Market Process Blog

CNN Money provides more detail on the congressional healthcare plan, and some of the freedoms that individuals like and will lose with the new plan. Shawn Tully explains

“To be sure, it isn’t easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.

If you prize choosing your own cardiologist or urologist under your company’s Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests — you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills that herald a health-care revolution.

In short, the Obama platform would mandate extremely full, expensive, and highly subsidized coverage — including a lot of benefits people would never pay for with their own money — but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can’t have. It’s a revolution, all right, but in the wrong direction.” Read more …

F.A. Hayek referred to socialist’s ability to think they could plan an entire economy as the fatal conceit. John Stossel in a new townhall column merely calls it arrogance

Federal Government Was Culprit in Housing and Economic Crisis, Says Congressional Report. Economists have been arguing this for several months. Now a congressional report states that “government intervention created a nexus of vested interests – politicians, lenders and lobbyists – who profited from the “affordable” housing market and acted to kill reforms. In the short run, this government intervention was successful in its stated goal – raising the national homeownership rate. However, the ultimate effect was to create a mortgage tsunami that wrought devastation on the American people and economy.”

So was it the free market that created this problem? Only in so far as that those private firms were complying or responding to the incentives created by government regulation. It has been argued over and over again that government intervention and manipulation of monetary policy creates these unstable bubbles.

A key point here is that the government policy did accomplish its short-run goal, but the long-run consequences are devastating. Currently, there are economists and politicians arguing the Keynesian point that only the short-run that matters. That we must do something.

The interesting question to me is that now that government has been shown to be responsible will people pay attention. Will we let markets function unhampered now and demand less intervention in these markets, or will people continue to argue that government now solve the problem that they helped to create?

Many economists have long argued that prohibition of any good or service will have poor economic consequences. One of the conclusions that follow from this view is the legalization of drugs. While the economics of the issue is pretty clear, not all economists are willing to argue for legalization of drugs. However, a group in California is pushing for the legalization of marijuana to help solve the state’s budget problems. State lawmakers are bitterly debating how to close a $26.3 billion budget deficit that likely means cuts to state services. In February, Assemblyman Tom Ammiano, D-San Francisco, introduced a bill to tax and regulate marijuana like alcohol. Bill supporters estimate the state’s pot industry could bring in more than $1 billion in taxes. … Read More

Greg Sabin at Mental Floss notes some interesting taxes from around the country in his post 5 Tax Laws You Shouldn’t Have to Worry About Take a look and be thankful that you do not have pay these taxes, and then take a minute to reflect on the fact that law makers actually wrote, debated, and passed these various taxes.