Continuation of Facebook Discussion: My Re-re-rebuttal Re: privatization – I agree that Wall St. is fundementally broken right now, but so is our social security system. I would have much more faith in a system were workers could contribute to an account that would be theirs, so they could see how much money they had, how much they had put in, and what had been done with it. Right now, the payroll tax goes to the IRS, the Treasury borrows those SS funds for the general budget and replaces them with an IOU, and that's it. The “fixes” that have been done for SS and Medicare really haven't solved the problem of more benefits being delivered/promised than assets seized, it's just kicked the can down the road for another few years till the other party is in power, or the bureaucrat has retired. My personal idea would be retirement savings accounts, which could be administered by the government (although this could be problematic) but each person would have an individual account so they would be aware of their standing. Privatization does not necessarily mean that you put your money all in the stock market. A mixture of stocks and bonds (commercial and government), would allow the account to grow while also providing capital to productive areas of the economy. The main thing is the individual responsibility that is attached. The government could guarantee some bare-minimum quality of life to keep the elderly out of abject poverty, but the idea that you can retire at 65 and begin a life of luxury is a delusion that has been propagated for too many years. Our current system is based on the idea that 3-6 productive adults can support the retirement lifestyle of the elderly, but time and demographics have exposed this as the Ponzi scheme that it is (I'm kind of pissed at Madoff for popularizing “Ponzi scheme”, because now too many people use it indiscriminately) . Each person needs to be accountable for their own retirement, otherwise the music has to stop at some point and someone (probably a lot of someones) are going to be left without a chair (us). I completely, absolutely agree about military spending, prisons, etc. I think we have an obligation to maintain an elite military, but the amount of spending that has gone on in the last 10 years is getting to ludicrous levels, and many generals/admirals would admit that most of it has gone to unproductive purposes. Part of the problem is that these are lucrative contracts for some constituency, so it helps some politician to approve these budgets. More military spending = more handouts for Congress to give to their favored voters/donors (more likely donors). I hate it. On the prison front, we absolutely need to decriminalize a good number of drugs, most certainly marijuana. Non-violent drug offenders should not be in prison, and we shouldn't be paying to keep them there. I like that California is toying with the idea of taxing pot, I think that's a great move for the state. On the Constitution point, seems like “general welfare” is a far-cry from “personal health-care”. There are many things that the government must do because of the free-rider effect or tragedy of the commons-like behavior. These are things that can only be provided for the population in general but not subdivided to provide for each citizen. In my personal opinion health-care is not one of the “public-goods” that is best provided by the government. You could argue that there are externalities to someone being sick (contagious epidemic control, lost productivity in the labor-market, etc), but I don't think these factors are serious enough to cede complete control of the health-care industry to the government. I completely agree that we need better maternity care in this country, and would like to see resources shifted in that direction. But it's a big leap to go from that to single-payer health-care. Dunno. In terms of your “taxes/disposable income” points, what do you define as “disposable”? Is that after you pay for cable TV, soccer practice, and eating out? The national median income is $44k,
and that changes as you move from age-group to age-group, with younger people typically being in the lower income bracket and moving up as they age. I meant “dumb” in that certain people lack the mental capabilities to allow them the option of pursuing certain careers, even if they wanted to. Others lack the physical skills to pursue careers they may wish. I really, really wish I could play MLB baseball, but alas, I am horribly uncoordinated. That doesn't mean that someone who chooses a certain “non-intellectual” career is dumb, because freedom of choice is one of my highest ideals. I do agree with you that currently we seem to be so focused on certain types of human capital. Personally, I feel that a college education is held in too high an esteem, and this leads to people attending college who would be much better off doing other things, like going to a trade school or getting a job out of high school. The whole mindset of “college or nothing” is counter-productive, as too many people don't get much out of college other than some cheap thrills and a bunch of hangovers, all of an exorbitant cost.. I do favor allowing anyone with the motivation and commitment to go to college the opportunity to do so, but I would also favor tending towards the work study/loans course of action as opposed to straight grants, as I think people should view it as an investment in themselves, and take it seriously. I think more people are going to start looking at what it is in life that they enjoy, and pass up opportunities for more money in favor of opportunities for more enjoyable work or more time/freedom. You mention that it really has only been since WWII that the “American consumer” has been the be-all/ end-all of our way of life. I agree, but I think this is mainly because since the rapid expansion of government during the New Deal and WWII, the private-sector charity of citizens has sort of be crowded out. We stopped doing as much for our neighbor, and I think a non-insignificant part of that is because we've come to expect the government to do it for us. We've lost the personal connection with those we're helping. I don't think that's the only way to do things, but that's just my personal opinion. I agree a lot of our system is screwed up, with certain classes of people able to take advantage of the system (CEO's and other executives). But I think the way to solve that is to fix our broken corporate governance laws. It's ludicrous that corporate boards are filled with executives from other companies who have a quid pro quo relationship with the people they are supposedly “overseeing”. Corporate boards are the ones that are supposed to be out there making sure companies don't do really dumb things, but they've been asleep at the wheel too often, along with being outright complicit in the gross over-compensation of executives . We need to give shareholders more power. Executive compensation has gotten out of whack, and this is the means to reel it back in. I hate the argument that “We're paying a competitive wage for the best talent”. I really want to know what the replacement level value is for most CEO's. How many other mid-level managers could do that job nearly as well? I'm guessing a lot. I dunno, just a pet peeve of mine. It's something else we really need to fix. With regards to pharmaceuticals, and Lipitor in particular, you mention that these highest selling drugs don't have the highest societal benefit. Now you get into how do you define “societal benefit”. It's hard for me to imagine what sort of benefit the Jonas Brothers give to society, but obviously many people are willing to fork over their hard-earned money for the quality of life improvement afforded them by listening to or seeing the Jonas Brothers. I would say that the Jonas Brothers provide a societal benefit in the form of entertainment (I think the same argument works with the PDE5 drugs like Cialis and Viagra). With the regards to statins, you are right, it wasn't a lack of statin prescriptions that caused the high cholesterol in a vast swath of the American population, but the choice now is what to do with that. You can take a pill, or you can try to fix the root cause. Taking a pill is easier for most people, so they pay for that. I hope we can make the statins obsolete, and I think that concrete
identification (if that's even possible) of the causation of our cholesterol problem is an important undertaking. But let's say that a cause is pinpointed. Do you outlaw that food? What do you do? We have a pretty good idea that smoking vastly increases the chance of lung cancer, yet we still don't outlaw cigarettes. Could we outlaw a food that causes high cholesterol? If we don't, we're still going to need the statins. I want to comment on the notion that all the large pharma companies do is take government funded research and sell it at 100x markeup to the unsuspecting public. I think this ignores the amount of resources needed to take a drug all the way through the process to commercialization. How many of these smaller firms have ever run a Phase 2b, let a lone a Phase 3 clinical trial? The amount of resources that this takes is tremendous. I know a lot of it is outsourced to CRO's, but the capital has to come from somewhere. This is the reason the smaller firms have to partner up. If they didn't need something from the bigger firms, they wouldn't do it. Also, the arduous approval process has been complicated by our tort system, and the general public, which expect perfect drugs with no side-effects, ever. As you surely know, the human body is immensely complicated, and not only that, but the patient-to-patient differences are non-trivial. We're all individuals, and that sucks from a pharmaceutical standpoint. At what level do we hold pharma companies liable? Side-effects at the 10 parts per million level? 5 ppm? 1 ppm? Because if you have 5 million people taking a drug, even 5 ppm is a high number. And there's no way you can do clinical testing to identify these 5-6 sigma events. Now, this is not to excuse any company that knowingly releases a drug and covers up sideeffects. They should most certainly be liable and executives should be put in jail. But see Wyeth v. Levine for a truly screwed up application of the law. I guess I see how “profit-seeking” could be a hassle to acquiring a drug for other nations, but what's the alternative, as I personally doubt that the drug would be there if not for the “profit-seeking” in the first place. We do need to work on what to do with the biopharmaceuticals and generics thereof, as this is a big question going forward for the biopharma industry. But I can't see a command-economy producing the breadth of innovation that we've seen in the medical establishment here. How would you dictate where funds are allocated? The politician/bureaucrats would be beholden to the same influences you cite for the rampant military spending we now see. And after seeing how NIH/NSF money is allocated by grant review agencies, I'm even more pessimistic. It's all politics and who likes whom, not who has the best ideas. I at least want funding decisions made by people who pretend to care what consumers would pay for, as this to me is the definition of useful. I don't think we disagree on too much, other than the fundamentals. I would rather see us not give up some freedom in an attempt to improve quality of life. That's pretty much my underlying philosophy, I think of myself as a benevolent Kantian. I'll end with a few of the observations that have had the most impact on my life in the recent past. One is from a speech that was reprinted in the WSJ, the speaker of which I can't recall. He was talking about socialism in general, and mentioned that he had always been troubled with it, and came to the conclusion that it sort of removes the need for accomplishment in people. He was saying his father grew up poor, and worked as a janitor, and made enough to support his family, and was very proud of that accomplishment. But if the state is there to support you no matter what, that takes away the pride of someone like his father, because he's now doing something unnecessary. I'll always believe in having a safety net for those in need, but I also think we need to let people accomplish what they can by themselves. The other two I'm sure you've heard of, but I love these quotes none-the-less. “The problem with socialism is that at some point you run out of other people's money” by Thatcher and “It has been said that democracy is the worst form of government except all the others that have been tried.” by Churchill. I personally think that socialism and democracy are inherently incompatible as you will always have politicians pandering to one group
while robbing someone else. We don't know where we'd be right now without a free-market economy, but I personally believe we wouldn't be anywhere near the level of quality of life we have now without it. So, while it may suck, it's the best we have. And I think I need to finish up at 2300+ words.