people's mind has reached this state of confusion, the rest is easy. The collectivists have won, because their basic premise has been accepted. ...

And here is the payoff: when the groundwork is ready, a collectivist says to the average American: "Don't fool yourself, brother. You've always lived under a system of rationing and always will. The only choice you have is this: Do you want to be rationed by selfish, greedy capitalists for their own private profit -- or would you rather be rationed by a public authority who will have no motive except your own good and the general welfare?" (page 323)

Either people have the right to control their produce and to make voluntary exchanges with others, or their property is collectively owned and rationed by politicians. That is the basic choice.

What is amazing is that 63 years ago Ayn Rand anticipated the precise nature of today's debate over rationing.

Read Rationing IV: Politically-Controlled Insurance and Rationing

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Bill Ritter's Campaign Director Smears Opponents

Governor Bill Ritter's Campaign Director David Kenney today smeared participants of local tea parties as "rabidly anti-government." The statement was part of a fund-raising letter sent by e-mail.

Kenney's dishonest and vicious smear campaign, which likens practitioners of First Amendment rights to diseased dogs, ignores the obvious fact that the overwhelming majority of tea party participants advocate government that protects people's rights and is limited in scope by Constitutional law.

See, for example, my coverage of the April 15 Tea Party in Denver, the July 4 Tea Party in Arvada, and the August 7 health rally in Longmont.

If Kenney wishes to find real examples of people who flout the rules of just government, he need look no further than the former Democratic campaigner arrested for vandalizing Democratic headquarters. If Kenney wishes to condemn some as "anti-government," he should look to criminals and anarchists, not peaceful protesters who advocate just government.

Apparently Kenney chooses to lie about tea party participants because he does not wish to engage their arguments.

Kenney also wishes to suggest that the only possible alternative to Ritter's leftist tax-and-spend policies of economic controls and corporate welfare is to be "anti-government." In fact, the proper alternative is to advocate a government that protects individual rights, including rights to property and voluntary exchange.

Following is the letter I sent in reply:

Dear Mr. Kenney,

Today you smeared me, a participant in various tea parties, as "rabidly anti-government."

In fact, I advocate government that protects individual rights, and I do not appreciate the governor's campaign staff smearing me for practicing my First Amendment rights.

I request that you retract your vicious and libelous statement and apologize for it.

Ari Armstrong

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Rationing II: The Definition and Application of Rationing

This is the second of a four-part series on rationing.
Rationing I: Price Distribution Is Not Rationing
Rationing II: The Definition and Application of Rationing
Rationing III: The Harm of Conflating Price Distribution with Rationing
Rationing IV: Politically-Controlled Insurance and Rationing

Rationing is defined by three essential characteristics. First, rationing means that some central authority distributes goods or services. Second, the property rights to the goods or services are usurped or not clearly defined. Third, under rationing recipients have some recognized claim to a portion of the goods or services. (Note: Diana Hsieh, Paul Hsieh, and Brian Scwhartz helped me to clarify my understanding of rationing.) A closer look at each condition clarifies the meaning of the term and its application to various examples.

Rationing involves some central authority. Price distribution does not. In the usual cases this is unambiguous.

What about a more complicated example of distribution under price ceilings that cause shortages? Under such circumstances, generally two outcomes follow. First, the quality of the price-controlled goods declines. Oxford's dictionary includes an example from 1892: "The most inferior goods in the market are called ration-tea and ration-sugar." Second, sellers who cannot sell goods or services at market rates must sell according to other criteria, and often this takes the form of personal favors or prejudices.

Ayn Rand discusses this example in her 1946 letter on rationing (see pages 320 to 327 of Letters of Ayn Rand). Rand argues that it is "counterfeiting" to claim that "apartments are not rented by harassed, hogtied landlords -- but are 'rationed by favoritism.' Implication: a landlord has no right to choose the tenants of his own property, if there are more than one applicant."

The essential difference between such non-price distribution under price controls and rationing is that no central authority is involved in the distribution. An authority is involved in setting the price controls, and that is what unjustly disrupts market prices, but price controls in themselves are not an example of rationing.

The second characteristic of rationing is that property rights to the goods or services are usurped or not clearly defined. Under price distribution of gasoline, the gas is owned by its producer (or, later, the retailer), and a consumer's money is owned by that consumer. The two parties may voluntarily agree to a mutually beneficial exchange. Under rationing, the gasoline is treated in part as the property of the government, which replaces voluntarily exchange with authoritarian distribution.

This point has important implications for health insurance. Insurance is a contract; its buyers agree to pay a regular premium in exchange for coverage under certain conditions. No insurance policy promises to pay for any conceivable health expense. For example, under my high-deductible policy, my insurance company is not "rationing" care by declining to pay expenses under my deductible.

A car insurance company might not cover damage caused to a policy holder's car if the damage was caused by his drunk driving. A home insurance company will not cover damage caused by the policy-holder's arson. None of this is rationing.

An insurance company, for instance, may decide in advance to cover established cancer treatments but not expensive, untried new therapies. A consumer who agrees to this policy may not properly complain about "rationing" when the insurance company declines to finance the sort of therapy that is explicitly not covered.

The problem arises when insurance contracts are vague and subject to arbitrary case-by-case evaluations, a problem that I'll return to in Part IV of this series.

Under political rationing, some authority must make ad hoc decisions about the distribution of goods or services. The rationed goods may be distributed equally among the population or according to individual cases. Yet even "equal distribution" requires considerable refinement by the authority. Does every citizen get the same number of gallons of gas? Every family (and what is the definition of a "family")? Every vehicle?

In the case of health care, obviously an equal distribution of resources would be senseless. Some people never get seriously sick, others incur modest health expenses, and others need (or want) extensive and expensive health services. Thus, simple ration cards for health care wouldn't work. Instead, some authority must decide who gets what care, based on criteria established by the authority. For example, health care might be rationed according to what is deemed medically essential or necessary. When the rationing authority fails to ration with sufficient stridency, waiting lines serve the function.

In her 1946 letter, Rand defines rationing as "to distribute... by the decision of an absolute authority, with the recipients having no choice whatever about what they receive; it also means that all the recipients involved have an equal claim to that which is being rationed, and are entitled to an equal share."

Rand's definition entails the three characteristics discussed above; however, her point about "an equal claim" needs refinement. With food or gasoline, each person might be rationed the exact same amount. However, the example of food illustrates the problem with assigning an "equal share." Should a three year old infant get the same food rations as a 250 pound, hard-working man? That would be ludicrous. Rationing, then, involves not literally equal shares, but shares considered equitable according to some criteria. A grown man gets more food than a small child. A sick person gets more health care than a healthy person.

In her novel Atlas Shrugged, Rand describes the collectivized distribution of the Twentieth Century Motor Company, which institutes the Marxist doctrine, "From each according to his ability, to each according to his need" (see page 661 of the hardback novel). One of the company's owners becomes its "Director of Distribution," who decides what everybody "needs," and whose "gauge was bootlicking." (page 667). However, insofar as the Director of Distribution attempts to distribute supplies according to need, she is rationing, though primarily on a case-by-case approach. Rand compares this system to the rationing of a global egalitarian system (page 669).

Nobably, employees of the company voluntarily remain in this system (though the best employees quickly leave). Thus, the rationing at Twentieth Century is crucially different from political rationing. Under political rationing, exit from the system is forbidden or forcibly restricted. One may join a commune that rations goods according to need, but so long as one joins voluntarily and remains free to leave, that is a fundamentally different situation than political rationing, which one is not free to exit. Political rationing is the major form and most important type of rationing.

While rationing involves an authority's ad hoc decisions, rationing does recognize that recipients have some recognized claim to a portion of the goods or services, the third characteristic of rationing. A king who arbitrarily hands out loot to his favorites acts too capriciously for his actions to be considered rationing, and at her worst the Twentieth Century's Director of Distribution resembled such a king.

The requirement of a recognized claim shows that charity does not count as rationing. A food bank that restricts recipients to a certain amount of food is not "rationing," for the recipient has no inherent claim to the food.

Food stamps (which are actually debit cards now) forcibly redistribute wealth. However, if its recipients are otherwise considered akin to the recipients of charity, then food stamps do not "ration" food by limiting the amount of handout that recipients get or the type of food that recipients may buy through the program.

Does rationing apply to a recent case from Oregon? ABC News reported last year:

The news from Barbara Wagner's doctor was bad, but the rejection letter from her insurance company was crushing.

The 64-year-old Oregon woman, whose lung cancer had been in remission, learned the disease had returned and would likely kill her. Her last hope was a $4,000-a-month drug that her doctor prescribed for her, but the insurance company refused to pay.

What the Oregon Health Plan did agree to cover, however, were drugs for a physician-assisted death. Those drugs would cost about $50.

Jon Caldara characterized this as an example not only of rationing but of a "death panel."

The problem with ABC's account is that it counts the Oregon Health Plan as just another "insurance company." It is not:

The Oregon Health Plan (OHP) is a state program of health care for people with low incomes. This health care includes services for medical care, dental care, mental health and substance abuse treatment. Depending on which benefit package you are found eligible for, OHP benefits may... [r]equire you to pay a monthly premium for your OHP coverage... Some adult clients are required to make a monthly payment for health coverage. (pages 1 and 9)

So did Wagner pay anything for her insurance premium? That is unclear. If she did, then she had some claim to the benefits. If not, then she was like a recipient of food stamps.

If, in a free market, Wagner had sought out voluntary charity, we would not call it "rationing" if the charity did not fund every conceivable treatment for her. No charity can afford to fund every conceivable request of every possible recipient. The difference between a charity and political rationing is that the charity has rightful control over its resources, whereas under political rationing the recipients have some sort of claim to an equitable portion of the goods or services in question.

Notably, if people are forced to pay tax dollars to support a program that provides benefits, then any government restriction of those benefits with respect to those paying the taxes counts as political rationing.

Read Rationing III: The Harm of Conflating Price Distribution with Rationing

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Friday, August 21, 2009

Rationing I: Price Distribution Is Not Rationing

This is the first of a four-part series on rationing.
Rationing I: Price Distribution Is Not Rationing
Rationing II: The Definition and Application of Rationing
Rationing III: The Harm of Conflating Price Distribution with Rationing
Rationing IV: Politically-Controlled Insurance and Rationing

That the political health "reform" endorsed by Barack Obama and his supporters would entail rationing is indisputable. It is simply impossible to expand subsidized care and contain costs without rationing. For more on this point, see my article in the Colorado Springs Gazette, John Stossel's article, or Martin Feldstein's piece in the Wall Street Journal. No serious supporter of politicized "universal" health care denies this, and various supporters openly brag about the fact as a virtue of their proposals.

In response to the criticism about rationing, advocates of politicized medicine routinely reply that the market also "rations" health care, so the debate is merely about which form of rationing is best. Many critics of Obamacare agree to the terms of that debate and proceed to argue that political rationing is worse than market "rationing."

But obtaining goods and services on an open market via the price system of supply and demand is not rationing at all. Claims that it is distort the language and obscure crucial distinctions between political rationing and market distribution.

Peter Singer is among those explicitly calling for health rationing. As Don Watkins reviews, Singer writes for the July 15 New York Times:

Health care is a scarce resource, and all scarce resources are rationed in one way or another. In the United States, most health care is privately financed, and so most rationing is by price: you get what you, or your employer, can afford to insure you for. But our current system of employer-financed health insurance exists only because the federal government encouraged it by making the premiums tax deductible. That is, in effect, a more than $200 billion government subsidy for health care. In the public sector, primarily Medicare, Medicaid and hospital emergency rooms, health care is rationed by long waits, high patient copayment requirements, low payments to doctors that discourage some from serving public patients and limits on payments to hospitals.

On this point the Cato Institute's Jim Harper quite agrees:

Health care is a scarce good, so it will always be rationed. The core question is whether government should take the dominant role in health care rationing over from insurance companies, or whether reform should restore rationing decisions to patients advised by doctors.

(See my July 12 article for an additional example and my preliminary reply.)

Price Distribution Versus Political Rationing

Let us begin by distinguishing clear cases of price distribution and political rationing. Suppose you walk into a department store and pay $20 for a pair of jeans. If the jeans had cost only $10 per pair, you would have purchased two or three pair, but instead you limit your purchase to one pair. If the jeans had cost $40, you wouldn't have purchased the jeans. Is that "rationing?" No. It is simply a consumer deciding which goods to buy, and in what quantities, according to price and ability and willingness to pay.

It is obviously true that the more money you make (meaning the more wealth you produce), the more goods and services you can afford to purchase. The wealthy may shop at high-end stores; I do a lot of my shopping at Target and thrift stores. So a free market definitely entails a method of distributing goods and services, and this involves a person's market wage rate as well as a person's shopping preferences. Put another way, market distribution of goods and services depends on the supply and demand of labor as well as of goods and services.

In no way does price distribution constitute "rationing." In contrast with the authoritarian distribution of political rationing, price distribution rests fundamentally on the rights of individuals to control their own resources and trade voluntarily with others.

Contrast the market system for distributing jeans with political rationing. What would rationing of jeans look like? One possible impetus for the rationing of jeans would be price controls. Let's say politicians declared that jeans could not be sold for more than $10 per pair. The obvious result would be a shortage of jeans; amount demanded would jump and supply would fall. So politicians might issue ration cards for jeans; say, one pair per family or person.

Let us turn to the example of gasoline. True, the supply of gasoline is artificially suppressed by anti-productivity "environmentalist" controls. But gasoline is not rationed; consumers choose how much of it to buy depending on its price and their preferences and willingness and ability to pay. If you find gas to be too expensive, you cut back on your driving.

Contrast the price distribution of gasoline with rationing. Last year I found my great-grandmother's gasoline ration card from World War II.




Here is part of the text:

Each coupon is good for ONE "A" UNIT of gasoline. The number of gallons which each coupon gives you the right to buy will depend upon the demands of the war program; therefore, the value of the unit may be changed. Any change in value will be publicly announced by the OPA [Office of Price Administration].

Do not loosen or tear coupons from the book. Detached coupons must not be honored by the dealer. When buying gasoline, hand the book to the dealer to remove coupons. He must remove enough coupons to cover the number of gallons of gasoline purchased... The dealer is permitted to deliver gasoline only into the tank of the vehicle described on the front over of this book, unless bulk transfer has been authorized by the War Price and Rationing Board.


1. Persons who do not observe the rationing rules and regulations of the Office of Price Administration may be punished by as much as 10 YEARS IMPRISONMENT OR $10,000 FINE, OR BOTH, and are subject to such other penalties as may be prescribed by law.

2. Gasoline obtained by use of this book must not be taken out of the fuel tank of the vehicle described on the front cover.

Those who would conflate political rationing with market pricing simply are not paying attention to the real and vast differences between the two.

Read Rationing II: The Definition and Application of Rationing

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Thursday, August 20, 2009

Should Politicians Force Insurers to Ignore Pre-existing Conditions?

Should a life insurance company "discriminate against" an 80 year old smoker with lung cancer by declining to offer the same policy available to healthy 20 year olds?

Should a home insurance company "discriminate against" a home owner whose house is on fire by refusing to offer a policy on that house?

Should a car insurance company "discriminate against" a five-time convicted drunk driver by failing to offer the same policy available to safe drivers?

Anyone who suggests that such "discrimination" is wrong should be deemed insane.

Yet, when it comes to the health debate, various politicians and pundits pretend it's perfectly sensible to force health insurance companies to ignore pre-existing conditions.

On August 15, Barack Obama said in Grand Junction: "A recent report found that in the past few years, more than 12 million Americans were discriminated against by insurance companies because of a preexisting condition."

Democratic chair Pat Waak wrote for the August 19 Denver Daily News, "There should be no discrimination for pre-existing conditions."

But this is not merely a Democratic phenomenon.

Jeff Crank, Colorado director for Americans for Prosperity, said at a July 28 rally in Denver that the "right kind of health care reform" includes "eliminating the pre-existing conditions exclusion."

And in a July 30 op-ed for the Denver Post, Republican Congressman Mike Coffman wrote that he wants to "require health insurers to cover those with pre-existing conditions."

Such insurance controls are wrong because insurers and their customers have a moral right to voluntarily associate and create contracts, according to their own best judgment. Forcing insurers to ignore pre-existing conditions violates the rights of both parties. The only proper role of government over insurance contracts is to prevent fraud and ensure fulfillment of contract.

Forcing insurance companies to ignore pre-existing conditions forces those without such conditions to subsidize others through higher insurance premiums. One consequence of such political controls is to price many out of the insurance market altogether.

Forcing insurers to ignore pre-existing conditions means allowing consumers to wait until they get sick to buy insurance. By the same logic, a home owner could wait until his house was on fire or in the path of a tornado before buying an insurance policy. Likewise, a person might as well wait until he gets cancer or some other medical condition to get insurance.

Such controls destroy the very purpose of insurance, which is to enable a group of people to pool resources in advance to cover unexpected high-cost risks. (See my previous article, "What Is Health Insurance?") For instance, we know some of us will get cancer, but we don't know who will get get it, so we voluntarily agree to spread the risk of paying for treatment.

The logical consequence of forcing insurers to ignore pre-existing conditions is to force everyone to purchase insurance, so that people don't wait to buy insurance until they get sick. That's what Republican Governor Mitt Romney advocated in Massachusetts, and that's what Democrats now advocate nationally.

As I argued previously, there is indeed a problem with pre-existing conditions with respect to health insurance. This problem was caused by political interference in medicine. Tax policy drove most Americans into expensive, non-portable, employer-paid insurance. Various insurance controls discourage long-term health policies. Politicians have mostly destroyed the market in long-term health insurance. Now, failing to take responsibility for the problems that they and their fellows caused, politicians wish to try to "solve" those problems by imposing yet more political controls on health insurance. The result would be only more distortions, more unintended consequences, and renewed calls for politicians to "do something" to solve the new problems.

The alternative is to restore a free market in health insurance, roll back insurance controls, and offset the tax-supported employer-paid system by allowing people to buy insurance through expanded Health Savings Accounts.

We need fewer political controls on health insurance, not more. We need more protection of individual rights in medicine, not more violations of our rights. If we value our health and our lives, we need liberty.

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Wednesday, August 19, 2009

What Is Health Insurance?

Why does Colorado Democratic Chair Pat Waak want to outlaw my health insurance?

With Barack Obama demonizing health insurance companies and various politicians (both Democrats and Republicans) calling for more insurance controls, now is a good time to review what insurance is.

Insurance (on a free market) is simply a voluntary agreement to pool resources to pay for high-cost risks.

Let us take a simplified example. Let's say we live in a community with 50 people total, and we figure that, within the next few decades, one of our houses will probably burn down. We don't know whose house it will be, but we're all at risk. None of us wants to bear the full costs of replacing a house. Therefore, we decide to share equally the cost of paying to replace the house that burns down. We might agree to split the costs of a new house once one is destroyed, or we might agree to contribute monthly to a fund. That's insurance.

In the same community, we might agree to insure against the risks of premature death, unexpected car crashes, and unexpected health costs.

In real life, most people purchase insurance to cover their lives, homes, cars, and health. There are two main differences between real-life insurance and the insurance of our simplified example. First, insurance companies pool many more people, making it easier to calculate and manage risks. Second, insurance companies are managed by professionals who do the work in order to earn a living, just as you earn a living in your specialty.

For whatever reason, today some people demonize "profits" -- earning a living -- in the insurance industry. This is strange, for, as my friend Justin Longo has pointed out, few think it's evil to "profit" by selling food. Do those who decry insurance profits also demand an end to for-profit grocery stores? In a free market, profits drive a company to offer better products and service at lower cost. Profits are good. A company that does not profit goes bankrupt.

Unfortunately, there is no free market in health insurance. (Indeed, as Tim Carney points out, insurance companies have been a major player in destroying the free market in insurance.)

Have you ever wondered why you purchase life insurance, home insurance, and car insurance on your own, but you buy health insurance through your employer? The reason is that tax policy has driven non-portable, expensive, employer-paid insurance. One consequence is that people do not buy long-term health insurance policies, as they do with life insurance. Lose your job, lose your insurance. This is the major reason why pre-existing conditions, which so upset Obama and other politicians, have become such a serious problem. Politicians have almost completely destroyed the market for long-term health insurance.

Another consequence of tax policy is that health insurance has evolved into pre-paid medical care. People have no problem dropping $30,000 on a new vehicle, but if they're asked to cough up a $15 co-pay for health care, they think the sky is falling. This has largely undermined the very purpose of insurance, which is to protect against unexpected risks.

Imagine you purchased car insurance through your employer, and this insurance covered new auto purchases, oil changes, tire rotations, and everything else related to your car. What would be the result? People would be a lot less careful with their cars, and they would use a lot more car services. That's basically what has happened in health care, thanks to federal tax policies.

In the tiny non-employer-paid insurance market, politicians have placed so many controls on policies that they are dramatically more expensive than they would be on a free market. Moreover, because insurers are subject to ever-changing political controls, they can neither calculate long-term costs nor (for the most part) offer long-term insurance policies.

The purpose of insurance is to cover long-term, unexpected risks. Because of political interference, health insurance no longer meets either goal. Because insurance is tied to one's job and insurers generally cannot offer long-term policies, we get the problem of people developing medical conditions and then losing their insurance. Because politicians encourage pre-paid health care, "insurance" premiums are dramatically more expensive.

And yet, in the name of "reforming" insurance, various politicians want to continue to undermine the very purpose of insurance. For example, Pat Waak, chair of the Colorado Democratic Party, wrote for the Denver Daily News, "Insurance companies should cover annual exams and tests that prevent illness. How about mammograms, pap smears, eye exams and other tests that will promote wellness?"

Why doesn't she demand that auto insurance cover tire rotations and oil changes?

Waak misses two obvious points. First, if you force insurers to cover routine, expected costs, the premiums will grow much more expensive. Because holders of this alleged "insurance" bear no direct costs for their health decisions, they are less thoughtful about how they use medical services.

The second point that Waak misses is that people can pay for preventative medicine without using insurance. This is what my wife and I do. Just this week my wife went to her physical and paid for it out of our Health Savings Account. Just a couple weeks ago I got blood work done at the local King Soopers pharmacy. (This blood work was free of charge, but I've spent our own money on other sorts of health care.)

Do people get oil changes or tire rotations even though those things aren't covered by insurance? Sure they do. Why? Because routine maintenance reduces long-term costs. The same holds true with health, if only politicians would leave people free to act on their own judgment.

Right now my wife and I pay $148 per month for high-deductible health insurance. This covers both of us. (Our insurance would cost less and cover us for much longer if there were a free market in health insurance.) We save money in a Health Savings Account, which we use to pay for routine expenses.

What Pat Waak wants to do is outlaw our health insurance. A likely consequence of Waak's policy is that my wife and I would no longer be able to afford insurance at all.

That is my biggest fear right now: if Barack Obama and Pat Waak get their way, the likely result is that my wife and I will go from having insurance we like reasonably well to not being able to afford insurance at all. That's not "reform." That's outright thuggery.

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Monday, August 17, 2009

That Government Is Best Which Protects Individual Rights

The following article originally was published on August 17, 2009, by Grand Junction's Free Press.

That government is best which protects individual rights

by Linn and Ari Armstrong

You just don't like government. That's what a friend told your elder author Linn following a local political event, during an informal discussion about which candidates are running and who is supporting them.

It's an odd sort of charge, given that Linn once ran for elected office himself and has participated in numerous campaigns and political functions.

The fact is, we love government, if it's the right sort of government. But not all governments are created equal. Who loves the oppressive governments of North Korea or Iran? What about the fallen government of the Soviet Union? There is no greater evil on the face of the earth than a government gone wrong.

The question, then, is what constitutes good government. That depends primarily on what is the proper purpose of government.

We disagree with Henry David Thoreau when he writes, "That government is best which governs not at all." We answer that government is best which protects individual rights.

Fortunately for us, our forefathers created a republican form of government with strictly delimited powers and an explicit recognition of individual rights. The obvious exception, slavery, took another century to expunge, and racist laws took longer to root out, but finally in this respect America lived up to her founding principles.

Nations to the south of us, on the other hand, often took a course other than freedom, and the result has been frequent juntas, bloodshed, and mass poverty.

Governments that try to run the economies of their nations must enforce their policies at the point of a gun. The mass slaughter and mass starvation of 20th Century Communist nations bear this out.

We witness the contrast of free markets every summer in Palisade, when fruit markets spring up along Highway 6 and 24 and growers sell everything from peaches to tomatoes.

Farmers grow and sell fruit under few political controls. What governs transactions instead is voluntary consent in which both parties benefit from the trade. The government's only useful role is to prevent force and fraud. The old marketing phrase, "reach for a peach," is an exhortation, not a command.

Contrast the benevolent exchange of the free market, in which both parties win, with the force and conflict of political intervention. The city of Fruita prepares to break ground for the city government's recreation center, something we argued against.

We witnessed a city with a friendly reputation fall into heated "us versus them" squabbling. Hostilities had barely receded after the first vote before a second was scheduled. While the motive might have been to improve physical health, the means was to force some to pay for the benefits of others, and this fostered distrust among neighbors and undermined the health of the community.

Meanwhile Clifton, a part of the valley often dismissed as a poorer area, recently witnessed the grand opening of a Gold's Gym. We witnessed no community division over this. The gym opened on time and on budget. While the Fruita center benefits from tax subsidies, Gold's Gym must pay taxes. In Fruita, some won at the expense of others. Gold's Gym illustrated the meaning of win-win.

We think people should be able to make their own decisions concerning their resources, from the color of socks they wear to the brand of peach they buy to the health care they purchase. The alternative is to treat people as wards of the state and stooges of political whim.

The economist F. A von Hayek points out that people are so different and complex that politicians cannot hope to successfully plan out our lives, at least if the goal is our well-being. Hayek lived through an era in which the well-being of the citizenry was hardly high on the list of priorities among social "planners," and mass murder was more likely where politicians ruled unchecked.

In a system of economic freedom, in which property rights are protected and people may direct their resources by their own judgment, people interact by mutual agreement.

Milton Friedman explained, "Adam Smith's key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit. No external force, no coercion, no violation of freedom is necessary to produce cooperation among individuals all of whom can benefit."

Right now many are asking what role we should give to government in our lives. Some, hoping for more political favors and a larger share of other people's money, or simply beholden to the ideology of statism, call for more political control of the economy.

We believe that a government that robs from Peter in order to placate Paul and gain his political support is not a government worthy of the United States.

We advocate individual rights. We therefore advocate government designed to protect our rights.

Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits from the Denver area.

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Rationing inherent in Obamacare: Sources for Gazette Article

The Colorado Springs Gazette published my article, "Rationing inherent in Obamacare," on Sunday (despite its August 14 posting date). Please read the entire article there. Here my purpose is to provide related links and context.

Barack Obama's line about "not having the surgery, but taking the painkiller," may be seen on YouTube. Unfortunately, the clip omits some of the context. Thankfully, ABC has published the complete transcript of the June 24 broadcast.

Turning to the second page, we find the following lines:

But what we can do is make sure that at least some of the waste that exists in the system that's not making anybody's mom better, that is loading up on additional tests or additional drugs that the evidence shows is not necessarily going to improve care, that at least we can let doctors know and your mom know that, you know what? Maybe this isn't going to help. Maybe you're better off not having the surgery, but taking the painkiller.

And those kinds of decisions between doctors and patients, and making sure that our incentives are not preventing those good decision, and that -- that doctors and hospitals all are aligned for patient care, that's something we can achieve.

My short answer is, "Who is this 'we,' compadre?"

John Lewis's evaluation of HR 3200 is available online. You can also read the entire text of the bill for yourself.

The sign from the July 29 Colorado Springs rally is shown in the second photo from a review by Americans for Prosperity. I covered the August 6 Longmont rally on my web page. The information about Mike Sola is available via YouTube and the Detroit Free Press.

As a couple of examples of British headlines, here's one about a heart surgery that was initially denied; here's another about painkilling injections" (via Patient Power). John Stossel's report, which includes information about England and Canada, is at ABC.

Watch the Independence Institute video on Oregon rationing:

I got the transcript of Obama's appearance in New Hampshire from the LA Times.

But, again, for my core arguments as to why rationing is inevitable under Obamacare, read the Gazette article!

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Monday, August 10, 2009

Tom Lucero Discusses Health Reform, Campaign '10

Finally I have succeeded in uploading to YouTube an August 6 video featuring an interview with Congressional hopeful Tom Lucero, who hopes to survive the GOP primary to challenge Betsy Markey (who took out Republican Marilyn Musgrave last time around). Lucero faces Cory Gardner in the primary.

I caught Lucero at the "Hands Off My Health Care" rally in Longmont. He discussed health policy, cap-and-trade, Ward Churchill, and the primary.

Watch the other four videos on health reform featuring the Longmont "mob," including the popular "Longmont CO Health Ralliers Reply to Democratic 'Mob' Charge."

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Rep. Mike Coffman Wrong to Demand More Insurance Controls

In a July 30 article for the Denver Post, Rep. Mike Coffman criticizes "increasing the government's involvement in our health care system." Why, then, is that what he promotes?

Coffman wants politicians to "require health insurers to cover those with pre-existing conditions." But prior political interference is precisely what created the problem. Tax policy pushed many Americans into the expensive, non-portable employer-paid system. Lose your job, lose your insurance. Politicians burden insurers with reams of ever-changing controls, undercutting their ability to offer long-term policies.

Forcing insurers to ignore pre-existing conditions only encourages people to wait to get insurance until they get sick, leading to Massachusetts-style mandates.

Coffman is right to want to limit frivolous legal suits and ease the tax burden for individual purchases of health care. The solution is not more political control but liberty.

(Note: The Denver Post declined to publish the above letter. I'm sure it is merely coincidence that the Post's pro-Obamacare editorial content has vastly outweighed the material critical of Obamacare, particularly in the letters.)

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Saturday, August 8, 2009

Malkin Mentions Longmont Rally

A video of the "Hands Off My Health Care" rally from August 6 in Longmont, Colorado, has received over a thousand YouTube views -- and counting.

Watch all four videos.

The most-watched video, and my personal favorite, is "Longmont CO Health Ralliers Reply to Democratic 'Mob' Charge:"

The video also got a brief mention by Michelle Malkin in an August 7 blog.

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Friday, August 7, 2009

Meet the 'Mob:' Longmont Protests Obamacare

Longmont CO Health Ralliers Reply to Democratic 'Mob' Charge

August 10 Update: In the above video, Spark Erickson says, "Hell, we came in on a bus with 45 agitators... of course we are [part of a mob]. You know that... And if I'm not, they'll tell you I am, so... go whatever way you want to with that." Apparently Erickson's sarcasm was lost on some viewers. Jeff Crank, the event's organizer, reports, "In total, there were six people who rode the bus from place to place on the bus tour. That includes the driver and tour coordinator."

Longmont CO Health Raly August 6 2009 Part 1

Longmont CO Health Raly August 6 2009 Part 2

Longmont CO Health Rally Speakers August 6, 2009

According to certain Democratic leaders, those who protest Obamacare are mobs. Ben DeGrow offers a good summary of articles related to this.

Congressman Ed Perlmutter told the Denver Post about tense Town Hall meetings, "They gin up this conflict and in some ways thuggery to try and stop stuff."

In other words, at a Town Hall meeting, where politicians invite people to come and speak, politicians expect people to shut up and take it.

According to Congressman Perlmutter, forcibly confiscating people's money is not "thuggery." Forcing some people to subsidize others through a maze of insurance controls and mandates is not "thuggery." Dictating to doctors how they shall provide health care, to patients how they shall receive it, and to insurers how they shall insure it, is not "thuggery." But complaining about it, that is "thuggery." Speaking up is "thuggery." Saying "no" to Big Brother is "thuggery." Daring to exercise the First Amendment is "thuggery." According to Congressman Perlmutter.

I was amazed that 150 to 200 people showed up for a "Hands Off My Health" rally in Longmont, in the middle of a work day, when seven such rallies were scheduled across the state with little advance notice.

I talked to a number of participants. I asked people why they came to the rally. I asked them why they oppose Obamacare. Finally, I asked them what they think of Democratic smears that they're part of some "mob." In short, I did what Democrats are deathly afraid to do: listen to people's opinions.

August 8 Update: I've added a fourth video, featuring some of the comments of the speakers. My favorite videos feature the participants. Please note that I don't necessarily agree with everything said at the rally.

Moreover, I didn't include everything I recorded in the published videos. I omitted a couple of comments, one calling Obama a "bastard" and another calling him a "racist." These were not indicative of the mood or sentiment of the event, nor do I regard such remarks as remotely useful. I recorded at least one comment about abortion that I left out; however, I think only one or two people I talked with mentioned the issue.

One guy said he thinks the solution is local taxes to care for the poor, which, while arguably better than federal programs, is neither consistent with liberty nor remotely adequate for those who regard health care as some sort of right.

Jeff Crank, the event's organizer, made the same comment he made at a previous rally, which is that the government should force insurers to ignore pre-existing conditions. I've criticized that view previously (in a co-authored column with my dad).

I approached people more or less randomly for interviews. Obviously only a minority agreed to be interviewed.

Interestingly, while some of the handful of union-associated counter-protesters talked with the Longmont Daily Times-Call, they all refused to grant me an interview. They said they were too busy and had to hit the road to attend the next rally. I think they were simply unable to make their case for Obamacare and knew as much.

However, I gave Nate, one of the counter-protestors, my card. I told him he could write a 500 word reply to this post, and I would publish it, unedited, perhaps with my reply. If you actually have arguments for your position, Nate, please take advantage of my offer. Otherwise, people might think you're all show and no substance.

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Thursday, August 6, 2009

Report Yourself to Obama's Thought Police

Diana Hsieh points out that opponents of Obamacare need to report themselves to the Obama administration for their "fishy" views.

From the White House: "Since we can't keep track of all of them here at the White House, we're asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to"

Here is Diana's self-report:

Dear Minister of Propaganda,

I'd like to report myself. I think that the Obama administration is attempting a government takeover of health care. Mandates are bad enough in themselves, and they're just one step on the road to total government control of medicine. That's appalling. I support individual rights and free markets in health care -- not more government welfare and controls.

I've told that to tons of people. Please tell me when and where I should report to my re-education camp.

I like hers so much I wrote a similar one:

Dear Minister of Propaganda,

As per your request, I'd like to report an American citizen to you for daring to exercise his First Amendment rights and speak out against Barack Obama's attempted political takeover of medicine.

I am reporting myself.

Not only do I believe that political interference in medicine is wrong and impractical, but I've told many other people about my views, and I intend to repeat this grave offense again today.

I fear I am an incorrigible practitioner of the First Amendment and an intransigent defender of individual rights. Please notify me when you have established your re-education camps, so that I may report in person.


Ari Armstrong
Westminster, CO

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Monday, August 3, 2009

In Health Debate, Left and Right Need to Check Premises

The following article originally was published on August 3, 2009, by Grand Junction's Free Press.

In health debate, left and right need to check premises

by Linn and Ari Armstrong

Hundreds gathered at the state capitol last Tuesday to protest the further political takeover of medicine. On Wednesday more than a thousand gathered in Fort Collins and Colorado Springs.

The left has also been vocal. Around the time of the rallies, Rep. Diana DeGette released a speech praising Democratic "reform," and assorted columnists joined in.

Obviously, our sympathies tend toward those who protest Obamacare. (Your junior author gave a speech at the Denver rally that you can view at However, while we criticize the left, we also disagree with various sentiments expressed by the right.

We'll begin with the left, where snappy but bogus statistical arguments continue to defy reasoned analysis. DeGette claimed that the United States has "one of the worst results in infant mortality." Ed Quillen of the Denver Post wrote that the French pay less for health care for better results. "We pay considerably more to get shorter lifespans and more dead babies," he wrote.

But obviously health care is only one of many influences on life expectancy (which continues to rise here). Diet plays a large role; Americans tend to carry around more extra pounds. Economists Robert Ohsfeldt and John Schneider point out that relatively high rates of car crashes and homicides depress U.S. life expectancy. By Quillen's logic, politicized medicine can also cure risky driving.

The U.S. beats France hands down when it comes to cancer survival or access to health technology.

As Sally Pipes and others point out, infant mortality is recorded differently in France than it is in the U.S. Here an infant with "any sign of life" that then dies counts as an infant mortality. France adds a viability standard, so the same infant that counts as an "infant mortality" in the U.S. may count as a stillbirth in France. Ronald Baily adds that more infants tend to be born underweight in the U.S. because more teens have children here.

DeGette and Quillen damn American doctors precisely because they heroically try to save infants that in France would be discarded.

The left suffers worse ideological problems. Mike Littwin, also of the Post, argued last week that equality-driven, politically-run health care is a moral issue.

We quite agree it is a moral issue. It is immoral to seize people's resources by force. It is immoral to forcibly override the independent judgment of doctors, patients, insurers, and consumers and to nullify their agreements. We oppose politically-run medicine because it violates morality. Moral health care respects people's rights of liberty, property, and voluntary association.

Unfortunately, the right also veers off track. Previously we wrote about the failings of Republicans like Mitt Romney, who pushed through mandatory, subsidized insurance in Massachusetts, and Jim DeMint, who advocates different health welfare.

Many at the Denver rally urged members of Congress to "read the bill first." We agree, but politicized health care threatens our health and liberty even if they read the bill.

Some opposed Obamacare because it may include tax financing of abortions. Yet this is a side-line issue. We get the eerie feeling that some on the right would accept bureaucratic medicine if it came packaged with an abortion ban (a possibility that should give the left pause).

We join the many calls for tort reform, but again that's not a fundamental issue. Reining in law suits won't fix the problems caused by political interference in health funding, delivery, and insurance. Still, we do want to weed out frivolous suits while compensating damage resulting from negligence.

One of the speakers at the Denver rally, Preston Gibson of the Jefferson Economic Council, eloquently argued that the "public option" would drive out private insurance.

Unfortunately, Gibson also claimed that "employer-sponsored health insurance has been the foundation of the highest quality health care on earth." Wrong. Employer-paid insurance is the product of federal tax manipulation. It is non-portable. It is expensive because it encourages people to use insurance for routine care rather than unexpected, high-cost emergencies.

American medicine is great despite the IRS-promoted employer-paid system. We should move away from employer-paid insurance to individual policies. We support the expansion of Health Savings Accounts to allow the purchase of insurance with pre-tax dollars.

Jeff Crank, organizer of the Denver rally, likewise made many admirable points. However, he also claimed that the "right kind of health care reform" includes "eliminating the pre-existing conditions exclusion." We take this to mean imposing more political controls on insurance companies.

When insurers are forced to take people with pre-existing conditions, many people wait to buy insurance until they get sick, undermining the very purpose of insurance (and leading to Romney-style mandates). The real answer is to remove all the political controls of insurance that have mostly destroyed the market for long-term policies.

Too often neither the left nor the right gets it. The name of our favorite health policy group summarizes the essential values we must protect: Freedom and Individual Rights in Medicine.

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