"Private capitalism makes a steam engine; State capitalism makes pyramids." ~ Frank Chodorov
'Obamacare Nightmare Edition' of Ringo's Law and the Healthcare System of Doom
Column by Glen Allport.
Exclusive to STR
As I write this – October 28, 2013, more than four years after the column below was posted (here with minor edits; see the original at this link if you wish) – NBC News is reporting that the Obama administration “knew millions could not keep their health insurance" under Obamacare, and has known this for at least three years. Sources “deeply involved in the Affordable Care Act" have told NBC News that up to 75 percent of individual insurance customers will lose their existing coverage over the next year; one expert says as many as 80 percent may lose their existing policies.
Naturally, Americans are shocked to learn that their President has been lying through his teeth about this – after all, he has been scrupulously honest about everything else. Except for his plans, policies, intentions, actions, ethics, and a few other things. Other than that, total honesty from the man. But now this. Millions were counting on being able to keep their existing health insurance, and Obama has repeatedly assured the nation in clear language that we could all keep our existing health insurance – and keep our family doctors as well, among other things.
Not happening, though. Instead, many people are losing their current policies (especially those with dangerous jobs, for example) or being priced out of the market.
Indeed, the "affordable" part of Affordable Care Act apparently means "theoretically affordable to someone, somewhere" instead of the old-fashioned, more conventional definition. Always with the cutting-edge ideas, these Big Government people.
Even many rabid Obama supporters are stunned at the rate increases that they, personally, are being hit with. Apparently, these costs were supposed to be borne by Some Other Guy, who evidently isn't pulling his weight.
This nationwide sticker-shock is very real and has become a threat to Obama's popularity numbers, which Our Leader and his minions are surely not surprised by. According to a story in Forbes, Obamacare's Website Is Crashing Because It Doesn't Want You To Know How Costly Its Plans Are. To even see the plans (and prices) being offered, one has to fill out many pages of personal information at the website (sheesh, doesn't the NSA already HAVE this information?), and this has created a huge bottleneck, contributing to the near-total failure of the Obamacare site. There is also the view, put forth by Jon Rappoport among others, that this whole fiasco is just another part of a long-term plan to destabilize America.
Of course, that's just too scary to be real. Right? In any case, there are millions of people not only losing their existing, affordable medical coverage but also losing full-time employment, either being let go or downsized to under 30 hours a week because Obamacare rules make it too expensive for their employers to keep the people on full-time.
Obamacare generously (i.e., with your money) offers subsidies to people below a certain level of income. I know this in part because our insurance agent tells us she will be attending a seminar to learn the relevant details; applicants will need, she says, to fill out 19 pages of financial (and other) information in order to see IF they qualify for a subsidy.
Obamacare causes havoc in many other ways, as well. I mentioned in Had Enough Government 'Regulation' Yet? (August 2010) that the new law (not to mention plenty of other government action) takes care of both insurance companies and Big Pharma at the expense of the rest of us. For example, in a discussion of how the FDA is helping a drug company at the expense of diabetics and anyone else who would like to inexpensively reduce damage to their body from blood sugar, I wrote:
We might be able to buy pyridoxamine from its new Big Pharma owners in 2014 (or never, if the firm runs out of money for clinical trials). In the meantime, millions of Americans will suffer from this imaginary transformation of a vitamin into a drug, as the kidney damage, eye damage, and other harm that might have been inexpensively prevented by pyridoxamine goes unchecked (and won't that be terrific for the fiscal health of Medicare?). Later, when the "drug" version – the identical substance – finally becomes available again, Americans will have to pay Big Pharma's insanely high prices for a cheap, natural vitamin. Medicare and other government health plans will ALSO pay the inflated new price, and without discounts: Obamacare forbids anything so déclassé as negotiating quantity discounts from the drug companies, or even importing lower-cost drugs.
[That link is now dead, unfortunately]. Obamacare apparently allows drug companies to charge ANYTHING for their products, and both government and private insurance companies simply have to pay what is asked or their customers get to do without. The efficiencies of this approach are obvious and will naturally lead to lower prices. Or maybe not.
I would go on, but if you live in the United States, you are reading and hearing about the details of this nightmare every day. More important than today's specifics is that the overall shape of this disaster was predictable years ago, because Ringo's Law is as real and powerful in its predictive power as are quantum mechanics and relativity theory. Below, a look at Ringo's Law from 2009, especially as it relates to government interference in health care.
Some years ago, noted philosopher Ringo Starr described an important and now-famous discovery: "Everything government touches turns to crap."
That observation clearly deserves elevation in status from the mere "something Ringo said" to the more formal Ringo's Law. Ringo's Law generates accurate predictions and explains events in useful fashion; it is no less scientific than Newton's laws of motion. For example, the Law predicts and explains the problems seen with corporatist healthcare, as found in the United States. The Law also predicts and explains the problems seen with government-run national healthcare, as in England, Australia, Canada, Cuba, and elsewhere. Fortunately, Ringo's Law also points the way to solving those problems by creating a low-cost, efficient, customer-pleasing healthcare industry that is not corrupted, diminished, or made unaffordable by government involvement.
Starr formulated his Law after decades of observing the dynamics of government action in his native England (see, for example, the song Taxman written by Starr's band mate George Harrison) and in his travels around the world. In 2005 Starr moved to Monte Carlo to escape the crushing tax load in Britain.
Ringo's Law and The Destruction of American Healthcare
American healthcare should be cheap and getting cheaper, easy to access, effective yet rapidly improving, and with nearly endless options for treatment, pricing, and method of delivery. The cheaper-faster-better dynamic we enjoy in high-tech areas that are not blighted by government regulation and control could and would apply to the medical and pharmaceutical industries if only we let it.
Instead, American healthcare has been broken for decades and continues getting worse. Prices are bizarrely, absurdly high and customer satisfaction is low. Government regulation (more accurately termed "protectionism") for the medical and pharmaceutical cartels has not only launched costs into the stratosphere but also reduced innovation and customer choice, harming the health and well-being of millions. That last is no overstatement; for instance, here's William Faloon of the Life Extension Foundation on why "the FDA is the number one cause of death in the United States", and here's Faloon this month on how government malregulation of the generic drug industry leads to costs being eight times higher than they should be (for generics!); both articles are well-researched and heavily detailed.
We now have an incredibly expensive healthcare system that is difficult and even anger-inducing to use, and which has had the spontaneity and innovation crushed out of it – meaning that, among other things, the system offers too-few choices and often creates poor outcomes.
Ringo's Law tells us the cause of these problems is government interference in healthcare, which began ramping-up in the 1960s. That is not to say government wasn't meddling in, raising the costs of, and otherwise harming healthcare (and squelching health freedom) even earlier – it was – but the destruction of what had been widely hailed as the best healthcare system in the world began in earnest during the turbulent years of the Johnson administration, in particular with the start of Medicare in 1965.
By now it should be clear to anyone: This government "help" has made things dramatically worse in healthcare, just as government reliably makes things worse in all spheres of life that government involves itself in. For many reasons, coercive government is the worst way to do anything. Like gravity, Ringo's Law is a built-in rule of the universe, omnipresent and unavoidable. There is no country on Earth where the Law is not conspicuously on display: "Everything government touches turns to crap."
What was healthcare like in the U.S. before the 1960s? "Less crappy" would be accurate but not detailed enough for our purpose. In many ways healthcare of the time was primitive; after all, science and technology have advanced hugely in the last half-century. But in terms of delivery of services, pricing, and freedom to choose and control one's own medical care, the healthcare market in the pre-HMO, pre-Medicare era was far better than what we have today, and not unlike the modern market for computers and electronics: inexpensive, high-quality, and easy to access.
"Easy access" included house calls by the family doctor, something I remember well from my own childhood. House calls were both common and reasonably priced. An account by Eugene Scheel in the Washington Post tells us that office visits in rural Virginia during the 1950s cost $3, while house calls were $5, in an area where the typical farm wage was $1 an hour. A doctor recalls practicing in the area at the time: "I collected about 80 percent of the money. The rest of them really couldn't pay; they just didn't have it. I don't think any doctor turned anybody down." So an office visit cost the equivalent of three hours wages for a farm hand, while a house call was the equivalent of five hours wages. And a doctor's overhead (much of today's is government-imposed) was low enough that treating the indigent without charge was commonplace.
This also shows why insurance, although increasingly common, was not such a major issue in the 1950s, just as insurance for your computer gear (well, unless you've got a MacBook Pro or other high-end machine) is a non-issue today: prices were low enough that even those at the low end of the economic scale could generally afford them. By its nature, insurance is something to help pay catastrophic costs: rebuilding your house if it burns down, for instance, or an equally catastrophic medical problem – as opposed to prescriptions, office visits, and other medical maintenance. You don't buy insurance to cover anything easily affordable, and general healthcare WAS easily affordable in the 1950s – despite, as mentioned earlier, previous decades of interference in healthcare at the federal, state, and local levels. It took even more interference – it took the Great Society mentality of the Johnson years – to begin the process of really wrecking American healthcare.
The Positive Side of Ringo's Law: When Government Leaves The People Alone
In stark contrast to drugs and medical care, most modern technology is vastly less expensive today than in the 1960s, despite the half-century of inflation that has eroded the dollar's value to near-nothingness. The U.S. government redeemed dollars from foreign governments for gold at the fixed exchange rate of $35.00 per ounce of gold in the 1950s – and indeed until Nixon defaulted on U.S. obligations in 1971. At this writing, gold is $964.60 per ounce (update 10/28/2013: gold is $1351.10/oz today) – so saying that "the dollar has lost value" is the understatement of the century. Despite such extreme price inflation (due to monetary inflation by the Federal Reserve), "cheaper, faster, better" has been our experience with electronic and other technology in the last fifty years, a trend which continues: "Intel's capacity to produce cheap transistors is exploding faster than the existing computer industry's ability to absorb those transistors," reports a July 30, 2009 article in Ars Technica, which, intriguingly, is about the Intel Health Guide, a computerized medical diagnostic and monitoring device for the home. (This continues, even in 2013: just last week, Apple upgraded their 13” retina MacBook Pro with newer processors and better graphics and battery performance, faster flash storage, faster WiFi performance, and a pricetag $200 lower than its predecessor. THIS is how the market works.)
It is easy to lose sight of how dramatic the progress has been in technology. Last August, on the 27th anniversary of the IBM-PC's introduction, Wired Magazine reminded us how expensive yet pathetically weak that machine was by today's standards: Customers paid $6,000 (over $14,000 inflation-adjusted) for a 4.77Mhz 8088-based computer with 256 kilobytes (not gigabytes or even megabytes) of RAM, no hard drive, and CGA color graphics (optional) with only 16 colors and resolution of just 320 x 240 pixels – for, yes, the entire screen (there was also a monochrome graphics mode of 640 x 200 pixels). This clunker had dramatically less computing power, less graphics power, and less memory than one of today's low-end, give-away cellphones – in other words, the price for that much computing power has effectively gone from $14,000 to zero.
Talk about progress! Don't think for a moment that this incredible drop in prices combined with such breathtaking advances in power came cheaply for the manufacturers: Wikipedia reports that simply building a chip fabrication plant costs over a billion dollars, with $3 billion to $4 billion price tags not uncommon. This mirrors the cost structure of modern drugs, which are – like computer chips – mostly intellectual property and which have huge up-front costs to develop, while unit production costs soon drop to near-nothing. Yet for the consumer, prescription drugs are insanely expensive while computer chips are the opposite: insanely cheap, almost giveaway-cheap.
Are you getting the picture here?
Your healthcare options should be as varied, affordable, and pleasingly efficacious as the choices at your local computer or electronics outlet (or on the web). Why aren't they? Why is healthcare such an expensive, frustrating, choice-limited quagmire? Easy: Ringo's Law.
The positive trend of lower prices combined with rapidly-improving products, seen to one extent or another in every area of technology not impaired by government interference, was broken in healthcare – and not just broken but actually reversed.
Healthcare prices didn't just fail to drop, they went up – and they went up enormously, at higher than the general rate of inflation. Meanwhile, progress (better products and better medical outcomes) in the field of health and medicine has slowed to a crawl relative to what happens in a free market. Whether it's painkilling drugs for patients in agony, drugs (for cancer or other diseases) that haven't made their way through our many-years-long, $800 million (sometimes as high as $2 billion) approval process, safety for those drugs, free clinics for the poor, or any number of other things that you might want for the health and well-being of yourself or your fellow man, government often literally forbids you from obtaining it – and where it doesn't do that, government regulation either reduces choice, degrades quality, or puts the cost in orbit – or all three.
Compare that with the life-saving regulation of electrical devices (and other things) by Underwriter Labs, a private firm which has been providing efficient, low-cost, and effective market regulation and safety testing since the late 1800s. If you look, you'll probably find a half-dozen or more electrical devices in your home that are "UL listed." What a shame that America's government healthcare regulation isn't as efficient, as cost-effective, as free from corruption, and as capable as is market regulation by UL. But then, given the reality of Ringo's Law, how could it be?
A market free of government interference is what most Republican voters think they are supporting, but what the Republican Party supports – especially in the actions of its members in office (Ron Paul excepted) – is not free markets but corporatism. The difference between genuine free markets and corporatism is essentially the difference between a politically free country and Hitler's Germany or Mussolini's Italy: corporatism is basically fascist in nature, with business and government entwined in an unhealthy embrace of the financially powerful with the politically powerful. Regular, non-powerful people are simply out of luck. A perfect (and rather sickening) example is the USDA forbidding cattle ranchers (and any private firm) to test their own cattle for Mad Cow disease, something unthinkable in a free society. This elimination of competition in the area of food safety saves big corporate producers from the expense of testing their own cattle for Mad Cow or from suffering loss of market share when consumers decide their health is worth changing suppliers for. That's exactly the kind of thing Ringo's Law predicts that government will tend towards: "consumer protection" agencies being used to improve corporate profit at the expense of ordinary citizens – even at the expense of their health and safety.
Speaking of corporatism, you might think that Big Pharma would be adamantly opposed to, and downright afraid of, Obama's proposed healthcare overhaul, but it turns out that what Big Pharma is actually afraid of, apparently, is that the bill might not pass, so the drug industry is now planning to spend $150 million on television ads supporting Obamacare. Does that suggest the proposed legislation will benefit the Little People (e.g., you), or that it will benefit the drug companies instead, while claiming to benefit the Little People? By now, you already know which answer Ringo's Law predicts is the more likely.
To sum up America's healthcare situation from 1960 to the present: Progress and innovation have slowed, choices have been restricted, efficacy and even safety have been compromised, and prices have skyrocketed beyond many customers' ability to pay. Once again, this is the opposite of what a free market system provides.
The People Want Change!
Naturally, most of our government-educated citizens now believe that even MORE government involvement is the only answer to our healthcare problems, in the same way that a late-stage alcoholic believes only another bottle of gin can solve his problems. What other answer could there possibly be?
Good thinking, America! "More of what caused the problem in the first place" is exactly the response our Wise and Fearless Leaders have used to fix our recent economic and financial problems – the problems caused by too much debt, too much inflation of the money supply, too much government malregulation replacing honest market regulation, and too much government spending.* We can all see how well that's working! Except, you know, for unemployment being at a 26-year high and record home foreclosures ("the future doesn't look much better," adds CNNMoney.com) and, well, maybe a few other things, including plummeting tax revenues and the coming Soviet-Union-like collapse of the United States according to some (except that the U.S. is not nearly as well situated for dealing with collapse as Soviet society was; video, 10 min 14 sec.). But the U.S. government did give trillions of your dollars to bankers and other folks who really matter, so at least some people are doing well.
Yes, boys and girls: government is the agent I want running the healthcare system, and never mind that the Constitution (ha!) makes no allowance whatsoever for such a thing. Because what else, other than government, could possibly fix the mess our healthcare system is in? I also look forward to government-run restaurants, to a government-run music industry, and to replacing our chaotic, unregulated computer, software, and electronics industries with compassionately run government versions, where profits no longer come before people.
The Future Awaits: Predictions Following from Ringo's Law
Back to reality: I see doom in our future, big-time. Call it the Healthcare System of Doom, where politicians run the medical system with the same wisdom, compassion, and efficiency that they have used to run the War on Drugs and the Pentagon – but without the wealth to provide much actual healthcare, because those same politicians have already bankrupted and indebted the nation to a level beyond anything previously seen in world history. Implementing the corporatist Frankenstein of Obamacare will crush whatever is left of the U.S. economy and dramatically tighten the Orwellian police state the nation has already become.
The Healthcare System of Doom will fit right in with the dark wreckage of American society now taking shape around us. Tyranny – already legislated into place** – will be increasingly applied, crushing love and freedom along with any remaining prosperity. The attempt to fix healthcare, or any of our other problems, with more government help of any kind will only hasten the day when average Americans at last look away from the corporatist and government propaganda streams to see, with horror, the cruel shape of the future bearing down upon them. Ringo's Law cannot be flouted forever without consequence.
What, if anything, could save us from the grim rip-tide of government-imposed tyranny and government-caused poverty we find ourselves caught in? What would not only restore American healthcare to its "envy of the world" status but also return this nation to the free and welcoming beacon for mankind*** it was meant to be?
Only two things are needed: first, a return to wide understanding of Ringo's Law. Coercive government eventually destroys society because, at bottom, coercion is evil. Thus, "That government is best which governs not at all", as Thoreau put it in Civil Disobedience. Reduction (and eventually abolition) of government coercion is the necessary first step to restoring sanity and prosperity for America. The second needed element – and the element missing from our original plan as a nation – is widespread (but non-political) commitment to compassionate treatment for all and especially for the young. Together, these are the only path to a world of love and freedom, and to wide and sustainable prosperity.
Solving our healthcare problems would be only one of many positive side-effects from choosing love and freedom over their opposites. No other method will do the job.
* Neil Barofsky, special inspector general for the Troubled Asset Relief Program, recently reported that "The total potential federal government support [to fix the financial system] could reach up to $23.7 trillion."
$23.7 Trillion to Fix Financial System? by Matthew Jaffe, ABC News, July 20, 2009
For comparison, the entire world GDP is only about $60 trillion (per Wikipedia). Wikipedia also reports that "The total value of all gold ever mined would be US$4.78 trillion at [$941.35]" – so U.S. taxpayers have – just recently, in response to the financial crisis – been put on the hook for more than FIVE TIMES as much wealth as the value of all the gold ever mined in history. That's in addition to our official $11 trillion national debt (itself more than twice the value of all the gold ever mined) not to mention our $50 trillion to $100 trillion (estimates vary) in unfunded obligations for Medicare, Social Security, and so on. We now also have trillion dollar+ annual deficits, apparently forever or until the United States collapses, whichever comes first. For a page with images of various amounts of cash, from a single $100 bill to a trillion dollars in hundreds, click here – a stunner, even if you've seen it before. It seems clear that the relative market values of gold versus the U.S. dollar will change dramatically, and probably soon. Other serious (and even catastrophic) changes beyond merely monetary consequences are implied by the numbers as well.
** It appears the Halliburton-built detention camps discussed in the linked column are now being staffed; here's a National Guard advertisement for "Corrections Officer – Internment/Resettlement Specialist". If you're wondering what the Army is doing with a string of "internment/resettlement camps" on U.S. soil, you aren't alone. The ad is undated but code in the "apply now" button says 7-16-09. The "Job Description" includes this:
As an Internment/Resettlement Specialist for the Army National Guard, you will ensure the smooth running of military confinement/correctional facility or detention/internment facility, similar to those duties conducted by civilian Corrections Officers. This will require you to know proper procedures and military law; and have the ability to think quickly in high-stress situations. Specific duties may include assisting with supervision and management operations; providing facility security; providing custody, control, supervision, and escort; and counseling individual prisoners in rehabilitative programs.
*** Most Americans today seem unaware of the exhilarating, truly historic and compassionate, world-changing intent that our founding generation had for their new country. From Thomas Paine's Common Sense:
"O ye that love mankind! Ye that dare oppose, not only the tyranny, but the tyrant, stand forth! Every spot of the old world is overrun with oppression. Freedom hath been hunted round the globe. Asia, and Africa, have long expelled her. — Europe regards her like a stranger, and England hath given her warning to depart. O! receive the fugitive, and prepare in time an asylum for mankind."
August 1 – 9, 2009