A Thought on Income Inequality

Inequality in incomes and in accumulated material prosperity are the inevitable outcomes of our inalienable right to equality of opportunity, as exercised through our differing endowments of talents, skills, work ethic, and luck.

The well off—including those best off—use their gains from those inequalities in a variety of ways.  Some of these ways are purely personal: luxuries and luxuries for their families.  Some of those ways also include support for what are often termed, loosely, “the arts,” and other cultural supports and advancements.  It is from these, and not from government, for instance, that support for museums of all sorts come, support for many artists originates, support for invention ideation and development begins.

These well off, also, serve as an example and a goad: I can do that.  I want that stuff, too.  And the efforts to emulate and/or to make oneself able to obtain those material symbols of “I’ve arrived” feed into the ideation/development/support cycle.

Of course this generates a steady supply of those less well off, a steady generation of poor.  These folks see the prosperity—they’re not as stupid or as dead-end as Progressives make them out to be with the latters’ drumbeat of offers of welfare and dependency—and they do what they can to go where the success stories are, and then they do their best to achieve those same successes or something like them.  In the absence of interference by governments [sic], they almost always succeed, almost always by their children’s generation if not of themselves directly.  The Statue of Liberty stands as the quintessential beacon, inviting everyone, but especially inviting those seeking personal and familial betterment.

Our greatness, our exceptionalism, our status as a magnet for the world, though, is jeopardized when government gets in the way of our poor.  Reread the preceding paragraphs.  The thick cord that runs through them is the idea that our poor want to—and most importantly can—make themselves better off than they were.  Our poor are fully capable of moving themselves up the economic ladder, fully capable of stopping being poor and becoming middle class, of leaving the middle class and entering upper classes, ultimately of reaching the top.  If they cannot do that for themselves (although some do), they can create the conditions within which their children can (and most do), and those children can—and most do—create the conditions that enable their own children, the grandchildren of our first generation in these paragraphs, to move up still further.

But to do that, government must stay out of their way, or, today, get out of their way.

And so we’re back to income inequality.  That inequality is what provides the motivation.  And—hated concept of the Left—it trickles down from the top, too.  As I alluded above, it’s the rich that provide the market for new things, for luxuries.  These become desired by the middle class and poor and so while increased demand props up prices, increased production—and growing competition to produce in order to get some of that new market—outstrips demand, and prices fall—and the middle class and poor ultimately can afford what was exclusively the goodies of the rich.  See air conditioning in houses, power steering and brakes in cars, televisions, telephones, and pocket computers that also run phone apps, and so on.

If, however, being successful is punished through government-mandated wealth redistribution, rather than that “redistribution” being the outcome of individual choices in a free market (where wealth is redistributed, simultaneously, in both directions, by every voluntary exchange leaving each participant in possession of things he wanted but did not have before the exchange) and individual choices in the means and objects of satisfying individual Judeo-Christian duties to help those less well off, then two things occur: the heretofore successful cease working so hard to be successful, and so the high end of wealth steadily lowers, except for those few who can find adequate favor from government.  And the poor cease striving to better their own and their family’s lots, satisfying themselves with government handouts from other’s wealth; and so, from that dependence on those handouts, the low end of wealth also steadily lowers, and each one’s absolute “share” also steadily dwindles in size as the wealth from which those “shares” are confiscated steadily shrinks.

And that destroys both the capacity and the impetus for upward mobility.

The final outcome is a more subtle and general impoverishment, both materially and morally—the latter is especially insidious, as it is the moral that gives strength to the capacity for increasing the prosperity of all.  The well-off lose their moral sense of helping others, both from malaise, as government confiscates their output, and from a surrender of their moral responsibility to that government, expecting instead that it will satisfy the imperative instead of them.  The poor lose their capacity for responsibility for their own betterment, and so the drive to better themselves and their families in ways that best suit them, through their acceptance of their status as dependents of government.

Obamacare and Health Spending

John Goodman, over at NCPA, has an interesting point-out on Obamacare (and on a Paul Krugman New York Times column, but that’s neither here nor there).*  OK, a little bit of here: Goodman cited Krugman as claiming that

Since 2010, when the [the Affordable Care Act] was passed, real health spending per capita—that is, total spending adjusted for overall inflation and population growth—has risen less than a third as rapidly as its long-term average.  Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.

Then Goodman presented this chart

and then Goodman noted

[T]he chart clearly shows[] nothing happened to the rate of increase in health care spending in 2010—the year ObamaCare was passed.

Yes, the growth rate of health care spending that year was well below the historical average.  But it was just as much below it in 2009, the year before the act was passed!  Health care spending growth in 2010 was exactly the same as it was in 2009.  It remained exactly the same in 2011.  And again in 2012.  Looking only at the numbers, we would have to conclude that nothing that happened in 2010 had any impact whatsoever on health care spending.

On that last point (no Obamacare impact whatsoever), though, I have to disagree with Goodman.  It looks pretty clear to me that Obamacare has utterly halted the downward trend in health care spending growth: that growth has stopped decreasing toward no growth.  If allowed to continue, the trend would have reached zero growth and gone to outright decreases around 2012.

Keep in mind, too, that the spending aspects of Obamacare have not yet kicked in.  Other than the increases in premiums and deductibles, I mean; those are getting started.

 

*Interestingly, Jason Furman, White House Council of Economic Advisers Chairman, had an op-ed in Monday’s Wall Street Journal that also burned through over 1,000 words showing all the ways he alleges Obamacare has slowed “health inflation.”  While also carefully ignoring that already in place declining trend in the years prior to 2010.

YGTBSM

Here’s another installment in this series, this time (again) with ObamaMart.

Finally get enrolled in an Obamacare health welfare package via ObamaMart?  Don’t die this year.  Don’t take that raise.  Put that baby back where it came from.  You can’t update your package to account for these life changes—that functionality deliberately was put on the back burner in favor of fixing other…glitches…in the Web site.

The list of life changes that you can’t tell ObamaMart about include, in addition to the above,

  • marriage and divorce
  • death in the family
  • new job
  • moving to a different community

Remember, moving to a different community also changes the premiums you have to pay—that community rating thing.

Remember, also, you still have to repay the subsidy payments you received after the raise made you ineligible.  And you still owe the taxes on the raise.

Just be sure, after you’ve separately told your Plan provider about your life change, you go back and tell ObamaMart.  After they get around to fixing this.

General Insurance Dysfunction

I’ve written about the failure and the dishonesty of Obamacare on a number of occasions.  However, the failures of insurance coverage aren’t limited to Obamacare.  Here’s an example from my wife’s insurance coverage, an old-style policy that hasn’t (yet) been canceled by Obamacare.

At my wife’s annual physical, last month, she spent over an hour talking with our doctor about mutual concerns, where they agree, where they disagree. (How many doctors will do that, in the first place?  This is one of the reasons I like her for my doctor, too.)

We got the billing statement a couple days ago:

Billed to Insurance = $20.00
Network Discount = $17.00
Applied to Deductible = $0.00
Paid by Plan = $2.70
Paid at Visit = $0.00
Amount you may Owe = $0.30

First, the insurance networks to which she belongs beat her up to a $20/hr rate that she’s allowed to charge (actually, it’s a per visit rate, but this is what this doctor’s integrity works that out to), then forced an 85% discount on top of that onto her.

Where’s insurance industry competition?  Obamacare ain’t it, and yet it’s worse than the insurance régime before.

Health Law’s Uneasy Launch

In a Wall Street Journal article from which I copied the title, Christopher Weaver opened with some misapprehensions that are interesting for a WSJ article [emphasis added].

Can [the Health Law’s] mix of government subsidies and market-based competition extend health insurance to millions of people…?

Umm, what market-based competition, exactly?  The Health Law begins with a mandate that creates artificial demand.  The underpinning and beginning of this particular market is decidedly anti-competitive.  The Health Law continues and ends with mandated coverages—innovation not allowed except by government permission—and with government-permitted premiums.  There’s no competition present in the product mix, either.

Oh, and those premiums are not at all based on the risk being assumed; indeed, health histories of the enrollees are explicitly excluded from the premiums charged them.

There’s nothing at all competition-based in this privately funded, government mandated welfare entitlement program.