In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
Innovation can change the world… if the world lets it. Unfortunately, society’s gatekeepers make it a point to constrain, regulate, and control these ideas. But their power is limited, and the power of innovation is too great. Unfortunately for regulators, there are some technologies they can’t control.
“Everything is proceeding as I have foreseen.” — Emperor Palpatine, The Return of the JediJon Stewart made great comedic hay during the Bush Administration out of the enormity of Dick Cheney’s “Sith Lord” malevolence. Events in Iraq in the past week have made especially palpable Cheney’s Palpatine-like quality.As Iraq unravels, you may suspect that Cheney might now […]
Entrepreneurs are high-tailing it out of the United States, and it’s the politicians’ faultThe U.S. government is driving some of its most productive citizens abroad. The only beneficiaries are countries such as Singapore and Switzerland, which offer sanctuary to Americans fleeing avaricious Uncle Sam.Three years ago Eduardo Saverin, one of Facebook’s founders, joined 1,780 other […]
Politicians love raising the minimum wage because they don’t have to ask voters to pay more in taxes. They just dump the costs onto shop owners. But they don’t act like politicians and go into debt to pretend like they have all the money in the world. They face real world situations. And sometimes that means replacing workers with more affordable options...
A cushy job in Hawaii that pays six figures. A beautiful girlfriend/boyfriend. Job security and professional experience that gives you plenty of future opportunities. Would you throw that all away to do what you think is right? Last year, one government contractor did just that. And now you see the world the government tried to hide from you.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
Regulation is supposed to keep you safe and make the economy function smoothly. At least that’s what they tell you in the news. But there’s another cost to regulation. One that you won’t hear about unless you have to deal with directly. And for the people in the economy who do, they’re the ones who have to pay the final cost.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
Liberal supporters of the Affordable Care Act specifically, and big government in general, are quick with excuses for all the problems that Obamacare has been experiencing in these early days. We have heard: they did not have enough time, it’s complicated, it’s the insurance companies’ fault, we just need to make a few adjustments, and on and on. Do not believe any of these excuses; this is what happens when the government tries to substitute its wisdom for the market.
The failed website has received the most attention, but the problems in implementing this ultra complex law began long before the catastrophic launch of HealhCare.gov. Beginning almost as soon as the law was signed by President Obama, the administration has been struggling to make changes and adjustments in attempts both to fix flaws in the law and to appease special interest groups that support Democrats.
Since almost immediately after passage, union groups and some large employers have been applying for waivers from various facets of the law. Hundreds of waivers have been granted. The latest and broadest waiver is the one year delay in the employer mandate that would have gone into effect on Jan. 1.
Next was the botched launch of HealthCare.gov, the website that was finally supposed to bring Obamacare to the masses. With three years to build a website and over $600 million spent, the American people were given a nonfunctional product of such low quality it would have been given an F as a term project in a college computer science course.
Even before the Obama administration and their contractors could fix the website, we moved to the next setback: cancelled policies. Over five million people have received cancellation notices because their insurance policies do not meet the minimum quality standards listed in the Affordable Care Act, set to go into effect on Jan. 1.
The president and his supporters are trying to convince Americans that all of these myriad problems with the implementation of Obamacare are simply bumps in the road, normal as part of any new program in its early days. However, that is not true. This is, in fact, exactly what one should expect when the government is in charge.
F.A. Hayek explained this all over half a century ago, most famously in his book The Road to Serfdom. At the simplest level the problem is that the government can never have enough knowledge to properly guide a market through a command and control structure. A free market can adjust itself as prices and quantities change in response to surpluses and shortages, to profits and losses. A huge amount of information is efficiently aggregated and transmitted to all the market participants through the simple mechanism of prices.
The failures in the implementation of Obamacare are not outliers, unfortunate events due to unforeseen circumstances. The problems that have occurred and which will continue to occur are to be expected whenever government is in charge. Even really smart people simply are not smart enough to match the functioning of a free market.
When the government runs a market, price signals are either completely missing or distorted. On the health insurance exchanges, many people will get free or highly subsidized policies. This means the prices they are basing their purchase decisions on are different than the prices on which insurance companies are basing their decisions to offer those policies. By basic economics, this will ensure that our nation will over-allocate resources to health insurance and health care.
The cancelled policies are a perfect example of government conceit expressed through command and control trumping individual choice expressed through a free market. If health insurance were free, nobody would choose to have one of the policies that are being cancelled as they generally provided rather limited coverage. However, health insurance is not free and so quite a few people find that their best choice is to purchase minimum coverage rather than to risk going completely uninsured. Now the wisdom of the government has decreed that people should not have the freedom to make that choice. We do not know best; government does.
Government can do some things, but generally the places the government “succeeds” are in areas where the free market would not work, such as the provision of public goods like parks or national defense. Even in these cases, the quantity the government produces may or may not be the correct amount and the cost to provide it is almost surely much more than the efficient cost.
In answer to critics who will argue that these temporary setbacks are to be expected when such a difficult and far-reaching project is attempted and everything will operate smoothly after a little while, two responses are appropriate. First, exactly which government services are so well done that they inspire such confidence? In general, people dread interacting with the government, cost overruns are normal, and problems are routine. Second, such difficulties are not common when the private sector does it.
The proof of this second response is simple. Three private sector programmers in San Francisco managed to build a website, healthsherpa.com, over a weekend that provides anyone who inputs their zip code with all their federal health insurance exchange options instantly. Given one more night, they added a subsidy calculator, so that now, in a few seconds, Americans can find out everything the HealthCare.gov website is supposed to deliver, but cannot.
Everyone should be forced to go to this privately built website before defending HealthCare.gov and see how well it works. You get all the information you need within seconds. The private sector site is $600 million less expensive and infinitely more useful.
Regardless of what the law’s supporters say, the problems with Obamacare are part and parcel of what to expect when the government tries to control an important sector of the economy. There is a reason why the Soviet Union could not deliver consumer goods to its citizens in either sufficient quality or quantity. Similarly, China’s recent economic success is inextricably tied to its leaders allowing free market economics more room to operate in many areas of their economy.
Ronald Reagan famously said “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” With the government about to take over one-sixth of the American economy, we are going to have many opportunities to remember those words.
– Jeffrey Dorfman
This article originally appeared here on Forbes.com.