Sydney Kendall Says

Thinking in public about anything that matters.

Category: Economics (page 1 of 2)

Cutting out the Third Party in Medical Care

‘Three years ago, Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma, took an initiative that would only be considered radical in the health care industry: He posted online a list of prices for 112 common surgical procedures. The 51-year-old Smith, a self-described libertarian, and his business partner, Dr. Steve Lantier, founded the Surgery Center 15 years ago, after they became disillusioned with the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists. In 1997, Smith and Lantier bought the shell of a former surgical center with the aim of creating a for-profit facility that could deliver first-rate care at a fraction of what traditional hospitals charge.’

And it appears that they’ve been very successful in accomplishing their purpose.

WATCH VIDEO

 

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Non-Objective Law and the Economy

Rob Tracinski comments on the Dodd-Frank finanacial reform bill.

Tracinski is not in favor of the bailouts or the “stimulus”, but points out that stimulus spending usually has a short-term success before the bubble it creates bursts – a success which isn’t happening.  This article is his take on why it isn’t happening.

I’ll tell you what, the stimulus here in Australia isn’t doing much for the shops on the main shopping strip in our suburb of Richmond.  So many shops are up for lease.   So many businesses are closing down.    I’m buying less, and yet my money is disappearing faster than ever.    Is Australia making the same kind of errors as the USA?  (Eh… I suppose some different kind of errors would suffice to screw up recovery.)

Aside from the above article by Tracinski, I’d also like to recommend a book I’ve recommended before, Thomas Sowell’s The Housing Boom and Bust.  If you get the book, be sure it’s the one in the blue cover, not the yellow one.  The blue one is the revised edition.  It contains all the same information as the original edition, plus extra information that has come to light since the first was written.

If you believe the financial crisis was caused by a too-free market, you need to read Sowell’s book.   And if you read it, you’ll see why I’m disgusted by any attempt by Barney Frank and Chris Dodd to pose as saviors of our economy, when they contributed so bloody damned much to the housing bubble that has exploded into such a friggin mess.    These two guys either know nothing about how markets work, don’t care to know, and are merely opportunistic politicians, or they’re trying to undermine the economy.   

My opinion: they pushed for the expansion of housing loans and bad policies out of political opportunism and economic ignorance, and now they’re trying to deflect attention from their own implication in the boom and bust.

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Tea Party Time

OH_NO_signedHave you happened to catch members of the media and some politicians making out that the “Tea Party” protesters are racist or are an “angry mob”?

If you’re firmly convinced that government botches up more than it heals when it steps outside its proper role as protector against fraud and against the initiation of physical force, you know very well that those Tea Parties have nothing to do with Obama being black or with any other racial concern.  You know that the principles of individual liberty and of reducing government to that specific role is what the fuss is all about.  It’s a color-blind issue.  It just so happens that the president that is in charge of creating a raging deficit, pushing for giant bail-out funds and a “stimulus” package and attempting to entrench government even deeper into our medical system happens to be black.

So what?

What I care about is the status of my freedom in relation to those in power, whatever color they may be.

I’ve been convinced of my political principles for about 50 years, more or less, and as I questioned those principles and tested them over the years against my experience and my growing body of information, I have only become more firmly convinced than when I started.

Here’s a link to Rob Tracinski’s article entitled:

It’s the Liberty, Stupid

I couldn’t have put it better, myself.

At the link for the photos of Tea Party placards, I like Rob’s sign that says “Brother, you ain’t my keeper!”

I also especially like the ones that say: “Read the bills or get off  ‘The Hill’.”

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Financial Crisis: More Links Defending the Free Market

From the Objectivist Camp:

Is Rand Relevant? –  by Yaron Brooke – March 14, 2009

Excerpt:

“[Rand’s] magnum opus, ‘Atlas Shrugged,’ is selling at a faster rate today than at any time during its 51-year history.

“There’s a reason. In ‘Atlas,’ Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?”

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Who is to Blame? – Interview with Yaron Brooke

Excerpt:

“What we need to do is really make the case to the American people—and I think it’s an easy case to make—that this is not a failure of free markets, this is not a failure of capitalism, but this is a failure of the exact opposite. It’s a failure of the regulatory state. ”

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America’s Unfree Market – by Yaron Brook and Don Watkins

Excerpt:

“Decades of “deregulation” and a “hands-off” approach to the financial industry, we are told, have unleashed Wall Street greed. The free market has proved itself incapable of policing the financial sector—a fact so obvious that even Greenspan, the alleged arch-defender of capitalism, could not deny it.”

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Let Them Fail – By Amit Ghate

Excerpt:

“… in a free market business failures are not just normal, they’re crucial for the best products and ideas to emerge. Most restaurants fail in their first three years because customers have other preferences. Many mom-and-pop grocers go out of business because Walmart offers better selection and lower prices. Even whole industries–think typewriters, 8-tracks and horses and buggies–vanish because new inventions and competitors arise.

“None of these failures are a problem, nor do they threaten the system. On the contrary, they are an inherent part of the progress which only capitalism makes possible.

“So why would failures in the financial industry be any different?”

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Who predicted the Crash of 1929?

Gerard Jackson writes about the economists that DID predict the Crash of 1929.

The Great Depression — then and now and bloody journalists

Excerpt:

“…Yet 80 years later we are still being told that economics still failed to predict the Great Depression, despite the historical fact that a group of economists succeeded where the mainstream forecasters failed. Widespread ignorance of this fact among those who are paid to know better is an intellectual scandal.”

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Kevin Rudd’s International Dud

Whether it becomes internationally celebrated or is recognized for the travesty it is, Kevin Rudd’s 7900 word paper on the current economic crisis is a whacking dud, full of half-truths and falsehoods.   Now it is propagating throughout the world.

All 7900 words of Rudd’s essay.

(Many sources say this is a 7700 word essay, but the monthly says it’s 7900.  Whatever.)

What we need in this onslaught of stupendous economic erroneousness  is ordinary-man-in-the-street-friendly analyses of what led to this crisis and what is needed to make it resolve as quickly and soundly as possible ( i.e., resolve quickly without using means that will backfire in the future).

We need analyses that avoid economic jargon where that jargon is unnecessary.

It should be thorough, with clear, unconfusing definitions of jargon where that jargon must be used.

It should take care not to leave gaping holes in explanations where the writer carelessly assumes his readers know something seemingly simple but crucial that he hasn’t explained.

It should be free and online.

And we need for these articles to be actively, urgently circulated.  We need everyone who is on the side of economic (and other kinds of) liberty to rev up their motors and make sure that their friends and acquaintances are aware of these articles.

There are a number of excellent articles and even books online that explain free market economic principles (from an Austrian School perspective)well, and lots of articles that explain well what has happened to bring about the present economic distress and what should be done about it.  Are they getting widely read?  I don’t know.  But I want to do my part to get them read.

If you know of articles that I have not listed that meet the above criteria, especially ones  that even an intelligent high-school kid could understand without the author  having to over-simplify – if you find articles even more thorough and clear than the ones below – please direct me to them!

Below I list some of the articles that I think are important reading, with excerpts.  Some I have listed before.

The crisis we’re enduring is not the worst possible economic disater we could have.  If  people are convinced that it was free market capitalism and not ENOUGH government regulation that is the fundamental cause of our present trouble, and if governments act accordingly, this crisis could be prolonged for many years more than it would have lasted naturally.  A lot of bad could come from that.

It is in the interest of every single person on earth that we understand the whole truth and nothing but the truth and get the solution right.

I am really worried.

$$$$$Free Market Thinkers on the Crisis$$$$$

George Reisman

The Myth that Laissez Faire Is Responsible for Our Financial Crisis – October 21, 2008 – “The news media are in the process of creating a great new historical myth. This is the myth that our present financial crisis is the result of economic freedom and laissez-faire capitalism.”

The above is a long blog article by an Austrian School economist, with footnotes.  I’ve posted it before.

I recommend George Reisman’s blog.  Sometimes parts of his articles are a bit difficult (for me, at least), but well worth the effort.

Here’s his front page:

George Reisman’s Blog on Economics, Politics, Society, and Culture

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Robert Higgs

Recession and Recovery: Six Fundamental Errors of the Current Orthodoxy – 16 March 2009 – “…Most unfortunate have been the policy implications derived from this mode of thinking, above all the notion that the government can and should use fiscal and monetary policies to control the macroeconomy and stabilize its fluctuations. Despite having originated more than half a century ago, this view seems to be as vital in 2009 as it was in 1949. Let us consider briefly the six most egregious aspects of this unfortunate approach to understanding and dealing with economic booms and busts.”

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Thomas Sowell

(Brief commentary articles.)

False Solutions and Real Problems – March 17, 2009 – “What was the problem that didn’t exist? It was a national problem of unaffordable housing. The political crusade for affordable housing got into high gear in the 1990s and led to all kinds of changes in mortgage lending practices, which in turn led to a housing boom and bust that has left us in the mess we are now trying to dig out of…

“… where the problem was real, local politicians were the cause. National politicians then tried to depict this as a national problem that they would solve.”

Upside Down Economics – Feb. 18, 2009  – “Lawsuits were only part of the pressures put on lenders by government officials. Banks and other lenders are overseen by regulatory agencies and must go to those agencies for approval of many business decisions that other businesses make without needing anyone else’s approval.

“Government regulators refused to approve such decisions when a lender was under investigation for not producing satisfactory statistics on loans to low-income people or minorities.

“Under growing pressures from both the Clinton administration and later the George W. Bush administration, banks began to lower their lending standards. ”

‘Jolting’ the Economy   – Nov. 25, 2008 –  ” Many of those who have, over the years, praised the fact that this was the first time that the federal government took responsibility for trying to get the country out of a depression do not ask what seems like the logical follow-up question: Did this depression therefore end faster than other depressions where the government stood by and did nothing?

“The Great Depression of the 1930s was in fact the longest-lasting of all our depressions.”

A ‘Sound’ Economy –  Nov. 4, 2008  –  “You may be as sick as a dog from having eaten the wrong thing. But that does not mean that you need to have your arm amputated or to receive massive doses of morphine. In other words, your body may be perfectly sound— and radical medical treatment can do more lasting damage than your temporary suffering will. ”

Postponing reality  – Dec. 17, 2008 – “Detroit and Michigan have followed classic liberal policies of treating businesses as prey, rather than as assets. They have helped kill the goose that lays the golden eggs. So have the unions. So have managements that have gone along to get along.”

Thomas Sowell’s front page:  Thomas Sowell

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For more articles addressing the economic crisis, please click the “Economics”  link in the sidebar under “Categories”.

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Eat at Home

The Australian Government must be motivated to get people to eat at home and to kick a lot of restaurants off the face of the planet along with the entry-level jobs they provide.  Prodos and I will probably not be holding our two weekly meetings anyplace but our own home if this plan goes ahead.   Maybe we can get our participants to each bring a pot-luck dish…

Restaurant Awards Hike Hard to Stomach

UPDATE:

Unions Opt for Jobs Over Pay

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Cruel Bastard!

For some reason Thomas Sowell thinks it’s wrong for taxpayers to bail out people who just wanted to have a house that they couldn’t afford.  He is mean and heartless and doesn’t care about the little guy! 

I just love him.

Go HERE to read the rest of this:

Since the average American never took out a mortgage loan as big as seven hundred grand— for the very good reason that he could not afford it— why should he be forced as a taxpayer to subsidize someone else who apparently couldn’t afford it either, but who got in over his head anyway?

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More on Economics

I keep running across the idea that consumer spending is the thing that “runs” the economy. Boost consumer spending and you save the day.

That isn’t the view of the economic school that I’ve been convinced of for many years. The Austrian School of economics is the one that makes sense to me.  Here are a couple of articles explaining why consumer spending is not “the” savior, and how saving in the aftermath of an exploded boom is a good thing.

Consumers Don’t Cause Recessions by Robert P. Murphy

The Importance of Capital Theory by Robert P. Murphy

Also troubling in regard to our present financial damages are statements to the effect: “It’s de-regulation that lead to the finanacial crisis” and “The crisis has proved laissez-faire economics to be a failure”, as if the market has actually been de-regulated or that we’ve been living in a laissez-faire economy.

I highly recommend the following to correct that particular misunderstanding:

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

And how about this one on how the present financial crisis was the result of government intervention in the economy:

The Government Did It by Yaron Brooke

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More on Financial Crisis

The financial crisis and the worst campaign question by Dr. Mark W. Hendrickson

“The one question that everyone wants Barack Obama and John McCain to answer now is: What will you do to fix the economy? This question is certainly understandable, but breathtakingly preposterous and pathetic.”

They are still getting it wrong on the recessionby Gerard Jackson

“If consumption was really responsible for our economic slowdown then it is obvious that firms at the lowest stages of production, those closest to consumption, would have been the first to feel the impact of any slackening in consumer spending.

“Instead we find that the higher stages of production — as predicted by Austrian economic analysis — started to contract before any fall off in consumer spending. In short, it is not consumer spending that is the driving force in the economy but aggregate business spending… “

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