On the Precipice

Free-market economist Ludwig von Mises wrote: “With a few exceptions contemporary commentators on economic problems are advocating economic intervention. This unanimity does not necessarily mean that they approve of interventionistic measures by government or other coer­cive powers. Authors of economics books, essays, articles, and political platforms demand interventionistic measures before they are taken, but once they have been imposed no one likes them. Then everyone — usually even the authori­ties responsible for them — call them insufficient and unsat­isfactory. Generally the demand then arises for the replace­ment of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again.”

Can you think of anything that better describes the situation over health care? Government first intervened in medicine in the 1940s, granting tax breaks to corporations (rather than individual consumers) for health insurance expenses. This led to a third-party payer mentality rather than a consumer psychology that governs the rest of the economy. This, in turn, led to higher prices culminating in the passage of socialized medicine for the elderly, i.e. Medicare. This, in turn, led to an explosion in health care expenses and regulation way, way beyond what the original opponents of Medicare ever predicted. After four decades of Medicare, medical care is a mess. Does Medicare get the blame? No way. Capitalism does, even though there is almost no capitalism left in medicine. Now Congress is on the brink — the “precipice” as Obama puts it in a revealing comment — of passing “just about socialized” medicine for all. The “compromise” solution appears to be leaving the barest, minimal remnants of a market in place so it will fail for sure, in about two years’ time, and then government can take it over altogether.

As von Mises said, one set of unsatisfactory interventions does not lead to a reversal of those interventions — but rather to their expansion. The idiocy and insanity in all of this is hard to comprehend in a civilization that is otherwise so advanced. The problem is that the idiots we elect into office are the least civilized among us. They’re savages in suits and with Ivy League degrees, descending upon us with the consent and approval of the ignorant and the dishonest.