L.A. Liberty

A Libertarian in Leftywood

There’s no denying that there’s risk in taking a drug or medical procedure that hasn’t completed clinical trials. The question is: Who has the right to decide how much risk a person will take — he or some faceless Washington bureaucrat? In my opinion, the answer depends upon the answer to the question: Who owns you? If one owns himself, then it is he who decides how much risk he takes. If government owns you, then you don’t have the right to unilaterally decide how much risk you’ll take.

The FDA’s mission is to ensure the safety and effectiveness of pharmaceuticals. In doing so, FDA officials can make two types of errors. They can approve a drug that has unanticipated dangerous side effects, or they can disapprove or delay a drug that is both safe and effective.

FDA officials have unequal incentives to avoid these two types of errors. If the FDA official errs on the side of under-caution — approving a dangerous drug — the victims are visible, and he is held directly accountable. If he errs on the side of over-caution — holding up approval of a safe and effective drug — who’s to know? The cost and the victims are invisible. Politicians and bureaucrats prefer invisible victims.

— Walter Williams, “Who Owns You?”

None of [Obamacare’s most careful critics] denies that government can successfully use a mix of regulations, taxes, and subsidies to effectively mandate an increase in the number of Americans who have health-insurance policies. Instead, the real concern is that Obamacare will either diminish the quality or the accessibility of actual health-care provision (rather than of health insurance) or that the costs of the extra health-care provision made possible by Obamacare - costs reckoned as the value of other goods and services sacrificed as a consequence - will be excessive.

Government’s success at mandating that more people have health insurance (or ‘better’ health insurance) no more implies that people thereby have better health care than would, say, government’s success at mandating that more people have jobs imply that people thereby have a higher standard of living.

— Don Boudreaux responding to Paul Krugman’s Obamacare enrollment cheerleading


One of the smartest people I have ever met is a property and contracts lawyer, someone from whom I have gleaned countless and valuable insights over the years.  He has advised me, among other things, to lead a “haggle-free” business life, where bids solicited from vendors are a “one chance” occurrence.  There are no counter offers allowed.  Over the years, this has ensured a good price and a mutually beneficial arrangement all at once at our surgery center.  

He has also taught me what a contract breech looks like and how to think through the extent of damages.  While I do not pretend to understand the tiniest fraction of his trade, I am confident that what I have learned from him has kept me out of hot water many times, particularly relating to business activities at the surgery center. 

“People love to sue insurance companies because many times they deserve it,” he told me once.  Paying insurance premiums to a company offering homeowner’s insurance, for instance, with the understanding that weather damage would be “covered” represents a contract.  Any failure to make good on this “promise” by the insurance company exposes them to accusations of contract breech and fraud.  Collecting premiums and paying no claims is always a moneymaker, until this fraud is exposed.  Health insurance companies and many other types of insurance companies actively engage in practices that minimize or refuse payment of claims, bound only by what they feel they can likely get away with.  I am convinced that this is one reason insurance companies change their names frequently, this practice allowing them to scam the same population, masked by their new name.

What do you do if you live in a country with “single payer” health insurance and realize that you have been scammed, paying premiums (taxes) for many years, only to find out that you have little or no benefit?  You thought you were “covered” for various procedures or treatments only to find out that the treatment for your cancer was essentially in “layaway.”  You can’t sue for damages.  There is no recourse.  There is nowhere to turn, other than to leave the country to purchase healthcare elsewhere.  I am not sure there could be a better argument against single payer than an utter lack of recourse. 

The lack of market competition and the recourse market failure represents, explains the failure of health care delivery in all socialized systems, whether in Canada or the VA system here, or the new Obamacare silliness.  Canadians have to buy health insurance, basically by paying taxes earmarked for the small amount of health care placed in layaway on their behalf.  People in the U.S. now must buy “insurance” or pay a penalty.  Worse, employers must provide insurance to their employees or pay a penalty.  What’s the difference?  The “purchases” in single payer countries and those in the U.S. now both occur at gunpoint, both mandated payments to those in power or connected to power.

Before you lay the blame for Obamacare on all of the stupid people in Washington, consider for a moment, Rothbard’s historical method.  The brilliant “Austrian” economist began every investigation of historical events with “cui bono,” or “who benefits.”  In short, he identified the beneficiaries of a law or government intrusion and assumed the worst of them, rarely if ever mistaken in his provocative conclusions. 

Similarly, I maintain that to truly understand the purpose of Obamacare one must, I believe, start with the end result, that is, lots of very identifiable people and businesses getting rich because of this “law.” In the private sector, a scam like Obamacare would of course be considered criminal, at least a breech of contract. 

The victims of single payer healthcare, VA healthcare and increasingly, Obamacare, are learning these lessons in the hardest ways imaginable.  The most difficult task it seems is to come to believe that the gang in D.C. knows exactly what they are doing and doesn’t care about broken promises or lives. 

At the Surgery Center of Oklahoma we plan to continue trumpeting the power and the beauty of the market at work in health care, hoping that our facility’s success and wonderful patient success stories will more quickly bring an end to the idea that the provision of health care should be entrusted to the corrupt state.

G. Keith Smith, M.D.

For more information about free market health care visit:



Hobby Lobby is a much simpler and less important case than it’s been made out to be, for reasons the Court clearly spelled out today. Obamacare’s contraceptive mandate had to fall under the Religious Freedom Restoration Act (without even getting to the First Amendment) because it didn’t show – couldn’t show – that there’s no other way of achieving its goal without violating religious beliefs. Moreover, the fact that a for-profit corporation is asserting the statute’s protections is of no moment because neither the corporate form nor the profit motive undermines RFRA’s solicitude for the rights of humans – including owners, officers, and shareholders. In short, the mandate fell because it was a rights-busting government compulsion that lacked sufficient justification. Nobody has been denied access to contraceptives and there’s now more freedom for all Americans to live their lives how they want, without checking their freedom at the office door.

— Ilya Shapiro, “Of Course Government Can’t Violate Religious Liberty for No Good Reason”

The VA Scandal and Socialized Medicine →

If one felt that veterans deserved some sort of lifelong benefit for military work, one could simply provide veterans with a stipend that they could use to procure health care. But this is not done.

The reason for this of course is that by providing health care directly through VA health care and VA hospitals, government can more easily subsidize and favor certain corporations and other government contractors who provide drugs, equipment and services to VA providers. If veterans were simply given stipends, then the veterans themselves might choose the “wrong” (i.e., not-politically-favored) providers.

We see this same process in the food stamp program which is designed to subsidize agricultural interests. This is partly why the food stamp program is administered by the Ag department and not by Health and Human Services.

Consequently, the real constituents of the VA are the corporate providers of health care supplies and services, not the veterans themselves. So who can be surprised when we find that the veterans are being treated like garbage? The political cost of doing so is quite low, while the political cost of running afoul of the corporate lobbyists who largely dictate VA contracts and services is quite high. Any intelligent VA official quickly figures out how to thrive in that system.

Under Obamacare, People Must Be Broken of Their Preference for Choice →

Where is the Innovation in Health Care? →

Health care in the United States is stuck in a rut. Americans are spending more on the same old care. The disastrous Obamacare rollout creates more problems than the administration can spin that it “solves.” We have simply grown to accept rising prices and stagnating service as a fact of life.

It doesn’t have to be this way.

Imagine a world where everyone, not just the mega-rich, has access to modern, affordable, high-quality care. In this world, doctors don’t need to beg bureaucrats and insurance administrators for permission to save lives. Entrepreneurs here actively compete to lower prices and innovate novel solutions. Imagine, in other words, a world in which our health care system is dragged out of the Stone Age and into a modern, competitive market economy.

Continue reading

Obamacare Exchanges Squander Taxpayer Dollars By The Boatload →

Up to nearly $25,000 per enrollee

Continue reading…

The Seal of Approval that Hurts the General Public →

Turning to government to bring down costs in health care is like turning to a hammer to fix a window it just smashed.

This Is Why It’s So Hard To Cut Medicare →

There are never cuts.

Occupational Licensing: Helping Entrenched Industry at Our Expense →

"How Do We Stop Rising Healthcare Costs?" | Peter G. Klein


EconPop: The Economics of Dallas Buyers Club


EconPop is the YouTube series that sifts through the haystack of popular culture to find the needle of economics within . . . and then stabs you with it!

Starring comedian Andrew Heaton, EconPop takes a surprisingly deep look at the economic themes running through classic films, new releases, tv shows and more from the best of pop culture and entertainment. Heaton brings a unique mix of dry wit and whimsy to bear on the dismal science of economics and the result is always entertaining, educational and irreverent. It’s Econ 101 meets At The Movies, with a dash of Monty Python.

In this premiere episode of EconPop, Andrew discusses the economics of Academy Award winner Dallas Buyers Club. Subjects include public health and safety regulations, crony capitalism and the role of regulatory capture, the emergence of black and grey markets, and commercial exchange as a means for increased social tolerance.

See Also



Today’s column:

Obamacare’s conservative critics sure know how to make themselves look out of touch. From Sarah Palin’s 2009 warning about “death panels” to last week’s headlines that a new CBO report said the Affordable Care Act would kill more than 2 million jobs, the law’s critics keep telling whoppers.

Say this much for the critics, though: At least they’re just bungling the facts.

Facts are easy. You can check facts. What supporters of the law are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.

Christina and Timothy Sandefur offer a perfect example in the latest issue of Regulation magazine. The fine levied for failing to purchase insurance, they note, is a “penalty that’s a tax but doesn’t raise revenue.”

Cast your mind back to those halcyon days of yore, when the law was first being debated. Democrats were keen to insist, as President Obama did in an interview with George Stephanopoulous, that the penalty was “absolutely not a tax increase.” On the other hand, the law’s proponents worried the Supreme Court would not buy the line that Congress had the power to impose the levy under the Commerce Clause. (They were right about that.)

So they came up with the bright idea of calling the penalty an “excise tax on individuals without essential health benefits coverage.” That was pretty sketchy, since an excise tax applies to the purchase of goods, not to individuals who haven’t bought a good. But it worked: In 2012 the Supreme Court’s majority rescued Obamacare by agreeing to call the penalty a tax.

At the same time, the Court also insisted that the penalty was not a tax. This was the only way to get around the Anti-Injunction Act, which generally requires someone to pay a tax before he can challenge the collection of it. Since the mandate penalties originally did not kick in until 2014, that would have prevented the Court from ruling on the law’s merits until much later.

But wait, there’s more!

The Constitution says “all bills for raising revenue” must originate in the House of Representatives. But the ACA originated in the Senate, when Majority Leader Harry Reid took a House-passed measure, deleted its text, and substituted what became the Patient Protection and Affordable Care Act for the original bill.

The Pacific Legal Foundation is challenging the constitutionality of Obamacare on Origination-Clause grounds. In response, the Obama administration claims the ACA not only originated in the House, but also that it is — wait for it! — “not a ‘Bill for raising Revenue.’ ”

So is the penalty a tax or not? Answer: Pick a color between one and 10.

And this is only the beginning. Consider the ACA’s other controversial mandate — the contraception mandate, now being challenged by (among others) Hobby Lobby, a company called Conestoga Woods, and Little Sisters of the Poor, a Catholic charity. They do not want to be forced to provide or arrange for contraception, which violates their religious beliefs.

In response, Obamacare defenders could simply say that life is full of trade-offs, and ensuring access to free contraception is more important than religious liberty. Instead, they want to claim both sides of the argument by insisting that those who object to the mandate are the ones violating religious freedom. Not buying your employees contraception, their argument goes, violates the employees’ freedom of religion. How? Because, um … hey, look, a squirrel!

The other day The New York Times took this absurdity another step further. The paper argued — you might want to grab a chair — that not forcing companies to furnish contraceptives for their employees violates the Establishment Clause of the First Amendment.

Moving on: The Affordable Care Act says people who qualify can obtain subsidies to buy insurance through an exchange “established by the state.” Thirty-four states have no exchange of their own; they have exchanges established by Washington. This means the people of those states are ineligible for subsidies. According to the law’s defenders, though, the language of the law does not say what it says, because we all know what Congress really meant. Or something like that.

Which brings us to last week, and the CBO’s projection that Obamacare will induce more than 2 million people to quit working or cut back their hours to take advantage of the law’s subsidies. Conservatives initially misread this as saying the law would destroy 2 million jobs, which was wrong of them; employers will not lay off 2 million people.

But if conservatives were too quick on the trigger, what excuse do liberals have? Not content to point out the truth, they have tried to spin the news as good: Isn’t it wonderful that those who could work will choose not to so they can reap benefits from the shrinking cohort of the employed? Obamacare is liberating people from the tyranny of gainful employment! What could be better?

Answer: “a comprehensive national health care system and a guaranteed basic income,” according to Alex Pareene of Salon, because “people should be free from [lousy] jobs.” If they were, then they could “spend more time with their families,” enrich themselves, get educated, “and even just … [fool] around a little more.” (No word on who, exactly, will be left to provide the income in this non-worker’s paradise.)

A world in which nobody has to do unpleasant work is a world in which you ride to the park on a unicorn. But that is a world many of Obamacare’s supporters inhabit: a place where the individual mandate is both a tax and not a tax; where the First Amendment’s Establishment Clause requires religious people to violate their faith; where “the state” means “the federal government”; where taking a job is wage slavery, but taking a handout is freedom.

Makes you wonder what color the sun is there, doesn’t it?

Pick a color between one and 10.

Great column.

(via barticles-deactivated20140505)

Policymakers and anti-addiction advocates now want to suppress opioid use, and to impose even greater restrictions on people who live with chronic pain. This isn’t going to address the addiction and overdose problem. Studies are now showing that when opioids aren’t as available and prices go up, addicts just switch back to street heroin. Pain patients, however, simply suffer. Their plight shouldn’t be an afterthought and shouldn’t be relegated to comments sections to stories that failed to consider their perspective. They are a crucial part of this story.

— Maia Szalavitz

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