Twenty Crazy Beliefs on Economics and Politics

Excellent questions posed here...

Twenty Crazy Beliefs on Economics and Politics

Donald J. Boudreaux – November 25, 2019
 
1. Why do so many American Progressives, fearing that rich people abuse state power, aim to reduce the riches of rich people, instead of the state power that Progressives admit is subject to being abused?

2. Why do so many American Progressives wish to put even larger swathes of our lives under political control given their belief that politics is so very easily corrupted by oligarchs and big-money donors?

3. Why do so many American Progressives – fearful of corporate power and understandably dismayed by cronyism – support tariffs and export subsidies (such as those dispensed by the U.S. Export-Import Bank)? After all, each tariff and every cent of subsidy is an unearned privilege granted by government to corporations at the expense of consumers, workers, and households – a privilege that creates corporate power and fuels abuse by corporations that would otherwise not arise.

4. Why do so many American Progressives, with one breath, criticize free-market economists for allegedly failing to take account of the immense importance that we humans attach to community, cultural identity, and other non-monetary values and features of our existence, and yet with the next breath talk as if the only inequality that matters is inequality of monetary incomes or wealth? (That this “Progressives” criticism of free-market economists is baseless is a subject for another day.)

5. And why do so many American Progressives, given their correct understanding that monetary values are not all that matter, treat differences in monetary incomes and wealth as sure evidence of economic malfunction?

6. Why do so many American Progressives believe that ordinary Americans are far too incompetent to choose for themselves, each individually, the appropriate levels of safety for their automobiles, workplaces, and pharmaceutical products, but supremely competent to choose which political ‘leaders’ are best for the entire country?

7. Why do so many American Progressives revile business people who seek greater wealth by succeeding in commerce, yet revere politicians who seek greater power by succeeding in politics?

8. Why do so many Americans Progressives hurl accusations of “greed” at private citizens who wish only to keep for themselves more of the money that they’ve earned, yet celebrate as selfless and noble politicians who wish to take from private citizens money that these politicians did not earn?

9. Why do so many American Progressives tout the alleged virtues of locally “sourced” foods and of locally produced goods while incessantly pushing for more and more power over individuals and locales to be exercised in far-away state capitals and in even farther away Washington, DC.?

10. Why do large numbers of American conservatives believe that U.S. government tax hikes and other interventions into the American economy are ham-fisted and, hence, harmful to the American economy, yet believe that similar interventions by foreign governments into foreign economies are genius surgical operations that inevitably strengthen those foreign economies?

11. Why do these very same conservatives also believe that the U.S. government somehow becomes capable of intervening successfully into the American economy if such intervention is advertised as being a response to foreign-government interventions into foreign economies?

12. Why do large numbers of American conservatives oppose taxes but support tariffs? Are these conservatives unaware that the latter is simply one of many different species of taxes?

13. Why do so many American conservatives boast about the strength of America and the resilience and greatness of her people but insist also that to allow these same American people to freely purchase goods and services supplied by low-productivity (and, thus, low-wage) foreign workers paves a sure path to America’s impoverishment and demise?

14. Why do so many Americans across most of the ideological space think they are offering sound and operational advice when they tell someone who is unhappy with existing government policies to “change” these policies by going to the polls to vote?

15. Why do so many Americans across most of the ideological space equate freedom with democracy? Do these Americans not see that oppression by a majority of one’s fellow citizens is oppression no less than is oppression by a minority of one’s fellow citizens?

16. Why do so many Americans, across most of the ideological space, who have ever waited in a line at the Department of Motor Vehicles to renew a driver’s license or to register a vehicle, or who have suffered long delays in a cavernous passport-control room to reenter the country after traveling abroad, want to turn over to the same institution that is responsible for the inefficiencies regularly on display in those government offices more control over our lives?

17. Why does not every American who has ever listened to a speech by a successful 21st century politician, or who has ever attended or tuned in to a “debate” among these office-seekers, come away from such an experience filled with terrible fear at the thought of any of these office-seekers exercising even the tiniest bit of say in the lives of ordinary Americans?

18 Why do so few American conservatives who were rightly appalled by Barack Obama’s performance in the Oval Office – and who rightly fear how that office would be abused by a President Elizabeth Warren or Joe Biden – wish to reduce the power of the presidency?

19 And why do so few American Progressives who are rightly appalled by Donald Trump’s performance in the Oval Office – and who rightly fear an additional four years of Trump’s abuse of that office – wish to reduce the power of the presidency?

20. Why does the goal of restraining the power of government in all areas of life have so little political clout given that confidence in government is at historic lows?

A ‘Wealth Tax’ is a Morally Evil Policy Proposition

A ‘Wealth Tax’ is a Morally Evil Policy Proposition
By William Sullivan

The late Dr. Charles Krauthammer wrote in 2002 that to “understand the workings of American politics, you have to understand this fundamental law: Conservatives think liberals are stupid. Liberals think conservatives are evil.” But many of today’s leftist policy propositions are not only practically stupid, but morally evil.

Consider that Bill Gates has come under fire for appearing skeptical of Senator Elizabeth Warren’s new “wealth tax.” For example, Anand Giridharadas, editor at large of TIME magazine, recently tweeted:

Astonishing.

@BillGates, the great philanthropist of our age, is so attached to his own wealth that he refuses to rule out voting to re-elect a white nationalist demagogue over Elizabeth Warren. 

It should be noted that Giridharadas is making a moral argument here, not a practical one. By not supporting Elizabeth Warren’s policy proposal to confiscate an arbitrary percentage of his wealth for the workings of government, Gates is not only advancing “white nationalism,” but he’s somehow morally suspect as an actual “philanthropist.”

Contrary to Anand Giridharadas’ claim, however, what is truly “astonishing” is how anyone can make an argument suggesting that Bill Gates is not philanthropic with a straight face. “Gates is among a group of billionaire philanthropists who have said that they would give away at least half of their wealth to charities under terms of the Giving Pledge,” writes Mark Decambre of Market Watch.

Note the words employed in that sentence. “Philanthropists.” “Give.” “Charities.” “Pledge.” Each and every one of them requires an individual action which is voluntary. Bill Gates is willing to give half his wealth to vetted charities of his choosing, and I don’t think that anyone could argue that such a pledge is not morally admirable. What he seems less willing to do is give the government license to forcibly confiscate his property at arbitrary and ever-changing levels, as it deems appropriate ongoing, to serve the purposes of government.

Gates made a statement that he didn’t think that Elizabeth Warren would like to speak with people like him on the matter, prompting Warren to say that she’d love to sit down with him about her “wealth tax” proposal. “I promise, it won’t be $100 billion,” of his estimated $107 billion net worth, she tweeted.

Bernie Sanders, the millionaire politician from Vermont who once honeymooned in the Soviet Union and espoused the economic virtues of governmental “bread lines,” apparently felt that Warren isn’t going far enough. “Say Bill Gates was taxed $100 billion,” Sanders tweeted. “We could end homelessness and provide safe drinking water to everyone in this country.”

So why shouldn’t the government steal $100 billion of his wealth? That seems to be the argument.

It’s easy to point out the practical failings in such arguments as Bernie’s.

Bill Gates claims he’s paid over $10 billion in taxes, and I have no reason to believe that’s untrue. If the government seizes $100 billion of his wealth and spends it today, then that’s it. He’d be a turnip with little else to bleed for such grand political schemes. But Bill Gates has earned his wealth through decades of unprecedentedly successful entrepreneurship and investment, and he’s proven that he’s far better with his own money than the government has been with ours.

If you need proof of the silliness in Bernie’s claim, consider that, this year alone, the federal government will confiscate from its citizens roughly 37 times the amount that Bernie Sanders argues could cure homelessness forever. And lack of sufficient revenue isn’t stopping additional spending beyond receipts, mind you. That same government will spend roughly 47 times that amount this year. So, we’re incurring debt of $1 trillion in an annual budget deficit, or ten times what Sanders says we need to cure homelessness and provide safe water to everyone. Why wasn’t America’s problem with homelessness and unclean water cured long ago, if simply having the government throw a hundred billion of other people’s dollars at any given problem is some kind of social and fiscal cure-all that no one’s thought of before?

Of course, any sane person knows that what Sanders is arguing is nonsense, in a practical sense. Any sane person knows that the federal government doesn’t have an income problem, but a resource allocation and a spending problem. But it’s compelling for many that he’s speaking to, nonetheless, because the practicality of his “solution” isn’t the point.

He’s making a moral argument that Bill Gates shouldn’t have as much money as he does. That’s the real problem that he’s looking to “solve,” and he’s proven that. The stated goal of his aggressive plan, called “The Tax on Extreme Wealth,” is literally to “cut the wealth of billionaires in half over fifteen years.” “I don’t think billionaires should exist,” Bernie says.

That is the true ideological impulse driving socialism, and it should be the most glaring problem with it. The obvious goal is to tear down successful individuals, not to empower the less-successful masses.

It’s not that socialist leaders like Bernie Sanders, a lifelong rabble-rouser who has never created any jobs or wealth without taxpayer funding, don’t have a clue what they’re talking about when it comes to the broad economics or practical outcomes of these Marxist policy propositions like the “wealth tax.” It’s that, in their immoral pride and lust for power, they stoke envy among the populace, nurturing and courting a growing gaggle of envious grumblers who, in turn, seek only to outsource their chosen moral depravity to government enforcers who may “equalize” economic outcomes by robbing others of their property.

Unmistakably, there is an eternal moral difference between Bill Gates pledging his own wealth to provide for the public good via charitable institutions, and Elizabeth Warren and Bernie Sanders telling you that they will confiscate his wealth in order to provide “charity” for others via government redistribution. The moral argument as to why one is morally righteous and the other is morally evil really couldn’t be simpler, and we never have to look at a single number to understand why.

Consider, for example, a circumstance where I donate my car to a fellow less fortunate than me. I am charitably pledging my property to benefit someone else. That is a culturally understood to be a positive moral decision that I was free to make. It is that freedom to choose which makes such a decision morally “good.”

If, on the other hand, someone takes my car against my will so that he might use it as he sees fit, it is equally well-understood to be a criminal act. It doesn’t matter if that someone steals my car so that someone else might use it, because it would not change the fact that my property was stolen from me. It’s still theft. And if every single one of my neighbors decides that the neighborhood association should confiscate my car so that it can be used by others in the neighborhood, I would thankfully enjoy the legal protection of my property. However, even if that association were able to exercise its power by stealing my car so that others might use it, the moral dynamic of the circumstance remains unchanged, because the element of my freedom to choose what to do with my property is never considered.

Okay. Save a few outliers who may harbor some peculiar notions about morality, we should all be able to agree that all of that is true. So, here’s the question. What if that car is one of fifty, a hundred, or a thousand cars that I own? In what way does that change the fundamental moral dynamic involved? And if it does, in your estimation, then why? Should I not be afforded the same rights to property that another might have who owns less property than I?

I should be so protected, in a culture where genuine morality is intact and individual rights are equally applied. So should Bill Gates, and any other American citizen. However popular the unconstitutional notion of a “wealth tax” may become, it will never be anything more or less than a morally depraved and evil proposition which can only serve to erode Americans’ property rights.

Median Incomes Surge under Trump

But wait, I thought tax cuts and Trump's handling of the economy were harmful to everyone but the very wealthy.

Might have to re-think that...

Democrats are wrong. Middle-class incomes surging – thanks to Trump policies
By Steve Moore | Fox News

The latest Census Bureau Current Population Survey data now show that middle-class incomes, after adjusting for inflation, have surged by $5,003 since Donald Trump became president in January 2017. Median household income has now reached $65,976 – an all-time high and up more than 8 percent in 2019 dollars under the Trump presidency.

This data was compiled by the statisticians at Sentier Research, an economic research group whose founders have more than 30 years of experience at the Census Bureau in analyzing the monthly income numbers.




I reported last week in the Wall Street Journal that real median family income had soared by $4,146 under Trump through July 2019. The just-released August numbers from Sentier show a huge monthly gain of $857 in income per household.

These numbers contrast sharply with the 16 years prior to Trump’s presidency. In the eight years that George W. Bush was president, median income barely showed any gain, up just $401 thanks to the deep recession of 2008.

In the seven and a half years that Barack Obama was president, and not including the end of the recession, which Obama inherited, incomes inched up by $1,043 (June 2009 – January 2019). This means that in the 16 years before the Trump presidency, incomes rose by about $1,500 while in less than three years middle incomes have risen three times faster.



The contrast is even sharper when measured on a monthy basis. The monthly rise in incomes under Bush was $4. That number was $11 under Obama and $161 under Trump.

These income numbers are PRE-TAX, so they do NOT include the impact of the Trump tax cut. The Heritage Foundation estimates that the average household has saved $1,400 a year on their federal taxes from the 2017 Trump tax cut. This means many working-class families now have a $6,000 higher after-tax, and after-inflation paycheck today.

These surges in income, especially in the last several months, have occurred at exactly the time when many liberal economists and media talking heads were shouting “recession.” In reality middle-class families were enjoying a near-unprecedented income windfall and “the gains in income levels in recent months,” Sentier reports, “have been accelerating.“


These surges in income, especially in the last several months, have occurred at exactly the time when many liberal economists and media talking heads were shouting “recession.”

These higher wage and salary incomes are no doubt related to the very tight labor market, which has given workers new bargaining power to ask for higher pay. Today there are more than seven million unfilled jobs in America – the highest number of surplus jobs in American history.

These latest income numbers also squarely contradict the claims by Democratic presidential candidates, such as former Vice President Joe Biden and Sens. Elizabeth Warren and Bernie Sanders, who claim that all the gains from the Trump economy have gone to the rich and large corporations. Warren claimed earlier this year that workers had to work "two or three or four jobs" just to keep their incomes from falling.

No, this has been one of the biggest middle-class success stories in modern times, and it is a testament to the success of the Trump tax, regulatory and energy policies.

Untouched by Climate Change Reality

For years global Cassandras have predicted that doomsday is at hand



By Richard W. Rahn - - Monday, September 9, 2019

If the government had not spent any tax dollars trying to mitigate climate change during the last 30 years, how much warmer would it have been and how much higher would the sea level be? The correct answer is, no measurable change. To the extent that mankind has an influence on climate change, the United States is a minor player. The United States has been reducing emissions of carbon dioxide, but these reductions are overwhelmed by the increases coming from China, India and some others.

If you really thought that the ocean level was rising rapidly, would you buy a house next to the sea? If you really thought that increased carbon dioxide emissions threatened the very existence of mankind, would you be so selfish as to fly around in a private jet, have houses with many times the carbon footprint of the average person, etc. etc.? Former President Obama just bought his family a very large seafront home. Many of the most vocal Hollywood crowd have multiple large homes, including on the beach, private jets, limos, etc. Their actions are more important than their forked-tongue utterances.

If the United States went to zero carbon emissions next year, it would have no measurable effect on global temperatures or sea level rise. For decades, the global Cassandras have been telling us we have only a limited number of years or it “will be too late.” In 1989, the claim was that doomsday was 11 years away. The year 2000 came and went without the “required actions,” and nothing changed.


This past week, CNN held a seven-hour forum where the various Democratic candidates for president presented their solutions for the “climate crisis.” Each one had a different cost estimate for their solution, as well as a different number of years before the world comes to the end — again, as you recall it did in 2000. Both the cost numbers and the years to the “end” seem to have been untouched by reality.

Joe Biden wants to spend $1.7 trillion over 10 years. Elizabeth Warren wants to spend $3 trillion over the next decade, and Bernie Sanders wants to spend precisely $16.3 trillion over the next 10 years. (By way of comparison, the U.S. GDP is about $20 trillion.) All of the candidates are rather unclear as to what exactly we get for all of the taxpayer money to be spent. If each of the programs is designed to avoid a climate “catastrophe,” it seems most sensible to go with the cheapest — the Biden plan.

Mr. Sanders wants to ban drilling on public lands and fracking anywhere. He also wants to nationalize power companies and expand worker-owned grocery stores and food-processing plants. A similar plan was tried in the old Soviet Union — and, as you may recall, it resulted in Chernobyl, power and food shortages. Ah, but next time they will get it right.

Ms. Warren also wants to ban drilling and fracking on public land, and end the political influence of the fossil fuel companies. She would zero out emissions between 2028-35. The energy deficit would be made up from imprecisely specified green energy.

Unlike most of the others, Mr. Biden’s plan at least has some connection to reality. He is willing to consider small nuclear units, but he insists that we totally phase out fossil fuels by 2050.

Assume that the goal is to move toward zero net emissions of carbon dioxide by some realistic future date. It could be done in a non-economically destructive way, by expanding nuclear to take care of most of the base load. (Note the table — France uses nuclear for about 70 percent of its power. It has done this safely for a half-century, as has the U.S. Navy, which has been using nuclear power in its major ships for many decades.) Natural gas is almost perfect for dealing with power demand surges since it can be quickly turned on and off, unlike wind and solar. Recent studies have shown there is enough suitable land for growing more trees in the United States, Canada, Russia and China to almost totally offset the carbon emissions from burning natural gas (trees inhale CO2 and exhale oxygen — and they look nice and shield much manmade ugliness). In sum, it is very possible to have a more efficient electrical system that over time is carbon neutral.

The U.S. political and media class have managed to turn people who are heroes into villains. For years, the fact that the United States was dependent on less than savory foreign countries was viewed as costly and dangerous for the national well-being. The problem was solved by oil-men, many with advanced degrees in geology and physics who developed fracking, horizontal drilling and other techniques for producing much more oil and gas at much lower prices, and with lower emissions. Thank goodness for realistic private businessmen rather than government/socialist talking heads who would have left the world dependent on whale oil.

Here's why your workplace health insurance is so expensive

Highlights:

• Health spending for a family of four is 67% higher than 10 years ago
• Employer spending on healthcare is up 51% from 10 years ago
• Deductibles are up as well, from 26% of total spending 10 years ago to 50% today

Clearly, Obamacare has not succeeded in decreasing costs.  Healthcare is the only product I can think of where 1) you don't know what anything costs and 2) you don't care because someone else is paying for it.  Until that scenario is resolved, healthcare costs will continue to increase. Government is not the answer - a free market and price competition is the best tool to bring sanity to the healthcare market.

PUBLISHED MON, AUG 19 2019 3:27 PM EDT
Darla Mercado@DARLA_MERCADO




Hero Images | Hero Images | Getty Images


Even if your employer offers you health insurance at work, chances are you’re shelling out more money for medical care.

Last year, employers spent an average of $15,159 in premiums to cover a family of four, according to an analysis from the Kaiser Family Foundation. In all, that’s an increase of 51% from a decade ago.

Things haven’t become any more affordable for workers, either.

The average family of four paid a total of $7,726 in 2018, according to the foundation. That’s an increase of 67% from 10 years ago.

Of that amount, families paid $4,706 in premium contributions for coverage at work, plus $3,020 in cost-sharing — that is, deductibles, coinsurance and copayments.

The cost of coverage has even outpaced wage growth, which has gone up by 26% over the last decade.




Bear in mind, employers still shoulder a large share of premiums. Employees also have the advantage of paying premiums on a pretax basis, as opposed to buying coverage elsewhere with after-tax dollars.

In contrast, on the private market, a family of four with an annual household income of $80,000 would pay $7,888 per year in premiums for a silver plan purchased through the health insurance marketplace — provided they are eligible for a premium tax credit of $9,961 per year, according to Kaiser.

Without the credit, the plan would cost close to $18,000 per year.

“Insurance companies get a lot of heat for raising deductibles and premiums,” said Cynthia Cox, vice president at the Kaiser Family Foundation.

“But if you look at what’s driving health-care costs year to year, it’s the price of health care: the cost of doctor’s visit, the cost of a hospital stay,” she added. “That’s really what’s making those premiums and deductibles go up each year.”
Rising deductibles


Deductibles — the amount you must pay before the insurance company provides benefits — now account for more than half of workers’ out-of-pocket spending, Kaiser found. That’s up from 26% in 2008.

Indeed, among workers in a plan with an annual deductible, the average for single coverage in 2018 was $1,573, Kaiser found.

That figure was even higher for high-deductible health plans: The annual average deductible there was $2,349 for single coverage.

High-deductible plans, however, often come with a health savings account or HSA — that is, a tax-advantaged account that allows workers to save pretax dollars, grow their money free of tax and use the money for qualified health expenses.
Managing expenses

Even with an HSA, workers are feeling the squeeze of rising deductibles. Employers are responding by backing away from offering exclusively high-deductible plans.

Indeed, a quarter of employers polled by the National Business Group on Health said they would offer only a high-deductible plan with an HSA, down from 39% in 2018.

In all, 147 large employers participated in the trade group’s study.

“In my opinion, the No. 1 factor is that the deductible is large enough for some people at lower wage brackets that it’s become a barrier to getting care,” said Karen Frost, vice president of Health Strategy & Solutions at Alight Solutions.

“It’s not just the premium, but that out-of-pocket cost, and what is the total cost the employee has to pay in a particular year if they have access to insurance and can’t use it,” she said.
Benefits enrollment season


With employee benefits season around the corner, workers should expect to see a few changes for 2020 — some of which can help lower costs.

Narrowing provider networks: Depending on the employer’s location, companies may decide to limit the providers a worker can access in a given geographical area. In exchange, employees may get lower premiums and deductibles, said Cox of Kaiser.

Using accountable care organizations: Employers coordinate with insurers to create a network of primary care physicians and specialists that work together to manage a patient’s care from start to finish.

This is known as an accountable care organization. “The theory is that they work together to give more holistic care, which should be better for the member,” said Frost.

Greater use of virtual care: Telemedicine, or virtual care, puts employees in touch with a nurse or doctor for different conditions, allowing them to skip a costly visit to the emergency room.

More than half of the respondents in the National Business Group on Health survey said they will offer more virtual care programs in 2020.

“Virtual care solutions bring health care to the consumer rather than the consumer to health care,” said Brian Marcotte, CEO of the business group.

Capitalism Will Save Us -- If Only We Let It

Steve Forbes

This story appears in the May 31, 2019 issue of Forbes. Subscribe

HARDLY A DAY goes by without some eminence from business or finance proclaiming with furrowed brow and seeming sorrow that capitalism is in crisis and must be overhauled if it is to survive and not be replaced with some variant of socialism. Inequality, climate change, obscene levels of corporate profits, stagnant wages, soaring healthcare costs, crushing levels of student debt, rampant Wall Street greed, high-tech monsters and much more are all laid at the feet of an allegedly heartless, unresponsive capitalistic system.

It ain't so. Contrary to all this highbrow hand-wringing, the problem is bad government policies and, worse, a fundamental misunderstanding of free markets. It's time for a reality check regarding this much-maligned system.

Capitalism, free enterprise, free markets--whatever you label our system--is moral because one succeeds by meeting the needs and wants of other people. An entrepreneur tries to discern needs people don't know they have until a product or service is introduced to the market. Think Steve Jobs and the iPhone and iPad. Businesspeople try to persuade you to buy what they offer. Unless the government gets involved, there is no coercion. Countless people are trying to come up with ways to make everyone's lives better. If they succeed, they might (gasp!) get rich, but we are all better off.

Ever more sophisticated supply chains rise up, which work precisely because no tsar or central planner is in charge.

Government mistakes--not inherent flaws in free markets--are at the root of every economic crisis in modern times.The Great Depression was triggered by the draconian Smoot-Hawley Tariff Act, which imposed higher taxes on thousands of import items, triggering a global trade war that devastated economies. This felony was compounded when countries--Germany, Britain and the U.S. were the worst offenders--substantially raised taxes in the teeth of a sharp downturn.

The terrible inflation of the 1970s was the result of the Federal Reserve and other central banks repeatedly printing too much money. The crisis of 2008–09 sprang from the U.S. deliberately weakening the dollar, which set off a flight to hard assets such as housing.

High taxes are growth-killers. Taxes are a burden. Countries that keep the burden light do better than those that don't. After it recovered from WWII, Europe had growth rates comparable to or even better than those of the U.S. But in the 1970s the weight of taxation became heavier and heavier with the imposition of VATs and higher effective income tax rates. Result: microscopic paces of expansion.

Every time the U.S. has enacted big tax cuts, its economy has blossomed. The economy's post-Obama pickup came from the 2017 tax reduction and deregulation.

Excessive regulations hurt. Regulatory expert Philip Howard cites a typical example: An upstate New York apple orchard is subject to 5,000 rules from 17 different programs. Regulations cost the U.S. some $2 trillion a year. On average, a manufacturer pays $2,000 to $4,000 in annual taxes per worker; its regulatory burden is $20,000 to $35,000. Is it any wonder that manufacturing has suffered until recently?

Don't blame student debt on free enterprise. Government is the villain. With the best intentions Washington created programs to help people pay for college, primarily Pell Grants and student loans. Studies from the New York Fed and others confirm that the more money colleges collected via these schemes, the more students were charged.

High-priced healthcare is not a failure of capitalism. Free markets are the solution here, not more government control. Ours is a third-party healthcare system: government (primarily Medicare and Medicaid), insurance companies and large employers, not consumers. Hospitals' revenues depend on how well they negotiate with third parties, not on how well they please their patients. What a drug company charges for a medicine is far smaller than what you see reflected on a hospital bill. A big chunk of the price charged goes to pay pharmaceutical benefit managers. Discovering in advance what a procedure might cost is a Herculean effort.

In normal markets, if you make an advance in productivity, competitors will likely follow suit quickly. Not so in healthcare or higher ed.

The Surgery Center of Oklahoma posts all of its prices online. It has topflight surgeons; its overhead is low, by industry standards; and the cost of an operation is a fraction of that charged at traditional hospitals and clinics because patients pay the entire amount in advance. (Prices are higher if a patient wants the center to file their insurance claim.) Yet it has few imitators. Why? Because there is no consumer market. Since third parties foot most of the bill, most patients have no incentive to compare quality and prices, and would be hard put to do so even if they wanted to.

Take electronic records. Every dry cleaner and gas station has had them for 20 years. But not healthcare providers: There was no competitive advantage. Then Washington decided to mandate them but did so destructively, in a manner worthy of the defunct Soviet Union.

Purdue University president Mitch Daniels has frozen tuitions since he took office in 2013. He has enacted numerous efficiencies, so that to attend this prestigious institution a student today pays less than a student did six years ago. By the way, Daniels has boosted the number of Purdue's tenured professors.

But just as with the case of the Surgery Center of Oklahoma and other hospitals, there's no stampede of colleges and universities urgently following Purdue's example.

Free markets reduce poverty. Real incomes per person have risen over 50-fold since we achieved independence. Before the Industrial Revolution, which capitalism made possible, individual incomes in the world grew imperceptibly. Today, despite all the economic policy mistakes, poverty is plummeting. Over the past 20 years, 1 billion people have escaped abject poverty.

Free markets always turn scarcity into abundance, today's luxuries into tomorrow's common products. Among countless examples is the handheld phone. The first cellphone of the early 1980s--which could only make calls--was as large as a shoe box, weighed as much as a brick, had barely an hour of battery life and cost $3,995. Today there are billions of cellphones, and most have the capability that a supercomputer had a couple of decades ago.

The same happy phenomenon of getting more for less would happen in healthcare if certain free-market reforms were enacted, such as nationwide shopping for medical insurance and removing restrictions on medical savings accounts.

Inequality? Wages, until recently, had stagnated since the financial crisis of 2008, and they hadn't been improving much in the decade before then. Once again, the problem was faulty government actions.

Investment is the sine qua non for progress, and more investment takes place when money has a stable value. Until the 1970s the dollar had been fixed to gold, and the U.S. economy had grown as no other nation's ever had before. But since then our average growth has declined 25% or more. And guess what: Income growth hasn't been as robust as when we were on the gold standard, either.

Another factor: relentlessly rising medical costs. Employer-provided insurance counts as part of an employee's compensation. Even though compensation has risen, the cash part has lagged. Not helping, either, has been the surge in federal payroll taxes, labeled "FICA" on your paycheck stub. With a regime of low taxes, a trustworthy dollar and a patient-oriented healthcare system, cashwages would rise very nicely.

Profits are essential. They are moral. Without them, the economy stagnates and regresses. The economist Joseph Schumpeter famously coined the phrase "creative destruction." Vibrant economies need enormous amounts of new capital to move forward. Change constantly destroys old capital--look at what the internet did to the value of legacy newspaper and magazine publishers--which must be replaced. Capital is needed to finance startups (most fail) and expansions as well as the productivity improvements of existing businesses. Capital comes from profits and savings. In that sense profit is a cost of doing business.

More and more young people want to work for outfits that are not "just" business. This is one of the great virtues of capitalism: The system seamlessly adjusts to people's wants and expectations. Wise companies quickly pick up and respond to these changes. Forbes has written frequently about these companies and the individuals pioneering their efforts.

Some people in business do bad, amoral or unethical things. Yes, they do, but that's not something unique to capitalism. People were guilty of bad behavior long before Adam Smith penned his capitalist classic, An Inquiry into the Nature and Causes of the Wealth of Nations, in 1776. Moreover, in an open, free-market and democratic system, the bad ones are usually flushed out, unlike in authoritarian or socialist regimes.

Socialism never works. It always leads to blood, tyranny and tears, as can be seen today in Venezuela, Cuba and North Korea and in the recent past in the Soviet Union, Maoist China and communist Cambodia (where, in less than four years, the regime slaughtered more than one fourth of the population).

What about the "socialism" of Scandinavia and Europe?They are not socialist in the sense that the government owns and runs the economy. Many of these countries have elaborate welfare programs, restrictive labor laws and overtaxation. But all this is beginning to change.

What self-styled American socialists overlook is that countries like Sweden have been scaling back government. Sweden has been cutting taxes. It has no inheritance tax, and it allows school choice, which is anathema to Bernie Sanders and his ilk. As for the rest of the EU, the average rate of economic growth since the crisis of 2008 has been minuscule, less than half that of the U.S.

More to the point, capitalism creates the wealth that makes welfare states possible. That's why more and more Europeans are looking at pro-capitalist reforms, such as low taxes, to gin up their economies.

Article here

Contracts and the lack of a free market contributes to the gap in pay of women's soccer beyond mere gender discrimination.  I agree with the author's point that the national organization should be providing equal accommodations (food, lodging) for men and woman.

The U.S. Soccer 'Pay Gap' Is About More Than Just Sexism

The U.S. women's soccer team deserves better, but mandating equal pay isn't the answer.

ERIC BOEHM | 7.10.2019 5:35 PM

(MAXPPP)

Members of the World Cup champion U.S. Women's National Soccer Team are agitating for better pay—equal to what the men on the U.S. team earn—after winning their second consecutive World Cup and their fourth overall. They were feted with a ticker-tape parade through Manhattan on Wednesday.

If pay exclusively reflected performance, there would be no doubt that Megan Rapinoe, Alex Morgan, Rose LaVelle, Julie Ertz, and the rest of the U.S. women's team deserve far more than what the men earn. The U.S. men's team, you may recall, failed to even qualify for last year's World Cup in Russia, and has not progressed beyond the tournament's quarterfinal round since the inaugural World Cup in 1930.

So it's easy to sympathize with the women's team when they demand better compensation—as they, and their fans, did during the trophy presentation on Sunday morning, shouting "equal pay, equal pay!" Presidential hopefuls have quickly judged which direction the wind is blowing and jumped aboard the cause. Sens. Elizabeth Warren (D–Mass.) and Kamala Harris (D–Calif.) have tweeted their support for equal pay on the soccer pitch, and New York Mayor Bill de Blasio on Wednesday said he would pay female athletes equally if elected president. Hillary Clinton has chimed in.

This debate is not happening only on the campaign trail, in New York's Canyon of Heroes, or on Twitter. The members of the U.S. women's team are suing their employer, the United States Soccer Federation, and the two sides have agreed to mediate the dispute out of court. That is important background for understanding why the women's team is trying to ramp up political and social pressure on the federation.

But, really, the debate over whether the U.S. women's team should be better compensated is about two related and overlapping issues. One is a matter of accounting and the other is about economics—specifically, about the importance of markets and about how workers are harmed when they do not exist.

Writing at Commentary, Christine Rosen dives deeply into the first argument. She notes that last year's American-less World Cup in Russia generated $6 billion in revenue, while the women's event in France this summer is expected to earn about $131 million. As a percentage of total revenue, FIFA (the body that governs international soccer and runs the World Cup) actually pays out larger prizes to the women's teams than to the men.

But what about the pay disparity between the American men's and women's teams, outside of prize money in major tournaments? The Wall Street Journal reports that the U.S. men's and women's teams have generated about the same amount of revenue from games played since 2015, although those totals account for only about half of U.S. Soccer's annual income. Yet, as Rosen again points out, the women's team continues to get shortchanged when it comes to the percentage of the federation's budget spent on "advertising and P.R., travel and training budgets, and…per diems for food."

U.S. Soccer has no good reason to feed the women's team less than the men's, or to make them sleep in subpar accommodations. Those inequalities should be addressed.

Beyond that, though, it's difficult to argue that the pay gap is unfair or sexist. It's largely the result of different pay structures that both teams have collectively bargained with the U.S. Soccer Federation.

Again, Rosen has the best explanation I've seen for the gap:

The women's team collectively bargained for and won a pay structure that guarantees them salaries, severance pay, medical benefits, and some performance-based bonuses. The women's team wanted the security of salary-based pay rather than purely performance-based pay, and they wanted to guarantee a salary even for players who were on the roster but didn't play.

By contrast, the men are strictly pay-for-play. They do not receive a salary or additional benefits like health insurance or severance pay. Their pay structure is performance-based.

Because of the different pay structures, a straightforward comparison is difficult. The U.S. women earn a base salary of $100,000 annually, while the men are paid $5,000 per game, with bonuses for winning.

Why would the women agree to a different pay structure? In part, that probably has to do with how much players are earning elsewhere.

Professional soccer players are also paid by privately owned club teams. Megan Rapinoe, for example, plays for Seattle Reign FC, one of nine teams in the National Women's Soccer League (NWSL). Player's salaries in the NWSL range from about $16,000 to $46,000 annually, according to NPR. That's not a lot, and it's certainly less than even the lowest-paid players in Major League Soccer (MLS; the top North American men's pro soccer league), who earn a mandatory minimum salary of $60,000.

That pay gap isn't the result of sexism. It's what the market allows. Major League Soccer teams drew an average of 21,000 fans last year, while NWSL games drew about 6,000. The TV contract MLS has with ESPN and other broadcasters generates $90 million a year. While neither league discloses revenue figures, it's a safe bet MLS earns considerably more—and, thus, its players do too.

If that changes, women's salaries will increase—and, really, that's the best way to make sure your favorite World Cup players earn bigger bucks, as Rapinoe acknowledged during an appearance on Rachel Maddow's show this week.

"Fans can come to games," Rapinoe said. "Obviously, the national team games will be a hot ticket, but we have nine teams in the NWSL. You can go to your league games, you can support that way. You can buy players' jerseys, you can lend support in that way, you can tell your friends about it, you can become season ticket-holders."

She's absolutely right. For all the attention that the World Cup generates, club teams are always going to be where soccer players make their money. And those club teams are beholden to the same rules that govern private businesses everywhere: requiring the Seattle Reign to pay every player as much as the MLS' Seattle Sounders would bankrupt the women's team.

That brings us to the second part of the debate. Part of the problem facing the U.S. women is the fact that there are no markets in international soccer.

What I mean by that is that there is no ability for the U.S. women to demand better treatment by taking their talents elsewhere. Even if a player does qualify to play on multiple national teams (in the event they had parents from two different countries, for example), under FIFA rules she is locked in place once she makes a single appearance on the field for a national team.

Think about it like this: If Rapinoe is unhappy with her contract with Reign FC, she can field offers from the other eight teams in the NWSL. She could even take offers from women's teams in other countries—Sunday's World Cup finale was held in Lyon instead of Paris in part because the local club team, Olympique Lyonnais, has a reputation for paying high salaries to female players and, not surprisingly, attracting the world's top talent.

Even with markets, there would still be obvious financial constraints. The popularity of women's soccer and the revenue generated by individual clubs may not allow teams to offer Rapinoe or Morgan the amount of money those players feel they are worth.

When it comes to dealing with the national federation, though, the players have considerably less leverage. That's why even the most egregious inequalities between the treatment of the U.S. men's and women's teams are difficult to correct.

Above all, it's certainly not wrong for successful employees to demand better compensation, regardless of gender. But because international soccer lacks the market mechanisms that would otherwise help members of the U.S. Women's National Team achieve that goal, they are forced to resort to other, less efficient means. That's why they have to turn this into a public relations issue, and a legal matter.

Lacking any better economic incentive to get the federation to change its behavior, publicly shaming U.S. Soccer over the disparity between how the men's and women's teams are treated might be the best lever for fixing the supposed pay gap.

Women's Soccer and 'Equal' Pay

An interesting take on the 'equal pay for female soccer players' conversation.  Can pay be 'equal' if female players capture 20% of the revenue they generate while men receive only 9% of the revenue generated by their tournament?   

 

By MATT WALSH

 @MATTWALSHBLOG

July 8, 2019

I'm not much of a soccer fan because I prefer watching sports, personally, but I was still happy to hear that the U.S. women's team won the World Cup over the weekend. I am far less enthused by the "gender pay gap" discussion that their victory inevitably generated, however.

Hillary Clinton To Women's Team On World Cup Win: 'Thank You For Playing Like Girls'

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The players on the women's team, along with the fans in the stadium, various presidential candidates, and a chorus of other feminists, have all insisted that female soccer players are the victims of a sexist wage gap. After all, they are paid less than male players, and misogyny is the only conceivable reason for this disparity. It is time, we are told, to rectify this injustice.

But is there any truth to these claims? Are women in soccer underpaid? If there is a gender pay gap, could there be a reasonable, non-bigoted explanation for it? Let's take a look at the facts.

First, we should clarify a crucial point. You've probably heard that the women should be paid more because they're better and they earn more revenue. Both of those claims are extremely misleading. It's true that the women's team is more successful against women than the men's team is against men. That does not mean that the women are actually better players. Keep in mind that the U.S. women's team lost to a bunch of 13- and 14-year-old boys a few years ago. If they couldn't beat adolescent boys, they can't beat grown men.

As for revenue, historically U.S. men's soccer has generated more revenue than U.S. women's soccer. That gap has closed in recent years, and now the women generate slightly more than the men — though this only takes into account ticket sales, not TV deals and merchandise. But the pay gap in U.S. soccer is not nearly as large as advertised. The highest-paid female soccer players in this country are paid almost the same as the highest-paid male soccer players. The pay gap in U.S. soccer only widens among the lower-tier players. The top stars are already on a very similar pay scale, as The New York Times notes:

According to figures provided by U.S. Soccer, since 2008 it has paid 12 players at least $1 million. Six of those players were men, and six were women. And the women hold their own near the top of the pay scale; the best-paid woman made about $1.2 million from 2008 to 2015, while the top man made $1.4 million in the same period. Some women in the top 10 even made more than their male counterparts over those years.

The really significant pay gap, and the one that gets most of the press, is in the World Cup payouts. FIFA, the international soccer organization, will give about $400 million to male players in the World Cup, while female players will make around $30 million. When you hear that male players make 10 times what female players make, this is the figure that justifies the claim. 

Megan Rapinoe has specifically condemned FIFA for this pay gap, and the FIFA president was booed over the issue after the World Cup in France. The fans in France weren't chanting "equal pay" because they want equal pay just in U.S. soccer, where the pay for top stars is already close to equal. They want it internationally, where the pay is definitely not close to equal. But that inequality, as Forbes explains, is entirely due to the astronomical disparity in revenue:

As Dwight Jaynes pointed out four years ago after the U.S. women beat Japan to capture the World Cup in Vancouver, there is a big difference in the revenue available to pay the teams. The Women's World Cup brought in almost $73 million, of which the players got 13%. The 2010 men's World Cup in South Africa made almost $4 billion, of which 9% went to the players.

The men still pull the World Cup money wagon. The men's World Cup in Russia generated over $6 billion in revenue, with the participating teams sharing $400 million, less than 7% of revenue. Meanwhile, the Women's World Cup is expected to earn $131 million for the full four-year cycle 2019-22 and dole out $30 million to the participating teams.

So that is $6 billion v. $131 million. The women aren't even in the same universe, in terms of revenue. If the women were paid the same total as the men — $400 million — they would be making nearly four times more than they generate. The men make 7% of their revenue. The women apparently want 400% of theirs. That's absurd, obviously, to say the least.

Megan Rapinoe, humble as always, will settle for just a meager quadrupling of their prize money. But $30 million quadrupled is $120 million. That would be close to 100 percent of their revenue. Again: The men only make 7%. Already, the women are earning around 20%. Indeed, if we want to be "fair" and "equal," we must conclude that the women are overpaid. Or else the men are underpaid. Either way, on an international scale, if there is a gender pay gap, women are the beneficiaries of it.