Libertarian Hatchet Job
I found this article a few minutes ago about the rumors of antitrust investigations around Google. Like most Libertarian hatchet jobs these days, it starts with a belief in an unproven set of first principles roughly equating The Market with a just and loving God, mixes in a total lack of understanding of a complex issue, and arrives at a useless conclusion.
The author doesn’t know the difference (and it’s significant) between AdSense and AdWords, which is the first clue as to how little he actually knows about this issue. I’m not even sure where I side on the Google antitrust topic, but I know it’s a hell of a lot less simple than “Google makes the best search engine and as soon as they stop the money will flow elsewhere.” Anyone who has actually used either of those two products (I’ve done both) knows this.
It’s not hard to find people (via Google searches no less) who were making a lot of money and then were effectively put out of business by a change in or sudden enforcement of the nebulous AdWords or AdSense terms, or in Google’s results algorithm. It’s clear to anyone sufficiently knowledgeable about internet marketing that Google’s tremendous share of searches gives them unprecedented control over the flow of advertising dollars on the net.
The author continues:
In other words, Google is to be shackled so that future competitors can catch up to Gmail, Google Maps and Google Books.
Google Books is undergoing a controversy of its own in relation to their settlement with the Authors Guild giving them and only them rights to sell orphaned books digitally, which has nothing to do with what the DoJ is rumored to be investigating. I’m not sure where I stand on that issue yet either, but one thing is for sure: it’s small potatoes compared to AdSense/AdWords and search engine results.
Gmail is in 4th place behind Yahoo, Microsoft, and AOL respectively, and Google Maps does well but has far more significant competition than their search or advertising products.
In summation, this guy has very little clue what he’s talking about, but that never stops a Libertarian from writing a negative opinion piece about the government.
Epstein is an analyst at the Ayn Rand Center for Individual Rights.
Shocker.
July 1, 2009 at 7:14 pm
The country is imploding in deficit spending. We have a national debt we can never pay off. In the meantime, those in power are using this as an opportunity to enable partial or whole government takeovers of the mortgage, banking, health care, energy, and auto industries…..and you’re scouring the net looking for typical Libertarian hatchet jobs?
Did you wake up this morning trying to be the village idiot?
July 1, 2009 at 7:19 pm
You’re really stretching there. Our deficit spending is nothing new. The only difference between now and the last 28 years of Republican rule is that at least currently, it may be temporarily justified.
Our government is not taking over any industry. Take a look at this handy chart: http://correspondents.theatlantic.com/conor_clarke/socialism%20chart.png
And our government has to step in on energy and health care. The former is a threat to the future prosperity of the entire world, not to mention funds the other side of the war on terror. The latter we pay more for than the rest of the developing world (where government intervention is universal) and get less.
Not that any of those have anything to do with what I wrote about, but you should probably educate yourself a little more before you go calling people idiots.
July 2, 2009 at 3:01 am
Matt, I’ve read your blog for a while, but had no idea you were coming from ‘that’ place…I’m sorry that you’ve misinterpreted Bush’s stupidity and Obama’s charisma for a belief that the free market failed and that central planning could ever possibly work.
The very fact that Republicans (unfortunately) and Democrats (of course) would spend every penny of tax revenue and then some, is reason to inherently LIMIT THE SIZE AND SCOPE OF GOVERNMENT, not expand it.
And, if you dig through common sense and recent history, it becomes fairly obvious that the pseudo-depression we’re currently enjoying is a result of the Federal Reserve artificially depressing interest rates to avoid the LAST recession, an action which avoided immediate pain and blew up the real estate bubble, which of course collapsed and has now lead to an immensely bigger problem.
Libertarians and Austrian economists, and any true constitutional conservative saw this coming. I assume you’ve seen the ‘Peter Schiff was right’ video on YouTube. If you haven’t, you might want to check it out, then listen to what he and others like him are saying today.
Good luck.
July 2, 2009 at 3:08 am
Again I said nothing of the sort. I simply find it naive to rule out the possibility, as Libertarians often do, that the government does some things better than the private sector.
Health care is the most glaring example. The rest of the developed world spends half of what we do, and has longer average lifespans, lower infant mortality, and better health in general, and it’s because in the rest of the world, government runs the show.
Low interest rates were one factor of many in the current bubble. Those still didn’t account for the excessive risk taking. That came from executive pay structures (set by the good old boys network of course) that reward short term risk, which the market produced. The effects of the gambling on the real estate bubble were much larger than the bubble itself.
Moreover, the vast majority of economists agree in principle with the bailouts and deficit spending, though they certainly fret over the future ramifications. Again, Libertarians diverge from sound economics in favor of their Free Market God.
July 5, 2009 at 1:36 am
Matt, you’re wrong on health care. The reason we trail many other developed countries in life expectancy is due to our overwhelming success post-industrialization. Wealth and a culture that celebrates excess, even regarding food, lead to an explosion in obesity rates which is the primary, and overwhelming, cause of poor health and early death in this country. That’s a cultural and prevention issue, not a health care issue.
Also, other developed countries have built-in advantages in covering more of their citizens and reducing costs across the board. (1) Many of them operate under the US’s military umbrella and can redirect those funds toward coverage should they choose to do so (that’s an opportunity cost advantage we don’t have). (2) Countries like France (a common comparison study) doesn’t have overzealous environmentalists derailing their energy programs at every turn. France currently uses nuclear energy for close to 40% of their total consumption. Of course in this country, the science community can publish study after study on the relative safety of nuclear energy and waste disposal vis-a-vis other forms of energy, but environmental groups lead by those that couldn’t pass an undergrad Physics survey course are “advising” of the dangers of nuclear power and using fear memes to influence legislators. (3) Those countries perennially ranked ahead of us have higher corporate taxation, income taxation, VAT, etc. and they use those resources for entitlement programs. That of course is a philosophical issue, but I would note our country was founded above all else on the principles of fair and minimized taxation, and protection of property and person. Government-dependent subsistence/survival doesn’t follow from that argument aside from national security.
I won’t even go into the fact that of the 46 million uninsured Americans, 27 million are illegal residents and another 11 million are 18-34 year old males who by income demographics can afford insurance but choose to go without. That leaves about 8-9 million truly uninsured, and for them, there over 40K free health clinics in the US and also in trauma emergencies, ERs are not allowed, by law, to turn away a critical patient.
So let’s be honest here, our health care system is by and large working well. The only appreciable issue is that of extended and/or specialized-care costs, e.g. long hospital stays, a long battle with cancer, or chronic issues that require persistent care or medications. Those specific areas should be the target of government subsidation.
They should focus on tort reform, breaking up the protectionism of pharmaceutical companies given by bureaucracies like the FDA, increasing preventative care and education, etc. The system needs a breast lift, not a double mastectomy. They shouldn’t be blowing up an entire system that largely works for 85-90% of the legal and working population!
Going to a comprehensive or universal system will hurt small-business owners, will dilute efficiency and quality of care, will discourage our best and brightest from entering the health care industry as it will become laden with additional bureaucratic battles and reduced salaries, will increase taxation in some form in the long run, and on and on.
I’m not a economic conservative at all costs, I’m more a pragmatist who errs on the side of econ conservatism when possible, and the health care debate is an OBVIOUS case of politicians trying to game a system they know very little about and will invariably lead to a host of negative externalities that will reuslt in a system far worse than we have now.
July 6, 2009 at 9:13 pm
According to figures cited in the Economist, other developed countries spend a lower percentage of GDP on health care than we do, rendering your arguments about military spending and higher taxation moot. While I’ll mostly agree with you on the energy/environmentalist thing, and that things like life expectancy can be explained by obesity, there are still some very telling statistics.
Our infant mortality rate is 6.7/1000… vs OECD average (including Mexico and Turkey) of 4/1000. The death rate after hemorrhagic strokes was 25.5% in American hospitals but only 19.8% in OECD countries as a group. These types of stats are hard to blame on our opulent consumption of food/liquor/tobacco.
Mostly I was going to nitpick some things you said… until I got to this:
> Going to a comprehensive or universal system will hurt small-business owners
What?! What small business owner would rather have the hassle and expense of handling his employees health-care over having the employees (and the government) handle it themselves?
It seems to me that a single payer system, or at the very least a system without the ridiculous expectation that employers are the gatekeepers to health insurance would be the biggest boon to small businesses in a century.
I’d like to say the current system works, and I suppose it does. But it does so very inefficiently. Really this article says it better than I could, so I’ll just link it:
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13899647
July 6, 2009 at 11:24 pm
Actually, those points aren’t moot. Health care spending isn’t about reducing cost in percentage values vis-a-vis other countries, it’s about providing the best possible affordable care, which we could easily do far better under our system, than those countries can under their system assuming we didn’t have the roadblocks I explained which includes policing the world. The idea that health care is rated by expense ratio of GDP is a highly flawed metric. The truth is, our care is the best in the world in actual medical application (best specialists, best facilities, and we don’t ration critical services) and we SHOULD be able to cover it with ease if it weren’t for expenses that other countries don’t have (at least in great part, of course there other considerations under the current econ climate).
IOW, in ’07 we spent 16% of our GDP on health care, England spent 9.5%. But our GDP is 8x England’s while only having 5x the population. We can afford 16% under more sane spending habits across the board (by reducing energy consumption costs, reducing government spending on other entitlement programs, and increasing investments by lowering corporate and income taxes and introducing a sensible VAT instead). If it meant we get to keep the current system qualitatively, then even 20% would be acceptable. An analogy of why that metric is flawed would be (I didn’t scale the incomes or prices for GDP, this is just a qualitative example): If I made $350K/year and bought a BMW M series for $100K, and my neighbor made $100K/year and bought a Toyota Carolla for $20K, then saying his car is better than mine because it only represents 20% of his income this year whereas my car represents 29% of my income this year, would be the equivalent argument and certainly beyond ridiculous. We can both reasonably afford our respective cars, but my car is qualitatively far better. Same goes for our health care. Our system provides the best care in the world, and at its current cost, we can easily afford it (if it weren’t for unnecessary and haphazard spending), and poor macroeconomic planning with respect to the GDP.
Regarding infant mortality rates, there’s another way of looking at this. China has an infant mortality rate of 21.6/1000 and India 32.3/1000. In England it’s 4.9/1000, in 4.6/1000 in Canada. Yet, the population of those four countries respectively are: 1.3B, 1.1B, 60M, and 33M. The US has an infant mortality rate of 6.7/1000 in a country with 300M. I’d say we do a pretty damn good job and in some ways, we could argue we do better than any other developed nation considering the overall stress our system is under due to raw population. I’d also note that if we unpacked those numbers, we may find some critical correlates that explains the situation even further in our favor, e.g. the overwhelming number of illegals in this country and how that affects mortality rates in over-burdened hospitals and clinics in certain hot spots, notably southern California.
Universal systems hurt small-businesses because they always go hand-in-hand with additional corporate and individual income taxation, a far worse burden for building a businesses than providing co-pay plans for employees that are subsidized by the government anyway.
To the point of efficiency, the idea that government intervention would result in greater efficiency in anything, especially health care, is laughable. No one that has ever run a business or even taken some basic economics courses would ever argue that. There are no econometric models that support that assertion. The government adding to inefficiency is as certain as death, it wholly consumes wealth without ever creating it, that’s the definition of inefficiency.
July 6, 2009 at 11:55 pm
% of GDP is the best way to measure the bill’s impact on society.
I think you’re confusing better and cheaper with your Toyota analogy. Better is about results. Our health care is clearly not better, the stats prove that. It excels at some areas (breast and cervical cancer for instance) but as a whole we’re living a shorter lifespan and spend more if it ill, more than can be contributed to cultural differences.
And we’re paying more for it. Whatever you think of our foreign aid spending, it has nothing to do with why we’re paying so much more for health care. We maybe can afford, just as we could afford an extra 2% income tax that was lit on fire at the end of the year, but that doesn’t mean we should.
July 8, 2009 at 4:04 am
Matt pointed out what I was going to say about your thoughts on GDP, so I’ll mostly go with that… but I’ll add that I would buy that argument if our health care really was a BMW to the rest of the OECD’s Corolla… but that is a laughable assertion. At best, our system is a Corolla LE to their Corolla… more luxurious but less efficient. We have vastly higher rates of consumption of diagnostics and elective procedures, without anything to show for it in the way of more positive outcomes.
Also can’t buy your hand-waving that infant mortality is somehow entirely explained by population size of the country. You compare two developing nations, that also happen to be huge, with two developed ones, that happen to be small, then claim the US, which happens to fall in the middle size-wise should also fall in the middle mortality-wise, and since it does, QED. Seriously? That said, I totally see your point about treating high immigrant populations regarding that particular statistic, but what explanation could explain the stroke stat?
> “it wholly consumes wealth without ever creating it”
So all that infrastructure built by the government, including power plants, dams, highways, and airports, never created any wealth?
Trust me, I’m no fan of having the government do everything, but I just don’t think people are capable of making rational economic decisions about health care. They want to be healthy, now, cost-be-damned. Even if they actually had good pricing information, I don’t think people would really shop around. They would just want things fixed as fast as possible. I’m not proposing that government should actually _run_ hospitals. Merely that it should use it’s immense purchasing power and regulatory ability as a single payer to realign doctor/hospital payment incentives and force cost cuts.
July 7, 2009 at 1:33 am
Measuring impact on society, no economist could predict that while keeping an ounce of humility. If you read the suggested proposal, mind you, none of these plans for comprehensive coverage have concrete figures, it’s all speculation, it’s completely pie-in-the-sky thinking. They don’t even account for potential negative externalities whatever they may be, though experience in legislating massive government spending tells us that the externalities will be there as will spending in excess of initial estimates.
You’re assuming lifespan is the only indicator of quality health care and not even attempting to quantify the problem of obesity and lack of disease prevention in our culture into the equation; two things that won’t be addressed just because more people will have an insurance card. We’ll just have more people with heart disease and diabetes on the government dime. Even if we assume life expectancy as our primary criterion of success, do you think that everyone having coverage will automatically increase life expectancy? That surely doesn’t follow necessarily. Then there’s the other side of this argument. Just as in the case of infant mortality, just because we’re ranked behind some other developed countries doesn’t mean much when sussed out in real terms. The paragons of life expectancy, e.g. France, Sweden, Canada, etc. are all right at 80 years. The US and our “heinous” system? 78 years. Wow, there should be riots in the streets!
And again, it doesn’t matter how much we pay for health care in terms of GDP percentage. It’s a balancing act that’s intrinsic to each country’s self-imposed standard of quality care and affordability. Burning 2% of taxes would obviously be frivolous, spending an extra 5% of GDP on health care isn’t.
Is it worth it to you that we cut that extra 5% by using dated equipment and procedures, rationing non-critical care, paying medical care professionals less, having substandard specialized treatment, etc. That’s what other countries do.
Matt, you’re a smart guy, I’m really surprised you’re not seeing how this overhaul is unnecessary and just a pet-project of the far left in the democratic party. Like I said, I would never argue that the current system is perfect, but it’s certainly not beyond salvaging, as though Sodom and Gomorrah waiting for God to purge it of sin via annihilation. It’s a strong system in need of a couple tweaks here and there, it’s certainly not on life support waiting for its plug to be pulled.
I understand why some people have an immediate aversion for anything the Republican party, and more specifically, the creepy far right evangelical faction of the Republican party, would support, but this is an issue where economic conservatives are mostly correct.
July 7, 2009 at 4:44 am
It’s hard for me to assume that universal healthcare is just a Democrat pet project because the Economist, which usually endorses Republicans, endorses it, as does the rest of the free world.
Your arguments aren’t entirely uncompelling, but they don’t seem to be particularly informed either. The fact that you’re spending so much time arguing in the comments of mattmaroon.com, where nobody of any influence will ever read (in fact, maybe 2 people other than us ever will) makes me think your beliefs have more in common with religion than informed opinion.
Which actually cuts to the title of an entry I’ve been working on for a while but haven’t finished yet: libertarianism is just religion for smart people.
July 7, 2009 at 7:23 am
I’m not arguing it here in hopes of influencing the public. There are think tanks with full-time scholars debating this everyday and studying the data, and trying to gain the favor of open-minded politicians in hopes of influencing quality legislation. I only brought it up because you mentioned that the government should step in certain areas of the market including energy and health care. I’m just pointing out that they shouldn’t. Their only role in the market should be to remove obstacles for private investment and private wealth creation, and only step in when a system within the market is headed toward absolute failure (energy, nor health care, qualify). The government shouldn’t be in the business of trying to solve problems the market is fit to solve for itself in an overwhelming majority of the cases, if unobstructed.
This line of reasoning isn’t zealotry, or arguing toward an already accepted conclusion as you presume. It stems from vigorous debate and scholarship going back 200 years. The proof is in the pudding. Economic conservatism has overwhelmingly won the debate on resource allocation and wealth creation. It’s the reason that Hayek and Friedman are taught universally in every econ department regardless of department politics, and Keynes and Galbraith are rapidly being reduced to footnotes.
That’s not to say the free market results in universally lauded outcomes in every case, but government intervention has proven time and again throughout history, both domestically and foreign, to be inefficient and wasteful of resources. Freedom stems from property and the ability act in one’s self-interest unabated. That’s the foundation of this country, not having the government step in every time another developed country gets 2 more years life expectancy or 2 less infants dying per 1000. If that’s the case, why not legislate that everyone has to wear a protective bubble suit, set speed limits at 10 MPH, outlaw all fast food restaurants, etc.?
July 7, 2009 at 1:06 pm
Its humorous to me that you bring up economists when most of them support public health care. They were also found in multiple independent surveys to have supported Obama who made that a key part of his platform.
Its easy to constantly shit on government, but unfair to do so without mentioning what its done well. We wouldn’t trust private industry to run the military or build a national highway system. Where would our economy be without those? Like it or not, health care appears to be in the same category.
The reason I assume you’re starting with the conclusion and working backward is your assertiom that wasting 5% on health care is better than burning it, when its identical. Its also unaffordable as our popukatuin ages and entitlements break us.
And think tanks don’t just start at the conclusion, they’re funded by it. I promise you I can find multiple of them on each side of most any issue.
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