Category Archives: Capitalism

No one is worth that amount of money! What Dictates Someone’s Payscale?

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

This last election showed that painting those with money out to be people who have unfairly attained wealth at the expense of the masses is sadly resonating here in America. We are supposed to be the land of opportunity; where one can achieve as much success as their imagination, hard work, and risk can take them. Yet once they do, the quasi-socialists of today attack instead of praise, and the masses harbor jealousy and animosity instead of admiration and respect.

One of the arguments that irritates me like sand encrusted toilet paper is the no-one-should-be-worth-that-much argument. Fairytales like Robin Hood and almost every movie with a happy ending have ingrained us to believe that just by being altruistic, hard-working, and smart, you should achieve fame and fortune.Robin Hood

The reality is that Robin Hood would have likely been shot, and rightly so—he’s a thief. Hard work doesn’t come close to guaranteeing you a better living—it most often just leads to more hard work. Altruism is hardly a harbinger of hope for wealth neither. Do you know of any active duty soldiers listed on the Forbes 500 list? Neither do I.

So do the socialists have a point? Let’s apply some logic with a side of skepticism.

Are people who are rich stealing from the poor? I mentioned I don’t know of any soldiers on the Forbes 500, but I don’t know of any career criminals on there either. Contrary to the Hollywood portrayal of high-profile con artists, et al., the fact is that most thieves are broke and about two steps away from a lengthy prison stay. So they certainly don’t make up the 2%.

Are they taking advantage of the poor by paying them less than what they are worth? Anyone with a modicum of understanding in regards to economic history knows that companies competing in a free market yield a better product at a lower cost. But what people so often fail to realize is that employees are competing in a free market too. If a person goes to work somewhere, and the company doesn’t pay well, most go work somewhere else. Companies who have a reputation for thrift eventually only get the dregs of the working world applying, and then it’s not long before they go out of business at the mercy of companies who opted to treat their employees better.

Business moguls of a past era such as Andrew Carnegie, Cornelius Vanderbilt, and John D. Rockefeller were not competing in a free market; they were collusionists and monopolists. But we Americans created laws to protect the consumer from capitalists who endeavored to destroy the free market over a century ago by passing anti-trust laws and prohibiting collusion. There’s likely no one left that has been taken advantage of in such a way.

Andrew Carnegie, Cornelius Vanderbilt, John D Rockefeller
Andrew Carnegie, Cornelius Vanderbilt, John D Rockefeller

So then why are NFL players paid millions while soldiers are paid modest 5-figure salaries? I’ve struggled with this one for a while, because I don’t feel good about it either. As I racked my brain for answers, it dawned on me that the number one factor in what people get paid is irreplaceability. If we’re talking about entrepreneurs; add risk to that.

I know the anti-capitalists on the left hate corporate bosses, but the fact is that every one who has ever dreamed, has dreamed of owning their own business or being independently wealthy. So let’s logically draw the scenario out. If you started your own company, and within that company you had a need for a job that was fairly rudimentary, would you pay someone a fortune to do it? Of course not. You would hire a person at a low wage, because no matter how dirty, altruistic, or physically demanding that job might be, if you are 99% sure you could train a gorilla to do it, why would you pay anyone more? If the person doing it leaves, it’s pretty easy to plug a new person into the mix and have them trained and running in little time.

However, if your new business involved a biological research lab which required someone with a background in the study of the molecular structure of cancerous cells and how they react to radiation exposure, you can’t just grab a homeless guy off the street and hope for the best, can you?

So when we look at most everyone who is employed, the more money they make is in direct correlation with how easy it would be to replace them. As much as it pains me to say this, many have the abilities required to be a school teacher, police officer, or a soldier. It is not however easy to find a guy who can jump three feet, catch a football in one hand, while being tackled, and yet somehow have the wherewithal to reach out his toes to get both feet in-bounds. It aches my heart to know an athlete makes more than a soldier, but my logic generally holds true.Detroit Lions v Seattle Seahawks

When it comes to entrepreneurs, I mentioned the addition of risk. Any gambler or stock investor will tell you that if you want to make a million dollars, you have to start with 10 million. Those who have only seen movies about gamblers and investors have been duped by Hollywood into believing that you can put up a dollar and win millions. You might think the lottery disproves this, but the fact is that for every one million won, there are several million lost. Entrepreneurs make money by risking almost all that they have on an idea that they think you the consumer will consider irreplaceable, such as your smart phone that you can’t live without. Therefore, irreplaceability + risk = success.

So the bottom line is that hard work is only a good way to not get fired, altruism is a good way to be loved by many, and intellect is merely a good foundation for success, but only if applied in such a way as to make you more irreplaceable.

If you want to make a fortune, you must find a way to become one in a million. If you really want to make a fortune, put your bank account, home, and first-born at risk and invent something irreplaceable. But all that being said, virtue is its own reward, and as long as you are happy in your career, and you feel good about who you are as a person, try being happy instead of jealous for those who have attained more than you. As long as they did you no harm, there’s no logical reason to advocate taking what they’ve achieved away from them or hating them for achieving a success greater than your own. The American dream isn’t just for you—stop being selfish. If you must have an emotion about them, try being motivated to be like them instead of tearing them down.

Should I Buy a Hybrid?

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

Let me start off by saying that I love the sound of a glorious V8 bellowing out its sonnet of horsepower as it kicks tire dust at the econo-boxes on the road of life. Conversely, there is nothing awesome about the silence with which a vehicle, not running on thousands of awesome explosions per second, goes about its business. If I were a spy or a serial killer, I could see the advantage of the silence an electric vehicle affords, but there is just something about the sound of suck, squeeze, bang, and blow that pulls at every emotional cord I have attached to me that a quiet whoosh will never fill.Corvette ZR1

Corvette ZR1

However, the other thing that I am passionate about is science and technology. So much so, that this whole electric vs. combustion thing has me in serious turmoil. So with that in mind, let me try to put any rhetoric aside and talk about this new-fangled technology objectively, from a scientific point of view, but at the same time, dispel some of the nonsense along the way.

I hate to do it to you, but let’s talk about physics. In order for something to move from point A to point B, Sir Isaac Newton says that a force must act upon it. The greater the mass, the greater the force required. So a Toyota Prius, if it dumped its batteries, electric motor, and all their relevant components, would lose several hundred pounds of weight, which would lead to a significant decrease in energy needed to move it. So why add the electric motor at all?

Toyota Prius
Toyota Prius

Well, the hybrid does something that appeals to my inner scientist, and should appeal to everyone—it uses something all other cars waste. Normally when you hit the brakes, what happens is you are turning kinetic energy from your moving car, and converting it to heat by clamping the brake caliper’s pads onto the brake rotors. That is what we will call “wasted energy” as that heat does nothing useful.

Some brilliant folks long ago came up with an ingenious idea to put generators on the drivetrain, so that when you apply the brakes, instead of pads clamping down on rotors, a generator is activated. That generator then creates added resistance making it more difficult for the wheels to roll, which slows the car down, but in doing so, it generates electricity at the same time. So the kinetic energy that was once wasted, now gets put into batteries for later use. No scientific minded person can argue with the beauty of turning waste into wattage.

Now that we’ve explained how hybrids generate electricity, who are they good for? If you drive 30 miles to work each day, and it’s mostly highway driving with little to no braking, yet you decided to buy the Prius in order to save the planet, you’ve not done your homework.

Hybrids are only beneficial for people who do most of their driving in stop and go situations where they can take advantage of the energy that regenerative braking creates. If you’re not using your brakes, you’re just carrying around a large mass for the gas engine to transport and burning more fuel doing it. You should have bought a Volkswagen diesel, or something of that nature, instead.

I won’t go into the studies that have shown that hybrids have a larger carbon footprint than a SUV because of all the extra carbon created in shipping the materials for that battery, their assembly before ownership, and disposal thereafter. For now, I’ll just discuss the merits of owning one to the user, not its impact on the planet as a whole.

Unfortunately, the best merit is that hybrid consumers are simply helping to subsidize the advancement of technology in this area. In theory, if the vehicle were purely electric, it would be a much better car. But the technology simply isn’t there to achieve this for one simple reason; batteries.

As we discussed, weight is the enemy of efficiency, yet all hybrid-electric cars have a gas engine attached either as a generator, or a 2nd drivetrain, which of course, is quite heavy also. So why not dump the gas engine? Because battery technology quite frankly is lacking.

Without the gas engine, the range in a hybrid is going to be severely less than a gas-burner, even if you didn’t turn on the radio, A/C, and lights. If you need to use such accessories and suffer from leadfootitis, you’ll be lucky to get 50 miles before you need more juice.

But the problem with the batteries isn’t just their limited range. The other problem is that batteries simply don’t recharge fast enough. The plug-in electric vehicles must generally be plugged in for approximately 12 hours to achieve a full charge.

So to recap; if you were to buy an electric car using today’s technology, without a gas motor attached, you would be able to drive around 70 miles or so, then instead of pulling into a gas station for 10 minutes and refueling, you park it, plug it in, grab dinner, go to sleep, get up, eat breakfast, and it should be just about done refueling and ready to go—another 70 miles.

However, technology and free market capitalism continue to drive technology at an amazing pace, and when battery technology catches up to the rest of the technology, we’ll have an amazing product on our hands.

Nuclear Power FacilityBeing a huge proponent of nuclear power, I believe nuclear powered electrical plants providing power to practical electric vehicles is likely the way of the future, leaving gas combustion engines for weekends and racetracks. The two can certainly coexist on this planet. But for now, I’ll keep my Corvette, and you can subsidize the electric vehicle technology as it strives to attain practicality. I don’t like being a guinea pig, and don’t like rolling up in stealth mode.

So my honest analysis. If you’re purely an in town driver, logging 20-30 miles a day, and doing plenty of braking throughout; then a hybrid or electric will be a decent car for you. Especially since Uncle Sam has seen fit to rob us in order to provide you with a juicy tax credit instead of letting free markets advance the technology at its natural rate.

But if you’re logging 100 miles a day, mostly highway driving, and need longer range; I promise you will hate yourself more than that time you woke up after a drunken bender next to a goat and an empty bottle of Jack Daniels.

It’s spelled F-O-X News. Enough With The Hate, It’s Pathetic

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

One thing that irritates me like pepper spray on my nether regions is when people use the term “Faux News” to describe Fox News. I’m not a dog being led around by the News Corp leash; I get my news from a number of sources. I use Google Reader with feeds from approximately 40 different outlets focused on different themes that are generally news or science based. As someone who prides himself on exercising proper skepticism, I feel it is important to be quite diverse in gathering information. So I look for numerous sources, and then do my best to weed out the ones who prove to be less than honest. I would never recommend someone getting all their news from one source.Fox News

There are a couple of issues on the “Faux News” front that annoy me in particular. The first being that people often don’t seem to differentiate opinion from hard news.

On Fox for instance, Bill O’Reilly, The Five, Red Eye, and others are opinion, while Brett Baier, Shep Smith, and others are hard news. The hard news people just bring you the stories and facts. Opinion however, is people interpreting those facts and providing analysis of what they presume those facts mean.

Opinion journalists therefore are often prone to spin and distort things in a light that is favorable to their ideals. You’re a fool if you think CNN, MSNBC, Bill Maher, Jon Stewart, and the networks don’t spin too. That’s just what opinion journalists do. But you can’t rightfully attack a network based on the opinions of one panelist. That’s like attacking the NFL because of what Mike Vick did. If Piers Morgan or Sean Hannity misspeak in some way, attack them, not their networks as a whole, because I guarantee there are others in their organization that are nothing like them.

Fox, MSNBC, CNN and the networks provide plenty of hard news that is good and factual. The charges that Fox lies are generally from people who just don’t agree with the opinions of the op-ed talent, and can rarely cite examples where the hard news people blatantly lied. Opinions, by definition, do not have a right or wrong answer. If you don’t like the opinions of the analyst, then don’t watch, but insulting them because they don’t agree with you is childish and pathetic.

The problem with hard news, is that it is often boring to people. News agencies have been delivering hard news for years, but once opinion programs started picking up entertaining talent, people preferred that over just a boring rendition of the facts. Human nature seems to be that most of us like hearing from people we think are similar to us because we trust those people more.

Jon StewartSo while some think opinion is bad because it distorts facts, the truth is that it gets more people interested in the news who otherwise wouldn’t be. People like Jon Stewart, Bill Maher, and Greg Gutfeld bring news with humor in such a way that younger crowds who would never watch hard news all of a sudden find themselves caring about the issues of the day. The more people learn, the better off we all are. We didn’t get to the top of the food chain by being ignorant.

So being the free-market capitalist I am, I love that the news has evolved to meet the consumer’s wants, instead of making us suffer through boring anchors of old who are just as likely to put me to sleep as they are to pique my interest. More importantly, I’m happy we have freedom of the press so left-leaning folks can watch MSNBC and I can watch Fox.

The other problem I have with the Faux News folks, is they’re not only insulting Fox, but they’re insulting everyone who watches it. Being a Libertarian, I love that Fox allows people like John Stossel, Greg Gutfeld, and Judge Napolitano to have a voice. Most other news media often ignore libertarians, yet Fox kills in ratings because it provides information to non-left-wing people like me that we would otherwise not get.Greg Gutfeld

To me, it’s said with the same hate and ignorance used by racists, sexists, and other hate groups. I would almost never watch MSNBC because of their statist bias, but I don’t insult them for it. If the Michael Moores and Janene Garafolos of America want a news program to watch, MSNBC is there for those people; more power to them.

The bottom line is that America is too often a nation of haters. Hip-hop music lovers call people who like country music inbred. Rock lovers call people who like rap music thugs. Conservatives call leftists commies; the left call conservatives greedy bastards. Just about everyone calls libertarians anarchists or potheads, of which I am neither. The intent behind these insults is to demean those different from you, which is no different from all the racial, homophobic, or sexist epithets people used in the past.

Piers MorganIf you feel the need to insult someone who is different from you or has a different opinion than you, you are the problem in my opinion, and it’s time to grow up. America’s freedom and free markets guarantee that no matter what you like in this world, as long as it doesn’t threaten someone’s rights, you have a right to consume it or sell it. The left would be furious if people like me tried to get MSNBC off the air, yet they’ll sing it from the mountain tops that Fox lies, and should be shut down.

I’ve always said, if you can’t win, don’t bemoan your competition, motivate yourself to be better. If you find yourself on the losing end, the problem isn’t your competition; it’s you. So until the other networks start beating Fox, maybe they need to look in the mirror and see what’s wrong with them that people don’t care for their message as much. But to sling insults and demand the competition be shut down, while it would make Hugo Chavez proud, has never been, nor should ever be the American way.

So you watch yours, I’ll watch mine, and let’s stop insulting people because they differ from you. The beauty of America lies in our differences, not the people who like to attack us for being different. We all know racism and sexism are bad, but it’s time hate in general be seen for the unhealthy emotion that it is.

The Insurance Mandate. What’s your paradigm?

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

I had a debate with a friend of mine about the insurance mandate. He professes to be a limited government guy that supported Reagan, yet he recently voted Democrat twice, is a proud union employee of the state, and supports socialized medicine. You know—a traitor. (I am kidding; he is a friend, just a misguided one from where I sit.) Needless to say, he and I don’t agree on much these days politically.

My work history includes years in the insurance business, so I have to say that the argument for the health insurance mandate makes mathematical sense—sort of. We pay at an early age into insurance we will rarely use while we’re young and healthy, so that later in life when we start to need it more, that money is there waiting for us. Think of it as health savings and insurance.health_benes_claim_form1[1]

By doing so, we increase the insurance company’s revenue now—and thus reduce their losses which results in lower rates for everyone later. In an odd sort of way, it’s the same as the argument that lowering taxes increases revenue because the economy grows; it’s just that the cause and effect are swapped.

But the argument is only logical because it is based on an assumption I cannot agree with—the assumption that everyone has a right to health care. If we as a country feel that people have a basic right to health care, then the insurance mandate is necessary and mathematically sound.

I however, am quite annoyed with the idea that health care is a substance like air and water, that we should all have access to. I instead know that health care is a service provided by people who spent a lot of time and money in order to earn a living. And, you don’t have a right to that service if you cannot pay for it.

cons
The United States Constitution

Our Constitution gives you the right to life, not the right to health care. A right to the life that genetics, nature, and dumb luck provides you.

Health care is a service that can extend that life, provided by professionals that offer that service, in order to earn a living. If you want a better and longer life, you have to pay them for it. Otherwise, when your time comes, that’s your time to go. It may seem heartless, but the circle of life is that all living things feed off of other living things and then eventually die themselves. Nothing gets out alive.

Let’s imagine a scenario where lives aren’t on the line for a minute. Your car breaks down, and you really need your car to get to work. So you take it to the mechanic. They advise you that you need a $500 repair, but you don’t have that kind of cash. Do you get to demand they help you and you’ll pay them later if you can?Auto_Repair-generic[1]

Well, doctors are ultimately mechanics for humans. If they are willing to help for free, for a lesser fee than they’d charge medicare (Which is currently prohibited by law, believe it or not), or for a promise to pay in the future, then that’s great. Otherwise, the person needing care needs to find another doctor or accept the consequences of the life they chose and/or the bad fortune that befell them.

We have been taught that caring for others is just the right thing to do, and I agree, entirely. But, I don’t believe that doctors are heartless people who would never help anyone, and history shows this to be true. While some patient-dumping was common practice, it certainly wasn’t a unilateral action. Remember that many of them joined that profession because they love helping people.

But all free people should have the right to choose who we wish to help, who we can afford to help, and who doesn’t deserve our help. And the chronic meth head, alcoholic, and serial moocher are not on my list of acceptable benefactors.drug-overdose[1]

Socialized medicine proponents often paint the picture that everyone who needs health care and can’t afford it are victims of society. But this is a false argument. Often, society is a victim of them, since we’re forced to pay for their care through higher prices, benefit fraud, and tax subsidies.

I think we all know people who can’t keep a good job because they drink too much, abuse their body, voluntarily miss work, don’t apply to begin with, and aren’t motivated to be successful—the type of people who work the hardest at how to afford work.

So then the abuse on their body catches up with them, and because they don’t have a job, they don’t have insurance. Now they need care because of their life choices, and they can’t afford that help. They are responsible for the life they’ve led, and they either need to find a way out of their troubles, or they will die as a martyred good example for others to not to be like them. Yet, under our current system, the rest of us become financially liable for them.

I’ve had a few people like this in my life because I don’t always hang out in the ritziest circles. I like some of these people dearly, but I also know that they are their own worst enemy, and the idea that society should take care of them is nonsense.

There is a phenomenon called the Peltzman Effect which says that the more safety you provide someone, the more risky behavior they will engage in. If you’ve seen someone driving like an idiot in the snow because they have a 4wd, you’ve seen the Peltzman Effect in action. If we want everyone to be self sufficient, we need to stop allowing people to so easily be dependent on others.

I believe that the only way to truly reduce health care expenses is to take away that safety net of guaranteed health care, take away government regulations that hinder competition, give doctors rights to work for a reduced rate if they choose to help the poor, introduce loser pays legislation and other legal reforms, and generally get the government out of the way of the health and insurance industry, letting the free market do what it does best; drive down costs.

The Beetle is Dead and Government Killed It

Any time new technology comes out, it is expensive. Completely new machines are often the folly of the affluent; the masses won’t get to enjoy them until decades later. ENIAC, the world’s first computer was debuted in 1947, but it wasn’t until 1981 that IBM brought us the PC and made the computer something we all could enjoy.

ENIAC
ENIAC

Cell phones were clunky boxes that only successful businessmen carried, and they were far too expensive for the proletariat to buy until science and the free market cut them down to size; both physically and financially.

So let’s talk about cars. 100+ years ago, the price of a car was significantly greater than the price of a horse. Plus, if you wanted a new car, you had to buy one. If you wanted a new horse, all you had to do was get your male horse together with a female horse, throw a little Barry White on the record player, and voilà! A new horse emerges months later, free of charge.

Cars were initially met with skepticism, disdain, and envy because they were loud, unreliable, and expensive. Here’s the thing though, horses have a relatively slow top speed, and even giving them the Lance Armstrong treatment isn’t going to get them up to a point where they can do 60+ mph for hours on end. So the value in cars is unmistakable. Although the technology was new, the dreamers saw that cars were the future and got to work building them, even if at the time, only the top 1% need apply.

Fast forward to the 30’s. Adolf Hitler was certainly a murderous %$@#$, but even violent psychopaths on occasion display some sort of twisted goodness, and this was his. He felt that cars shouldn’t just be for the rich and Ferdinand Porsche was commissioned to build the “people’s car” (Volkswagen) for the average Joe to buy, and the 911’s not-so-hot older sister was born.beetle

The history of the Beetle is legendary. But let’s look at what it was—a cheap car. It looked good, had character, four wheels, an engine, and occasionally brakes. That was pretty much it. The car sold millions around the world, not because it was fast, had all the options, or was an exclusive ride, but because it was affordable.

A drivetrain, wheels, seat, and steering wheel wrapped in a steel overcoat, by itself, has tremendous value to anyone needing to get from points A to B. All the other options that have been added through the years add value, but they also add price which some people simply can’t afford.

A bare bones car appeals to two types of people. Those of us who are broke but need to go to work, and those of us who race and consider Colin Chapman’s “Weight is evil” philosophy to be that which was handed down from the gods. People who are broke and people who like to race aren’t a small demographic. We’re out there, and we’re in the millions. We want a cheap, bare bones, nothing is there that doesn’t need to be, kind of car.

Colin Chapman's Brainchild, the Lotus Seven
Colin Chapman’s Brainchild, the Lotus Seven

So what am I whining about? The same thing everyone whines about; our well-meaning, yet ever meddling and oppressive government of course!

Any car you buy in America must be equipped with OBD2, air bags, anti-lock brakes, tire pressure monitoring systems, seat belts, windshields, achieve a certain MPG, meet government specified crash standards, and a whole host of other requirements our governmental overlords have legislated.

All of these gizmos and gadgets add two things; weight and cost. They have one thing in common as well; they’re not uniquely necessary on an automobile. So the ability to buy a modern-day Beetle is dead, and government killed it.

cons
United States Constitution

Our constitution was designed so that “we the people” would always be free to make our own decisions by limiting the powers of government to infringe upon our rights. So how does forcing me to buy an air bag that I can then legally turn off do an ounce of good? Riddle me that Batman!

A free market should allow us to buy whatever we want as long as we aren’t harming someone else by using that product, but none of these safety features actually accomplishes that goal. Instead they merely serve to infringe upon our rights to make decisions about how safe we choose to live our lives. As a libertarian, that infuriates me. That is not, nor was ever, the role of our government as laid out by our founding fathers.

I’m not one of those libertarians who float conspiracies like air biscuits; freely and aromatically-challenged. I truly believe that our politicians mean well. But let me give you an analogy. If we were going full-blown Bear Grylls in the wilderness, no cell phones, transportation, or means of getting help, and you fell and impaled your brain with something, it would be obvious you need emergency surgery. So armed with my hunting knife, I go to work. I’m no Dr. House however, so what is going to happen? You’re going to die; that’s what.

Hugh Laurie as Dr. Gregory House M.D.
Hugh Laurie as Dr. Gregory House M.D.

Were my intentions evil in performing surgery on you? Of course not, I was trying to save your life! So why did you die? Because while my intentions were good, I don’t know what the heck I’m doing.

This is our government in a nutshell. They do their best to protect us from harm, but many of them have never worked in the auto industry and know little about it. So they make decisions every day without having the slightest comprehension of the ramifications of them.

In a proper free market society where our government does what it is supposed to do, what would happen is that government would insist we the people had information. We don’t need cars that meet certain crash standards, we only need to know what crash standards a car meets, and then we can make our decision as an informed consumer.

Ariel Atom
Ariel Atom

It is time we the people tell our government that we choose what we want and you don’t get to dictate that to us. If I want to buy an Ariel Atom and drive it to work every day, then I shouldn’t have to buy it with “some assembly required.” Give me the information I need to be an informed consumer, and then get the hell out of my way.

Why Pre-Existing Conditions Matter

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

In the Affordable Care Act, AKA Obamacare, there is a provision that requires health insurance companies cover pre-existing conditions. While the majority has condemned the insurance mandate of the ACA, most are in favor of pre-existing condition coverage being forced onto health insurers.ACA%20image[1]

However, I feel that this is unwitting hypocrisy. How can someone oppose the government forcing them to pay for something but be OK with the government forcing someone else to? We oppose the mandate because we empathize with those who feel they don’t need to buy health insurance right now. But with pre-existing conditions, we then imagine situations where we lose our job and insurance and then are unable to get coverage because of pre-existing conditions, and lose our wonderful powers of empathy we had a moment ago and decide “f*** the insurance companies.”

This is what happens when people don’t care where money is coming from or who the loss hurts, as long as it benefits them personally.

It seems cruel to people that insurance companies would deny pre-existing conditions, but quite frankly, it’s wrong for us to expect them to cover them. I’d like to think it is because people don’t fully understand the issues with this, so having an insurance background, I’ll try to explain.

Imagine you decide to trade in your car which happens to have a irreparably damaged engine—now only serving the function of an industrial-sized paperweight. The car should be worth $5,000, but it needs $3,000 worth of repairs. The dealer takes the car in on trade for $2,000, and then resells it without fixing the engine. Instead, they sell the new buyer a $1,000 warranty. The new owner takes the car to a repair shop to address the blown engine, submits the claim, and now the $1,000 policy is supposed to pay for a $3,000 engine repair everyone knew it needed before all of this started?

Engine Which Has Suffered a Connecting Rod Failure
Engine Which Has Suffered a Connecting Rod Failure

The insurance company would immediately take a $2,000 loss that it would have no way to recover since the policy was paid in full up front for $1,000. While the consumer and dealer might think this is awesome, the insurance company and all its employees who are about to go out of business because they’re repeatedly taking unrecoverable loss, won’t be as pleased.

The ultimate truth is that covering a pre-existing condition is not insurance, it’s a grant.

Insurance is designed so that the insured pays a premium up front, and in return, the insurer takes a financial risk that the insured can’t afford to take themselves. What’s the risk you ask?

Imagine you open a collision policy, and then pay your first premium of $200. On the way home from the agent’s office, you plow into someone and send them to the hospital with a quarter-million dollar medical bill. Guess what? The insurance company just lost $249,800 on you, and there is nothing to stop you from canceling your policy immediately after, leaving them with a massive loss. That’s a legitimate risk they take every single day.gap-insurance-1[1]

The way they make a profit is by employing actuaries who calculate the insurance company’s anticipated claims using mathematical models, then the insurer charges a percentage above that in hopes the actuaries are have nailed their projected losses. You the consumer benefit because you passed that risk of a $250,000 settlement you might have incurred and can’t afford onto the insurance company, in favor of a monthly payment you can afford.

Here’s the reason I say that covering pre-existing conditions is a grant. What is to stop you from dropping your insurance company after you’ve had a massive claim like that? The answer is nothing. In the accident situation I explained, it is the risk the insurance companies take. While they lost, risk is the business they are in after all.

But in the pre-existing condition situation, there is absolutely no risk. You already have the condition, and they are going to be expected to pay for it. The word risk implies they may or may not incur damages, but with pre-existing conditions, risk is replaced with certainty because now they are liable for something you knew existed—because it was PRE-EXISTING.

Imagine you owned an insurance company and someone drove up with their car on a tow truck smashed to bits, requesting to start a full coverage policy with you. Are you really going to agree to that deal knowing that the claimant is going to give you $200 only to file a $10,000 claim tomorrow? If you’re answer is yes, you may want to avoid starting your own company. So, using the “Golden Rule” as a standard, why are we doing unto them, what we wouldn’t want done unto us?gap-insurance-1[1]

I am not a heartless person who thinks people should be left to die. But, aside from the obvious personal responsibility issues of people who can buy insurance but opt not to, I believe we should not be treating insurance companies as if they’re Satan in business form, and that taking advantage of them should be considered an acceptable or even honorable practice. They employ a lot of people and help keep our economy strong by assuming those risks most of us can’t afford for a nominal fee we can. If you don’t like it, feel free to take that risk yourself if you can afford to.

Contrary to left-wing beliefs, insurance companies do not have a bottomless wallet. They can, and often do, go out of business if their losses become excessive, just like any other business. Which hurts all the people who work for them.

So while this law doesn’t pass the costs onto the taxpayer per se, insurance companies will pass it to the consumer in the form of raised rates, lest they go out of business. Many of you have no doubt noticed the rate increases already. And while we’re at it, taxpayer and consumer are generally the same people; it’s just the former implies the government pilfered a few bucks first.

There is a better way to improve the health care system through deregulation and tort reform which would lower costs. Taking advantage of legitimate businesses that are then forced to pass those damages onto us is not the answer.

The Myth Of Greedy Capitalists

I have this horrible recurring dream that millions of college students die from alcohol poisoning after playing a drinking game during an Obama speech. When he uses the word “fair-share,” they are required to drink a shot. (Please kids, don’t try this at home)

It is a well-known psychological trick that overuse of a word is often done with the purpose of being permanently associated with it through subliminal suggestion. I don’t profess to know what is in Obama’s heart, and you should be wary of anyone in the media who says they do. But I don’t believe it is an accident that he uses this word over and over again so that he may mildly brainwash everyone to believe he is the only candidate who cares about you getting a fair shot. Political strategists certainly know and would advise him to use such a tactic. Disingenuous or not, it is effective.Obama-golfing[1]

However, let’s take a look at this from a skeptical point of view and analyze what it presumes. If he is saying this as a means of promoting himself above another candidate, then that means he is also saying other candidates do not want you to have a fair shot. If they all believe in fairness, then there’s no more point in bringing it up, right? For instance, no candidate campaigns on the platform of prosecuting murderers because we all want that, and saying so, would not set that candidate apart from their competitors.

So this then means that, in selling himself as the candidate of fairness, Obama is asserting that Mitt Romney, a devout Mormon who donated his father’s inheritance to the church so that it could be used to help those less fortunate and so that he could earn his own way instead, somehow only wants rich people to succeed and poor people to stay poor. Is this narrative starting to sound pretty ridiculous yet?

Mitt Romney
Mitt Romney

Let’s dig a little deeper. How do rich people get rich? They sell products or services. The richest of the rich sell products to the masses. The late Enzo Ferrari likely made a pretty centesimo, but he was nowhere near the financial status of a Bill Gates for instance. If poor people stay poor, can they buy a Windows computer?

So if some conspiracy theorist is ignorant enough to believe that all rich people get together in some sort of bourgeois yacht club meeting and collude to keep the proletariat down, then explain to me how they benefit by impoverishing their intended customers.

The idea that rich people benefit from everyone else being poor only works in a socialist model where the rich can forcefully take from the poor, and force them into servitude, not a capitalist one where the rich depend on the masses to buy their goods.

I am to wealth what a McDonald’s Hamburger is to a steak. But I am increasingly disgusted with the idea that the boogeyman is synonymous with a capitalist. Because, while I may not be rich, I have goals and dreams that include becoming wealthy one day, and I’m not about to be told I’m a bad person for wanting it or that I’ll be a bad person if I attain it.

I believe everyone is a greedy capitalist. Some aren’t willing to work as hard as others, some aren’t willing to work as honestly as others, and some refuse to believe that people richer than them deserve more for their efforts. Apathy, jealousy, complacency, and sometimes just dumb luck prevent most of us from achieving our dreams. But we all want more than what we have, we all want success. Then, once we’ve achieved it, we all want control how it is shared with others.

So while I credit Obama with a smart tactic, and let’s not lie to ourselves, it is working with those who don’t bother to put a critical eye to it as I have done, it is still just a psychological trick, not an indication of someone who understands how to make America better through hard work, critical thinking, and an honest assessment of the historical evidence of socialism versus capitalism.

We know socialism has no successful models to point to, yet he promotes socialistic policies. We know that over-regulation causes business owners to pull their money into their proverbial turtle shell until the “predator” passes by instead of investing, hiring, and growing the economy, yet he pushes the EPA and OSHA farther and farther into territory they were never intended to occupy at the peril of every entrepreneur trying to become a productive part of America. We know that forcing people to be self-sufficient by kicking them out of the nest works, yet by advocating more entitlements instead of less, he continues to enable those who would rather be on a permanent government funded vacation.EPA-Logo

Ronald Reagan humorously quipped, “The best minds aren’t in government. If any were, business would hire them away.”

President Obama telling Romney how to help businesses grow, and vicariously our economy, seems to me like Obama telling Tiger Woods how to fix his golf swing. So you can vote for the guy that says he’ll solve all your problems for you, but I’ll vote for the guy who honestly says, “I don’t understand your problems as well as you do, so let me get the hell out of your way.”