Wednesday, March 24, 2010

Why is mandated health a bad thing?

A friend was telling me how they like this health care bill because the insurance companies "can no longer deny anyone with preexisting conditions insurance, something myself and multiple friends have had to deal with. In my eyes, it's completely unfair."

I'm confused... why is that unfair? It's saying we all have the right to force someone else to insure us no matter what our condition. Living is risky and it can be expensive. Government can pass a law for anything, but it doesn't automatically mean there's suddenly enough resources to cover everyone... unless it tries to simply print money, which has it's own set of consequences.

Let's imagine a politician suddenly says, "Everyone has a right to look good," and then passing a bill requiring everyone to go to salons, and requiring every salon to provide a basic cut to everyone who asks. By ignoring the actual needs of consumers and salons, we get imbalance in the stylist economy. Some clients will be happy that they get subsidized cuts; some clients will be overjoyed because a salon is forced to work with them; and some salons will even be happy because they'll give basic cuts at an effective price.

But we can see how the majority of clients as well as most salons will lose out in the long run. We get things like fewer great stylists because there are so many basic cuts required; less salon business innovation for the same reason; and customers who don't even want cuts must still spend time and money for something they don't want. Will we enjoy that society if we're the ones forced to cut people's hair and we cannot control our own business (how much to charge, who to accept as clients, etc)?

The economics of this (ie. forcing all companies to cover everyone or forcing people to buy insurance) skew the reality of supply and demand; in the end they create bigger booms and busts. So we'll be like a friend from New Zealand explained: everyone has basic insurance, but it takes a year to see a doctor... except for the super rich (and politicians) who can afford to pay extra (or get them into elite circles).

Actually, I believe many people would appreciate that kind of society.

I don't buy the "Buy American" motto.

I just got a note from a relative with a long article about buying American-made products first, and finishing with: "buy as many articles as possible that are made right here in the USA!"

I disagree.

I do agree with buying things locally first... and not just because of the money. When your community works together and trades together, not only do you support your local resources, you increase the bonds of trust and cooperation, both of which can help you in the future.

However, once you get outside your "community" (maybe 5-20 miles?), you might as well be dealing with another country. Unless they're someone you plan to do business with again, you're just dealing with another anonymous supplier, so you're not building any meaningful relationship. Any why not support workers in other countries? I love how Americans have helped build up communities and infrastructures in other countries just because they need the help... and the very best way to get aid to our brothers and sisters worldwide is to buy their goods, rewarding their work. (Now, many of these products actually help corrupt governments instead of communities, so you've got to be smart about buying internationally as well. Dunno how. It's all hard.)

So, no, I don't buy the "Buy American" motto.

PS: Note that when you're a business you do create long-term relationships with people located further away, so a business "community" may be much broader. But it's still about the relationships.