Health care pre-existing conditions

Our new healthcare bill will forbid insurers from denying coverage to an individual who has a pre-existing condition. There is also a mandate that forces those who are better off without health insurance to buy insurance or pay the punishment. These evil people who think of only their own wellbeing will face a punishment of arround $750. This means that if you currently do not have any health issues, you may be better off just paying the punishment for your selfishness. But if you are afflicted with a serious ailment, you can choose to be a good person and pay your fair share and purchase insurance. Since you cannot be denied coverage, there is a bigger incentive to wait until you face a serious health issue before buying insurance.

New health care bill

We now have a new health care bill passed along party lines and unfavored by the majority of Americans. This health care bill is predicted to raise health care costs and taxes. It mandates coverage for those who have already determined that their money is better spent elsewhere.

What solutions do we have to the increasing costs of health care? First we must ask, why are health care costs rising? There are some reasonable causes of increasing health care costs: increasing reliance on newer technologies, newer treatment techniques that require more highly trained, and therefore more costly, providers, etc. But there are reasons for the higher costs that we can control.

The burden of health care costs has shifted. The majority of health care costs were once primarily paid by the individual. Thanks to government tax policy and government price controls during World War II, much of the cost has been passed on to insurance. The incentives of the tax policy lead to the creation of more comprehensive insurance coverage. While comprehensive coverage benefits  the sick and the poor the most, the majority of Americans do not benefits significantly.

We need to move away from a third party system where due to the reduced individual out of pocket costs, people have the incentive to over consume. Over consumption raises prices and therefore insurance costs. The current plan to add more people to the insurance rolls will cause prices to rise even higher as those who now must sacrifice things that gave them utility in order to purchase insurance. To make up for lost utility and due to reduces out of pocket cost for use of medical services, we will see and increase in health care consumption and even higher costs.

Why not government

Why am I opposed to government? I suppose it comes down to the radical idea that certain moral that all people, even in government, should follow. It is wrong to take property that is not your own. It is wrong to kill a person who does not pose a threat to others. It is wrong to threaten aggression against anyone who tries to compete against you.
Some might say that tax, as opposed to being taking someone else's property, is payment for services. But what if we do not want the service the government provides. Often times the government threatens aggression against those who would try to compete against it and other times you can hire competitive services, but you still have to pay for the government services too. Only a government can enjoy that luxury.

Dragon Age: Origins

I have started playing Dragon Age: Origins from Bioware. The story is compelling and the graphics look very good. There are 2 starting races, Dwarves, Elves and Humans and 3 classes, warrior, rogue and mage. Depending which race and class you choose determines you background. A Dwarf character can start as a warrior or a rogue and can be either a Dwarven noble or a Dwarven commoner. Elves and Humans can be any class. A mage can only be a member of the Magi. An Elf can choose to be Dalish Elf or City Elf if not a mage while a Human who is not a mage can only be a Human noble. I have tried the starting stories for all but the Dalish Elf. The stories are quite involved and really help to develop the back story for you character. Regardless of the actions you take, assuming you do not die, all character move on to becoming part of the Grey Wardens.

Batman: Arkham Asylum

For Christmas, my wife got me Batman: Arkham Asylum for the X-Box 360. I have been playing it off and on since I opened it. I really like the game. There are a few interesting features like the optional Riddler puzzles that expand the game beyond a typical 3rd person RPG. The story feels like a batman story. The voice actors are the same as those on the Batman cartoon series. If you are a comic fan but have shied away from comic based video games in the past because of how poorly they were done, give Batman: Arkham Asylum a try.

What is important

I spent some time recently with my family going on a nice walk. I have come to realize there are more important things in life the arguing about religion. I have but 1 life to life an I see no point in arguing about made up stories. No satisfactory arguments for God have been presented. God IS the God of the gaps. Science has brought us knowledge while religion has brought us ignorance. Science is open to discovery and adaptation to new discoveries. Religion is closed and not open to refute. I have faith in science, not blind faith like with religion, but faith because science is open to change as evidence is presented. The only that never changes with science is that everything else is open to change with new evidence.

Given my change in focus, this blog will discuss things of interest to me. I may post movie or game reviews of interest or comment on politics or economics.

The Pretence of Knowledge

Here is an abstract I wrote for my class on the Hayek article, "The Pretence of Knowledge."

The failure of modern economics to successfully guide policy is due to the tendency to try to imitate the procedures of the physical sciences. This has become to be described as the scientistic attitude. This attitude is unscientific since it involves an application of habits of thought to fields different from those in which they were formed.

Monetary and fiscal policy, which are largely due to the mistaken conception of the proper scientific procedure, consisted in the assertion that there exists a simple positive correlation between total employment and aggregate demand for goods and services. This has lead to the belief that we can maintain full employment permanently by maintaining total money expenditures at an appropriate level. While strong quantitative evidence for this can be brought forward, it is fundamentally false and to act upon it is very harmful.

In the physical sciences, it is generally assumed that any important factor that determines the observed event will itself be observable and measurable. However, in the study of markets, which depends on the actions of many individuals, the factors that determine the outcome will hardly ever be fully known or measurable. We know with markets and other similar social structures a great many facts that we cannot measure and only have some general and imprecise information. Because the effects of these facts cannot be confirmed by quantitative evidence, they are simply ignored by those who only accept scientific evidence who then go on to assume that the factors they can measure are the only ones that are important.

The correct explanation for unemployment would be the discrepancies between the distribution of demand among the various goods and service and the allocation of labor and other resources to the productions of outputs. We have good reason to believe unemployment reflects that the structure of wage and prices has been distorted. To equate the demand and supply of labor, changes will need to be made to relative prices and some labor transfers will be necessary. We can know the general conditions under which the market will be in equilibrium but can never know the correct prices and wages to establish it. We merely say which conditions will allow the market to achieve the prices and wages necessary such that demand and supply are equated.

The social sciences have to deal with structures of essential complexity, structures whose characteristic properties can be exhibited only by models with relatively large numbers of variables.

In the determination of prices and wages will enter the particular information the each market participant possesses. This sum of facts cannot be known by any one observer. Here is the superiority of the market that in the resulting allocation of resources, more of the knowledge of particular facts will be utilized which exists exists dispersed among numerous people and that no individual can possess. Because the observing scientist cannot know all the determinants of such order and cannot know at which particular structure of prices and wages demand equals supply, we cannot measure deviations from that order. We cannot statistically test our theory that it is deviations from this equilibrium price and wages which makes it impossible to sell some products and services.

The great advantage of the mathematical technique is that is allows us to describe by means of algebraic equations the character of a pattern even if we are ignorant of the numeric values which determine the particular manifestation. We have this illusion, however, that this technique can be used for determining and predicting the numerical values of these magnitudes which has lead to a vain search for quantitative constants. Even Vilfredo Pareto, one of the founders of mathematical economics stated that it could not be used to derive a mathematical calculation of prices because we could not ascertain all the data.

Present inflation and employment problems are a very serious example of how much harm can be done by assuming only measurable values are important. The effect has been that the likely cause of extensive unemployment has been disregarded by the scientifically minded economists because it cannot be confirmed by the directly observable relations between measurable magnitudes and an almost exclusive concentration on quantitatively measurable surface phenomenon has made matters worse.

The demand created through injections of additional amounts of money at points in the economic system must cease when the the monetary injection slows down or stops. Together with expectations of a continuous price rise, this draws labor and other resources into employments which last only so long as the rate of increase in the money supply continues or only as long as the it continues to accelerate at a given rate. Due to this mistaken theoretical view, we have gotten ourselves into a position where we cannot prevent substantial unemployment from reappearing.

The key point to be made is that the rapid advance in the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomenon as functions of only a few variables. To construct a theory of essentially complex phenomenon must refer to a significantly larger number of particular facts. To derive a prediction or to test requires determining all these particular facts.

If we try to act as if we had the knowledge and power to shape the processes of society to our liking, when in fact we do not have the knowledge, is likely to make us do much harm. We are now beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based. This communication system, what we call the market, turns out to be a more efficient mechanism for taking advantage of dispersed information than any that man has designed.

If we are to do more good than harm in our efforts to improve the social order, we will have to learn that in this field, as in other field of essential complexity of organized kind prevails, we cannot acquire the full knowledge which would make mastery of the events possible.