Sunday, December 27, 2009

Ho-Ho-Ho…We’re Screwed!

By Orlando Watson:

This holiday season, as millions of Americans decorate their homes, exchange gifts, volunteer at local shelters, and spend time with their loved ones, let us consider our government’s wish list: Fed-induced monetary “stimulus” and trillion dollar health care reform. Both big ticket items and both seemingly paved with good intentions. Who wouldn’t want a strong economy and affordable health care? But, someone should tell this current administration that there is no Santa Claus and you just can’t get something for nothing.

Unfortunately, the bureaucrats in Washington just don’t get it. They continuously have said deficit spending would revive our economy, as would artificially low benchmark interest rates. They have ignored elementary economic principles, arguing most egregiously that increasing government’s role in health-care would decrease costs. When was the last time government involvement decreased overall costs? What they failed to say is that middle and working class Americans would pay considerably more now, as they will in the future. Where do Black Americans fit in this picture? As a group, blacks are overrepresented among the poor, and they are therefore disproportionately affected.

As the Federal Reserve continues to keep interest rates low and the printing presses humming, those with political connections and power will be the first to receive the money. While the money inevitably spreads throughout the economy, there will be a subsequent aggregate rise in price levels. In the words of the late hip-hop icon Biggie Smalls, “more money, more problems.” The cost of food, clothes, and consumer items will increase. Those receiving this new money last – as explained by the injection effect – will undoubtedly be the poor and working classes. The Federal Reserve’s inflationary policies, therefore, benefit certain businesses and the politically connected, while robbing Black Americans of their economic power.

Government intervention in the health-care industry helped to create the bureaucratic and inefficient morass that is our current system. This holiday season, notice how people shop for the best prices on items. Imagine if they could do the same with their health care. We need competition among medical providers in addition to clear prices for consumers. Consumers win when businesses compete. Let medical providers compete and watch the quality of their services improve as prices decline. Such is the nature of the free market. Yet, if our administration insists on coercing individuals to get health insurance and pushes insurers to expand coverage, service will remain unaffordable and health-care costs will skyrocket.

Wanting a healthy economy and populace are indeed noble intents. Accomplishing these goals, however, via inflationary policies, deficit spending, and increasing the role of government ignores the high costs involved and the plight of Black Americans. With black political power in America being realized through the election of President Barack Obama, the community’s focus has shifted to economic empowerment. This wish list of good intentions should remind us that “all that glitters isn’t gold,” and if any group should be keenly aware of such when it comes to government policies (i.e. War on Poverty, War on Drugs, No Child Left Behind etc.), it’s Black Americans.

Orlando Watson is currently a senior Public Policy major at the College of William and Mary. The writings and ideas of Thomas Jefferson, Frederick Douglass, and F.A. Hayek influenced him politically. Soon after being introduced to the philosophy of liberty, he realized the importance of restoring limited government, free markets, and personal freedom in our united States of America. His interests include investing, watching documentary films, and rooting for the New York Knicks.


J. Thomas Hunter said...

Mr. Watson, I agree with you.

As you know, though, unemployment in the black community is much higher than the national average--as usual. That means, however, that health insurance is not available to the black unemployed. Prohibitive health care costs adversely affect blacks by either deterring them from seeking medical attention until more serious, however preventable, health issues arise; or by compounding financial burdens on already economically depressed people.

While government-run health care will result in an increase in costs on all goods and services, would it not be better to increase those costs if that means also increasing black access to health care?

Your piece reminds me of a construct that Shelby Steele lectured about at the Heritage Foundation in a speech about Abraham Lincoln. Steele argued that American politics can be described as a tug-of-war between goodness and liberty. I have come to wholly embrace this construct and I measure most policy with it in mind.

I know how I would answer my question, but I am curious to know how you would.

Thank you for your thoughtful piece!

Anonymous said...

Douglass, Hayek and Jefferson. Spread the word!!!

A lib during the George Bush stimulus handouts asked: "Where are they getting the money in the first place?" When O tripled down on that, she sat on her hands. But the Q has to be asked even moreso now.

The answer is, stop the DC hand-outs and let profit-seeking entrepreneurs make their bets on themselves. Then there will be new jobs.

Look at black unemployment #s and remember how easy it is to discriminate when times are bad and entry-level jobs exact such a high toll on the employers.

Anonymous said...

A choice between good and liberty? Let's ask, who decides "good"? I'd prefer each individual have ownership of his life (its short but it's mine). Any policy that allows individuals to act on their own behalf leads to better societal results.

Mr. Hunter: Think beyong Step 1 (read Dr. Sowell to learn more). How does the removal of capital from investors lead to more jobs that then pay health insurance? Read Bastiat, sir.

Your heart is in the right place but you and your leaders just digging bigger and bigger holes. I prefer robber barons for prosperity