Open letter to President Obama on Health Care Reform

 
 
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Skipshot
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24 July 2009 11:14
 
Billy Shears - 24 July 2009 04:45 AM
Skipshot - 24 July 2009 04:13 AM

C’mon, Billy, tell us what you’re really afraid of.  The government taking more control?  Losing value in your health care investments?  Afraid of a little competition?  Why do you insist on restricting options to only one?

I know the answer, you want to protect America from spending good money after bad, since everything the government wrecks everything it touches.  Thanks for the concern, but I have the feeling the government is your preferred scapegoat for all problems regardless of how things turn out.

And I cannot help but notice you completely fail to address even a single point I raised.

Yes I did.  I answered your point right above.  Your, and Saul’s, primary motivator in this discussion is your fear of the government.  You want the rest of us to share your fear, and when we don’t you project your fears on us.

It’s simple, if you don’t want to participate in public health care then pay for private, just like education, but don’t deny those who want public heath care access just because you are afraid.

I don’t trust the government completely either, but I trust those who profit handsomely from the misery of others even less.  I am not afraid of government competition.

 
Billy Shears
 
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Billy Shears
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24 July 2009 12:46
 
Skipshot - 24 July 2009 03:14 PM
Billy Shears - 24 July 2009 04:45 AM

And I cannot help but notice you completely fail to address even a single point I raised.

Yes I did.  I answered your point right above.

No, you didn’t, you completely sidestepped it in order to begin hurling accusations.  You did not address the arguments, which are that pointing the finger at CEOs of pharmaceutical companies is a distraction, and even if their salaries were reduced to zero, it would have a negligible effect on the cost of medicines.  You did not address the argument that condemning insurance companies for failing to accept patients with pre-existing conditions is condemning them for not doing the economically impossible.  You did not address the argument that real, meaningful reform, which would bring down the costs of health care, ought to include tort reform, which would help reduce the costs of malpractice insurance that doctors have to carry, and which they have to pass on to their patients.  You did not address any of this, you simply blithely ignored all this in order to accuse. 

Skipshot - 24 July 2009 03:14 PM

Your, and Saul’s, primary motivator in this discussion is your fear of the government.  You want the rest of us to share your fear, and when we don’t you project your fears on us.

Wrong.  I don’t fear government.  I am skeptical of government’s ability, especially under the proposed plan, to bring down the costs of health care—especially when the government’s own congressional budget office is saying the president’s proposed plan would increase the costs of health care.

Skipshot - 24 July 2009 03:14 PM

It’s simple, if you don’t want to participate in public health care then pay for private, just like education, but don’t deny those who want public heath care access just because you are afraid.

I don’t trust the government completely either, but I trust those who profit handsomely from the misery of others even less.  I am not afraid of government competition.

Ah yes… the evil capitalist trope.  Now who’s projecting fears?

 
 
goodgraydrab
 
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goodgraydrab
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24 July 2009 13:40
 
Billy Shears - 24 July 2009 04:46 PM

You did not address the argument that condemning insurance companies for failing to accept patients with pre-existing conditions is condemning them for not doing the economically impossible.

It is not economically impossible, if the insured group is all American citizens and lowering costs are addressed in delivery of services. You’re still paying for it, unless the society you envision expects people to suffer unnecessarily and just quietly lay down and die. And what then when you find yourself uninsurable? Or when your employer switches insurance companies without your knowledge and consent in the middle of treatment for a condition, should the new insurance company have the right to refuse you for pre-existing conditions? In fact, company marketed group insurance policies have little of the restrictions in individual policies, and unemployed individuals that have the same level of health status still have to pay more for the exact same coverage as there employed counterparts. There can be procedures for equitable distribution spreading the higher risks across insurers by ratios and percentages, while allowing them to go after their selected customers through competition. It’s not like insurance companies are hanging on a thin thread of survival. I have no sympathy for them, I used to work for one.

 
 
Billy Shears
 
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24 July 2009 14:18
 
goodgraydrab - 24 July 2009 05:40 PM

It is not economically impossible, if the insured group is all American citizens and lowering costs are addressed in delivery of services. You’re still paying for it, unless the society you envision expects people to suffer unnecessarily and just quietly lay down and die. And what then when you find yourself uninsurable? Or when your employer switches insurance companies without your knowledge and consent in the middle of treatment for a condition, should the new insurance company have the right to refuse you for pre-existing conditions? In fact, company marketed group insurance policies have little of the restrictions in individual policies, and unemployed individuals that have the same level of health status still have to pay more for the exact same coverage as there employed counterparts. There can be procedures for equitable distribution spreading the higher risks across insurers by ratios and percentages, while allowing them to go after their selected customers through competition. It’s not like insurance companies are hanging on a thin thread of survival. I have no sympathy for them, I used to work for one.

I’m not defending the system we have now.  It’s in bad need of reform; I just don’t the reform that’s proposed will fix the problem.

And you simply refuse to look at the unintended consequences of forcing insurance companies to sign on any patient who comes to them with pre-existing conditions.  As it is right now, a lot of people, especially young and healthy people, don’t carry any insurance—and this despite knowing that if they wait too long, and develop a chronic or serious health problem, they might not be able to get it.  If it should be mandated that insurance companies will take you, no matter if you have a pre-existing condition, the inevitable result will be more people who don’t carry any insurance while they’re healthy.  Why should they?  They don’t need to pay the premiums when they’re not sick.  Would you buy auto insurance or fire insurance if you knew you’d never be in an accident or have your house burn down, or that if you did, you could then sign up and pay the same thing you would have paid even if you’d never needed it?  Of course you wouldn’t.  You wouldn’t need the insurance all those years; you could spend the money on something else, and I’m sure you would rather do it.  I know I would. 

Now apply this to health insurance.  People don’t pay for it for years while they’re healthy.  Then when they get sick, they can sign up with no penalty.  The company has to take them.  Now in a situation like this, how are insurance companies going to collect the revenue which they need to cover bills.  The money to cover those bills is only there because millions of healthy people are paying regular premiums.  If they stop, the tit runs dry.

The money to cover medical expenses has to come from somewhere.  If people stop paying for private health insurance because they don’t have to pay until the moment comes when they finally need it, and the companies fold (which they will) because their suddenly constricted revenues are no longer enough to cover the medical bills of their claimants, then there is only one way left—a tax levied on everybody.  And now, private health insurance has been shut down by the laws of economics, instead of the laws passed by the government, but the end result is the same: a government system that is the only option for most people.

 
 
 
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SaulOhio
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24 July 2009 14:54
 

[quote=“Bad Rabbit”]Sorry, I must be mistaken here, I know , the market is flawless.

Strawman argument, as I explained already. Nobody ever clamied that markets are flawless. That is the statist’s standard, and demand.

I am willing to accept the fact that no system that involves human being will be flawless. People make mistakes. Our powers are limited. We don’t know everyhting. Shit happens.

I am willing to accept that, while working to improve things. It is the statists who insist that every little problem is an excuse for government to take over.

Can you please address the issues I explained without distorting my position?

I will try to restate them in a more clear, concise form:

We probably agree that the outcome we want is better care, available to more people, at lower cost. The last is one of the key talking points in the present public debate.

So how do we go about lowering costs? The one place to look for ways to reduce costs without reducing availability, and hopefully even increasing it, is labor costs. Unless we are willing to create a fully communist or socialist society and abolish money, we need to pay the people who will be providing the health care. This includes doctors, nurses, lab techs, radiologists, anesthesiologists, maintenance and housekeeping staff, construction workers building hospitals, workers in factories manufacturing hospital supplies and diagnostic equipment, pharmacists, and so on. That is the cost of health care, the wages, salaries and fees paid to the people who do the actual work of producing the goods and services that constitute health care. Volunteers who help out for free are low in number, and tend to be unskilled, and what health care needs is skilled labor.

In order to increase the availability of care, we could do one of two things:

1: Hire more of all these workers to produce more health care, but its already been agreed by most that one of our goals is to reduce costs, and hiring more workers is an increase in costs.

2: Increase the productivity of these people so that they can serve the needs of more patients.

In order to cut costs, we could do one of two things:

1: Reduce the amount of care by denying it to some people, rationing it.

2: Increase the productivity of healthcare workers so that fewer of them are needed in order to provide the same amount of care.

How does either Obama’s plan or the bill now being considered do anything to increase the productivity of healthcare workers?

 
 
goodgraydrab
 
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goodgraydrab
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24 July 2009 18:37
 
Billy Shears - 24 July 2009 06:18 PM

I’m not defending the system we have now.  It’s in bad need of reform; I just don’t the reform that’s proposed will fix the problem.

There isn’t one comprehensive finalized plan that you can critique at the moment. You bring up problems but don’t offer solutions. For instance, one can’t opt out from paying taxes, although there are many clever ways to get breaks on them. There doesn’t need to be an option to not pay/have insurance? Yes, mandatory coverage. You work, you pay something. Problem solved. The rich are still going to have top of the line coverage available to them. There is a reasonable solution for all of your worries and complaints. No, I don’t have all the answers, but I know that the right answers are possible. If naysayers would come up with constructive solutions instead of yelling ‘socialized medicine’ every chance they get, the whole exercise might go a lot smoother with better results. While you’re at it, fix my and millions of others’ problem of paying a lot of money monthly to insurance companies making them richer, while we under-utilize necessary care, or get rejected for treatment because we can’t afford to pay the deductibles, co-pays, etc, etc.

 
 
 
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Skipshot
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24 July 2009 19:15
 
Billy Shears - 24 July 2009 04:46 PM
Skipshot - 24 July 2009 03:14 PM
Billy Shears - 24 July 2009 04:45 AM

And I cannot help but notice you completely fail to address even a single point I raised.

Yes I did.  I answered your point right above.

No, you didn’t, you completely sidestepped it in order to begin hurling accusations.

Irrelevant distractions.  I noticed you also completely failed to answer my question on why you want to deny the people public health, so I had to make something up to force you to answer, but you avoided it again.

Billy Shears - 24 July 2009 04:46 PM
Skipshot - 24 July 2009 03:14 PM

Your, and Saul’s, primary motivator in this discussion is your fear of the government.  You want the rest of us to share your fear, and when we don’t you project your fears on us.

Wrong.  I don’t fear government.  I am skeptical of government’s ability, especially under the proposed plan, to bring down the costs of health care—especially when the government’s own congressional budget office is saying the president’s proposed plan would increase the costs of health care.

And your superior plan for public health care is. . . ?

Billy Shears - 24 July 2009 04:46 PM
Skipshot - 24 July 2009 03:14 PM

It’s simple, if you don’t want to participate in public health care then pay for private, just like education, but don’t deny those who want public heath care access just because you are afraid.

I don’t trust the government completely either, but I trust those who profit handsomely from the misery of others even less.  I am not afraid of government competition.

Ah yes… the evil capitalist trope.  Now who’s projecting fears?

Your response has nothing to do with the statement.  I am not advocating abolition of private health care, but adding public health care to the options available to the people - an option you want to deny but can’t articulate why.  At least Saul answered that he would rather live bankrupt and having collection agencies hounding him while he rips off the system as a dead beat, but he doesn’t see how ripping the system off raises prices for the honest ones among us, which in turn turns honest people into deadbeats just because they got sick and couldn’t pay the ransom for their heath.

If you want to pay full retail for the best possible care then go for it.  What you demand is that everyone else do the same, which is what those who profit from the status quo also demand, since they don’t like competition.

[ Edited: 24 July 2009 22:25 by Skipshot]
 
 
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Skipshot
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24 July 2009 19:30
 
teuchter - 24 July 2009 08:00 PM
SaulOhio - 24 July 2009 07:41 AM

I’ve noticed a few people talking about paying for health care, and people going broke doing it, as if being alive and healthy, but broke, is a bad thing compared to being dead or incapacitated by illness. If I have the choice between going broke to pay for cancer surgery or waiting in line till the cancer metastasizes, I choose going broke.

Not everyone in the US has those two choices, and nobody in France or Canada has to make those choices.  What you describe, in your Objectivist utopia, is robbery:  give me your money or die.  Sounds like a great place to live.

Thanks for this, teuchter.

There’s another problem with the current system, as my wife and I have found out.  Four years ago at age 36 she developed breast cancer and has so far defeated it, but once a cancer patient always a cancer patient.  What this means for us, as she is the primary breadwinner, is that she is stuck working for “The Man” for the rest of her working life.  There goes hope of starting her own business since health insurance would be either denied or too expensive.  Of course, this is good for “The Man” since the situation keeps employees down through fear, but it sure isn’t in the best interest of the people.  With public health care this wouldn’t be a problem and we would be able to go anywhere in the country, but Billy and Saul want to deny this, but they can’t say why.

 
 
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SaulOhio
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25 July 2009 04:47
 
teuchter - 24 July 2009 08:00 PM

But, the reference to infant mortality was to the US’ poor performance compared to European and Canadian health care;  the fact that the Third World may (or very possibly may not) measure infant mortality in a different way is wholly irrelevant.

Infant Mortality

While the United States reports every case of infant mortality, it has been suggested that some other developed countries do not. A 2006 article in U.S. News & World Report claims that “First, it’s shaky ground to compare U.S. infant mortality with reports from other countries. The United States counts all births as live if they show any sign of life, regardless of prematurity or size. This includes what many other countries report as stillbirths. In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth; in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long. In Belgium and France, births at less than 26 weeks of pregnancy are registered as lifeless.[5] And some countries don’t reliably register babies who die within the first 24 hours of birth. Thus, the United States is sure to report higher infant mortality rates. For this very reason, the Organization for Economic Cooperation and Development, which collects the European numbers, warns of head-to-head comparisons by country.”[6] However, all of the countries named adopted the WHO definition in the late 1980s or early 1990s.

teuchter - 24 July 2009 08:00 PM

“Adjusted for those factors….”  Well, I guess reality, adjusted for a simpleton’s view that the free market is omniscient and omnipotent,

Again with the same strawman argument I have debunked and exposed time and time again. Please cite me ONE SINGLE PERSON who ever claimed that the market was omniscient and omnipotent. Or even anything close to that.

Maybe its because I have argued that GOVERNMENT isn’t the omnipotent and omniscient being, capable of granting everyone’s smallest wish, that statists seemto think it is. If government isn’t God, then the people arguing for free markets must think that markets are God. Of course!

You are projecting.

teuchter - 24 July 2009 08:00 PM

Which brings me to:

SaulOhio - 24 July 2009 07:41 AM

I’ve noticed a few people talking about paying for health care, and people going broke doing it, as if being alive and healthy, but broke, is a bad thing compared to being dead or incapacitated by illness. If I have the choice between going broke to pay for cancer surgery or waiting in line till the cancer metastasizes, I choose going broke.

Not everyone in the US has those two choices, and nobody in France or Canada has to make those choices.  What you describe, in your Objectivist utopia, is robbery:  give me your money or die.  Sounds like a great place to live.

That was a choice between the two systems. If I had to choose between living in Canada and having to wait for my “free” care till my tumor metastasized, or go broke paying for surgery myself, I would choose to pay for it.

Can you answer my arguments without distorting them? Seems you can’t.

teuchter - 24 July 2009 08:00 PM
SaulOhio - 24 July 2009 07:41 AM

Once it is established that the government has an obligation to care for my health, my life is no longer my own. The government is then calling all the shots, based on its own standards and priorities, which are usually the good of the collective. If you are getting old, and are of no more economic use to the government, it becomes impractical to care for you anymore. Some welfare statists have even talked about the “duty to die”, which is the ultimate expression of the idea that your life is not your own.

My god, you are either independently rich and out of touch with reality, or such a moron you are out of touch with reality.  I pay $18,000/year to have an insurance company “calling all the shots, based on its own standards and priorities, which are usually the good of the” insurance company.

You have the choice to find a different insurance company, or not deal with one at all.

With a rate like that, you must have some pre-existing condition that costs the insurance company almost that much to treat!

teuchter - 24 July 2009 08:00 PM

No health plan in Europe or Canada, nor any proposed in the Congress, suggests putting old people on ice bergs and floating them off.

Mental services ‘shut to elderly’ from the BBC

Older people are often denied access to the full range of mental health services available to younger adults, a watchdog has found.

Free NHS long-termcare ‘denied to elderly’: Patients linked to means testing
NICHOLAS TIMMINS, Health Services Correspondent, Thursday, 10 March 1994

ELDERLY and infirm patients are losing their right to free long-term care on the NHS, MPs warned yesterday as Sir Duncan Nichol, the NHS chief executive, admitted there was no clear boundary between health care that is free and social care that is means- tested.

Aged people are too often denied full human rights

Being particularly vulnerable, the elderly are “often ignored and denied their full human rights,” according to the Council of Europe’s Commissioner for Human Rights Thomas Hammarberg, writing on the council’s website on 28 April 2008.
————————————————————————————
Faced with ageing populations, the elderly are bound to be “a strain on the social and health care system,” therefore the commissioner urges European leaders to re-examine their social protection systems, health care and housing policies, which are not “suited” to the elderly.

Situation of Elder Persons in Europe: Council of Europe Recommendations

7. Bearing in mind Article 23 of the revised European Social Charter (ETS No. 163), which provides that elderly persons shall have access to “the health care and services necessitated by their state”, the Assembly deplores
the fact that in some countries elderly persons may be denied treatment because of its high cost.

So are you going to actually answer the questions I asked?

How is Obama’s health care plan going to increase the productivity of health care workers? As I said, that is the ONLY way to make such care available to more people at a lower cost.

 
 
 
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SaulOhio
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25 July 2009 13:27
 

None of this was based on Ayn Rand’s teachings. Its basic economics.

You didn’t answer a thing I said about infant mortality.

$18,000 a year? Why can’t you find something less expensive? At the very least, you should be allowed to put that in a healthcare savings account. Should be, of course, if not for all the government regulations imposed on the market.

Which is why thats all beside the point. As I keep saying, the system as we have it now isn’t what I am arguing for. acting that I am defending our current system is dishonest.

Have a look at Group Health Insurance Regulations State-by-State. We have nothing close to a free market, which is what I am arguing for. Telling me how bad our current system sucks just proves my point.

teuchter - 25 July 2009 03:20 PM

This is a sociopathic statement, but that is not surprising from a member of the cult of narcissism founded by Ayn Rand.

Apparently it is not against proper netiquette to throw around insults and interpret someone’s statements in the worst way possible. There is supposed to be something called The Principle of Charity

The Principle of Charity

Abstract: The principle of charity is a presumption often made in philosophy whereby preconceptions about an argument, a topic, or a belief are set aside in the attempt to gain new understanding.

  I. The Principle of Charity is a methodological presumption made in seeking to understand a point of view whereby we seek to understand that view in its strongest, most persuasive from before subjecting the view to evaluation.
      A. While suspending our own beliefs, we seek a sympathetic understanding of the new idea or ideas.
      B. We assume for the moment the new ideas are true even though our initial reaction is to disagree; we seek to tolerate ambiguity for the larger aim of understanding ideas which might prove useful and helpful..
      C. Emphasis is placed on seeking to understand rather than on seeking contradictions or difficulties.
      D. We seek to understand the ideas in their most persuasive form and actively attempt to resolve contradictions.  If more than one view is presented, we choose the one that appears the most cogent.

But of course, the principle of charity goes out the window any time anybody even hints at anything resembling the ideas of Ayn Rand.

There are many alternatives to insurance, or at least there would be if we had a free market. Health care savings accounts. Different sorts of health plans. You interpret my words as some sort of sociopathic suggestion for suicide because you want to, not because thats what I mean.

You insisted that infant mortality in America was higher than that in Europe, but I showed those statistics to be deeply flawed. I would have thought that at least this would cause you to stop and re-evaluate your hysterical opposition to any idea that contradicts your own beliefs.

If you want to get rid of all the bureaucracy in our insurance industry, I suggest deregulation.

And if you are going to use the old strawman argument that anarchy is a bad idea, I suggest reading But Don’t Businesses Need to be ‘Regulated’? to understand the difference between regulations and laws.

So then, let me ask you, if they manage to do away with all the insurance bureaucracy by socializing the whole system, what then? How will they continue to reduce costs? What does government bring to the table that private hospitals don’t have, besides the guns?

[ Edited: 25 July 2009 13:35 by SaulOhio]
 
 
goodgraydrab
 
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goodgraydrab
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27 July 2009 06:48
 
teuchter - 26 July 2009 03:02 PM
SaulOhio - 25 July 2009 05:27 PM

  And if you are going to use the old strawman argument that anarchy is a bad idea, I suggest reading But Don’t Businesses Need to be ‘Regulated’? to understand the difference between regulations and laws.

Thank you for the link; it was a laugh riot!  Like something a 7th grader would come up with when he decided to reinvent the world.  My favorite was this denunciation of “regulation.”

Teuch, didn’t you learn a thing in law school, like what is law? I guess an ‘ounce of prevention isn’t worth a pound of cure’ afterall.

 
 
 
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SaulOhio
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27 July 2009 17:24
 
teuchter - 26 July 2009 03:02 PM
SaulOhio - 25 July 2009 05:27 PM

You didn’t answer a thing I said about infant mortality.

Really?  I thought I did:

No, you didn’t. You didn;t respond to anything I said in response to what you just reposted. I cited actual specific standards by which EUROPEAN countries measure infant mortality in different ways than in America. I will repost:

Infant Mortality

While the United States reports every case of infant mortality, it has been suggested that some other developed countries do not. A 2006 article in U.S. News & World Report claims that “First, it’s shaky ground to compare U.S. infant mortality with reports from other countries. The United States counts all births as live if they show any sign of life, regardless of prematurity or size. This includes what many other countries report as stillbirths. In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth; in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long. In Belgium and France, births at less than 26 weeks of pregnancy are registered as lifeless.[5] And some countries don’t reliably register babies who die within the first 24 hours of birth. Thus, the United States is sure to report higher infant mortality rates.

You did not respond to that. It throws everything else you said out the window. The numbers cited on infant mortality that make the US look so bad are invalid. The countries named aren’t third world countries, but industrialized first world democracies.

And as I keep saying, none of this has any bearing on the value of free market medicine, since the US has very little of it. It is a heavily regulated market.

And calling that article on regulation I linked to “something a 7th grader would come up with” is not an argument. And what little counterargument you provided IS like something a 7th grader would come up with, if he failed to actually read the article. Your response shows that you didn’t read, or at least failed to think through the following paragraph:

In a capitalist society there is no justification for regulations.  If a business negligently, knowingly, intentionally or recklessly acts in a way that violates others’ rights, it should be prosecuted and held accountable; it should not be ‘regulated’.  For example, if a car company creates or markets unsafe models that cause injury or death to others or their property, such as the Ford Pinto during the 1970’s, the solution is to convict and imprison the officers and engineers who knowingly approved the dangerous design and levy heavy fines against the company; it is not to start telling all car companies how to design their gas tanks or chassis or engine blocks or whatever.  If a CEO of a major corporation directs the accountants to “cook the books” by greatly overvaluing assets and causes the company’s bankruptcy, as was done at Enron Corporation, the solution is to prosecute the CEO and the accountants for fraud; it is not to start specifying how all companies are to conduct their accounting procedures (as the American Federal Government did with the Sarbanes-Oxley Act).

[ Edited: 27 July 2009 17:29 by SaulOhio]
 
 
 
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SaulOhio
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27 July 2009 18:23
 

Since what you said about my “insane little cult” isn’t true, I think I should take your advice and not argue with a crazy person.

You are mad at me because I beat you on the infant mortality issue.

 
 
tavishhill2003
 
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tavishhill2003
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28 July 2009 11:35
 

Anyone who thinks that the number of pages of regulation in a book is akin to the strength of said regulation is a god damned moron, too terrified to face their own free market mythologies to be bothered with the task of addressing reality. 

Also, Clinton’s CRA had nothing wahtsoever to do with the collapse of the housing market or the lending issues we are still going through.  Virtually all of the CRA funding went to programs to help LOW income communiites be able to afford housing.  These types of low income communities were not a significant part of the housing market’s collapse.  That burden came from banks ripping off middle class individuals.  Are you incapable of learning Saul?  You sound like an ignorant lobbyist spouting talking points, lol.

[ Edited: 28 July 2009 11:46 by tavishhill2003]
 
 
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SaulOhio
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28 July 2009 17:32
 
tavishhill2003 - 28 July 2009 03:35 PM

Anyone who thinks that the number of pages of regulation in a book is akin to the strength of said regulation is a god damned moron, too terrified to face their own free market mythologies to be bothered with the task of addressing reality.

Calling someone a moron. Nice argument. Argument ad

The reason for mentioning the number of pages in the Federal Register is to show that there wasn’t deregulation, but added regulation. Wether or not those regulations wer strong or effective is irrelevant. The claim is made that our governemnt was in some sort of deregulatory spree in the last 20 years. The facts show otherwise.

tavishhill2003 - 28 July 2009 03:35 PM

Also, Clinton’s CRA had nothing wahtsoever to do with the collapse of the housing market or the lending issues we are still going through.  Virtually all of the CRA funding went to programs to help LOW income communiites be able to afford housing.  These types of low income communities were not a significant part of the housing market’s collapse.  That burden came from banks ripping off middle class individuals.  Are you incapable of learning Saul?  You sound like an ignorant lobbyist spouting talking points, lol.

The CRA wasn’t Clinton’s. It was Jimmy Carter’s. And it was only ONE of a vast number of government interventions in the housing market. What about Fannie Mae and Freddie Mac, which covered somewhere between a third to half the mortgages in the country, backed by government money. How about land use regulations like “open space” laws which restricted the supply of land available for building new housing in many areas, causing the value of the land itself to skyrocket? How about the Fed lowering interest rates to 1% and adding a couple extra trillion dollars to the economy, most of which went directly into the housing mortgage market? What about the Department of Housing and Urban Development? Bush’s American Dream Downpayment Act?

Clinton’s was the National Homeownership Strategy:

The True Story Behind The Economic Meltdown

In 1994, the Clinton Administration went directly to the Department of Housing and Urban Development (HUD), and promoted an initiative called The National Homeownership Strategy, which pushed for looser and more creative lending guidelines from both the public (FHA & Fannie Mae/Freddie Mac) and private sector’s lending institutions. They released a document, called “The National Homeownership Strategy: Partners in the American Dream,” and here’s a telling excerpt:

“For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.”

And it worked: from 1994 to 2004, the percentage of U.S. homeowners rose from roughly 64% to roughly 69%. Loose lending guidelines, continued and exacerbated by the Bush Administration and its artificially low interest rates, made money cheap, easy, and available to everyone, which created a buying frenzy, which, of course, drove up real estate prices, creating the real estate bubble. Never mind the fact that many of these borrowers were simply not qualified for homeownership, and subsequently defaulted, leading to an avalanche of foreclosures, which burst that real estate bubble.

Incidentally the National Homeownership Strategy document was posted on HUD’s website until 2007, when HUD removed it, presumably out of embarrassment and fear of denouncement.

The U.S. government specifically condoned and encouraged the subprime mortgage industry, despite its current cries of outrage. This is our government, that we created, out of complacency and foolishness. We wanted cheap money, they made it a reality, and now we want someone to blame, so we can sleep at night feeling like innocent victims. Look in the mirror, and look at your politicians.

How HUD Mortgage Policy Fed The Crisis

Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt. Owned by private shareholders but chartered by Congress, they are exempt from state and local taxes and receive an estimated $6.5 billion-a-year federal subsidy because they can borrow money more cheaply than other investors. In return, they are expected to serve “public purposes,” including helping to make home buying more affordable.

And the low interest rates from the Fed were, in fact, enough to create a bubble. Without all those interventions specifically directed at the housing market, it might not have been a housing bubble, but there would have been a bubble anyway. It would probably have involved the housing market, though, since home mortgages are what many people borrow a lot of money for anyway. You pump massive amounts of new money into the economy, what do you expect to happen?

I admit the CRA may have had only a small role to play in this mess. Its just one more piece of evidence in this huge mountain that proves that we did NOT have laissez-faire, or even relative deregulation. The people who are blaming laissez-faire and deregulation are the ones that are afraid to face reality and their statist mythology. They are looking for scapegoats to blame for the mess they made themselves.

The Myth that Laissez Faire Is Responsible for Our Financial Crisis by George Reisman