Impotent and
Knee Deep in Mud
What ever happened to the “can
do” attitude in America? We are
acting like pathetic children: whining
about our problems but seemingly
incapable of solving them.
We are the society that tamed the
American wilderness, defeated the
British, invented an enduring
constitutional republic based on
individual freedom, a-bolished slavery,
built the Panama Canal, won two World
Wars, defeated Communism, and led the
world to prosperity based on a
free-market economic system. We tamed
malaria, polio, smallpox, and
tuberculosis. We invented ninety percent
of the world’s life-changing
inventions from the telephone, radio, and
light bulb to the airplane, television,
copy machine, computer, and Internet. Did
I forget to mention that we sent men to
the moon?
But several problems plague us year after
year after year. They never go away and
we seem to be making no progress.
Center stage lately is the “Oil
Crisis” or “Energy Crisis,”
which has been festering for over thirty
years. Other lingering failures are:
education, healthcare, and Social
Security.
These are not our only problems, but they
seem to be the BIG ones and the only ones
that just keep going and going like the
Energizer Bunny.
Question: What do these problems have in
common?
Answer: They are all problems that the
GOVERNMENT has created and which the
government puts “off-limits” to
free-market solutions. The government has
sold us a lie: “Only BIG GOVERNMENT
can fix these problems. No private
solutions allowed!”
What are prohibited, in each case, are
all sensible avenues to a solution. The
havoc that results from continuing
failure becomes fodder for campaign
speeches, new programs, increased taxes,
and additional government regulations.
I cannot remember a time when America was
as stuck on failure as we are today.
Each of these problems has a relatively
straight forward solution and can be
solved within a decade or less if the
government would just stop perpetuating
them.
Let’s look at these four problems
one at a time:
EDUCATION: There is nothing new-fangled
about education. There is no need to
invent anything in the classroom. We don’t
need a billion dollars for new computers,
or new government teacher certification
programs, more mandated testing, or
readiness programs. And we certainly do
not need any new “schools of
education” to promote mediocrity in
core academic subjects.
The solution is to let parents and
students control their own educational
dollars. Their goals and our goals are
aligned: better educational outcomes. The
same cannot be said for the special
interests represented by the teachers’
unions, education colleges, and special
education providers.
After the parents and students are put in
the driver’s seat – via
vouchers or “education stamps”
– some educational institutions will
prosper and expand while others will
fail. The vast majority of students will
succeed, but a few will not. We live in
and want to remain in the real world, not
in a make believe world where we
foolishly attempt to ensure that “no
child is left behind” by merely
slowing down the bus.
If liberals don’t want to take
advantage of education vouchers, fine.
Just give them to intelligent
independents and conservatives. Let the
liberals figure it out later.
HEALTHCARE: Anyone who is serious about
this problem knows the solution. It is
not a secret; it is obvious. We have high
healthcare costs and poor service because
healthcare consumers have no significant
motivation to avoid costs and have no way
to punish those who provide poor service.
A recent personal story illustrates this.
I am one of those rare people that have a
high deductible medical insurance policy.
Recently, I had a scheduled procedure and
was told by my doctor that I could have
it done at a local hospital or at a
nearby clinic.
Since I would be paying the bill, I
ask-ed what the costs were for the
various options. He looked at me like I
had three heads. He had no idea and had
never been asked. I then asked the doctor’s,
the hospital’s, and the clinic’s
billing departments and my health
insurance company’s claims
department. Each was dumbfounded and none
knew the cost, but they all promised to
find out. I won’t bore you with the
succeeding dozen or so calls, but I
finally found out that the procedure in
the hospital would cost me three times
what it cost in the clinic. After
determining that the quality of service
and risks were not measurably different,
I chose the clinic. So what do we learn
from this? We learn that costs almost
never play a role in deciding if or how a
procedure is per-form-ed. Most patients
pay almost nothing out of pocket, so they
never question whether a procedure is
worth having done. There is no cost
difference if they decide on the more
expensive venue … so, why not
indulge?
Consumers and providers have little or no
motivation to control costs. Any efforts
by government bureaucrats to constrain
costs are effectively opposed by highly
motivated special interests that benefit
directly from high prices. So costs
continue to sky-rocket.
Similar facts play out in almost all
healthcare decisions. Until consumers
routinely trade off costs and some
combination of
quality/efficacy/comfort/convenience, the
motivating force for improving healthcare
while moderating costs will be missing.
The only way to accomplish this is to
move towards Health Savings Accounts
(HSAs), coupled with high-deductible
insurance for catastrophic medical
events. Such a system rewards both
healthcare consumers and providers for
making sensible healthcare decisions.
RETIREMENT: Social Security is a bad deal
for just about everyone except the
politicians, who enjoy spending the
current Social Security “surpluses”
and look forward to raising taxes when
the surpluses turn into deficits. Since
nobody benefits from the current Ponzi
scheme except politicians, they have to
scare the old folks every time someone
touts private retirement accounts while
hoping the younger generations aren’t
paying attention.
With the old people frightened and the
younger generation listening to their
iPods at the beach, the status quo seems
safe. Of course, it is those under 40 who
should be frightened, not retirees like
myself.
Moving from the current system, which
immediately spends your withholdings, to
a system of private savings accounts with
returns averaging 7-10% annually is the
only long-term solution. Isn’t this
obvious?
Young people have a choice: They can get
taxed into poverty while building no
assets under the current system as the
ratio of retirees to workers approaches
2:1 … OR they can build a nest egg
that they will own, that will probably
grow into the millions, and that they can
pass on to their children when they die.
Older folks also have a choice: Settle on
a set of guaranteed benefits now while
letting the younger generation save for
their retirements … OR risk a revolt
by the young that puts all Social
Security benefits at risk.
ENERGY CRISIS: The world is flush
with energy resources and the people,
capital, and technology needed to
harvest, refine, and distribute them
affordably. Our current energy shortage
and high prices are the result of
GOVERNMENT interference in the market.
Government can’t fix these problems;
it needs to get out of the way.
If you consider uranium, oil, and natural
gas within U. S. territories or under our
continental shelf, along with coal, shale
oil, and tar sands - not to mention the
over-rated wind and solar energy sources
- we are drowning in energy resources. If
we opened the floodgates, oil futures
would quickly drop to under $50/barrel.
Couple this increase in energy supplies
with demand reductions due to such
technologies as plug-in hybrids (using
cheap nuclear power for recharging) and
we could send the Saudi sheiks back to
camel herding.
None of this requires environmental
Armageddon. The technologies needed to
keep environmental damage in check are
well understood. In fact, in many
instances eliminating current
restrictions on domestic drilling and the
building of nuclear power plants will
reduce oil spills, carbon emissions, and
other environmental hazards. Yes, a few
reindeer may become steaks for the
construction crews, but SO WHAT?! Would
you rather freeze to death some winter as
you walk to work?
Do we need change? Yes, we do.
Our biggest problems are a direct result
of government programs and regulations
championed by liberals that only serve
the special interests and consistently
fail everyone else.
The change we need is to get the
government out of the way and let the
needs, aspirations, creativity, and hard
work of the American people solve these
problems through the miracle of free
markets.
Oh, and I’ll have my reindeer steak
medium rare!
Dr. Ormsby is a member of the
North Andover School Committee. He
is a graduate of Cornell and has a
doctorate from MIT. You can contact Dr.
Ormsby via email: cormsby@comcast.net
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