Sunday, June 7, 2009

Socialism, Single-Payers, and Big Business

(I'm about to start reading Atlas Shrugged, so I have not yet had that influence yet)

One thing I have come to understand better in the last few years is that not everyone can run a business. I've also learned that few people are good managers and the education system does poorly at preparing and differentiating the less capable.

Just as the Right warns, we are headed towards a deeper level of socialism and it will move the bar over towards few supporting more. A one-payer insurance system will penalize me and my employees. A true one payer system would possibly put me out of business or at least drastically curtail my future likelihood – but the previous statement is only about the impact of a single payer system. Preventative medicine sometimes saves a lot of money and suffering (like vaccines), but other preventative medicine doesn't necessarily save money (for instance smokers die off earlier and they aren't necessarily more expensive than non-smokers). One thing that must be true is that a single-payer, government controlled medical care system will ration access to medical treatments. You'll benefit if you aren't getting care under the current system and you'll lose some of your medical choices if you currently can afford better coverage.

I have spoken to a few MDs recently who are unexcited about a single payer system. One of them had developed cancer and will have to be treated for the rest of this life with a moderately expensive chemotherapy. While eligible for Medicare, he told the government to forget it, because he couldn't use it to get care from the people he wanted. In short, Medicare isn't some grand solution, it causes offices to operate on tight margins or augment through standard insurance to offset the costs.

If the Left wants to create a single-payer system and force everyone to participate, I suggest that they do it while leaving open private hospital systems and insurance. This must operate on a for profit - private insurance - system.

The Left has, however, got it right on executive compensation. No leader is worth $100 million dollars in a year. If he has helped them make $1G, then someone else could have too. The top levels of business is an inside game. One guys on the boards are often CEOs and it works in a circle. As a single employee or single investor, you are not getting the same deals as the Venture Capitalists who are in and out well before a company is public. This isn't about transparency, it is about who has the money and opportunity to make real money. You are a rube if you think $20
million dollar plus bonuses are good for business, good for America, and good for you.

Back to Altas Shrugged and John Galt. It seems an appropriate read right now with Obama's rescue. If only Ayn Rand had perhaps seen a corrupt system run into the ground chasing paper profits – but producing nothing – John Galt may have had a somewhat different speech.

What would be good is to make the path easier for small business (company with less than 500 or 1000 employees).

I can tell you that executive compensation from a small business doesn't have very much to do with the executive compensation at AIG … which is good really. But turning a small business into a huge business given the advantages that big business has – is like becoming governor on a 3rd party ticket: it can be done, but the system is against you.

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