The Leveller: A modern day regulator

Basic economics and current healthcare legislation

We’re on the cusp of massive government intervention not seen since last month and again about 12 to 14 months before that during the last days of the Bush administration. Yes, it is insane how the current events are piling on asinine policies. The proposed health care legislation seems to be nebulous and since the Senate voted on it without possibly having time to even read it probably wouldn’t have made much sense.

Why the rush to pass something, anything? In brief, no matter what legislation is passed these politicians will simply point to it down the road to take credit if events are “interpreted” as generally good by the people. If the events are interpreted “bad” the blame will be placed on anything but the legislation that was passed.

The proposed intervention into health care is certainly going to cause confusion and imbalance the effect of which can not be precisely predicted. The fact is no one knows the deleterious afterwards that will follow.

Excuse me, I am watching PBS right now in the middle of a segment on the recession interviewing Alan Blinder from Princeton. He just finished answering a question about how come “no one warned us” about the possible implosion of financial markets. He said, “it was beyond almost everyone’s imagination”. WTF? How come Joe Public like myself, the articles I read, the people I discuss issues with knew better? Very similar to the lunacy about invading Iraq and the intelligence assessments neglected by the executive branch.

Let’s explain the current financial bailouts and criminal activity by the government in terms of “hooking up” Goldman Sachs and attempts to pass invasive healthcare legislation with an economic comparison to classical biological control. Just as an exotic plant can turn invasive when freed from the enemies that kept it in check back home, so too can an exotic biocontrol insect run amuck itself in the absence of the predators and competitors it evolved with.

Ah, excuse me. Same program on PBS now interviewing Laura Tyson, barf, remember her as one of Clinton’s administration economic advisers big 3. She just uttered more nonsense like Blinder.

Ok, so you may be familiar with biological controls. The unintended consequences can be devastating and in each case unpredictable. Of course recent scientific advancements have probably contributed to more precise biological interventions the comparison between economic predictability of intervention remains the same but always potentially devastating.

We can use Geithner’s and Bernanke’s own words here when they discuss the recent interventions as being “imaginative” or “exploratory” alluding to wonderful new financial tools present today that didn’t exist decades ago. The stronger critics, most visibly Ron Paul since he is the only member of Congress that gets it, will say these invasions into the economy will cause imbalances, severely retard free markets and so on. The other side of this legislation after its had to time to distort the economy will leave common people poorer and with fewer choices. They are right but because these predictions can not say with precision the day or the hour does not make it any less so.

The health care legislation will simply cause increasing distortion in the industry. We know it will create fewer choices, cost us more, and leave us with inferior medical care.

Don’t believe the economic pseudo science. No math is necessary since the economic models are for the most part a canard. These so called experts try to introduce high math models and general functions to explain economics to pretend they understand and can in fact “predict” the effects of economic policy on the market. But just as with any other legislation if there is some good as a result, perhaps a green shoot, credit is then taken. If there is brown shit then blame is likewise deflected.

Have a happy 2010.