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Source link: http://archive.mises.org/10636/anatomy-of-an-economic-ignoramus/

Anatomy of an Economic Ignoramus

September 10, 2009 by

We all encounter more than our share of foolish blog posts. Most of the time you simply have to let them be. You could spend the rest of your life correcting drones and automatons who will never have an original or unconventional thought no matter how much you prod them. Their seventh-grade teacher, who was also the track coach, taught them what they know, and they’re sticking to it.

Once in a while, though, for your own sake and for the sake of readers who suspect the post is all wrong but aren’t quite sure why, you let loose with a full-blown response. And that’s what I’m doing here in reaction to a blog entry called “Peter Schiff: Medicare Recipients Are Lazy People Who Refuse to Pay for Their Own Health Care.”

This is longer than my usual pieces, but I hope I am not trying the reader’s patience too much. In block quotes are the words of a blog author who identifies himself, interestingly enough, simply as “Che.”FULL ARTICLE


Dennis September 10, 2009 at 8:13 am

Professor Woods,

You have my admiration for taking the time to refute the moronic comments of “Che.” He obviously knows little correct economics and is unable to reason in a detached and objective manner.

However, another side of me believes that someone of your knowledge and achievements could have better spent the time on other projects, and not, to paraphrase Mises, refuting ideas that have been many times refuted by true economists. With that said, I realize that articles such your instant one are needed, and reading the demolition is a pleasure.

Barry Loberfeld September 10, 2009 at 8:31 am

“Holding the government accountable for its actions is called Democracy.
Holding a CEO accountable for his or her actions is called impossible.” — Che


Professor Noam Chomsky is the Left’s — indeed, political philosophy’s — rara avis: someone who views socialism as the fulfillment, not an antipode, of classical liberalism. But how can one seriously maintain that political liberty led directly to its own denunciation as “sham-liberty”? That the call for the “abolition of private property” was a linear development of the classical liberal defense of private property? That Cobden and Bright were, in effect, the parents of Marx and Engels? These absurdities aside, is Chomsky’s thesis coherent even on its own terms, or is it as volatile as tri-Marxism?

To quote those terms directly:

Classical liberalism … was opposed to the church and the state … for a reason: because those were the striking examples of centralized power. What it was really opposed to was centralized power that’s not under popular control. Nineteenth-century corporations are another form of centralized power completely out of public control, and by the same reasoning we should be opposed to them. If you take classical liberal thought and apply it rationally to more recent conditions, you become a libertarian socialist and a kind of left-wing anarchist.

Here Chomsky erects an analogy between the Church and the Corporation that immediately collapses of its own weight. The classical liberals did not view religion the way socialists (of any stripe) view business. The classical liberals did not advocate the abolition of religion — by either government or “anarchists.” They did not declare that the religious “power” of the Church must be destroyed or even regulated. They did not condemn the Church as a totalitarian institution whose hierarchy oppresses the masses — and then call for the obliteration of the free market of religion. They did not call for all religion to be placed “under popular control.”

The only “power” of the Church that the classical liberals opposed was its tie to the State; all they demanded was that government remove itself from religious affairs. And they didn’t call for the oppressive functions of the State’s power (e.g., persecution of dissenters) to be placed “under popular control,” but for those functions to be abolished. Government wasn’t democratized; it was limited — to the protection of life, liberty, and property.

If the Church and the Corporation are to be considered equivalent institutions, then both are to be either equally separate from the State (the classical liberal — and modern libertarian — position) or equally subject to the State (the position of all socialists — from the Russian Revolution’s totalitarians to the Spanish Civil War’s “libertarian socialists” and “left-wing anarchists,” who destroyed churches and slaughtered believers, among other acts of “revolutionary” violence). It means that government protects economic liberty and doesn’t persecute “economic power,” just as it protects religious liberty and doesn’t persecute “religious power.” In American terms, it means having the Corporation as unnationalized, unregulated, untaxed, and unfunded as the Church — again, the separation of Firm and State. And however Chomsky may cavil about definitions of “socialism,” none of it merits our indulgence: Anyone who really wants to treat commerce the way classical liberals treated religion isn’t a socialist in any sense.

(And if we may one moment more continue exchanging chairs and teaching the professor: Corporations are not “completely out of public control” — that is, if “public control” means market discipline and consumer sovereignty — which is no doubt why they keep running to “democratically elected” politicians for protection from it.)

Matt_R.L. September 10, 2009 at 8:46 am

Usually such a withering critique would have me wincing, feeling pity and sorrow for the newly-demolished. Not so here. Reading this was pure pleasure. I pray that ‘Che’ attempts to respond. Keep on fighting the good fight, Tom.

ktibuk September 10, 2009 at 8:53 am

Many people, mistakenly, treat “the market” as an agent of action. This is also evident when people talk about “market failure”.

“The market” or “the free market” (or “the hampered market” for that matter) is an environment, not an agent of action. The market doesn’t have goals or ends and the market doesn’t try to use means to reach those ends.

Only agents of actions have goals so they may succeed or fail regarding those goals.

A market can not fail because a market can not have any goals.

Mushindo September 10, 2009 at 9:14 am

This is the first time I’ve seen fisking used coherently. Nicely debunked Mr Woods. Sadly, I rather suspect that Mr Che is unlikely to be convinced, because people like him are invariably careful to avoid reading anything they don’t already agree with.

In endorsing your approach to the ‘profits are evil’ myth, May I observe the same thing from a slightly different perspective:

In any properly free market, profit is a precise reflection of the newly-created value placed in the hands of the consumer by the producer recording that profit. If that new value wasn’t so created, there would have been no sale and hence no profit.

Steve Hogan September 10, 2009 at 9:25 am

I think that qualifies as a smack down. Will Che respond? I’m not holding my breath.

mpolzkill September 10, 2009 at 9:25 am

Professor Woods,

Might it have been the motto of the blog in big, bold letters that set you off on your full blown destruction of the blogger’s “points”?


an aside: I never fail to surprise myself with my ability to be surprised. I thought lefties would be embarrassed by O’Donnell’s pathetic, revealingly desperate attempt to shout Schiff down for an entire “interview”. I thought any lefty with a blog would pass over the event with no mention, not use it to launch talking points. There I go giving them too much credit, again.

Tim Kern September 10, 2009 at 10:07 am

“Che” is certainly an idiot, but one of the blows against him didn’t land. The argument that, “But now let’s proceed to the second sentence: on a free market, Che could pay a woman less than a man, which means in turn that men would have to accept lower wages,” is not refuted in context.

Real per-worker wages in the US have not increased since the 1960s. In fact, when one factors out the ultra-rich, they have declined. That is not, however, because “Che could pay a woman less than a man.” It’s because of the huge influx of women into the workforce. The supply of labor is gender-neutral; when supply increases, its price declines.

Another factor overlooked is that the US labor market is not a closed system; non-US labor can be substituted in cases where the nature of the demand and transportation costs, etc., allow. As long as US labor rates exceed the costs involved in using non-US labor, there will be downward pressure on US labor rates.

The third factor, and the ultimately decisive one is, of course, productivity — value-added. If the worker adds value he can charge some price that’s just short of that value-added amount. And since value is subjective (as Prof. Woods notes), the trick is to give people what they want… which “Che” seems to concede is already known by some member of the ruling class.

There’s nothing “wrong” with that. It’s just business; it’s just economics.

Shed Plant September 10, 2009 at 10:08 am

It must be awful to be so stupid.

Larry N. Martin September 10, 2009 at 10:26 am

It must be awful to be so stupid.
Nonsense: ignorance is bliss. ;-)

Ethan September 10, 2009 at 10:40 am

If Che does indeed have his own blog, isn’t there some way to goad him into responding?!

Enjoy Every Sandwich September 10, 2009 at 11:08 am

You think they’d work overtime on high-quality products for the sake of the brotherhood of man, or the great fatherland, or whatever abstraction the regime proposes?

Why, of course they would! That’s the way it works on Star Trek!

Martin Dumas September 10, 2009 at 11:12 am

Dear Sir,

Che must appear as the ideal strawman from your standpoint. I believe it is not very useful to spend much time responding to the most simplistic arguments advanced by ‘Che’. Your contribution to the debate, on the contrary, would be more precious if you could address more serious and challenging questions. Here is one: what do you suggest in order to ensure that people who cannot afford medical care do not prematurely suffer and die in the United States?

Shed Plant September 10, 2009 at 11:22 am


Use this website’s search function to look for articles and essays about health care.

My recommendation is to start with Walter Block’s recent talk on Healthcare Economics. It’s about an hour long and you can download the .mp3 here: http://mises.org/MultiMedia/mp3/MU2009/MU2009_Block_07-31-2009.MP3

Inquisitor September 10, 2009 at 11:31 am

“would be more precious if you could address more serious and challenging questions. Here is one: what do you suggest in order to ensure that people who cannot afford medical care”

This is more challenging?

Jonathan Finegold Catalán September 10, 2009 at 11:35 am


Mises Daily published one of the best articles I have read on health care. It is George Reisman’s “The Real Right to Medical Care versus Socialized Medicine”: http://mises.org/daily/3613

mpolzkill September 10, 2009 at 11:42 am

Mr. Dumas,

You are abusing the term “straw man.”

Also, “the[se] most simplistic” fallacies are shared by a substantial portion of the American public and Professor Woods has just given the many of us who could improve our tools an awesome primer to counter said fallacies, which we hear every day.

Speedmaster September 10, 2009 at 11:58 am

A brilliant classic piece. Bravo!!!

Shay September 10, 2009 at 12:35 pm

Dennis, I found this one of the better article here on Mises. It simply uses Che’s comments as a starting point for refuting common misconceptions. That makes it easy to point a random person at and teach him something. There is great value in helping someone with a common misconception get from where he is to the Austrian view, and see why his is flawed. This article does that.

Martin Dumas, the best way to allow everyone to pay for necessary medical care (or food, or whatever) is to ensure the medical industry isn’t bogged down by things that drive costs up (i.e. government interference). Beyond that, you could steal money from others to pay these costs.

LionHeart September 10, 2009 at 1:13 pm

What the U.S. needs is single payer, at least. It needs to kick insurance completely out of business. Talk about redistribution of wealth, that is ALL insurance companies do, and they drain profit out, making it a bad deal for everyone but shareholders. If I’m to support someone I don’t need to, let it be the poor who will lie in my streets if not cared for, not the rich who already can’t spend all of the money they have, but want more nonetheless.

Timothy September 10, 2009 at 1:20 pm

Thanks very much, Dr. Woods, for sharing this excellent refutation.

To those who think it is less than sporting to shoot this particular fish in a barrel, consider the importance of evaluating what you think you already know.

“Everyone knows” the earth is round. Can you name three scientific arguments for it?

“Everyone knows” the earth is more than a few thousand years old. Can you identify the observable evidence?

“Everyone knows” men landed on the moon… but can you prove it? Etc.

When it comes to basic assumptions, relying on arguments from authority just won’t do.

Even though I’ve been an amateur economics buff for years, I never tire of reviewing the basic questions in new ways. Dr. Woods has, once again, demonstrated new rhetorical kung-fu to confront old-time Marxist ignorance. Since most people’s economic errors spring from faulty assumptions, finding new ways to challenge these assumptions is to plant the seed of economic understanding.

Steve Hogan September 10, 2009 at 1:26 pm


Dude, are you serious?

Assuming you are, maybe you should ask yourself what insurance is and what it’s used for. Then ask yourself how “medical insurance” differs from the real thing.

In a nutshell, insurance is supposed to pool risks, where none of the participants knows in advance whether he will need it or not and has no direct control over the outcome.

Compare that with the health care mess we have today, where simple check ups are covered by insurance. This is stupid. Plus, there is a third party involved, such that the consumer is not bearing the full cost (in some cases, no cost at all) of the service he is receiving. At least not directly. As night follows day, pricing a service below its market level means demand exceeds supply. Prices skyrocket. Sound familiar?

If you want to contain costs, the patient needs to pay out of pocket for basic medical visits. He will then economize, and doctors will compete for business. Does any of this exist today? No. Will single payer solve this problem? Of course not!

A government monopoly is the last entity capable of providing an affordable product with improving quality. Think of the post office or a VA hospital, and you’ll begin to understand what awaits you if Obama and Co. gets its way.

Hank September 10, 2009 at 1:55 pm

Great Job Dr. Woods! To anyone who feels he is wasting time by refuting this so eloquently, you underestimate the prevailing stupidity and misconceptions regarding “free markets” and “capitalism”. Dr. Woods has essentially just written a “Free Markets and Capitalism for Dummies” that we can all share with our friends like Che. Is anyone surprised that Che has been called a number of times on his site to refute Dr. Woods, even by some who claim to agree, and he has yet to even try?

FarSide September 10, 2009 at 2:00 pm

Just wonderful. Tom Woods’ passion for the subject blazes with every sentence. I get inspired and fired up every time I read him.

No, the ideas and content are not new for me – I have been frequenting mises.org for a couple of years now. But for those who may be new, or those who may need a refresher, or even for those (like myself and others above) who are less eloquent and clear and can appreciate different nuances to use for debate or in teaching others, this is a great resource.

If you no longer want to read articles of this nature and want more advanced stuff, stop relying on the daily blog entries and use the search bar. There is no way anyone could have exhausted the free material available here.

As for LionHeart, you must either quite new to this site or are simply a troll. I’d encourage you to read a little more and beef up your positions before posting again, or some of the more aggressive posters may start to attack…

Terry Hulsey September 10, 2009 at 2:51 pm

Occasionally it’s OK to T-ball an easy target out of the ballpark. Likewise, hearing a bad orchestra inspires appreciation for a truly good one. And after all, the author Che remains not only impersonal, but serves as an invincible archetype for millions on the subject of economics. You will never persuade these millions; the only hope is to limit the influence of politics in the market.

Shay September 10, 2009 at 3:08 pm

Agreed, FarSide; there’s always benefit to regularly re-stating one’s position and justifying it from new angles or even just in fresh words. If one can’t describe and defent one’s position in many different ways, then one hasn’t fully explored it. Che is merely the unfortunate person to have his way of expressing the popular view used as a starting point. Assuming he’s reading this thread, he could capitalize (haha) on the opportunity by asking questions and learning. Even offering objections would be useful, as it could give more opportunities for elaboration.

N. Joseph Potts September 10, 2009 at 3:51 pm

The market certainly DOES “know” what to produce, when, where, and how, at least as much as any “thing” (reified in this case) “knows.” In the absence of the market, something DOES have to know what to produce, when, where, and how, and it is impossible for any actual thing like the government to know such a thing.
So, if you care to speak of the market “system” (it’s actually the absence of a system), then this “system” reliably does a simulation of knowing these unknowable things that beats anything possible by any actual institution trying to know the same things by a wide margin.
Friedrich Hayek explained it a number of times, as have others. I expect Che is entirely innocent of the wisdom of Hayek. So was the real Che, I expect, and most of those in between these two.

Stephen September 10, 2009 at 4:34 pm

Haha. This was on the front page of Che’s blog.


“It’s time to reboot – and use a very, very, very simple message so all Americans can understand it.

“Let’s use Medicare, which nearly every American understands. Just create “Medicare Part E” where the “E” represents “everybody.” Just let any citizen in the US buy into Medicare.

“It would be so easy. No need to reinvent the wheel with this so-called “public option” that’s a whole new program from the ground up. Medicare already exists. It works. Some people will like it, others won’t – just like the Post Office versus FedEx analogy the President is so comfortable with.”

LionHeart September 10, 2009 at 5:26 pm

That’s all a fairy tale. How are the poor kids with cancer or Leukemia supposed to pay for their treatment? You’re just going to let them die while the rich kids’ parents can afford it?

Dana September 10, 2009 at 5:30 pm

Che did respond on his page (the link Dr. Woods provided), although his rebuttal contradicts his previous statements. Dr. Woods gave him the education he needed.

Jero September 10, 2009 at 5:39 pm


I’ll chip in to help the kid with leukemia. Will you throw in a bit? Anyone else?

How do you think groups like the Shriners provide so much free health care to children?

Nick September 10, 2009 at 5:53 pm


I would gladly contribute to a private organization that helps those with rare diseases. But, I do not want to fund quadruple bypass surgery for a 30 year old that doesn’t exercise and eats McDonald’s every meal. Shouldn’t that person have to realize the economic costs of of their lifestyle?

LionHeart September 10, 2009 at 5:59 pm

Why do you think that government is involved in the first place? BECAUSE PRIVATE ORGANIZATIONS CAN’T HANDLE IT. Too many were still not being treated.

Shay September 10, 2009 at 6:06 pm

“That’s all a fairy tale. How are the poor kids with cancer or Leukemia supposed to pay for their treatment?”

They aren’t, just as virtually none of us can pay to go into space (though it’s getting cheaper, thanks to the free market). If money were no object, I don’t think we’d even have enough doctors or equipment to treat everyone.

“You’re just going to let them die while the rich kids’ parents can afford it?”

Is this just a case of keeping up with the Joneses? You can find out by seeing if you feel the same regarding rich people having more material things than poor people.

Lowell Sherris September 10, 2009 at 6:09 pm


How are the poor kids with cancer or Leukemia supposed to pay for their treatment?

Why are these kids poor? Are their parents lazy? Or, more likely, did the government set up a system of intrusive regulation and taxation that lowers everyone’s the standard of living and keeps most citizens poor?

Those poor kids are going to depend upon charity since their parents can’t afford to care for them. Stealing more money from productive members of society in order to perpetuate this broken system is not the answer.

You’re just going to let them die while the rich kids’ parents can afford it?

Did you think Robin Hood was logged into this board? You seem to be surprised that contributors to this board do not want to participate in grand theft. Your only solution to the problem is to impoverish everyone. That way we all get to be on waiting lists for health care. Everyone dies prematurely; true equality.

Caveman September 10, 2009 at 6:25 pm

Why do you think that government is involved in the first place? BECAUSE PRIVATE ORGANIZATIONS CAN’T HANDLE IT. Too many were still not being treated.

Non sequitur. This is the same argument every statist uses for state intervention while ignoring the state’s existing involvement and the deleterious effect this involvement has.

Bizarro World Timothy September 10, 2009 at 6:51 pm

LionHeart, I find it very irresponsible and inhumane that you do not also advocate free healthful food, clothing, and housing for all Americans who cannot afford the highest standard. These things are clearly more essential than healthcare, so why not have the government produce them, since it does such a better job than any greedy capitalist could do?

I am sick of supermarkets getting rich off the threat of starvation. They won’t be happy until we’re malnourished and they can gouge us for produce.

Clothes manufacturers? They must want people to die of exposure, otherwise they’d be giving their clothes away.

And don’t get me started on home mortgage providers, they literally kick people out on the street after tricking them into buying a house they can’t afford by using lots of big words.

Universal healthcare? That’s fine for people like LionHeart who are rich enough not to worry about shelter or their next meal. But those of us who really care about the poor realize that government must monopolize all the essentials of life if we are to end scarcity as we know it.

LionHeart September 10, 2009 at 7:26 pm

Man, what a bitch fest. People with health insurance already get more tests then are medically necessary. You know that this county pays more per capita for health care and has one of the highest infant mortality rates in the industrialized world. I honestly have a hard time believing people can say this crap about universal coverage. You think there’ll be rationing? Are you kidding me? Also medical companies are massively overcharging medicare, ever heard of McAllen Texas the town where seniors are getting double the number of tests and treatments as similar seniors just fifty miles away? We need to stop healthcare companies from gouging everyone for treatment

RWW September 10, 2009 at 7:42 pm

LionHeart, “we” simply need to stay the hell out of each other’s business.

Mike September 10, 2009 at 7:57 pm


You appear to see “health care” as some infinite resource that everybody can have all of they want but the only reason they can’t is insurance companies are hoarding it all so they can be the final masters of health care and everybody will have to bow down to them and kiss their feet if they want health care.

This is a complete denial of reality. Reality can be tough to digest in large doses, so let’s start with a small one. Answer this question: Why is health care more expensive than, say, tap water in Florida?

LionHeart September 10, 2009 at 8:15 pm

Nice strawman, Mike.

LionHeart September 10, 2009 at 8:32 pm

Also, patients vary widely in what they want from health care; some want to visit their doctor six times a year to get the slightest thing checked, while others are ill-at-ease with even regular checkups every year or few. The overall point – that a public option will not bankrupt private ventures – is entirely sound, and is supported by the result of similar plans in numerous other countries. France and Switzerland are two prime examples.

Tina Brewer September 10, 2009 at 8:49 pm

I have been doing a lot of thinking about the healthcare mess, particularly since reading George Reisman’s excellent pamphlet about this issue. In it, he describes the mechanisms by which the partial socialization of a market drives up prices, leading to ever more demands for increased socialization, and on and on. To me, its fairly obvious that total socialization is more economically rational than partial socialization for this very reason; at least under a totally socialized system, there would be SOME rational attempt to control prices, such that the average person would not be faced with catastrophic costs due to illness. While this in no way represents an endorsement of socialization of ANYthing, per se, it definitely seems to me more just than the hybrid, hyper-expensive system we now have.

When I think about our current state of affairs, it honestly seems vanishingly unlikely, really TOTALLY unlikely, that genuine, free-market reforms will have any chance of succeeding. People in general just don’t have any interest in, or understanding of, the radical types of changes which would be necessary to restore economic sanity to healthcare. Given this fact, it seems like less overall harm would come from a single-payer type system. There would be different harms, for sure, all of them immoral, but we have all of that now anyway. Help me to undersand where I am wrong on this…

Mike September 10, 2009 at 9:11 pm

Hey guys, “Che” responded! The response is at the top, just under the original article.

Lionheart: That was an exaggeration intended (probably not successfully) for comical effect. This is different from a strawman for reasons not the least of which is the fact that I didn’t knock it down.

Instead, I asked a question. I assume you ignored it because you are afraid of its obvious implication: that health care is scarce and therefore HAS to be rationed one way or another.

Jack September 10, 2009 at 9:13 pm

“Given this fact, it seems like less overall harm would come from a single-payer type system.”


The system loses the previous efficiency which it inherits as prices for various things lose whatever actual supply and demand signals that were embedded into them.

The horror stories from Canada and the UK are too true.

And the bureaucracy does not scale well. A large nation like ours would be ripe for a catastrophe.

Ryan September 10, 2009 at 9:28 pm

Possibly the most entertaining article on Mises this year. Hilarious.

P.M.Lawrence September 10, 2009 at 9:39 pm

“2. Wages go down, because it [employers' drive for profits] pits workers against one another. For example, if there are no labor regulations, I can pay a woman significantly less than a man to do the same job. This forces wages down, because now a man must settle for a depressed wage if he wants a job.

“This is why nonchemists do not write about chemistry, and nonbotanists stay out of botany. At this point our author is simply making things up.”

No, he isn’t. Read on.

“…But for a simple reply to the claim that under competitive conditions wages will fall, we ask the simple question: has this in fact happened?

“During the 19th century, without any of the institutions that Che thinks make wages rise, real wages quadrupled [read below for what this leaves out]. This is not supposed to happen, according to him — competition among workers should make wages go down. But whom are you going to believe, Che or your own eyes?”

Precisely. What your own eyes should tell you is that they went down – and later, when some other factors had come into play, they went up even more. The precise pattern and timing varied from country to country; in the UK real wages were probably at their lowest just before the 1846 Repeal of the Corn Laws that let cheaper food into the country.

“There is no point in pretending that the level of compensation workers enjoy today has anything to do with the minimum wage or labor unions; the vast majority of Americans earn much more than the minimum wage, and labor unions have always been a negligible factor in the United States. US workers’ wages have consistently outpaced those of the much more heavily unionized countries of Europe. Che can account for none of this; we should, according to his logic, all be earning minimum wage.”

Actually, it’s more complicated than that. The bottom end of the scale to some extent sets the base for the whole range, so the minimum wage does affect all the other positions somewhat – because the logic does not mean that everything settles on a single level.

“…the tendency for real incomes to increase on a free market… When firms increase and improve the equipment and machinery at the disposal of workers, their labor becomes more productive… The amount of production the economy is capable of [emphasis added] is thereby increased… This process is the only way the general standard of living can possibly rise. Only in this way can the average laborer produce the tiniest fraction of what today he is accustomed to producing… the process by which everyone in society [emphasis added] sees his purchasing power rise.”

Do you notice the amount of switching back and forth? Actually, wages of the workforce go up, the workforce may well shrink, production can even fall – and real incomes (including those of people who are not workers, i.e. unemployed) may go down. In extreme historical cases like the early stages of the Enclosure of the Commons, this actually happened. The author’s argument only works when all factors – including labour – are fully employed and the categories work out the same in practice. So it is important to look into how far off this optimum things are.

The author’s broad conclusions happen to be correct for quite other reasons, but on the way there he used unsound arguments, “trying to prove too much”.

Peter September 10, 2009 at 11:34 pm

Che did respond on his page

If he did, he seems to have deleted it…I can’t see any response.

Gil September 11, 2009 at 1:52 am

I don’t see why real incomes should necessarily rise per se. Elsewhere Libertarians would point out the opposite – in a free market profit margins should go down. Profit margins should go down to a parity level because high profit margins cause others to start businesses to get themselves a slice of that profit margin. Humungous steady profit margins should only be the preserve of a monopoly and Austrians are quick to say why a monopoly happens to exist. Similarly, a edict in which women are allowed to enter the workforce overnight should theoretically see wages go done by half. Women would underbid men and men then try to underbid women to get their jobs back. In reality wage/salary rates should follow the same path as business profits – those who get a high hourly rate or high annual salary should invite other aspiring workers to get the same skills and then underbid the pay that current workers are getting until the pay hits an equilibrium point.

Tim Kern September 11, 2009 at 10:35 am

After re-reading the article and many of the blog posts, I examined my own situation. I carried a $5000 deductible, $25,000/year 50/50, plus 100% to $1 million. Of course, if I started treatment one year and it continued past January 1, the $5000 deductible, etc., kicked in again (but the $1 million cap stayed). I paid about $250/month for this — and I’ve been paying that much for five or six years now, with of course no claims.

Realizing that much over the $5000 would mean bankruptcy anyway, I figured, “what the heck?” and canceled that worthless insurance. Could I have more security today, if I had not spent the $15,000+ on insurance? Sure. Am I going to stay healthy forever? No. Would having such insurance matter? No.

I’ll roll the dice and bank the money. Besides, I don’t have the cash flow to support the insurance company — and I can get “free” insurance through my state, but only if I don’t have insurance. Plus, the President just said I can have everything I want, and all you folks and generations of your grandchildren will pay for it. Cool. Suckers, aren’t we?

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