Removing the middleman

The Obama administration apparently wants to take over the student loan market, and they want to do it as part of the health care plan. The Washington Post explains:

Under the proposed legislation, the Federal Family Education Loan program that includes private lenders would end on July 1 and all federal loans would be issued through the government.

Granted, the government already controls the student loan market and takes on the default risk of most of these loans, so by eliminating these private companies that originate and service the loans, there will be some savings. That is precisely the argument that the administration is making:

Obama administration officials have argued that the change would amount to nothing more than removing the middlemen from transactions that allowed lenders to pocket billions of dollars in profit at the expense of taxpayers.

In other words, if the government is going to subsidize, control and regulate the entire market for student loans, why waste money on these private sector companies who are profiting from these taxpayer subsidies? Why not just remove the middleman?

This is an excellent demonstration of how the proposed health care bill can eventually lead to a single payer system. That's because the health care industry under Obamacare will look very much like the student loan market - it will be federally controlled, heavily subsidized, and private companies (in this case health insurance companies) will act as middlemen who profit from taxpayer subsidies.

Once premiums continue to rise, and the government's fiscal situation continues to deteriorate, perhaps to the point of a genuine fiscal emergency, the government can simply propose: "If we just cut out the middleman - those greedy, profit-seeking insurance companies - look at how much money we can save!" And voila, we have a single payer system.

"That's No Angry Mob, That's My Mom"

Got to love the title of this new book from Michael Graham. So apparently I'm not the only one whose mother is DVR'ing episodes of the Glenn Beck show and devouring books on Austrian economics and the founding fathers.

Closing arguments

Paul Ryan, the de-facto leader of the opposition to the President's health care reform, made his closing arguments today. Below is an excerpt:

Even though it’s not single-payer, and even without the so-called “public option,” this is still a government takeover of health care – and here’s why we keep saying that.

The entire architecture is designed to give the federal government control over what kind of insurance is available for patients, how much health care is enough, and which treatments are worth paying for.

This plan assumes that everything is connected to everything else. You can guarantee coverage for pre-existing conditions only if you have healthy people in the insurance pool to spread costs; and you can only do that by requiring everyone to buy health insurance; and you can do that only if you subsidize people; and once you start handing out subsidies, you have to impose artificial limits that further inflate the true costs and further strip decision-making power from patients and doctors.

It creates a Health Insurance Rate Authority, a Washington-controlled price-setting board. This will usurp State governments’ role in regulating insurance and premiums, and will further smother the normal market forces that would otherwise encourage innovation and cost-saving efficiencies.

It empowers Washington to decide what kind of insurance will be available. The proposal gives the Secretary of Health and Human Services and a new Health Benefits Advisory Committee – an unelected group of Federal bureaucrats – unprecedented Washington-centered power to create and change the requirements for “acceptable coverage.”

It gives the U.S. Preventive Services Task Force new powers to further limit patient choice, allowing the Secretary of Health and Human Services to unilaterally deny payment for prevention services contrary to Task Force recommendations.

It empowers a “comparative effectiveness board,” created by last year’s “stimulus” bill, that will restrict providers’ decisions about what treatments are best for their patients.

Case closed as far as I'm concerned. Watch the whole thing here.

The incoherent David Brooks

Last week, David Brooks scolded those of us who are too blind to see that the President is and has always been a "center-left pragmatic reformer". In supporting this claim, Brooks points to Obama's books, speeches, and even his "on-the-one-hand-on-the-other sentence structure". That's right, speeches, words, and sentence structure make him a pragmatic reformer. Brooks even calls the President "courageous" on the issue of education reform because of a speech he made about failing schools. I guess the speech is supposed to help us ignore the fact that the President chose not to save the DC voucher program, a program which actually does save kids from failing schools.

And then yesterday on Meet the Press, Brooks called the President a "riverboat gambler", who is betting his entire Presidency on this health care reform.

So, according to Brooks, the President is a "riverboat gambling pragmatic reformer".

What? It sounds contradictory to me, but maybe I'm just not smart enough to decipher this Presidency the way David Brooks has.

"Beer wars" movie is pro-market

Just watched the documentary "Beer Wars". I was expecting it to be movie about the history, personalities, and business-side of the micro-brew industry, which it was. But what I was surprised to discover was that it was also a movie with a powerful free-market message.

The fimmaker Anat Baron explores the question of why the beer industry has been so heavily dominated by a few key players - Anheiser-Busch, Miller and Coors - despite the fact that their product just isn't very good. Yes, great marketing is a big part of the equation, but she also comes to the conclusion that outdated, prohibition era federal regulations have created high barriers to entry, making it very difficult for smaller brewers to compete. Specifically, she points to the "three tier system", which requires that the brewer, distributor, and retailer all be separate, making it illegal for brewers to sell directly to retailers and consumers. Baron even visits Washington only to find an army of beer industry lobbyists urging Congress to keep the "three tier system" in place because it has served consumers so well. Near the end of the film, she concludes: "Big business combined with government is a dangerous brew."

Not that the news is all bad. The movie is also a celebration of how the craft brew industry has been able to expand so rapidly over the last 25 years despite these obstacles, primarily because of one thing - consumers like their product. Reason TV calls the micro-brew phenomenon a "beer revolution".

See the movie trailer below:

Just a coincidence

Here's an interesting statistic. According to Planned Parenthood's Annual Report for 2007-2008 (the most recent one available on their website), here are the stats for abortions provided by the organization compared to the number of adoption referrals

2006

abortions: 289,750

adoption referals: 2,410

2007

abortions: 305,310

adoption referrals: 4,912

That's a ratio of roughly 81 to 1 over the two-year period. Adoption referrals are just 1.2% of the total.

And people say Planned Parenthood is a pro-abortion organization!

(via Mere Comments)

Bill Whittle on the nanny state

This video essay from PJTV's Bill Whittle about the nanny state is definitely worth watching. It includes these two gems:

When Han Solo made the kessle run in 12 parsecs, no doubt some bureacrat was there to say that the kessle run should never ben done in under 18 parsecs, as it's wasteful of fuel and desctructive to wormholes. Wasn't the entire point of the Star Wars saga the right to make it a free galaxy. What's the point of a free galaxy, if you can't make the kessle run in 12 parsecs?

and

The reason the first three Star Wars movies were so terrific and the second three sucked so bad is actually very simple. The first three were about rebels shooting guns and driving fast and speaking with American accents. The second three were about politicians, discussing treaties, holding court, and speaking with British accents.

I have seen the future and it is totally cool

This is awesome. It will remain awesome unless and until I become the parent of a teenager. Then it will become scary, unsafe, and entirely out of the question.

The Martin Aircraft Company has created its own jetpack for public use, and the units are apparently for sale to anyone who can pass the company's own internal training sessions. That's right, this sucker is classified as an Ultralight and therefore requires no FAA pilot's license. What's more, Martin says the Jetpack costs the same as a high-end car or motorcycle. Sign us up!

…. With 600-pounds of thrust, Martin claims its Jetpack can accommodate pilots up to 280 pounds. The five gallons of fuel carried onboard are enough to get you 31.5 miles in any single direction... as the crow flies, as they say. Plus, just imagine how lovely everything will look at the Jetpack's 8,000-foot ceiling.

Zoom over to Autoblog for more

Our health care system's "original sin"

Holman Jenkins explains that the tax code is at the root of the problems with our health care system:

Let us flip back to an epic series of Senate Finance hearings in 1992. They represented a remarkable meeting of minds across a broad swath of health-care wonks and economists (not interest groups) that the original sin was the exclusion of employer-provided health insurance from taxable income—imposed carelessly by the IRS in 1943 so defense contractors could compete for workers without transgressing Roosevelt-era wage and price controls.

Everybody knows this turned "insurance" into something else. Call it prepaid health care, as Milton Friedman did. Call it a giant tax Laundromat for the nation's private health spending.

It became a massive subsidy to third-party payment, an incentive to channel every ache and pain through an "insurance" bureaucracy. It became an incentive for the most economically competent Americans—the secure, high-earning employees of corporate America—to overspend on health care, treating it as a free good.

What a surprise that the medical-industrial complex reorganized itself in light of this central driver. Nobody was looking for price tags so price tags disappeared, as did any competition on price, and any clarity on price versus value. Voilà.

David Horowitz goes to UMass

David Horowitz audits a politics course at the University of Massachusetts:

I had previously suggested in my writings and lectures on universities that professors who use their classrooms as platforms for their political agendas represent a small but significant minority, which I have estimated to be about ten percent of a given faculty. The other ninety percent are scholars who are professional and observe the guidelines on academic freedom which enjoin faculty from presenting students with “ready-made conclusions” on controversial matters. Or so I thought. After auditing Professor Goldman’s course I will have to revise that judgment.

Read the whole thing.