United Liberty

…and in breaking news, the sky is blue!  President Obama, speaking to the US Chamber of Commerce, tried to put forth the idea that regulations are a good thing.

From the Fox News report:

Speaking on matters that concern the business community with which the president has had a rocky relationship, Obama said, “The perils of too much regulation are matched by the dangers of too little.”

But, he said, regulations also serve a purpose.

“Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs,” he said. “But ultimately, winning the future is not just about what the government can do to help you succeed. It’s about what you can do to help America succeed.”

He added, “We cannot go back to the kind of economy — and culture — we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class.”

The president took the opportunity to defend two of his primary legislative achievements — a Wall Street banking bill and health insurance reform.

“I know you have concerns about this law,” he said of the health law. “But the nonpartisan congressional watchdogs at the CBO estimate that health care tax credits will be worth nearly $40 billion for small businesses over the next decade.”

Of course, he neglects to point out that the “nonpartisan congressional watchdogs at the CBO” are hamstrung in how they can figure up their numbers, so you can trust what they say about as much as you can trust Paris Hilton to score perfect on the SAT.

One of the most common refrains from the political left and the media is that, regarding the economy, conservatives advocate for unchecked freedom for big business to do whatever it wants to do, and for no government interference with business at all. These assertions stem from a fundamental misunderstanding of the nature of conservatism.

For the conservative, the issue comes down to the proper role of government. To have no government at all is anarchy, and certainly no conservative would argue that. So the question is not whether or not there should be government involvement (there should), but what level of government involvement is appropriate.

When we look at the biggest financial scandals of the last decade (Enron, WorldCom, Fannie Mae and Freddie Mac, etc.), they all have one thing in common. At some point, whether through active complicity or negligence, government played a huge role in allowing the scandals to occur. And with every scandal, it becomes an excuse, or rather an imperative, to increase the level of government involvement to keep it from occurring again.

Some of the major scandals have occurred because the regulatory oversight assigned to one government agency or another was either inadequately enforced, or government employees were co-opted into the fraudulent scheme. Others occur because our statutory and regulatory law has become so complex that it is inevitable that a crafty thief will be able to find technical loopholes that fulfill the letter of the law while being contradictory to the clear intent of the law. Either way, we continue to add layer after layer of government bureaucracy, regulation and complexity, and yet the scandals keep getting more and more expensive. That is because the more complex the law, the easier it is to find a technical Get-Out-of-Jail-Free Card.

As a libertarian, I hear a lot about how licensing and regulation is important. “We need this for our protection,” they argue. That may be, in some cases. But in others? Hardly. Licensing and regulation have long since run beyond anything approaching reasonable.

It’s easy to say we need licensing. Doctors, someone will say, are a prime example. Licensing supposedly insures that they know what they’re doing. Contractors are another, some will argue. Heaven forbid you use an unlicensed general contractor. After all, your house could collapse.

I’m not going to get into doctors, because that discussion could take all day on its own and never quite get resolves. Contractors are another matter entirely. In Dougherty County, Georgia, getting a Contractor’s License requires an outlay of money based on what you think you’ll make and how many people you think you’ll employ. No skills test is required. No competency has to be shown. You just get the license and then start trying to get jobs.

And you know what? Houses don’t collapse in Dougherty County any more frequently than anywhere else.

The thing is, I can actually see the point of those who favor licensing on contractors. I disagree with them, but I see where they’re coming from on that. There are a myriad of other licenses that are required to perform a profession that are ridiculous.

For one, barbers and hair stylists have to be licensed in many places (are there any places that don’t require it?). Now, this may have made sense in the Middle Ages when barbers also performed surgery, but now? The absolute worst thing I can get from an unlicensed barber is a horrible hair cut. Guess what? I’ve gotten that form licensed barbers too.

Last week the GOP released their Pledge to America, attempting to give American voters a clear view of where the Republican Party stands on current issues. Since so many Americans – especially those of us who identify as Republicans – are furious with our out-of-control federal government, a specific plan of attack is a great idea.

One of the biggest concerns among Republicans that the Pledge to America addresses is the new health care law. Good points can be found in the health care section of the Pledge, but we should be cautious not to blindly accept everything the Republicans are offering. For example, the GOP’s Pledge promises to require health insurance companies to offer coverage to people with pre-existing medical conditions.

The party in Washington that has allegedly heard the concerns of America has pledged to extend regulations that dictate how insurance companies must operate.

Requiring insurance companies to cover customers with pre-existing conditions is a violation of free market economic principles and is a regulation that will raise insurance costs for everyone.

People with pre-existing conditions will buy the insurance (because government regulations will require insurance companies to offer them coverage), and the higher costs incurred because of the pre-existing conditions will lower the insurance company’s profit margin.

To offset the lower profit margins, insurance companies will raise their policies’ premiums, offer less extensive coverage, and give lower payments to doctors. As health insurance costs increase, we will find ourselves paying for coverage too costly to afford, receiving fewer benefits, and being treated by disgruntled doctors who have been forced to accept lower payments for their services.

Is this reform, or is this the status quo?

We’ve been covering the discovery of a provision in ObamaCare that would place a burden on small businesses by requiring that they file 1099 forms for expenditures over $600. Even Democrats realized that this requirement was bad for business, especially as President Barack Obama tries to convice voters otherwise.

Instead of voting on an outright repeal of the provision, Democrats tucked it away with other provisions that hiked taxes and it ultimately failed when it came up on the floor:

The House rejected a bill Friday that would have repealed the provision. The two parties disagreed on how to make up the lost revenue.

“This foolish policy hammers our business community when we should be supporting their job growth,” Sen. Mike Johanns of Nebraska said in the Republicans’ weekly radio and Internet address Saturday. “It’s only one example of how the administration’s promise to support small businesses really rings hollow.”

Democrats blamed Republicans for Friday’s failure.

“Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most,” said Rep. Sander Levin, D-Mich., chairman of the tax-writing House Ways and Means Committee.

Businesses already must file Form 1099s with the IRS when they purchase more than $600 in services from a vendor in a year. The new provision would extend the requirement to the purchase of goods, starting in 2012.

Note: I intended to merely comment on this chart when sharing it via my Posterous. During the 5 or so minutes I was commenting, it grew to be something more substantial, and at the urging of others, it has been cross-posted here.

Since the 1960s, the percentage of total healthcare cost paid directly by the end consumer, aka patient, has dropped drastically, but out of pocket costs have risen and the cost of healthcare has risen drastically over that same period.

What has happened between then and now? The intervention of government into the marketplace. Insurance regulations, government mandates about what MUST be covered, Medicare/caid, and inflation make costs skyrocket, but the opacity of the prices keeps patients from seeing what each visit, prescription, and procedure actually costs. With that opacity, there is no competitive pricing, because the prices paid by patients are merely co-pays and the withholding from their paycheck for employer-sponsored health plans, insurance companies, and government programs that pay negotiated rates. Without competition and price transparency, prices will continue to rise.

In addition, patients largest out of pocket expense is their insurance coverage, which does not fluctuate to accommodate the amount of healthcare services consumed. The patient knows they only pay $10-$50 for each office visit, but the overall costs of those visits can be thousands of dollars. The patient rarely, if ever, sees the actual cost… Usually only if their insurance claim is denied.