Healthcare and defense

Saw the following question posted online:

1.) Why is it that every other industrialized nation in the world isn't being crippled to their knees right now from their own socialized healthcare?

2.) What do we do to fix it here in the U.S.?

Those are interesting questions. Long answers...


I think, namely, because every industrialized nation with socialized healthcare happens to also have been industrialized at the time of WWII and therefore are participants in the global security order which evolved thereafter going into the Cold War and beyond... the US subsidizes their defense. This concept might seem archaic and belonging to a bygone era, but it's actually incredibly pertinent.

No nation becomes industrialized (meaning, generates the levels of wealth and commerce necessary to elicit the industrializing process) in isolation from the world; it requires global trade. Trade requires security. In multilateral power configurations in the past, this has meant spheres of influence being carved out and put in zero-sum competition (mercantilism). WWI and WWII were largely the result of this configuration boiling out of the pot (and the aggregate perception of zero-sumness reaching a critical threshold to the point that do-or-die warfare was considered necessary). The crushing defeats it left created opportunities for the only surviving combatants of any appreciable power (US, USSR) to compete in a new system to secure the reconstruction (and subsequent reconfiguration) of the redeveloped industrial powers into a trade order more favorable to one side than the other. Capitalism, the inherently more trade-friendly system, prevailed, and thus allowed for economic expansion. But for this to occur, the US had to take responsibility for all the security of all of western Europe and east Asia (and gradually throughout the world).

Eventually the European and Asian economies came back online, and enamored in their rediscovered wealth (minus the burden of securing their right to trade), they indulged in costly social welfare systems. And so we're left guarding the trade lanes.

One might believe that threats to the global trade order are remote today, but they'd be wrong. Every time a series of global events have exposed underdeveloped rule sets (some would call them opportunities) in the international order, there have been minute but opportunistic powers that have taken advantage of them. An example: post-Cold War, the End of History, lots of questions as to what a world with a lone super power would be like, and what the extents (and limits) of that power would be. Iraq makes a very 19th century move and invades Kuwait. The international order builds a new security rule set saying "No, you can't do that", and they enforce it. With American tanks. What happens when said super power is bogged down in two costly wars? Russia invades Georgia's breakaway provinces. Throw in Somali pirates in there too. Breakdowns, or even just lapses, in the international security order lead to these sorts of militant adventurism which in turn threatens trade and therefore economic growth.

Anyway the next logical question is why can't these developed nations share the security burden? Well, they could, and they should, but doing so would require largely dismantling their social welfare systems as they presently exist. The French are rioting over a 2 year increase in the age of retirement. Good luck with that. We should, however, be trying to involve the newer developing nations (brazil, china, india, turkey, etc) in our security structure, which is really the only way it's going to stop being just 'ours' and become 'everybodys'.

There's another component to this answer as well. D00mz you ask why the industrialized nations aren't crippled over the costs. A big part of it, I think, has to do with sheer size. These European states are tiny compared to the US. It could just be that larger the body you're trying to create this system for, the more complexity evolved, not to mention sheer mass, and therefore less cost effective. I bet a EU-wide socialized healthcare system would fall flat on its face. Why should we expect any different here in nation of 300+ million?

We should probably keep experimenting at the more manageable state level. It could be that these programs only work in systems of that scale. And frankly that makes sense; you don't have a federal fire department, it's local. Your beat cops aren't federal cops, they're local. Both of those systems are fully funded at the local level, why shouldn't healthcare? If it can't be self-sustainable at the local level, how on earth do we expect it to be sustainable at the massive federal level?

How do we fix it? I think probably a combination of diversifying the global security responsibility while experimenting in more localized social programs. Obviously we have to reduce healthcare costs, realistically through technology and sheer economic development. We also have to create smarter programs that leave each generation demographically independent, meaning a wave of baby boomers won't break their children's backs.

Will Obama go the Route of Carter or Clinton?

ARTICLE: Will Obama go the Route of Carter or Clinton? by Andrew Stewart (Via Rise of the Center.)

President Obama has an important choice to make.

With all indications pointing to a Republican takeover of the House and possibly even the Senate, it is becoming clear that the Democrats super majority is coming to an end and the President is going to have to decide how he will proceed with that reality in mind. Ezra Klein and Mark Schmitt have wondered aloud what a Republican majority would do, musing back and forth between obstructing the Republican Congress or transforming his own agenda into one that Republicans could collaborate on, or at least support.

Go read the rest over at Rise of the Center.

It's never too early to start saving for college

ARTICLE: Establishing College Savings in Kindergarten by Mark Huelsman, October 5, 2010 (Via Higher Ed Watch | NewAmerica.net.)

While many families will only save a small percentage of what is necessary to fund a postsecondary degree in California and elsewhere, universal savings accounts -- structured properly -- could have a broad affect on aspirations and behaviors at a critical development stage for low-income students, and single-handedly move them into the financial mainstream.

Sensible stuff from my friend Mark Huelsman. Go check out the rest of the article.

Oh no! Third World America!

ARTICLE: US politics is angry, polarised, and gridlocked. Can it be reformed? | Timothy Garton Ash (Via The Guardian.)

ARTICLE: Firefighters Watch As Home Burns: Gene Cranick's House Destroyed In Tennessee Over $75 Fee (VIDEO) (Via Huffington Post.)

The event was dubbed "pay for spray" by MSNBC host Keith Olbermann. It's a chilling vision of what could play out in a third world America, where paying taxes isn't enough to cover basic services. Fire protection, it turns out, is a privilege in some communities. On Monday's show, Olbermann railed against the larger implications the incident, calling it "a look now into the America envisioned by the tea party ... just a preview of what would come in a kind of a la carte government."

ARTICLE: America Goes Dark - Paul Krugman (Via NYTimes.com.)

Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.

Hardly.

It's the new battle cry of advocates of big government who are trying to associate a recession period environment with limited government, as though the later were the cause of the former. They hail from the Keynesian and Progressive camps.

This incident wasn't a result of small government, it's about some guy living outside one district's jurisdiction and some firefighters being assholes by not helping him anyway. It's the government itself that created the situation which allowed this to happen, not a lack of government. There's also nothing particularly "new" about this situation, I'm sure it's been this way in those parts for quite awhile.

All these keynsian big government progressive types are trying to scare the public into thinking America is somehow in a state of decay that is being brought on by 'limited government', and the only answer is a full embrace of invasive big government, that we should hand over all our wealth in taxes to a benevolent government that is somehow going to see to it that that money is put to good work.

Baloney. This idea of a once perfect America that never had any cracks in the pavement is pure fantasy. Our market oriented economy and the liberal trade order that we have fostered throughout the world since the end of WWII has brought great amounts of wealth and opportunity to our citizens, but America, just like every other society in the world, is just yet another work in progress.

There is no flawless antiquity that we have fallen from. The recession has slowed our growth (as is the definition of a recession), but it has not receded us into some more primitive state. Blaming something like this incident on limited government, a concept we have not experienced in many generations and which certainly should not be equated with a recession environment, is dishonest.

As for Timothy Garton Ash's (one suspect's gleeful, but maybe I'm just cynical after reading him for so long) insistence that America best shape up or China will overtake it? Well, let's just say I'll take America's demographic forecast over China's any day.

Krugman is in the dark

A friend passed me latest from the Krug:

ARTICLE: America Goes Dark by Paul Krugman (Via NYTimes.)

After reading the very typical Krugman pice, I showed my typical disdain for Krugman's faux-intellect, to which my friend asked if I 1) hate the government and 2) don't think Krugman has a point.

His initial point is obviously true: local governments lack the budgets to properly fund public works. The fact I said that should show I don't "hate the government", I just strongly disapprove of the form of governance that is being slung around here, a supposed lack of which he attributes the blame for this localized situation to. The rest of his 'point' is crap. He's trying to connect the localized effects of a recession with the diminished federal revenue resulting from the Bush tax cuts. Our problems are not a result of lower federal tax revenue, they are a result of runaway misguided spending.

He then goes off on his typical tirade for demand-side economics, which makes no more sense than supply-side economics. You can't supply yourself into demand and you can't demand yourself into supply, yet that's the very nature of the debate taking place here and ultimately it's just the world's biggest version of the Chicken or the Egg.

Personally I think we should be cutting taxes across the board, along with deep cuts in federal spending, and increased spending at the more local levels. This isn't a states rights argument I'm making, it's a case for resilient localism. The system as it is now takes the majority of tax revenue and centrally pools it where it can be distributed to whichever districts have elections coming up. Not exactly a model of efficiency. When times are good, it's asinine but effectively harmless. When times are bad, well then it's a ridiculous exercise in inefficiency that ultimately leads to very poor, impossible choices in allocation that deprive localities of the funds necessary to maintain their own public works; funds that never should have left those localities in the first place.

Immigration as the domain of the Federal level of governance

ARTICLE: Editorial Observer - The Hunt for American Decency in the Arizona Quicksand - NYTimes.com (Via New York Times.)

I completely agree with this article on immigration law. Namely this:

The message was that Arizona cannot have its own immigration or foreign policy. It cannot tell the federal government how to enforce its laws. It is not up to any state to seize the power to upend federal priorities, particularly to wield a blunt enforcement tool that will do harm to Hispanics, citizens or not, who live in certain neighborhoods, wear certain clothes, drive certain vehicles and speak Spanish or accented English.

I often talk about the concept of 'localism' (really it's just properly executed Federalism), some of which falls under the category of States Rights, and I believe that large segments of our governance should fall under more localist jurisdiction. Ie, entitlement programs would be better executed and constitutionally non-controversial if devolved to the state level (ie ie, despite my libertarian leanings, I'm personally perfectly fine with anything up to and including a single payer health care system IF done at the state level)

But this is article outlines a really good example of where the Federal government's jurisdiction comes in. Localism should only apply to areas of policy that actually affect us as individuals (again, entitlement programs, services, your basic every day laws that you as an individual encounter). Where the Federal government comes in is the interplay between states, the interplay between the collective of states (ie the USA as a national body) and other national bodies, superseding state laws when it comes to individual rights, and those policies that govern immigration into this country.

Devolving entitlements to the states frees federal political capital

ARTICLE: Opinion: It's time to shift spending to states - Jeffrey A. Miron - POLITICO.com (Via POLITICO.)

Great article from Politico, and very much in agreement with my view on devolving entitlement programs to the state level. The benefits from this adjustment would include exposing programs like Social Security, Medicare and Medicaid to the competition inherit in the policy market that is our system of 50 states. Again, Jefferson referred to the system as 50 laboratories for experimenting in policy. Devolving this type of function to the state level would also free up tremendous amounts of political capital at the Federal level to deal with issues that are actually intended to fall under Federal jurisdiction; namely national security, foreign affairs, immigration policy, serving as a guarantor of individual rights, and facilitating a federal coordination of these various state programs when they cross state boundaries (the proper usage of interstate commerce).

Political will aside, this development wouldn't be that difficult to implement as our federal pension and health programs are already funded by a separate revenue system (payroll taxes) which could simply be transferred to the state level for collection and expenditure without affecting the rest of federal spending.

But even at the state level, many of the current problems with these programs will be inherited as well. Not all of the answers are readily available, but the age of retirement seems and easy one. When originally introduced, the age of retirement for Social Security was 65 and the average life expectancy was 63. It's no wonder that the most often proposed solution lately is to raise the retirement age. But any adjustment is likely to be moderate and will likely only put off having yet another politically expensive battle to raise the age again in the future.

The problem is setting this value as a constant, instead of determining it by a function that is based on the dependent variable here: the average life expectancy. Peg the age of retirement at or a couple years above the average life expectancy and social security should become more sustainable.