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Obama is doing fine as his policies fail

November 13, 2009

President Obama is staying up around the fifty percent approval mark as two-thirds of the people feel the country is headed in the wrong direction. Big spending liberals were sent packing in Virginia and New Jersey, but voters attributed none of it as fall out from the President. Remaking health care in the leftist image was until recently a forgone conclusion in the House, but the bill barely squeaked through this past week.

The Left concludes from this that the public actually loves government-orchestrated health care, new energy taxes, a foreign policy structured around apologies, and, above all, unbridled spending. The proof, they say, is that Obama is still popular, and surely his popularity would have suffered if voters did not want the proposed Big Government. Only lies by Republicans and Fox News, they claim, have temporarily interfered with voters what they really want.

The problem with that explanation is that the voters are getting the truth about the programs, and they are not much liking it. That brings us back to the conundrum: why is Obama remaining so popular in the face of rapidly growing dissatisfaction with his policies?

Obama remains popular because many middle-ground voters have not associated him with the implementation of the policies of his administration. The committed Left and the committed right have no trouble associating Obama with Obama policies, but few in either of those camps have changed their opinions about Obama since he was elected. The middle ground perceives health care as a product of Congress, not the President. The President wants only wonderful things: lower health costs, universal coverage, preserving what you now have, and no increase in deficits. He is firm on all those things, having asserted them in 112 speeches on the subject.

He does not talk about $500 billion in Medicare cuts and other details that might offend. It’s the job of Congress to make magic happen after he casts the spell. The same strategy applies to cap-and-trade, the Stimulus Bill, restructuring the financial system, figuring out where to put GITMO inmates, and so forth. The upside of not providing leadership is avoiding the responsibility that goes with it.

Congress was run by Democrats for the last two years of the Bush administration, yet Democrats have had success holding Bush responsible for everything. A poll showed that 57% of the people who voted for Obama believed that Republicans controlled Congress. Now with a Democrat as president, the Democratic-controlled Congress is held at fault rather than the President. That’s an amazing feat of politics.

It flows from Obama’s style and enormous skill as a politician. His campaign was based upon “hope and change,” without the specifics. The specifics get politicians in trouble. That strategy worked to get the Stimulus Bill passed. Insofar as there was agreement on the bill, in was on the generic premise that “government must act.” It was not sold on the premise that ten months later only 14% of the money would have been pumped into the economy.

Can Obama continue with generic messages that express goals rather than policies? It is possible. Imagine a scenario in which Republicans do well in the elections next year. Obama is already doing well blaming Republicans for his policy failures, despite Republicans having little power in Congress. Obama can step that up by posing the situation as his generic goodness being blocked by horrible detail-obsessed Republicans.

That might not happen. Another scenario is that voters gradually feel the lack of leadership from the President, and start holding him accountable for failed policies. It hasn’t happened so far, but perhaps it is just a matter of time.

We may be seeing a basic flaw in democracy. The best candidates may be the ones who are best at running for office, and perfection as a candidate comes at the expense of the ability to govern once elected.


Ken Burns documents the rise of neo-pantheism

October 9, 2009

Famous documentary film producer Ken Burns has a new series being shown on Public Broadcasting, “The National Parks: Americas Best Idea”: I have been watching with interest. The series is more about the history of the Parks than what is in them. There are clips of fabulous park scenery, but far more historical black and white images. What strikes me are the frequent explicit references to nature worship as a moving force among park advocates.

Nature worship abounds these days. One may ask, for example: Why should we import foreign carbon rather than exploit our own coal, oil, and oil shale? There is no less carbon in foreign fuels than in our own, yet strong measures are taken to restrict domestic production, with the consequent loss of a trillion dollars or more in trade deficits and not the slightest reduction in carbon emissions. Drilling in the western half of the Gulf of Mexico has not produced any significant environmental damage, so why is eastern half off limits? Caribou have been prospering in Alaska since the North Slope was developed, so what is the problem with developing the barren plains?

The answer is religious. The act of recovering carbon is deemed fundamentally profane. It some cultures, slaughtering animals and burying the dead have been relegated to inferior castes. There were the “burakumin”: in Japan and the “Dalit”: in India and central Asia. The “decent” people in those societies ate meat and died, but nonetheless the necessary supporting activities were avoided to the extent possible. So it is with carbon. We are not going to stop using carbon any time soon, but it is okay if we pay someone else for it. The sacrilege of carbon recovery must be deduced as being fundamentally a religious act, because there is no rational explanation for it.

The history of the National Parks is full of people who find their _true_ God in high mountain scenery, and are not afraid of saying so forthrightly. I don’t believe Mr. Burns is embellishing the point. The casting of nature as religion is a persistent theme in the documentary because that is what the advocates indeed believed.

Key Park advocates were opposed to development of the Parks. Having no roads was thought best, but if there must be some roads then they should be as wretched as possible. If God is to be found in the mountains, then wouldn’t it follow that as many people ought to make the acquaintance? Why should only vigorous wilderness hikers meet God, and not the young or the old or the disabled? Well, it makes sense in the context of the very holy places of religion, where infidels must not be allowed to affront God by their presence. the holy places should only be available to those who complete the pilgrimage.

Religions have truth in them, and I give pantheism its due. There is something deep in the human spirit that is moved by starry nights, grand vistas, and the workings of the natural environment. It derives from the nature of mankind, as does conventional non-pantheistic religious tenets like the Golden Rule. I’ll go further and claim that the Abrahamic religions are perhaps a bit light on nature worship.

Religious excess is the consequence of believing the gods one worships demands irrational acts to please them. Having parks but excluding people from them is bad thinking not because it is religious, but because it is religious excess. It’s reasonable to keep people from despoiling the environment, but it is unreasonable to turn against people so as to please one’s god of nature.

Some who watch Mr. Burns documentary will slide past the religious references by assuming that the God referenced is always a manifestation of the Christian God. That’s possible sometimes, perhaps, but what is said is much more easily related to pantheism. It helped set the stage for the modern rise of neo-pantheism, and its excesses.

Health Care for Illegal Aliens

September 14, 2009

President Obama made the point in his speech this week that H.R. 3200, the leading health care bill in the House, specifically excludes coverage of non-citizens. That brought the infamous outburst, “You lie!” from South Carolina Republican Jim Wilson. Wilson’s outburst was inexcusable, and he rightly apologized. But what is the planned coverage for illegals, and what should it be?

While non-citizens are specifically excluded from the pending legislation, there is no provision for enforcing the restriction. The is no requirement to check citizenship status and no penalty for failure to report non-citizens. All the medical bills will be paid by the government. So while they are specifically excluded, they are implicitly included. For those who think receiving care and paying the bill is relevant, they are covered.

Illegal workers pay some taxes, but it amounts to only a third of the services they receive. Currently, they generally receive health care through the emergency room system. The Congressional Budget Office has proven that health care costs increase when emergency care is supplemented with general care. That’s for essentially the same reason that the long waits in national health care systems reduce costs: people endure pain as the alternative, they drop out of the system and seek private care, and some people die while waiting in the queue. Liberals easily confuse receiving care with not receiving care while waiting, but in practice that’s not a distinction.

Illegal workers are often employed in agriculture, construction, and the hospitality industry (hotels and restaurants). Because the taxes paid by illegal workers do not cover the government services they use, the rest of taxpayers subsidize the consumers who use the products and services provided by those industries. One could argue that “everyone” consumes manually harvested crops, uses hotel rooms, and enjoys restaurant meals. That’s not completely true, and more importantly some people get advantage from the subsidies a great deal more than others. Why should people who frequently stay in hotels be subsidized by those who do not? Why should those who eat labor-intensive lettuce be subsidized by those who eat mechanically harvested corn?

Beyond the inequity of some taxpayers subsidizing the consumption of others, providing a hidden subsidy distorts the market for those things. If the true costs of the labor were reflected in those markets we would expect less of the more expensive products to be consumed, legal labor to be more competitive with illegal labor, more automation to replace labor, and some products to be produced increasingly abroad.

For example, labor-intensive field crops may be produced more in Mexico and Chile and less in the United States. That is appropriate and it supports the economies of developing countries while freeing American capital to be applied to better uses.

The solution for this aspect of health care is to require the employers of non-citizens, legal or not, to provide for their workers’ health care. They can do that by providing health insurance for their workers and families of the workers or by being directly responsible for their health care expenses. Employers would pass the costs along to consumers, and markets would then be a better reflection of true costs.

Do we need comprehensive immigration reform first? No, we should make incremental improvements when possible. This gets back to the radical idea that nothing short of a revolution is acceptable. That is the false presumption of the Left, who care far more about accumulating government power than finding practical solutions to problems. That is a form of obstructionism.

As a consequence of Congressman Wilson’s outburst, there is now a move afoot to provide checking of citizenship to receive the proposed benefits. So was it true that President Obama was lying? Well, yes, it was true by any reasonable assessment. Obama certainly knew that there was no checking of citizenship, so he knew non-citizens would received de facto coverage. Nonetheless, the Congressman’s outburst was inexcusable. The end does not justify the means. There were other ways to make the point.

Why can there be no compromise on health care?

September 3, 2009

Nancy Pelosi has stated in explicitly: any bill that does not include a government option cannot pass the House. Howard Dean says that true reform of health care requires a government option. The question is why a larger role by government is deemed essential by ideological liberals. the main reason is fear that the compromise might work, and that would upset their larger agenda for government control.

We have a good idea what Republicans want. Republicans uniformly favor tort reform, which is estimated to account for 10% of the direct costs of health care, and as much as 20% more in the form of unnecessary tests and procedures done to fend off potential future lawsuits. Republicans favor laws that would eliminate health insurance companies refusing to accept customers with pre-existing conditions and dropping coverage on customers who develop expensive illnesses. Republicans favor changing the laws that prohibit insurance companies from doing business across state lines, which results in some areas having health insurance unavailable.

There are certain legal obstacles to the sale of high-deductible health insurance which Republicans would like to remove. This would serve the presently-estimated 22 million who can afford insurance, but don’t get it because they choose to take their chances. Many might get a catastrophic health insurance policy as a compromise.

There are 47 million uninsured, but after subtracting illegal aliens, those who make over $75,000 but elect not to purchase health insurance, and those who qualify for Medicaid but haven’t applied because they are not sick, there are about 12 million who need support in obtaining health insurance. Senator DeMint has proposed legislation that would give a $5000 voucher for the purchase of health care to each of these individuals. The total cost would be about half of what Democrats claim their program would cost, and if tort reform could be accomplished overall health costs would still drop.

Incidentally, illegal aliens should be insured by their employers. The costs would then be passed along to consumers. So, for example, people who buy vegetables and rent hotel rooms would pay the true costs of labor in the agriculture and hospitality industries. This is fair. It ought to be a part of health care legislation.

It’s not clear how many Republicans would sign on to DeMint’s legislation, but it indicates an area where a compromise is possible. Other Republicans have advocated cooperatives as a mechanism for providing insurance, but here is a question as to whether cooperatives would end up as just a proxy for government. It’s nonetheless in the area of compromise.

Why are Pelosi, Dean, and their ilk unwilling to discuss legislative approaches that seem to have a good chance for success? I think there are at least three reasons.

First is that the more or less obvious improvements, like allowing competition across state lines and denying exclusion for pre-existing conditions, are held hostage to what they perceive as the greater goal of expanding government involvement and control. They claim that the obvious improvement can only be obtained as part of the larger package that presages government involvement. As opposition to government involvement grows, they have changed “health care reform” into “insurance reform” and played up the obvious improvements as the centerpiece of the legislation. In fact, since Republicans have already introduced the legislation, they could be swiftly enacted if the Democrats desired.

Second, tort reform is not in the Democrat’s package, even thought it would pay for the uninsured, because trial lawyers are the top group of contributors to the Party. Give credit to Howard Dean for acknowledging this fact. When you work the numbers, health insurance company profits are about 1% of health care costs, and they earn those profits by administering stiff fraud prevention programs and introducing genuine efficiencies. However, tort reform may represent 30% of costs, but it is untouchable due to Democratic special interests.

Third, radicals having the gnawing doubt that a compromise might work so well that their demands for revolutionary change would no longer have an audience. This is the larger agenda in holding obvious improvements hostage to grander schemes. The radicals fears are well-founded. Incremental improvements are likely to provide good results, and that might well lead to additional incremental improvements.

For leftists, security for the country as a whole comes from the power of a liberal elite to rule. Bureaucrats handle the details. For rightists, security comes from national wealth. Free markets handle the details. That makes seizing power the top item on the leftist agenda, for if the chosen elite rules then problems will be solved by the elite, and the rest of us need not be concerned with what they are going to do. For right-wingers, security is achieved by making the nation prosperous, and doing that is the top agenda item. We see these priorities played out in the health care debate.

Conservatism is the doctrine of evolutionary change. Small changes expose weaknesses before they are institutionalized, so the errors can be undone. Leftists do not like to compromise precisely because incremental change works, and it defeats their agenda.

Lies and Hypocrisy in Health Care

August 25, 2009

There is a difference between a lie and a mistake and also between hypocrisy and just playing the cards you are dealt. These conceptual differences arise regularly in political debate, and now in in the health care debate. Let’s start with hypocrisy.

The claim is now made that that it is hypocritical to accept Medicare while opposing government health insurance as part of the Obama health plan. The alleged principle called upon is that one cannot ethically oppose something while participating in it. Daniel Gross wrote in Health Care Hypocrisy for Newsweek that “many the pundits attacking government health insurance rely on government health insurance for their own families.” This is every bit as shocking as the revelation that many who advocate government health insurance now actually depend upon private health insurance to protect their families. That would be private health insurance from an employer like, say, Newsweek.

I isn’t it shocking at all. Suggesting it is hypocritical is dumb. It is entirely reasonable to stay in System A while advocating System B, until such time as System B actually comes to pass. The people who could not figure this out when earmarks where the accepted method for government to dispense money, cannot figure it out now. As with earmarks, people have every right to refuse them as a way to protest, but there is no obligation to do so. Thus if Mr. Gross wishes to renounce any private health care he is receiving as a means of protesting the lack of a government program, it think he is entitled to do so but not morally obligated.

On to lies. Robert Parry wrote in an article Palin’s ‘Death Panel’ and GOP Lying “False Republican claims about President Barack Obama’s health-care initiative, including former Alaska Gov. Sarah Palin’s demagogic charge about a “death panel,” are part of a pattern of systematic lying that has marked the GOP’s political tactics at least since Ronald Reagan’s presidency in the 1980s.” Of course, Mr. Parry is not burdened by the old-fashioned notion that a lie is proven by evidence that the speaker knew something was false at the time it was said. Nowhere in the piece does Mr. Parry offer any evidence that any Republic knew something to be false that he proclaimed to be true.

The House bill does provide for payment for periodic end of life counseling, but Palin was mistaken in describing that as a “death panel.” Mr Parry, cannot conceive that Palin misunderstands what the “end of life counseling” that is in the bill actually refers to. Note that a Republican amendment clarifying that this could not include recommending euthanasia was flatly rejected by Democrats. Also, there was the case in Oregon where their liberal-inspired UHC denied a $4000 drug and offered euthanasia instead. How could Palin possibly have gotten the wrong idea? It’s inconceivable, according to Mr. Parry, so she must have been lying.

Let’s try out the thesis that a major political figure could not possibly be mistaken about the contents of the health care bill. President Obama said that the House health care reform bill does not deprive anyone of choice in health insurers, yet page 16 the bill says that if you loose your job, you can only get government insurance. So is Obama lying? We apply the argument, “It’s just not possible that the president of the United States would not know the relevant part of the bill he is supporting.” per Mr. Parry, and must conclude from that logic the President was lying.

I don’t buy that. I think it is quite likely that Obama is simply mistaken about what is and is not in the legislation. Palin is also entitled to be mistaken. In fact, the bill is a manifestation of “Big Bang, no details.” For most things, it is not possible to know what it says, and that is by design. The principle is that some time in the future, assuming it is passed, the bureaucracy will reveal what it says and implies.

Notes for the Health Care Debate

August 11, 2009

The current debate on health care is confusing. I focus on five central issues. The debate would be improved if these specifics were in the forefront. The debate would be improved if these specifics were in the forefront. My points are, (1) heath in the US is more a product of lifestyle than the care system, (2) insurance company profits are a trivial part of health care costs, (3) justified changes in insurance regulations do not require the much large health care package, (4) a person will not be able to keep their present health insurance if employers drop the option, and (5) critical details of the new system are not disclosed.

1. Health is a product of lifestyle

There is often an unspoken premise that the primary determinant of health care in an economically developed society is the health care system. In poorly developed societies there are problems of famine and drought, and the basic public health measures of clean water, common immunizations, and simple antibiotic cures are absent. This leads to poor health of the populace. The imapct of modern medicine is dramatic. A hundred years ago the life expectancy in the United States was 47, most of the improvements were due to health care. This leads to the incorrect supposition that health care is still the primary factor in longevity. It’s not true. Now the primary determinant is lifestyle.

The health care system of Costa Rica is often ranked as superior to that of the United States, despite their spending about $350 per citizen in comparison to the U.S. spending of over $8000. The life expectancy in Costa Rica is only a couple of years less than in the U.S. What this proves in not that they have a miraculous health care system, but rather that they do not need a miraculous system. The U.S. longevity suffers greatly from deaths due to violence, drugs, traffic accidents, and suicides. If a person makes it to 55 in the U.S., life expectancy is then the longest in the world. That is despite all the clogged arteries and other consequences of horrendous habits.

The U.K. system is uniformly rated better than the U.S. by those who do ratings. The mortality rates for certain types of cancer are the same in the U.K. as the U.S. In the U.K., half as many people get those types of cancer, but one diagnosed, twice as many die from. That makes the U.K. lifestyle, or whatever it is in their environment that causes cancer, considerably better than the U.S., but their health care system considerably worse.

Obama and supporters of their concept of “reform” repeat the false premise chronically. It is flatly untrue that if our health care system is best our health would be the best. When confronted with this fact, the response is invariably, “That’s just an excuse for not improving the system.” It is not. There is broad agreement that the U.S. system can improved. It is a good reason for not copying a defective system on the grounds that it is better.

2. Insurance company profits are not the issue

President Obama in his town hall meeting supposed that high insurance company profits were a good reason to demand “insurance reform.” In a recent year, insurance company profits were about $12.7 billion out of total health care costs of about $1200 billion. If those profits were somehow eliminated, we are looking at about 1% of costs.

However, those profits are earned. Fraud in Medicare is estimated to be about 5%. In private insurance systems, it’s put at much less than a percent. Medicare makes only superficial checks for fraud and erroneous billing. Checking runs up their administrative costs, and government bureaucracies look better if their administrative costs are less. They need not worry about bottomline costs. However, insurance company profits are made the major issue, not the much great inefficiency inherent in government bureaucracy.

3. Insurance regulation is a separate issue

The new phrase for “health care reform” is “insurance reform.” In political talk a reform is absolutely anything you want to do that increases government control. Obama spoke at length about the need to have legislation that require insurance companies do not reject applicants based upon pre-existing conditions. He is quite right about that. California has had such a law for many years, and it works fine. It doesn’t harm the insurance companies, because each gets to operate under exactly the same rule. Republicans agree with this change. Republicans in the Senate Finance Committee, the only place in Congress where Democrats allow Republicans to have a voice, has proposed this legislation.

If everyone agrees, why hasn’t it already been passed? It is held captive to the health care package as a whole. It allows Obama to falsely claim that the only way to get this aspect of the legislation is to adopt the whole monstrous beast.

4. Employers may choose

President Obama assures voters that they can keep their present health care insurance if they like what they have. This is disputed on several grounds. In the current House bill, there is specific language that requires that if you lose your job, you must switch to the government program and then stay on it. It’s doubtful that Obama has read the bill, so he wouldn’t know about that. Beyond, that there is no guarantee that employers will not switch to the government program and drop the option you now have. Proponents argue that the government option will be cheaper; that’s the major argument for it.

How many employers will switch, removing the private options? The Heritage Foundation, a conservative think tank, say it will put 83 million of those now insured on the government program. I have heard estimates of 120 million. Proponents calim it will be zero. While the number is debatable, the point is that the claim that everyone can keep their current insurance is certainly debatable. It is extremely doubtful.

The related question is whether any private enterprise can actually compete with the government. Proponents say its possible if the program is structures correctly. Perhaps on lesser programs its possible, but government health care is ideologically too big to be allowed to fail. For example, the cost of Medicare turned out to be seven time greater than originally estimated by the Congressional Budget Office. A seven-times cost overrun would sink any private entity. Medicare, however, was guaranteed to be a success. The same Congressional Budget Office puts the cost of the new proposal at about $1.6 trillion. One wonders if the same factor of seven should be applied.

5. It is Big Bang, No Details

President Obama countered fears that the new health care plan requires mandatory euthanasia counseling. The plan will pay for end of life counseling every five years, but it’s optional whether the patient elects it. The subject is not euthanasia, but rather the patients wishes if they should end up on indefinite life support and unable to voice an opinion. That’s legitimate.

Nonetheless, while the immediate explanation is legitimate, it doesn’t put all the fears to rest. Oregon has a government universal health care system. Like all such systems it uses rationing to control costs. A case has come to light recently of a 64-year old woman who had cervical cancer. A $4000 drug called Tarceva offered a small hope of a cure. It was by no means a sure thing, but a hope. The state decided the drug was too expensive to be justified relative to the chance of success, and instead offered either hospice care or euthanasia.

The present health care legislation has a provision to reduce Medicare costs by $500 billion. No one to my knowledge has suggested any way that such huge cuts can be achieved other than through rationing of some sort. The cuts will be determined by a panel of advisory board after the legislation is enacted. It will be done in such a way that the decisions can only be overturned by prompt action of a two-thirds majority of Congress. That is a near impossibility.

With the Oregon case in evidence, and the prospect of indeterminate huge savings in Medicare already in the bill, it’s easy to see how people connect the dots. Proponents deny it, asserting that there is nothing in the bill that requires it, and it just won’t happen.

This is the strategy the Bush Health and Human Services Secretary Mike Leavitt calls Big Bang, Not Details. (Leavitt elaborated in an informative debate with Tom Daschle.) In the 90s, Hillarycare sank because it was both revolutionary and disclosed exactly what it would do. People didn’t like the revolution they were offered. The new strategy is to offer a revolutionary vision of free care with no downside, but conceal what it actually entails. Experts will determine that later, you are told not to worry about that now.


The way to debate health care is to debate it. It is not protesters shouting at elected officials, nor Obama’s orchestrated town hall lecture in which his every sigh was met with thunderous applause. Proponents should square off in public debate with opponents. For a start, my list of topics should be addressed.

The current debate on health care is confusing. I focus on five central issues. The debate would be improved if these specifics were in the forefront. My points are, (1) heath in the US is more a product of lifestyle than the care system, (2) insurance company profits are a trivial part of health care costs, (3) justified changes in insurance regulations do not require the much large health care package, (4) a person will not be able to keep their present health insurance if employers drop the option, and (5) critical details of the new system are not disclosed.

Why does government prefer rationing?

July 27, 2009

It’s a straightforward observation: when government is presented with a problem, there is a strong tendency to use some form of rationing as a major part of the solution. We see this in health care, water supplies, electricity, and many other aspects of government regulated or government-run operations. It’s is a reasonable to unexpected emergencies, like World War II shortages or hurricane interruptions, But it is an unreasonable response to chronic problems. So why is it the preferred tool? I think it is because it does not require long term planning, it enhances government authority, and it perpetuates an illusion of fairness.

It should not take too many examples to establish the existence of the rationing preference. My state of California has chronic problems with water shortages. There are a number of ways to increase the supply of water. New dams could be built in the mountains to hold spring runoff for the dry summers, and the Pacific Ocean has the potential for desalinated water. In recent years those solutions have been consistently rejected in favor of water rationing. The price charged for water escalates rapidly to discourage use, but an official promised that people would not be allowed to “buy their way out” of rationing. The government will put flow restriction devices on customers who do not obey dictates.

California took the same approach to electricity shortages, with a system of brown outs to ration supplies. Shortage were easily foreseeable.

Government health care systems around the world depend uniformly on rationing to limit demand. The most popular method is to build long queues for treatment. That discourages people from seeking care, gets rid of some that die while waiting, let’s people live in pain as an alternative to providing service, or encourages them to seek care outside of the government system.

The proposed cap-and-trade system is a mechanism for rationing energy. There is fairly uniform opinion of experts that a straight tax on energy would do a much better job of reducing consumption, assuming one really wants to do that, but a tax is rejected in favor of rationing.

In each case, there is an option to provide all of what is needed on a scale of increased cost. The free market does this naturally. It is only when government intervenes that it doesn’t happen. For example, people who can afford it could sign up for desalinated water to keep their gardens alive in droughts. This could be privately financed so it would cost the taxpayers nothing. It would have the general benefit of increasing the demand for desalinization technology, which ultimately drives the cost of technology down.

In the case of cap-and-trade, the reason for a rationing system is rather transparently related to a quest for government power. Government gets to decide who will get the coupons and at what price. This has the general feature of supporting the theory that government makes better decisions than the free market, so those who have faith in government get to propagate their faith. In particular, it allows politicians to reward their friends and punish their enemies. The coupons will go to buying off key votes to get the legislation passed, to damaging business in states that don’t come along peacefully, and rewarding influential donors who will benefit from the market for rationing coupons.

Politicians are elected for short terms, so the pressure is for them to make a quick fix rather than a long term solution. Environmentalists oppose dams and desalinization, preferring instead a quasi-religious austerity to please the gods of nature. Any politician who goes for a practical long term solution will face the ire of this new brand of fundamentalism. Most voters would probably prefer water to the moral purity of drought asceticism, but so long as water generally comes out of the tap, they are unwilling to ponder the long consequences of avoiding new supplies. In the short term, the politician gains the fanatical support of eco-fundamentalists and loses little general support.

Ignoring the long term is likely to lead to crisis, and politicians may suffer from that. California electricity shortages brought on by the political logic of rationing was eventually swamped by the reaction of the general voters, so a little something was done to eliminate brownouts in the short term. It has to get to the point where the peasants are lighting their torches and marching towards the castle where government lives.

When government manages to stamp out all alternatives to the government system, people tend to be more accepting of rationing as a necessary part of life. They think it is the way things have to be, rather than a consequence of particular policies. The logic is that droughts are a result of the forces of nature, not a consequence of government failing to keep supplies at a pace with population. Similarly, long queues in a health care system are accepted as a natural consequence of working system, not an unnatural consequence of a failed system.

Rationing also perpetuates an illusion of fairness. We don’t want the rich getting more water or better health care, do we? The answer is that in fact we should want the rich to get the better things, so long as they pay for it voluntarily. We should want it as a simple matter of free choice, a fundamental right to spend money as one wishes. However, the invisible hand works to the general advantage as well. The rich get to pay a premium price for the latest technology, be it laser eye surgery or water desalinization or whatever, with the result that it drives the cost of that technology down for everyday use. If in some cases it does not, then we benefit from discovering that fact without a government funded research project.

Politicians are largely not sophisticated enough to recognize the benefits of free markets, or if they do recognize it they find it easier to sell government-imposed fairness to the voters.

Understanding the reasons behind government rationing brings the realization that is not an accidental outcome. It is inherent in government control of markets.