Laissez Faire Links: Rational Production, Debt Hysteria, Economic Ignorance, and Obamacare

Where does wealth come from?  The answer is simpler than you ever thought.  Washington’s antics over the current debt crisis and people’s ignorance of Obamacare’s deceptive design.

  • Over at Objectivism for Intellectuals, the idea that wealth comes from action based on rational thought is not a new revelation, but simply a rebuttal to those who still maintain otherwise.  Wealth, according to the classical tradition in political and economic theory (i.e. Locke and Smith), is a product of one’s labor.  See my discussion here for elaboration on this point.  Wealth cannot be anything but a “product” of action, not wish or whim.
  • Dan Mitchell from the Cato Institute points out the current debt hysteria in Washington as nothing more than political posturing.  The issue of raising the debt ceiling, lest the government default on its obligations, overlooks many aspects of U.S. fiscal responsibilities that point to a much less severe predicament.  His comments on the Treasury Report are particularly insightful:

“The Obama Administration is deliberately trying to blur the difference between defaulting on the debt, which would have real consequences, and “defaulting on obligations,” which is a catch-all phrase that includes mundane and uneventful matters such as postponing a Medicare payment to a hospital or delaying a grant disbursement to a state government.”

“The White House wants people to believe genuine default is likely even though tax receipts this fiscal year are expected to be more than $3 trillion and interest on the debt is projected to be only $237 billion. In other words, the Treasury will collect more than 12 times as much revenue as needed to pay interest on the debt….I want to reiterate that a default only would happen if the White House wanted it to happen.”

  • The Objective Standard has an interesting, albeit bit depressing, piece on how many of the Americans who voted for Obama visualize how government, economics, and insurance markets actually function.  I highly recommend taking a minute or two to read this!
  • On a related note, Laissez Faire Today provides a piece with particular insight into why health insurance markets are so difficult to understand and so expensive.  For example, what makes them different from life insurance markets?

“When premiums reflect expected costs, people are essentially paying their own way. When that happens, it really doesn’t matter very much who chooses to buy insurance and who chooses to self-insure and bear the risk themselves….Why are things so different in the market for health insurance? Because in this market, premiums are regulated, and that regulation is completely dominated by the idea that it’s unfair to charge real premiums. In fact, the most common belief is that everybody should pay the same premium for health insurance, even if everyone’s expected health cost is different.”

See the whole article here.

Laissez Faire Links: Government Shutdown, Delaying the Obamacare Mandate, the Morality of Abortion, and Myths Against Capitalism

What would a proper government shutdown look like?  Why will President Obama need to delay his mandate provision?  Can a woman be charged with homicide for aborting her baby?  Did capitalism cause the 2008 financial crisis?

  • Ari Armstrong over at The Objective Standard talks about a government shutdown that would be welcomed.  His brief piece Toward a Shutdown to Celebrate makes the point that most government functions are superfluous, and there are many.  Beneath the umbrella of laissez-faire capitalism, the proper function of government is strictly limited to protector of individual rights.  He states, “In order to protect rights, the government needs to run an effective military, police force, court system, and the aspects of government necessary to support them. Those, and nothing else, are the essential functions of government.”
  • Forbes contributor Scott Gottlieb discusses problems the new government healthcare exchanges are having out of the gate.  Why President Obama Will Have To Delay His Health Insurance Mandate makes the case that technical problems with the virtual exchange rollout will necessitate a delay in the requirement for those uninsured to purchase coverage.  His prognosis is not optimistic: “The Administration started building these systems late, and rushed them online, without perfecting these networks. Working them out now, in real time, is going to take months, and maybe a year.”  With that large of a delay, the Obama Administration will have to backpedal on its threat to penalize the uninsured.
  • Just a little more from our friends at The Objective Standard tells us about a possible Colorado ballot measure that would effectively criminalize any and all abortions, even in cases of rape and incest.  The measure would go further though.  In addition to calling for “homicide prosecutions for killing the unborn,” the “Brady Amendment” violates a women’s moral right to choose how she lives and what is best for her and her body.
  • Did Capitalism Cause the Financial Crisis?  This is a short, but invaluable video regarding the common myth that capitalism failed, resulting in the 2008 financial meltdown. Yaron Brook, Director of the Ayn Rand Institute, states that this is erroneous because a true system of laissez-faire capitalism did not exist prior to 2008.  What did exist was a degree of government intervention that distorted the market, leading to bubbles in asset prices that never would have existed under natural market forces.  It is no coincidence that the three most highly regulated industries – housing, banking, and mortgages – were those that failed.  Pay particular attention to his comments on the Federal Reserve system.  For more information, see my discussions of the Federal Reserve.

Laissez Faire Links: Myths Agaisnt Capitalism, Obamacare, Budget Talks, and the Index of Economic Freedom

Myths against capitalism, Doctors under Obamacare, budget cuts in lieu of growing government (how can that be?), and a decline in economic freedom for Americans are up for discussion today.

  • Check out Don Watkins’ new article over at the American on the common equation of successful businessmen with “greedy capitalists”.  The comparison often made between crooks like Bernie Madoff and successful businessmen such as Bill Gates or Steve Jobs are erroneous at best.  On the contrary, the two are polar opposites.
  • Ari Armstrong points out the new problem posed by Obamacare in Under ObamaCare, “The Doctor Can’t See You Now”
  • The Republicans are just as guilty as the Democrats regarding our growing welfare state.  Michael A. Laferrara discusses the supposed “cuts” from SNAP proposed by Republicans.  The important point to note, however, is that no entity in Washington questions the morality of federal assistance and its growing role in the daily lives of Americans.
  • Indeed, federal assistance has become its own institution in Washington, often dominating political issues as fundamental and basic as the fiscal budget.  The current shutdown is a result not of politics in itself, but a fundamental disagreement between left and right on the scope of government involvement, symbolized most prominently by Obamacare.  The Senate rejection of House budget proposals along with current polls of Obamacare indicate that Washington listens little to the people when making decisions that affect them on a daily basis.

In every poll conducted by eight major national pollsters this year, opposition to the Affordable Care Act outweighs support. In the September 2013 CBS News/New York Times poll, for example, 39 percent of respondents approve of the law and 51 percent disapprove. In the mid-September Kaiser Family Foundation poll, 39 percent have a favorable view of it and 43 percent an unfavorable one. The late September CNN/Opinion Research Corporation poll found 38 percent in favor and 57 percent opposed.

Minimum Wage Laws: State Intervention Leads to Individual Degradation

The following article from the Objective Standard Blog explains how minimum wage laws hurt individuals.  In addition, it highlights how the issue has become mischaracterized, cloaked in the shrouds of altruism.  This ideology is perhaps the most dangerous of all, for it legitimizes the State in almost every aspect of life.  Regarding the minimum wage, altruism supplants the individual’s ability to earn a living, with the State’s authority to forcefully redistribute wealth.

Minimum Wage Laws: Immoral, Crippling, and Nevertheless Supported by Many.

Economic Cannibalism: A Lesson from the Soviets

Originally posted on kapitalcon:

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Simon Black’s June 14th article entitled “What are the Social Implications of Economic Collapse?” makes a clear-cut diagnosis of America’s imminent fall from its economic pedestal.  The point of no return is passed according to Black.  Foreign buyers of Treasury securities are undoubtedly nervous over the credibility of U.S. debt, and as we lose their business the only option for Washington is to turn up the printing press at the Federal Reserve.  Deficit spending has evolved into an all-out race to the bottom of the dollar.  The diagnosis is in.  Massive inflation and an attempt to continue government austerity via higher taxation will erode much of America’s purchasing power along with her savings.  The final result will be what Black and many others have termed economic cannibalism.  On this, Black makes a poignant reference that bears the full light of Ayn Rand’s vision as laid out in Atlas…

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