God is a Capitalist

Sunday, November 11, 2018

If socialist healthcare is so great, what are all those Canadians doing in our hospitals?

I was in a hotel in Houston recently and ran into several families from the UK who had a family member receiving medical treatment for cancer at the MD Anderson Cancer Center there. I have read many stories of Canadians flying south for medical treatment. I began to wonder, if socialized medicine is as great as the UK and Canada claim, why are these people here?

So I began looking into medical tourism. Most of the information you will find on the internet talks about US citizens going to Asia for great care at a much reduced price. I have no problem with that. The American Medical Association wielding the sword of government has made US healthcare insanely expensive. I once told a doctor from Scotland what Americans pay for an office visit and he called me a liar. He said no sane person would pay that much. I had to agree with his last statement.

The Reformation financed the Industrial Revolution

After millennia of stagnation, why did the European economy explode in the 17th century into what economic historians call the hockey stick of per capita GDP? We know that Christianity had finally made an impact on envy; Christian individualism had broken out; modern science, created by Christian theologians, began to contribute; the Salamancan scholars persuaded people to respect commerce and protect property. Those are all necessary ingredients. Still, where did business people get the money to invest?

Marx claimed that Europe stole it from the Americas when Spain began looting it colonies of gold and silver. But Spain never took part in the Industrial Revolution and declined in wealth and power throughout the 17th century.

Europe lacked the wealth needed to ignite the revolution for two reasons. One was the conspicuous consumption of the nobility. They held to an economic principle that their spending benefitted the poor, so they were required to spend as much as possible on moral/economic grounds. Also, their status in the community required them to spend lavishly on houses and throw parties with great banquets. Had investing in business interested the nobility, which it didn’t, they would have had no savings to invest.

Envy caused the Kavanaugh Kerfuffle

A Slavic folktale has an angel approach a peasant with an offer to reward him for some good deed. The angel asks the peasant what he would like. The peasant thinks aloud, “Well, my neighbor has a goat.” The angel interrupts, “So you want a goat like your neighbors?” “Heavens no!” answers the peasant. “I want you to kill my neighbor’s goat!”

Helmut Schoeck offers the tale as a distilled description of envy in his classic Envy: A Theory of Social Behavior. At the core, envy is resentful of the success of others and R.J. Snell, a contributing editor of Public Discourse, blames it for the Kavanaugh soap opera and similar dramas in US society. That may seem like a Grand Canyon leap in logic, but follow his argument for a moment. He includes a quote from Tocqueville:
The desire of equality always becomes more insatiable in proportion as equality is more complete... It perpetually retires from before [men], yet without hiding itself from their sight, and in retiring draws them on... To these causes must be attributed that strange melancholy which often haunts the inhabitants of democratic countries in the midst of their abundance, and that disgust at life which sometimes seizes upon them in the midst of calm and easy circumstances.

Monday, October 8, 2018

Why You Shouldn’t Be Afraid Of Options And Futures

Buy-and-hold is the standard investment advice for rookies. They tell young people to grit their teeth through bear markets like those of 2001 and 2008 where some investors lost half their savings. They say you will eventually make back your losses over time if you stay in the market. They call that “diversification across time.” They suggest old folks like me should have most of our money in good bonds because we don’t have the time left to make up for losses, but we can’t do that because the Fed has forced interest rates to near zero for almost a decade.

One reason that diversification across time is a bad idea for young people is simple math. If a market crash takes half your life savings, the market will have to double in order to make up your losses. That may take five years, but then you’re only back where you started and have missed five years of potential gains. The math looks bad.

Few investors would buy a $300,000 house and not buy insurance on it against fire, flood, tornados or hurricanes. A few more might go without insurance on a $100,000 BMW, but not many. Consider that the odds of a bear market in stocks that steals say 25% of your savings are far greater than your house burning down or totaling your BMW. Bear markets happen every decade. So why not insure your investment in the stock market as you would your house or car?

Tuesday, October 2, 2018

Big State Good For Growth? Then Why Did Humanity Starve For Millennia Under Big States?

Among the debates between socialists and capitalists is the question of who made the West so rich? Was it private enterprise or the state? Former President Barack Obama energized the discussion when he told us, "If you’ve got a business, you didn't build that. Somebody else made that happen" during a 2012 election campaign speech.

The left continues to prop up the idea that the state is the fount of all blessings. Mariana Mazzucato, Professor of the Economics of Innovation and Public Value and Director of the Institute for Innovation and Public Purpose at University College London, wrote recently that western economies are failing because the people have hobbled the state:

Who Can We Blame For The Great Recession?

This year marks the tenth anniversary of the “Great Recession” and the media are trying to determine if we have learned anything from it. The Queen visited the London School of Economics after the “Great Recession” to ask her chief economists why they hadn’t seen this disaster coming. They told her they would get back to her with an answer. Later, they wrote her a letter saying that the best economic theory asserts that recessions are random events and they had successfully predicted that no one can predict recessions.

Still, George Packer, a staff writer at the New Yorker magazine since 2003, thinks he knows more than the LSE academics. He wrote the following in the August 27 print issue:
It was caused by reckless lending practices, Wall Street greed, outright fraud, lax government oversight in the George W. Bush years, and deregulation of the financial sector in the Bill Clinton years. The deepest source, going back decades, was rising inequality. In good times and bad, no matter which party held power, the squeezed middle class sank ever further into debt...
In February, 2009, with the economy losing seven hundred thousand jobs a month, Congress passed a stimulus bill—a nearly trillion-dollar package of tax cuts, aid to states, and infrastructure spending, considered essential by economists of every persuasion—with the support of just three Republican senators and not a single Republican member of the House.
Typically, journalists will defer to an expert on matters in which they aren’t trained, which is most subjects. But Packer didn’t bother to ask an economist as the Queen did. Had he done so, he would have received the same answer from mainstream economists – recessions are random events and can’t be predicted. If economists knew the causes of recessions they could predict them when they see the causes present.

Do European Social Engineers Know More About Products Than Their Actual Engineers?

Socialists love central planning, but they hate another type – planned obsolescence. According to the report “EU aims to abolish planned obsolescence,” they have banned the practice before they identified what it is.

The European Parliament now wants the European Commission to create a clear definition of the term “planned obsolescence" and to develop a system to track that aging process. It also wants longer warranty periods and criteria to measure a product’s strength. Each and every device should also have a mention of its minimal life expectancy.
Devices should also be easier to repair: batteries and other components should be freely accessible for replacement, unless safety dictates otherwise. Manufacturers will also need to give other companies access to their components so that consumers can visit those companies for repairs.
The resolution should prevent situations like Samsung’s Galaxy Note 7 fiasco. The battery proved to be an explosion hazard and seeing how it could not be replaced, the South Korean company was forced to recall every single device.
The European Parliament also hopes the resolution will also stimulate job creation, because it should result in more independent repair services. The second-hand market should also benefit from the resolution, because products will get a new lease on life.