When government-run “competitors” are funded by tax revenues, and immune to the same economics and regulations that the freer-market is subject to, the real competition is eliminated.

Phase two is much worse.

The remaining “only option” is a dysfunctional charade of entrenched mediocrity immune to the requirement of customer satisfaction - essentially like our “only option” public schools. Except that in the case of health care, financial negligence, social engineering, lowering standards, and stifling innovation (all hallmarks of socialized endeavors) will cause more immediate loss of life instead of the living death imposed by socialized education.

• A Potential Spark of Economic Intelligence In Government
• Real Economic Stimulus
• End The Fed (A Great Idea)
• Fed Adds 25K+ Units Of Dead Weight

• For a market to be prosperous, both consumers and producers need to be free to act in their best interest. Our current market enables substantial freedom for consumers, but not for producers. Government imposed regulations, controls and mandates have substantially driven up operating costs for producers - increases which are passed directly to consumers. Most Americans sense the freedom they have as consumers, but are ignorant of how, and to what detrimental extent, government regulation and intervention stifles producers. Failure to consider the producer aspect leads them (along the encouragement of statists pining for power) to incorrectly blame the “free market” as faulty and inadequate. They are right to advise doing something, but wrong in the something they condone (increased government intervention). The solution is to free the other essential realm in the market - the producers.
  
  Consumptive Freedom + Productive Freedom = Prosperity
  Consumptive Freedom + Production Regulation = Escalating Costs/Declining Value
  Consumptive Regulation + Production Regulation = Market Stagnation

• Americans have tolerated (and confessedly bought into) the welfare state out of altruistic default. We’ve dealt with more and more wealth being confiscated in countless new ways to fund seemingly endless streams of income redistribution. We can only hope that enough people will sense that this collectivist endeavor is a different beast altogether. Socializing medicine differs in that it moves beyond simply confiscating money through taxation to buy other people’s widgets - it effectively (in time) stifles and stagnates the entire widget market for everyone.
• Until recently, I never imagined a day would come where I’m actually considering which of my physician friends would function as my “Black Market Doctor”.
• The only way a private business gains any kind of immunity to economic forces is through some form of government influence impinging upon it. Without such influence, businesses (regardless of size) are subject to consumer choice. They may have immense capital assets and infrastructure, but they still have to keep the customer happy or in time they’ll go bankrupt. This is the key difference between economic and political power - only the latter, the power of government, can be legally forceful. The only way insurance companies, the most commonly demonized player in this scenario, obtain any power to operate in a manner which may appear to be immune to market forces is as a result of some government distortion of economics. The demand for medical expertise, usually through insurance coverage, is so high that any lack of efficiency or uncompetitive offerings would present an opportunity for other players in the market to seize the chance for expanding their market share. However, if some unnatural force prevents new players from entering the market, or prevents existing competitors from acting upon the opportunity, then the market goes unchecked and prices may rise while quality of service declines. This should sound very familiar.
• Insurance companies are typically condemned for the amount of profit they earn, but this can only be an issue in a mixed-economy, i.e., an unfree market. A producer can increase profits by either raising the market price of their goods to consumers, or lowering their costs of production through efficiency - the high-price method, or the low-cost method. In a free market, competition urges producers to compete on the latter, because competing on high prices would be contrary to the law of supply and demand. This competitive dynamic leads to lower prices, because any savings from the low-cost method can be used to gain a competitive advantage and are transferred directly to consumers. But, when that competitive dynamic is retarded or eliminated by barriers to market entry, or oppressive regulations that stifle competitive pressure, prices tend to trend upwards. This escalating trend that appears immune to supply/demand is what grants certain businesses the facade of power - political power. The only way insurance providers, or any business in any market for that matter, can obtain political power on consumers is when equipped with government assistance.
• When prices in a given market escalate at a higher rate than inflation without a comparable increase in value to the consumer, some force is distorting the economics. That force could be a natural one, e.g., a shortage in some vital resource (labor, materials, etc.), or an unnatural one - which, in a mixed-economy, is most often government intervention in some form or manner.

Yep, the next chapter in the most blatant story of economic ignorance in history gets under way. Anti-trust, the American hallmark of self-destructive and senseless tyranny, is rearing its obnoxious head again - this time to aggravate Apple and AT&T.

The Department of Justice has started an informal review of the exclusive arrangements that limit handsets such as Apple’s iPhone to particular wireless communications companies, according to people familiar with the matter.

The inquiry follows consolidation in the US wireless industry that has left four operators accounting for more than 90 per cent of the country’s wireless subscribers. This has left them with the market power to carve out exclusive deals with makers of the most popular handsets, making it hard for smaller rivals to compete and leading to higher prices for mobile services, according to rivals. [emphasis added]

Hmmm, so the resources and market position that AT&T and Apple have earned should be sacrificed to the needs of smaller rivals? Only in altruist-collectivist-statist-wonderland.

Apple, as the creator and producer of the iPhone, has the right to sell it to whomever under whatever terms they choose. Likewise, AT&T has the right to distribute and market products of their choosing; also according to whatever terms they choose. In sum, Apple and AT&T have the right to work together under whatever terms they agree upon. Any law that trumps their right to do so is unjust, irrational, subjective law.

So long as a market is left free from Government intervention, new competitors will step in if prices are set higher than the market will tolerate. If AT&T’s exclusive contract to sell the iPhone is leveraged to charge more than the market will bear, other competitors like Google and Blackberry will have an opportunity to seize a share of the market. Apple’s rightful purpose in business is to make money, not to provide phones as a charitable cause. Likewise, AT&T’s purpose is to make money, not to dole out phone service to the needy. If any relationship between these two companies results in prices that are higher than what the market will bear, consumers will spend their money elsewhere.

Thanks you meddling idiots, but we can take care of ourselves - no brilliant Government intervention is necessary.

Our country is the final stages of a tremendous mistake - one that will have adverse effects on every person you know. Acting as if human lives are disposable and that economic laws are pliable, so many are willing to give in to consensus and experiment with Government run health care. It can’t hurt to try right?

This is a deadly pragmatic notion that must be rejected. Not even a single right or life is properly available for sacrificial experimentation. Even if dissecting one human being would save the lives of billions, doing so is immoral. If one man’s rights are violated, so all men have suffered injustice.

For America to endure we must return to nothing less than a free-market in health care.

Politicians are masters at muddying the water in order to aid their efforts. The more they obfuscate and complicate the issue, the more likely citizens are to give-up and give in to what appears to be the superior insights and motives of our leaders. Throw in some hollow rhetoric and spike the potion with the moral tint of altruism and consensus will stomp over an endless sea of corpses. However, If one peers through all the emotional fog, the entire conversation is revealed to be senseless. To make the case much clearer, I’ll frame the principles in an analogous market less prone to emotional fraying.

This not-so-hypothetical market is comprised of a fictitious entity called “Technicare” - a taxpayer funded program to assist a segment of the population with their electrical appliance needs - and a retailer, in this example I chose Wal-Mart, arguably the most highly qualified bastion of efficiency and value.

Like all cases of market dysfunction throughout history, the cause is unnatural economic forces. Essentially, the only force capable of wide scale economic influence is Government. Economics is an elegantly simple system governed by principles that endure time and scale. Producers produce goods that consumers consume according to the standards and prices that both parties agree on voluntarily. That’s it. These fundamentals are absolute and unforgiving, and when any component of the preceding summary is acted against, the market becomes dysfunctional. If producers ability to produce is either enhanced or hampered, if consumers ability to consume is enhanced or hampered, or if the voluntary prerogatives of either are restricted to any extent, the result is some degree of market dysfunction.

Our Heath Care market is one that’s clobbered with regulatory assault from every angle. Each of the components prescribed above are unnaturally manipulated by Government. Government meddling inevitably serves to reduce competition, and decrease purchasing power, the two elements that form the lifeblood of a growing and prosperous economic system.

There are far too many instances to cover exhaustively, but fortunately a principled examination of only a few will clearly illustrate the negative impact that is universally achieved by market intervention. We’ll start by considering an element that achieves tremendous competitive detriment and has no logical justification - The Certificate of Need.

From the NCSL site:

Certificate of Need (C.O.N.) programs are aimed at restraining health care facility costs and allowing coordinated planning of new services and construction. Laws authorizing such programs are one mechanism by which state governments seek to reduce overall health and medical costs.

The basic assumption underlying CON regulation is that excess capacity (in the form of facility overbuilding) directly results in health care price inflation. When a hospital cannot fill its beds, fixed costs must be met through higher charges for the beds that are used. Bigger institutions have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual needs.

Profit is determined by the difference in revenue from a unit of work in relation to the unit’s associated costs. Profit increases by either charging a higher price per unit to consumers or establishing a lower cost per unit for producers - by higher prices or by lower costs. Competition amongst market players urges them to offer services at the lowest possible price, thus their opportunity to increase profit will be naturally determined by their ability to operate at the lowest possible cost, as opposed to selling at a higher, less competitive price. Competition is a necessity.

By hindering the competitive aspect of the market, the CON hurdle is actually prone to a rise in costs precisely because mitigates (or eliminates) external pressure to compete on price. Additionally, the process is tedious, timely and expensive. For productive endeavors, time is money, and this process equates to an atrociously misdirected waste of capital.

The other fallacy used to justify this process is that investors would risk such vast amounts of money as typically involved without doing the proper market research to justify the expense. Like in so many other cases, and for obvious reasons, bureaucrats just can’t grasp the concept of personal responsibility. Unlike moochers wasting handout money, when an individual is spending his own earned resources, he’d best be, and typically is, mindful of how he does so. Successful investors seeking a profitable avenue for their capital do not need parental guidance.

Let’s consider this absurdity in our fictitious market:

• How would the “Certificate of Need” process and burden, including all the inherent political wrangling, affect an aspiring Wal-Mart store?
• Would the associated cost cause their prices to increase or decrease?
• Would that money be more appropriately invested in real estate, infrastructure and inventory, or as the cost of asking permission to do business when and where they see fit?
• On what logical grounds should they have to ask permission?
• By what right could some authoritative body decline their request?
• By what right does anyone or any entity have such authority in a country founded on individual rights?
• Whose right to what would be in jeopardy of encroachment by a lack of oversight for this new entity?

Consider Technicare’s impact throughout the rest of Wal-mart’s business model:

• Once the tedious CON process is complete and business is booming, how would Wal-Mart compensate for selling televisions to Technicare customers for an amount that’s significantly reduced - possibly below cost?
• Would these customers tend to spend more or less if given a Technicare credit card for which they have no financial responsibility?
• How would this consumption impact the individuals who are liable for the Technicare expenditures?
• How about if Technicare was granted the authority to determine what Wal-Mart could charge non-Technicare customers for televisions, how would this affect these customers if the pricing was at or below cost?
• By what right should Technicare posses such authority?

If Technicare was expanded to include storage media:

• Would this amplify or negate the existing affects of the program on Wal-Mart?
• How about if the storage media market was regulated by Technicare’s parent company GovCo. so that the media could be adequately tested, which led to drastically increased research manufacturing and legal costs and the time to market for a new product was a number of years. Would this impact the cost of storage media for all consumers?
• What if Wal-Mart was also regulated on how much they could charge Technicare customers for storage media?
• What if they had to sell below cost? What would this do to the costs of storage media for non-Technicare customers?

If Wal-Mart were forced by law to give away products at no charge:

• How would the rest of their business model be impacted?
• Would they continue operating at a loss?
• Would this raise or lower costs to the remainder of their customer base?

If Wal-Mart’s prices increased drastically over time due to the mandates of Technicare:

• How would the “Certificate of Need” process and burden, including all the inherent political wrangling, affect an aspiring competitor?
• Would it make market entry easier or more difficult?
• Would this affect lead Wal-Mart to be more or less responsive to its customers?
• Would such market-entry overhead inspire entrepreneurial interest?

Given the above scenario and the obvious answers and established patterns:

• On why logical grounds would some suggest granting Technicare/GovCo drastically increased, if not exhaustive, control of Wal-Mart operations, accounting and pricing?
• What would the expected results entail?
• As non-Technicare customers lose purchasing power as a result from both having to fund Technicare and having to endure higher prices as a result of Technicare, what changes would be more likely to repair the situation?
• What if Technicare decides to restrict all customers from shopping anywhere besides this new WalTech-GovCo?
• By what right could they?
• Wouldn’t this be a coercive monopoly?
• What would that mean?

With “solutions” like these, who needs problems? Is this issue really as complex as so portrayed by the media and politicians?

Socialization proponents consistently offer supposed aspects of the health care market that exempt it from economic laws due to some disadvantage faced by consumers. Regardless of the specifics, for each such claim we should ask “Why is this, and what are the repercussions?”

My point in general is that the “whys” are far more important than their corresponding repercussions. If a patient has a rash it could be a sign of a number of things, such as poison ivy, a food allergy, an infectious disease like measles, or a skin infection. Treating the symptoms without accurately identifying the cause could leave the patient worse off. Making assumptions on faulty or unrefined premises is a recipe for failure.

I’ve yet to hear a valid claim of “market-dysfunction” (if you will) that is actually more in substance than an acknowledgment of reality, e.g., individuals have varying financial means, or an example of a symptom caused by an existing economically unnatural force in the system, e.g., how Medicare rates affect private insurance premiums.

The former family of claims, in the context of “what should be done?” should properly be answered “whatever motivated individuals choose to do with their own resources.” The charge of “not providing unlimited free service to all who’d consume it” is no more valid a charge of dysfunction than criticizing a rock for not spurting pop-tarts on whim. Demanding a breach of reality in the form of non-causal action is irrational.

If the same question is posed in the context of the second category above, the answer should be “identify and remove the source of the issue.” - which arguably is in all cases, Government intervention.

Despite all the attempts to complicate this issue, it really is as simple as the answers above. Unless and until that is, as I mentioned previously, ulterior motives come into consideration. As soon as the rights of producers and consumers to contract freely are inhibited to any extent, the only possible result is a distortion in the market that will exponentially correlate to the extent of the inhibition.

Individuals thrive under, and have a right to, freedom. Innovation, value and efficiency are the result of freedom. Regulations, on the other hand, reduce freedom - which results in inefficiency, shortages, escalating prices and general stagnation. History illustrates this condition quite well.

Patients have the right to choose from whom, for what, and at what price they consume medical services. Likewise, providers have the right to choose from whom, for what, and at what price they provide their expertise.

This is the only moral and practical relationship between patients and providers.

A diligent consideration of any elements of the market that affect these mutual rights, including their cause, will very accurately highlight what needs to change for the market to operate normally. Increase freedom and all the positive dynamics of this and any other market will prevail.

Again, history unequivocally supports this fact.

To concretize - a free-market in health care, just like every other field throughout history - would result in the best service at the lowest price, according to the discretion of the consumers and producers involved.

There’s nothing unique about the health care market that should exempt it from basic economics. Providers gain expertise in medical services that individuals would consume based on supply and demand.

Only third-party involvement by force can disrupt economic laws and patterns. If one detects a flaw or undesirable pattern, prudence suggests one identify any source of unnatural tampering. Any market traits, e.g., “Forty-plus million uninsured”, could either be symptoms of an illegitimate disruption, or merely factual attributes representing reality. If one were to consider the statistic in slightly different terms, say “Forty-plus million individuals can’t own a 42 inch widescreen television”, then the issue becomes less clouded by by emotion. The facts illustrate that five years ago, indeed a large percentage of individuals couldn’t afford a 42″ television. However, the market (a relatively free one) has responded to demand and now a 42″ television is much more affordable. These principles work regardless if the market is for widgets, televisions, mobile phone service, wellness physicals or CT scans. Where the conversation veers drastically off course is when egalitarian politics come into play. If authentic rights are to be subsumed by artificial privileges, some external force must attempt to usurp economic reality. For every ‘yin’ of Government intervention, there’s a corresponding ‘yang’ of market disturbance. These ‘yangs’ reverberate through the system and their effects continue to amplify until very serious results surface. The system we have now is a result of 50+ years of intense ‘yin’ing. What, other than a tremendously distorted market, could we expect? And, exactly why would we propose more intervention as the solution?

So long as consumers are left free to consume (by their own means) and producers are left free to offer services (as they see fit), the market will perform and innovate like any other.

The government depriving people of opportunities and choice regarding their livelihood is not the solution to the problem of the government stifling competition with distorted economic forces. The solution is to get the government out of health care altogether.

Supplemental Ammunition:
I highly recommend Paul Hsieh’s work demolishing the case for socialized medicine:

FAQ On Free Market Health Insurance

Health Care Reform vs. Universal Health Care

Moral Health Care vs. Universal Health Care

Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America

• Seeking Alpha - Wall Street Breakfast
• Another $363 Million… (Remember who earns it…)
• More Income Redistribution Stupidity: Refi’s on upside-down mortgages??? Why not!

• The Gold Bull Market and the Fed It Rode In On -
  “I thought that as part of the new Mogambo Program To Stop Freaking Out (MPTSFO) and maybe get some sleep that is not disturbed by screaming at nightmares of the horrors of inflation and economic ruin that are the just desserts of an America that has now embraced ignorance, stupidity and sloth as virtues, I had turned off the alarms in the Mogambo Bunker (the MoBu) that were connected to the circuits monitoring the creation of bank credit by the Federal Reserve.”
• Is Your Portfolio Ready for Hyperinflation?
• The Simple Solution
• Northwestern Mutual Makes First Gold Buy in 152 Years
• IRS Weighs New Rules on Tax Preparers - Yay! Just what a limping economy needs - more rules!

This read is astonishing.

This raises a truly alarming question: can capitalism and democracy survive side by side?
[edited for relevant concision]

His conclusive question is valid, but not for the misguided notions he presents.

The answer is clearly no, Democracy and Capitalism are not compatible.

Capitalism is a system based on individual rights where Government acts to protect such rights as the sole agent of retaliatory force.

Democracy is mob-rule. Whether the gangs involved are political parties, lobby groups or grassroots organizations - they are all competing to condone and prescribe illegitimate government force to achieve their ends. Such goals can only be achieved by encroaching on other individuals right to life, liberty or property and cannot be accomplished under a system where said rights are sovereign.

The author seems to resort to the tired old false dichotomy of Keynesian meddling vs. full Statism, i.e., Socialism/Fascism vs. Communism - neither is the path to Capitalism and the prosperity that results.

America is not and was not constructed as a Democracy but rather a Constitutional Republic. To borrow Ayn Rand’s words -

The American system is a constitutionally limited republic, restricted to the protection of individual rights. In such a system, majority rule is applicable only to lesser details, such as the selection of certain personnel. But the majority has no say over the basic principles governing the government. It has no power to ask for or gain the infringement of individual rights.

Also, contrary to his apparent penchant for central planning, Keynesian madness is precisely the tactic (facilitated by a phony currency) responsible for all previous, current and our impending economic turmoil because it involves wholesale trumping of individual values, choices and accountability and the attempt to evade reality in a economic context.

I’ll end with the thoughts of Myrhaf:

The only solution to the entire crisis is the one thing our statist politicians cannot tolerate: individual rights. Get the state out of the economy and let free individuals dispose of their property according to their best judgment. No, Obama and his buddies want no talk of individual rights; they want the people to think of themselves as part of a collective controlled by the state.

Mob violence is a perfect manifestation of Obama’s collectivist vision of man’s nature. His altruist-collectivist-statist premises have no room for free, rational individuals trading peacefully with one another without interference from their masters in Washington, D.C.

The anti-freedom monkeys are in another flinging frenzy. They just can’t accept the notion that freedom enables individual variance in lifestyles. Couple this with complete ignorance of individual rights or economics and the result is their attempt to regulate existence.

I’m amazed at how quickly people will condone the trampling of others at whim. This little gem is one of the most offensive justifications I’ve heard.

Statesville resident Eric Lamberth, a smoker, said he supports the ban because he believes it would help him kick the habit. [emphasis mine]

Unbelievable - the condonement of Government tyranny as means to compensate for his lack of self-control and discipline.

Restaurants are private property. The property owners are the only individuals who can rightfully determine the smoking policies for their property. The purpose of Government is to protect individual rights from being forcefully violated. Since customers are free to choose whether they accept the smoking policies of a particular dining establishment or not - no rights are being forcefully violated. Any law that trumps an owner’s smoking policy prerogative is an unjust slap in the face of America’s essence.

Your rights end when you are unable to keep your smoke away from my nose.

Only if we’re on your property.

The typical debate surrounding this non-issue rests on a fundamental error. This issue is not about the rights of individuals to smoke, nor about a supposed “right” to fresh air; but rather the right of property owners to set the terms for acceptable behavior on their premises. There is no “right” to fresh air. The only right that applies to consumers in this scenario is your right to not be forced to be exposed to air quality that you find unacceptable. So long as an individual chooses to enter the property of others (as opposed to someone forcing them to be there) they do so under the acceptance of the owner’s terms.

This, like all economic issues, is one that a free-market would solve far more effectively. If consumer demand for smoke-free environments rose to the point where such an offering were profitable, then the market would supply such. Instead, our culture is oblivious to the concept of rights and their fundamental role in making America the most prosperous country in the history of mankind. Rights equal freedom and freedom has a brilliantly clear historical record of raising man’s standard of living. To the extent that we chip away at freedom by violating real rights in favor of supposed rights, we destroy what made America.

As Don Watkins of ARC put it:

This widespread war on smoking [sic] is infecting America with a political disease far worse than any health risk caused by smoking; it is destroying our freedom to make our own judgments and choices.

Well said.